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Quotient Limited
6/1/2021
Greetings. Welcome to Quotient Limited's fourth quarter and fiscal year 2021 financial results conference call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. I will now turn the conference over to Peter Buehler, Chief Financial Officer. Thank you. You may begin.
Thank you, Sherry. Good morning, everyone, and welcome to Quotient's earnings conference call for our fourth quarter and fiscal year ended March 31st, 2021. Joining me today is Manuel O. Mendez, Chief Executive Officer of Quotient. Today's conference call is being broadcast live through an audio webcast, and the replay of the conference call will be available later today at www.quotientbd.com. During this call, Quotient will be making forward-looking statements including guidance and projections as to future operating results and expected development and commercialization timelines. Because such statements deal with future events, actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in quotient filings with the U.S. Security Exchange Commission, as well as in this morning's release. In forward-looking statements, including guidance and protections provided during this call, are owed valid only as of today's date, and Quotient assumes no obligation to publicly update these forward-looking statements. With that, I would like to turn the call over to Quotient's Chief Executive Officer, Manuel.
Thanks, Peter, and good morning, everyone. This is my first earnings call since I joined Quotient 60 days ago. Over the past couple of months, I've been meeting with investors, customers, internal associates, both in person and virtually in Switzerland, Europe, and the US. This external and internal perspectives enabled me to develop a clear understanding of the company informed by my many years in the diagnostics and life science industries. When I reflect on the short time I've been here, I believe we are well positioned for the future. I look forward to keeping you updated on the progress over the coming months and years. I would like to begin by providing you with an overview on the following three topics. First, the MOSAIC solution development and commercial readiness, where I will inform you of the progress we've made on each of our transfusion modalities, immunohematology, serology, and molecular. Next, I will provide you an ALBA by quotient full year and Q4 performance update. And lastly, I will provide you with an update on the company's financial position. Regarding our MOSAIC solution and development progress, To further strengthen the company's R&D tech transfer and overall mosaic development strategy, we have added a new member to the Quotient leadership team, Dr. Michael Hausman. Michael will join as Chief Technology Officer in Q2 of this fiscal year. Most recently, Michael served as the Senior Director of Global R&D Clinical Diagnostics Division at Thermo Fisher Scientific. Michael brings over 20 years of experience in the in vitro diagnostics industry and most recently a Thermo Fisher Scientific, he expanded the adoption of Brahms Procalcitonin in China and the US. Prior to Thermo Fisher, Michael led a team at BMRU to develop the VITAS and VITAS-3 assays. And while at Abbott, Michael developed an ex-US architect infectious disease portfolio for blood screening and diagnostics. We will benefit from his experience specifically in assay and instrument development, and across other functional areas, such as manufacturing. I'm extremely excited with Michael's joining, and I know he's gonna make a big impact. During the last few weeks, I've had an opportunity to visit our customers in the US and Europe, and I was encouraged to hear our Fusion Mosaic customers are eagerly awaiting the commercial launch of our innovative system. One of our customers shared The mosaic solution will improve our workflow and help solve the staffing shortages in our industry is facing today. I'm confident the multimodal multiplexing mosaic solution can help address lab complexity, staffing shortages, budget constraints, and for sure the safety of the blood supply that our customers need. We look forward to collaborating with our customers to gain share in the 3.4 billion transfusion diagnostics market in the near future. Next, I'd like to share the continued progress we've made on our three modalities key to the transfusion diagnostic and alternate markets. On expanded IH, or immunohematology, we have made further improvements in our manufacturing process, which resulted in improved performance levels than we have previously published. The ABO, RH, and CELS system performance levels met 100% accuracy. Also, most of the extended phenotyping tests were above 99% accuracy. We now have a confirmed menu and are ready to enter CE marking field trials this month. Very exciting. US field trials will commence shortly thereafter. With recent new hires and with the capital raise, as you've seen from our previous press release, we have the human and financial resources we need to complete the commercialization of the expanded immunohematology product. Regarding our serological disease screening panels, the continued development for the expanded STS menu has brought the performance of the detection of the antibodies for the individual markers to the expected performance level. We have finalized the development for most of the antibodies and antigens and are working on the integration of those markers on the microarray. I will provide more information regarding the next steps at the end of this call. Moving on to our MDS or molecular disease screening, previously we provided performance updates on the MDS assay concordance against the predicate device and we have now completed a successful phase of testing aimed at challenging the assay's limit of detection against the Roche-Cobas. This testing confirmed the Mosaic MDS assay has similar levels of sensitivity for HIV-1, Hepatitis B, Hepatitis C, and this gives us confidence in our ability to extend the development to the full targeted product menu, which I will share on the second part of the presentation. On commercial readiness, we have great news as well. We continue to make progress towards Mosaic commercialization and customer partnerships. Currently, we have received commitment from 12 customers to evaluate and demo the Mosaic solution. The placement served to strengthen our chances of tender success, but also gives us the ability to generate third-party data supporting our scientific narrative. We anticipate 25 potential tenders in 2021. FY22 and FY23. Additionally, our commercial team evaluated various global market expansion opportunities for Mosaic and have identified potential distribution partners. Also, we've hired additional key account managers to support coverage in new geographies such as Poland, Czech Republic, Slovakia, Italy, and Benelux, among others. Lastly, we will expand our laboratory process consultant team to partner with customers to create workflow and efficiency value as they implement the Mosaic solution. Moving on to Alba by Quotient Reagent Business Update. Alba by Quotient is a steady business with 67% of sales based on standing orders, mainly from a small number of OEM partners. We have had a good fourth quarter with 7.4% growth year-on-year, The 2021 full-year sales of Alba by Quotient grew 9.2% over the last year, mostly fueled by direct business growth of 8.8% and our largest OEM customer growth of 11.1% year-on-year. Peter will be sharing some additional data. Lastly, our team has evaluated various global market expansion opportunities for Alba and have identified potential new geographies and distribution partners to fuel the growth. Regarding financials, as the last point, I will give you a brief summary of our current financial position. Last week, we announced the private placement of convertible notes for a total amount of $95 million. The agreement also includes a re-opener for a total amount of an additional $15 million. We are very excited with the prospect of closing some of this additional opportunity in terms of additional funds. Securing this financing from an existing, long-standing stakeholder like Hybridge and other investors strengthens Quotient's balance sheet at a pivotal time for our business. Importantly, the funds allows us to meaningfully advance our strategic vision of developing a multi-modal, multiplexing diagnostic MOSAIC solution for the transfusion market and accelerate our expansion to our commercial opportunities. In the next few months, we will assess possibilities to restructure or refinance our existing senior secured debt, which I know is in some of you's minds. Regarding our investments in Credit Suisse supply chain funds, to date, more than 68% of our initial investment was returned, and we have a remaining $34.7 million outstanding. We believe Credit Suisse should reimburse any potential loss to the company which may incur on these investments. So far, Credit Suisse has not yet committed. We will monitor this in the coming months ahead. With this, I will turn it back to Peter for the financial update.
Peter? Thank you, Manuel. Fiscal fourth quarter product sales were $9.6 million, an increase of 10.8% from last year's fourth quarter. The increase in product sales was primarily attributable to Alba by Quotient revenues from OEM customers and to limited mosaic sales of COVID-19 antibody tests. In the quarter, OEM sales of $6.5 million grew 10.3% year over year and represent 67% of all product sales. The increase continues to be driven by better pricing and increased sales to existing customers. Direct and distributor sales of $2.9 million increased 1% year over year and represent 30% of product sales. Direct sales in the United States increased 10% year over year. In the fourth quarter, Gross margin on product sales was 45.8%, and slightly increased compared to 45.6% last year. The improvement is due to better sales mix. In the fourth quarter, we recorded an operating loss of $28 million, compared with $21.5 million last year. In the quarter, operating expense were 32.4 million, an increase of $7 million over the prior year. Research and development expenses were 15.4 million, a $500,000 increase year over year, mainly driven by additional staff and material costs associated with the Mosaic project. General and administrative expense were $14 million, an increase of 6.1 million compared to the prior year. This cost increase is related to the change in CEO and the departure of the COO, as well as increased insurance cost. Also included in G&A cost is stock compensation expense, which increased from 1.1 million to 1.5 million, an increase of $400,000. Sales and marketing expense of $3 million increased $300,000 from the prior year's fourth quarter, reflecting the continued scaling up of the commercial group in view of the launch of our first commercial menu for donor labs. In the fourth quarter, depreciation and amortization were $2.1 million versus $3.3 million in the prior year. Depreciation and amortization decreased due to assets located in our Swiss manufacturing site that are now fully depreciated. Net other expense was $9.9 million, compared with $2.6 million in the fourth quarter last year. Net other expense consisted of interest expense of $6.4 million, a $1.2 million foreign exchange loss, and an impairment loss of $2.3 million on our investment in Credit Suisse asset management funds, compared to interest expense of $3.5 million, and an 800,000 foreign exchange gain in fiscal 20. Interest expense in fiscal 20 were lower due to reassessment of accumulated royalty liability. Overall, our net loss for the quarter was $38.3 million or 38 cents per ordinary share compared with $24.7 million or 31 cents per ordinary share in the prior year's fourth quarter. For the fiscal year, product sales were 35.8 million an increase of 13.2% over the prior year. Total revenue for the year also includes other revenues of $7.6 million that primarily relate to the non-reimbursable upfront milestone payment received from also upon signing of the letter agreement. In the prior fiscal year, other revenues reached $1.1 million. For the year, gross margin on product sales slightly improved from 43.7% in fiscal 2020 to 43.9% in fiscal 2021. For the full year, operating expense increased by $10.3 million to $105.8 million. This increase is primarily due to higher general and administrative expenses. The increase in G&A is driven by the cost related to the change in CEO, legal expense related to the also arbitration, and higher insurance cost. Our R&D cost increased $400,000 year-on-year and reached $54.2 million. Sales and marketing cost remained stable at $9.8 million versus prior year. Our fiscal 2021 operating loss of $82.5 million included $15.4 million of non-cash expense, which compares to a $80.7 million operating loss, which included $17.8 million of non-cash expense in fiscal 2020. In the fiscal year, net other expense was $24 million compared with net other expense of $21.4 million last year. Net other expense consisted of interest expense of $25.9 million and an impairment loss of $2.3 million on our investment in Credit Suisse asset management funds, offset by a $4.2 million gain on foreign exchange. This compared to interest expense of $23.9 million and the $2.4 million gain on foreign exchange in fiscal 2020. Overall, our net loss for the year was 108.5 million or $1.18 per ordinary share compared with 102.8 million or $1.44 per share in fiscal 2020. Net cash used in operating activities totaled $20.8 million in the fourth quarter of fiscal 2021 compared with 15.8 million in the prior year fourth quarter. For the full year, net cash used in operating activities reached $77.6 million, compared to $80.6 million last year. The decrease of use of cash is mainly due to the additional milestones, revenues, and higher ALBA by quotient gross margin, partially offset by increased operating expenses. Capital expenditures in the fourth quarter of fiscal 2020 was $600,000 compared with $700,000 in the prior year. For the full year, CapEx totaled $4.2 million compared with $4.6 million in the fiscal 2020. Our capital expenditures mainly include the purchase of mosaic instruments and manufacturing and IT equipment. Moving to the balance sheet. Available cash and cash equivalents and short-term investments at March 31st, 2021 were $112 million compared to $121 million one year ago. In addition, we held $9 million restricted cash reserve related to our senior secured loan. Our short-term investments include investment into two Credit Suisse supply chain funds. Credit Suisse suspended redemption and announced liquidation of these funds in March 2021, and the total remaining investment at March 31st, 2021 was 53.2 million. In April 2021, we received a further payout of $18.5 million, and as of today, $34.7 million are still invested and subject to significant valuation uncertainties. At March 31st, 2021, we have taken an impairment charge on one of the two funds of $2.3 million. Timing and amount to further payout is not clear, but we believe we will be able to recover the outstanding funds within fiscal year 2022. As announced last week, in May 2021, we raised additional cash through the private placement of convertible notes. This further strengthens Quotient's cash position as we continue to advance our Mosaic development pipeline and start commercialization. The terms of these convertible notes allow us full flexibility on restructuring or refinancing the existing senior debt facility, and we will address this question in the coming months. At the end of the fiscal year, the total outstanding senior debt secured debt was $145 million, with a $12 million reimbursement paid in April, and the further reimbursement of $12 million due in October 2021. With the additional cash added to our balance sheet, we address the question of potential additional cash requirements, and we do not anticipate any liquidity constraints in the foreseeable future. Accounts receivable totaled $5.3 million, and inventory totaled $22 million. Inventories increased by $1.5 million year over year. This increase was related to higher Mosaic inventories and an exchange rate-related increase of our Alba by Quotient inventories. Moving to guidance. For fiscal 2021, we are forecasting full-year revenue from product sales of our Alba by Quotient reagents in the range of $35.5 million to $36.5 million, and no milestones related to other revenues are expected. We forecast capital expenditures in the range of $5 to $10 million. With the acceleration of our Mosaic field trials, we expect cash use and operations of approximately $6 to $6.5 million per month. No guidance is provided on operating loss, and we do not expect major revenues derived from Mosaic. With that, let me now turn the call back to Manuel.
Thank you, Peter. Looking forward now, I first would like to share upcoming plans for the next few quarters in the same three topic areas I mentioned earlier. Firstly, the expanded IH microarray CE marking field trials are just around the corner and will start in June. U.S. field trials will commence shortly thereafter, as I mentioned before. Instruments have been installed. Qualification visits have already been conducted. And due to my recent travels with some of these accounts, they really confirmed the interest on that. So we are on track to submit to the regulatory agencies and expect to obtain CE marking around the year end. Upon approval, we will be qualified to participate in European tenders. As I previously stated, we expect around 25 tenders to become available in 22 and 23. Additionally, we have been working on the development of our patient microarray, which will leverage the learning and development from our expanded microarray. This is a key deliverable in our partnership with Ortho Clinical Diagnostics in the patient transfusion market. Regarding the serological disease screening, We continue to make progress with the realization of our expanded SDS solution. The disease targets of the antigen and antibody detections are progressing through the final stages of development and integration. Performance data on the antibody to date has met seven of the eight targets, and based on the de-risking activities in place, we are confident to achieve the required targets for analytical sensitivity and specificity within the stated timelines. Additionally, we have identified the sites for the required field trials and the process for finalization of the clinical protocols is currently being reviewed by the IRBs. All activities are on target to begin field trials in parallel in Europe and the US by year end. Lastly, although we deprioritized the initial STS-510K resubmission in the US to focus on improving our expanded IH microarray, our teams have made great improvements on the STS product for the US in terms of performance to specific known concentrations and various clinical disease states. We will need to run additional clinical field trials and expect to submit to the FDA by year end. As a reminder, we will commercialize the initial STS microarray in the US after we received the expanded IH microarray FDA approval. So our commercial launch for the initial SDS and immunohematology launch is on track. Regarding the MDS or molecular disease screening microarray, development is continuing with the full MDS menu. As I stated earlier, we have performance data on HIV-1, HBV, and HCV from the feasibility phase, and the team have identified the reagent pairs for detection for HIV-2, HEV, and West Nile virus. This is really great in terms of completing the target menu. Performance targets will focus on equivalency to Roche-Cobas, and we will be updating you on this in the coming weeks. On commercial readiness, we look forward to the tender demo evaluations to support the customer experience. Additionally, our commercial teams have been utilizing both our transfusion advisory board and a newly created IVD advisory board to drive product and partnership positioning and decision making. These types of partnerships will allow us to draw on the skills and knowledge from external experts. Our Alba by Cushion team has conducted incremental assessment of products and are looking into new customer opportunities. Using that information, the team will begin implementing an action plan in the coming months. The other business started the process to extend the certificate to 2024, which includes renewals under the IVDD, as well as the generation of additional data for the first batch of products that must be IVDR certified by May 2022. We expect to submit to the notified body in June of 2021. So Quotient will be ready to transition from IVDD to IVDR. Lastly, on our financial position, I would like to reiterate Peter's point. I am very excited with our current financial flexibility, which provides us with the freedom to deliver on our plans and generate substantial value for our shareholders over time. To close, I am extremely proud to be part of this coaching team and look forward to partnering with our customers. Now, I would like to hand it over to Sherry to open the Q&A session. Sherry? Thank you.
Thank you. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Sunji Nam with BTIG. Please proceed.
Hi, thanks for taking the questions. Maybe kicking off with the expanded IHRA, sounds a little bit like the field trials in Europe have been delayed a little bit, and just was kind of curious, you know, would you still be able to make the CE mark submission by the end of the year with the new timeline, and also, was curious about what the timeline for the FDA submission might be at this point.
Yeah, thank you for the question, Sanjeev. So there's no delays on the start of the clinicals. We've always planned to start them in June for the CE marking, so that's on track. And so we don't anticipate any delays in terms of completion of the clinical trials, submission to the CE marking agency or body. and then, you know, the obtention of the approval. So there's no changes there. That has been anticipated previously. And then as far as the U.S. clinical trials, they remain on track to start in the August, you know, timeframe. And, you know, we expect to submit by year end. And then from there, you know, obtain the, you know, do the necessary exchange with the agency, with the FDA, to get the proper approval.
Thank you. Thank you for that. And then could you kind of talk about the environment currently, you know, from the pandemic? Obviously, there's been delays just from your targets, you know, a few quarters ago, given the pandemic worldwide, and it was just kind of curious in terms of what you're baking in as far as potential risks associated with it, you know, if you anticipate, you know, you know, obviously you're making a lot of progress, but, you know, we're curious, you know, what's kind of going on in Europe versus the U.S. as far as opening up of the laboratories, et cetera, in relation to the pandemic.
Yeah, thank you for the question. So, regarding the pandemic, I think good news is that there are different governments and countries are opening up. We see great openings here, particularly in Switzerland, where we have As you know, R&D and a big presence here. So many people are being vaccinated. The government has really taken a lot of steps. We're also doing vaccination efforts for our teams, which then helps us to have a lot of flexibility. Actually, starting yesterday, now the government has said that people don't have to work from home. Before, previously, they were required to work from home for the most part. So that has been lifted. which gives us a lot of flexibility in terms of making sure that one, we can bring the necessary teams onto the site, as well as then making sure that we have a safe environment in the working environment here. So we're taking all the measures necessary to be able to bring people back fully and then continue the engagement across that. So that's specifically to Switzerland. As you've seen in the different countries, the UK has been going back and forth with the recent variants. I think that has created some challenges where they have gone back from amber to red by some countries. And so we're managing through that process. But for the most part, we do anticipate, again, that our clinical trials, which are in different countries, will be able to proceed. We don't anticipate the COVID pandemic situation to put any limitations on that in the near future. So I think that's overall good news for all of us. Peter, I don't know if you want to add anything.
No, I think, like you said, we will now be able to progressively bring people back on site. Yeah. Okay, great. Thank you.
Great, thanks. Fantastic. And then lastly from me, just curious about the plasma diagnostics market, kind of what the addressable market potential there is and any progress you're making in terms of developing products for that segment. Thank you very much.
Yeah, so that's a great question. Thank you for asking. So one of the things that I've identified in the very short term since I've been here is that we definitely have an opportunity to collaborate with different plasma companies partners, and we're exploring, you know, that market size, you know, that opportunity. Peter, you have the number. I think it's like almost about a million.
About 750 million roughly market size, total market.
Yeah.
It's primarily U.S.-centric, right?
Yeah, U.S.-centric. So we'll be exploring some of these. One of the things that we discussed internally is can we leverage some of the clinical trials sites that we're using and that we're doing to accelerate the introduction in a plasma setting. So that's something the teams are evaluating to see. So then, therefore, it allows us to get quicker approvals, plus also leverage the infrastructure we're going to have on these sites to, you know, decrease our cost in being able to do some of these clinical trials. So I think it's a win-win for everybody as we go and try to target opportunities in this area as well.
Fantastic. Thank you so much.
Thank you.
Our next question is from Josh Juddings with Cowan and Company. Please proceed.
Hi. Thanks, Manuel and Peter. Congratulations on the progress and bringing Dr. Hausman onto the team. A follow-up question on the IH2 progress. It sounds like the optimization of some of the antigen tests went well. Can you just remind us, I mean, You guys didn't release formal internal V&V test results, but you shared some metrics on the call, Manuel, and they seem to be very successful. But the gist of my question is, were there any antigens added, and is that V&V testing going to be made public before the EU field trials?
Yeah, so look, I think to your point, we've been very pleased with the progress on the menu, what's been included in the menu. We haven't shared this data. We're looking at the different incremental testing internally, and then once we start on the clinical trial sites, then we'll be able to share some of this information in the future. At this point, again, while we're gearing up to the clinical trials, we're not planning to release any data yet. But, you know, certainly we'll be looking forward to the, you know, to a successful outcome on the clinical trials and then sharing some of this information in the future. But what I can tell you is, you know, we are very pleased with the results. As I mentioned, the team has done a really great job in not only address the basic, you know, menu, but the extended, which is key as we compare against, you know, other providers in the market. which makes us, again, really, really excited with the prospect in conversation with the customers, the positioning of our solution. But, Peter, I don't know, anything you want to add?
No, I think, you know, I mean, our focus was really to improve the tests that were below the 99%, and I think, as Manuel said, we were successful on that, and now we're going into field trials, and I think that's what counts in the end, from the field trials.
Excellent. Excellent. Thanks for that. And just on the U.S. field trial front for IH2, can you share how many sites will be running tests? And just remind us, I mean, how long do you expect it to take to run those field trial results and then get the results and make those public?
Yeah, so normally we have selected three sites. As I mentioned on a previous question on plasma, we may add a fourth site just because, you know, we may want to have that as part of the clinical trials. Normally, it would be about six weeks, you know, to complete it. You may think to yourself, you know, wow, that's a bit long. But, you know, it's because we're actually comparing different methodologies where some of them are automated and some require manual intervention, particularly if you look at discordant samples. It requires manual testing. So that's what's sort of extending that. But what the team normally will do is then, you know, analyze the data. And once the data is completed, is submitted, then we need to assess, you know, how if this data can be shared publicly, or again, if it's solely for the purpose of the submission, sometimes there's some sensitivities there. So we'll assess that in discussions with our regulatory teams, and then if it's something we can share, certainly we'll do that as soon as possible. But again, if we go back, we'll do the same thing on the CE marking, where the submission is expected shortly after clinical trials are completed. in Q3. So, you know, we're excited to see, you know, the, you know, and wait for the outcome of that submission.
Great. Thanks. And the question on commercialization in Europe, one C mark is in hand. Great update. 25 potential tenders and 12 connecting valuations at minimum of 12 sites by fiscal Q1. We're just hoping to understand better just the It sounds like you'll get a CE mark, you'll start to have these evaluations conducted at the centers, and the tenor process will be going on in parallel. But maybe just to help us understand this evaluation process and how that the time it could take for the evaluation kind of testing and integrating into workflows and then actually signing, getting an install and starting to generate revenue from those Mosaic installs in Europe.
Yeah, so that's a great question. Thanks, Josh. So out of the 25 tenders that we are evaluating, not every tender requires an evaluation or a demo, right? So that's one thing. So the second piece is that those that would like to have an evaluation, and we've been very successful in influencing that, or they require an evaluation. That's part of the tender process, so it's not something necessarily that we control in terms of timing. So we'll have to adhere to the timing of the tender. It depends on how many samples they're gonna run, the experience from a customer interface. Sometimes it takes a week, sometimes it takes a couple weeks as they do the process. Now our intent is that once an evaluation is done or a demo is done, that can turn into a revenue instrument, of course. So in working with the commercial teams, We are keeping this in mind, you know, which is, and we have very successful experience. Once customers experience the mosaic, because of the ease of use, because of the, you know, the capabilities that the instrument has, it's like running a, you know, taking a car for a spin. You know, they want to keep it. They don't want to. You know, they don't want to, you know, give it back. So that's our intent in these evaluations and the demos as well. Again, we need to abide by the tender process and, you know, what they go through. So I can't really comment on timing, but certainly our intent is to be able to do whatever is in our power to accelerate that process and then, you know, ensure that there is an immediate adoption following that.
Great. And just a follow-up, just in terms of the historic hypercare sites, where mosaic systems were placed and that evaluation work may have already been done. Are those sites, should we be considering them kind of sites that have already had this evaluation period and completed and are ripe as potential new customers earlier than some of these other 12 and understand that other customers won't need an evaluation process
Yeah, that's exactly right. Yes, Josh. So we're looking at those, again, whether we're hypersites or sites that also happen to have had the experience with the COVID, you know, our COVID solution with the mosaic. I can tell you I went to visit a customer that was in that this past week, and they were super pleased with the progress that had been made, with the advancements that you know, were achieved, not just on the performance of the assays but also on the potential of the workflow value that they see. I mean, I went to visit this one customer who had, you know, laboratories on three different floors. Well, you know, when you introduce the mosaic, that's going to be two mosaics on one room. So, you know, I think they start to believe and see the value of our solution. And frankly, I can't tell you, you know, so many times they're like, okay, when is this product coming? You know, can you come to market, you know, because I think it will create good value. So, again, that's what we're focusing on, whether it's through the evaluation, through the tender process, through the hypercare sites. Those are all within the scope of our team.
Excellent. And just last follow-up on this topic, thinking about the – Mosaic placements for COVID testing, thinking about the clinical field trial sites in Europe, thinking about the hypercare sites. I mean, we should think about 10 blood centers or more that have had direct experience with Mosaic, the workflow, and just the system prior to this launch. Is that the right way to think about it?
Yeah, I would say, you know, that's a fair number. I don't know, Peter, do you have any comments?
Yeah, I would say that's roughly right, yes. As you said, between the field trials, hypercare, then we have COVID sites, yeah, that's 10 to 15, probably, yeah.
Great. Thanks, Joan, for taking the questions.
Thanks, Josh. Our next question is from Jeffries. Please proceed.
Hey, thanks. Good morning. Well, since you sort of started with this at the top, you know, and with respect to Dr. Hoffman's hiring, you know, given Mosaic is in late-stage development, right, and about to be commercialized, why is now kind of the right time to bring someone of his expertise into this CTO role? Is it really, you know, in terms of how you're thinking about the pipeline, and molecular that he'll be in charge of. Just curious as to what exactly he'll play near term.
Well, I think, look, we're planning definitely to make a big impact in terms of what we have in front of us, which is the transfusion. He has extensive experience in blood screening previously, and I think he still can make a significant contribution to help accelerate the molecular piece of it. and some of the characterization that we're doing there. And then also on the serological side, I think we have made great advancements, but at the same time, bringing a set of eyes with great experience that have seen the movie before and been involved in launches in this nature also serves to support the team in different areas to ensure that we have the expertise internally to be able to take us to the next level. And then also in anticipation for us to look at what's beyond transfusion. I mean, it's a bit early for us to focus on that, but I think it's important as we are designing, developing tests and assays that we have this as part of our focus. And so I think bringing Michael at this time is gonna help in this as well. So whether it's for the current menu or for future menu, I think it brings a lot of that experience and maturity for our teams to then deliver in a more effective, structured way.
Gotcha, okay. Earlier, JJ asked about B&B data for the IH menu. I'm curious as to the timing of B&B data that you plan to release for the expanded SDS 2.0 microarray? Will we see that prior to you starting concurrent field studies in Europe and the U.S. later this year?
Well, I can't answer that now. I think, again, to be honest, I even participated in the core team meetings myself, and we're still in conversations around that. I don't have a specific answer. It certainly will be our intent to share in the next weeks and months on the progress we've made in this area. It's something that certainly we can consider, but it's not something that we've decided at this time. I can understand how sharing some of this data will help people understand the progress we've made and the effectiveness of our solution, for sure.
Okay. Last one for Peter. Could you just quantify the magnitude of net pricing in the ALBA reagents business both for last year for fiscal 21 and what's embedded in the guidance for 22?
Net pricing was your question, Brandon?
That's right.
Okay. Yeah, well, so the pricing is really very different depending on the product, right? So it's a pretty wide range. Now, when it comes to the guidance for last year, there is a price decrease built into the contract of one of our very large customers, and that is baked into this guidance. which is why we anticipate to be the year-over-year growth for FY22 to be a little lower than what we saw maybe in the previous years. So that's probably the key background of your question. And, you know, giving an average pricing is difficult because of the broad range depending on the product.
Gotcha. Great. Thank you.
We have reached the end of our question and answer session. I would like to turn the conference back over to management for closing remarks.
Well, I want to thank everyone for joining us today on this call, and we look forward to updating you on the progress on the next quarterly discerning call. I really appreciate the questions and the open dialogue, and again, we look forward to speaking to you soon. So have a nice day, and thank you.
Thank you. This does conclude today's conference. You may disconnect your lines at this time. And thank you for your participation.