Trinity Biotech plc

Greetings and welcome to the Trinity Biotech Corporate Update Call. At this time, all participants are in a listen-only mode. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Eric Ribner. Thank you, Mr. Ribner. You may begin.

Thanks very much, and thank you for all for joining us today to review Trinity Biotech's entry into the wearable biosensor market and associated intended partnership with Bayer. and its amended credit agreement and strengthened investment relationship with perceptive advisors. We will also touch on the company's Q3 2023 results. Joining us on today's call are John Gillard, Chief Executive Officer, and Des Fitzgerald, Chief Financial Officer. Before we begin, please note that statements made during this conference call may be deemed forward-looking within the meaning of federal securities laws. These statements are subject to known and unknown risks and uncertainties that may cause actual events to differ from those expressed or implied in such statements. These risks include but are not limited to those set forth in the risk factor statement in the company's annual report on Form 1020F with the Securities and Exchange Commission. Trinity Biotech undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrence of unanticipated events. Please also note that description of the transactions on today's call do not purport to be complete. and is qualified in its entirety by reference to the transaction documents which will be included in form 6K to be filed with the U.S. Securities and Exchange Commission. With that said, I will now turn the call over to CEO John Gillard, after which we will open, after which we will let you know that you can ask us questions by using the email associated on the press releases. John, the floor is yours.

Thank you, Eric. Hello, everyone. I'm very excited to speak to you today in my first investor conference as CEO about the recent waveform transaction, which we believe marks the beginning of Trinity's transition into a global leader in wearable biosensor technology. Behind the scenes, we've been spending a significant amount of time evaluating options to drive the company's future, and I'm eager to tell you about our vision and plan moving forward. We have engaged a group of industry-leading consultants with whom we have collaborated to assess markets, conduct extensive technical due diligence, and map out development and commercialization scenarios. We have combined this work with Trinity's 30-year healthcare industry experience and the insights that our new management team brings from other industries and companies to develop our reinvented vision for Trinity, a vision built around the modern technology and healthcare landscape. This vision is ultimately focused on developing a range of wearable biosensors to deliver analytically driven health and wellness insights based upon what is happening in, on, and around the body. Compared to sporadic and or infrequent lab testing that combines disjointed small and often analyte data sets biosensors have the capability to regularly and frequently capture large, enriched, and digital data sets. We believe this will be critical in training and fueling the next generation of diagnostics and wellness insights, which in our view will be powered by artificial intelligence. Of the three pillars required to build artificial intelligence-powered diagnostic and wellness insight models, two of them being software and computing power, are relatively broadly available through cloud computing services. It's the third, access to large accurate data models that we believe is likely the largest constraint to development and where we believe biosensors can play a critical role. On this call, we will explain why we found the opportunity so compelling and why we think that Trinity can succeed in this large developing and important market. Those who have followed Trinity's story know that we have been providing accessible, high-quality HIV diagnostics throughout the world since 1996 and currently manufacture over 30 million diabetes HbA1c tests annually. Leveraging these strengths, we are now reinventing and repositioning our company towards a future in wearable biosensor technology and artificial intelligence-driven insights. we've acquired a wearable biosensor technology platform from Waveform that offers a proprietary needle-free, reusable, and affordable continuous glucose monitor, or CGM. We believe that this Trinity biosensor technology will initially allow us to launch a state-of-the-art CGM that delivers a lower annual cost of care compared to the current main market participants. This should allow us to bring this important care solution to the vast number of potential users who currently don't have access to this technology due to the cost of care of existing solutions. These people can be, one, users in low or middle income countries where public or private payer resources are insufficient to provide broad access to CGM. As I will talk through later, many of the countries where diabetes is growing at its fastest rate are lower middle income countries. meaning this is an ever-increasingly important problem to solve. And two, diabetics in high-income countries where public or private payer budgets are exhausted by paying for the current CGM solutions across only a portion of the diabetic population. Frequently, this shortfall is attributed to financial constraints, and many countries only cover insulin-dependent diabetics rather than offering the solution to non-insulin-dependent or pre-diabetics who could use CGM to manage and prevent the progression of their condition. As we all know, prevention is better than cure. The acquisition of the Trinity Biosensor Technology was made on what we believe are attractive terms, and I will walk you through those specifics shortly. Our development and commercialization of this new technology will be supported by existing capabilities. In high-volume, high-quality medical device manufacturing, and global regulatory and distribution expertise. We expect to kickstart our scaled commercial launch of this new technology through commercial partnerships, the first of which with Bayer in China and India, we are delighted to also announce today, and which we will speak more about later on this call. Trinity has a long history of working as a key partner with some of the largest healthcare industry participants globally. And we look forward to building a strong and mutually beneficial relationship with Bayer. As I mentioned, in the Trinity Biosensor Technology, we have acquired an innovative wearable biosensor technology, which we believe has applications beyond CGS in being a key data capture component in the move towards artificial intelligence-driven diagnostics and wellness insights. At an industry level, going forward, we expect that developments in artificial intelligence, including machine learning, provide immense opportunities to deliver personalized, visible, and actionable health and wellness insights to users. This is where we believe diagnostics is going. However, a foundational requirement to capture such insights will be the convenient capture of accurate, multifaceted data points about what is happening in, on, and around people's bodies. As such, we believe that the delivery of an accurate, multipurpose wearable biosensor technology can, unlike existing solutions that arguably only offer a pinhole view of what is happening, instead effectively be a window into people's health and will be absolutely key to unlocking the value from these broader technology revolutions. And we intend to build that data capture technology in tandem with developing a sophisticated and multipurpose analytical platform that can deliver insights to digital devices, including smartphones, smartwatches, et cetera. The Trinity Biosensor CGM has a number of attractive points of differentiation versus the current market-leading devices. Notably, it features proprietary needle-free insertion, of the wearable biosensor, which reduces pain and tissue trauma at the injection site and also offers more user comfort. All other major marketable wearable CGM devices require a needle, which creates trauma at the injection site by puncturing the skin. And this needle is then withdrawn and needs to be disposed of together with its applicator. In contrast, The waveform device allows for reusability of the applicator as there is no need for disposal. In addition, all of the components of the CGM solutions offered by the current main market participants must be discarded in their entirety after use, i.e. 10 days to two weeks. This includes the battery, electronics, and plastic housing. In contrast, the main components of our new technologies, including the battery, electronics, and applicator, are reusable for up to two years, resulting in a lower cost of goods in terms of an annualized cost of solution and substantially less waste from an environmental perspective. The reusable nature of our electronics allows for the cost-effective incorporation of additional sensor technology, details of which we will keep confidential for now given commercial sensitivities but we will update the market on these in due course. These features make the product ideal for low to middle income countries where cost sensitivity can be a gaining factor to scale CGM adoption and should significantly reduce the cost of care to both patients and payers alike in higher income countries, allowing for a broader adoption of CGM as the standard of care for diabetics. The generally accepted measure of CGM accuracy is mean absolute relative difference or MARD. The waveform device achieved CE mark approval in 2019, and published clinical studies have demonstrated a MARD of less than 10%, which is brought in line with the published MARD of the main market participants. While the waveform device was commercially launched in a limited number of European countries, we are not going to continue sales of the current device. as we believe it would benefit from upgrades in its feature set, considering today's user expectations, including in terms of calibration frequency, look and feel, plus manufacturing process improvements to facilitate manufacture at high volume. After our extensive technical due diligence and development road mapping, in partnership with an internationally recognized technical consulting house, we have identified a discrete number of product and process improvements. In particular, we, as an experienced and high-volume manufacturer of quality medical devices, have identified manufacturing improvements that can improve real-world performance and user experience. These enhancements should fundamentally upgrade the product feature set and performance and deliver a more consumer-friendly and compact product. Our immediate plan which we have already started, is to execute on these enhancements and confirm their impact in a clinical trial, which we aim to begin in 2025. In order to drive this program, we have hired a number of senior waveform leaders and are engaging internationally recognized external experts to augment our internal resources. We will update the market on our progress in due course. It's important to note that we are not starting from scratch. Although we are not continuing sales of the current version of the Waveform product, we are going to build on that significant prior investment foundation on earlier device development. We understand that over $100 million has been spent two days on the Waveform technology. We expect to complete final improvements through commercial relaunch with a relatively modest incremental outlay compared to the size of the financial opportunity that exists for this technology. This investment allows us to reinvent trilogy by better utilizing our existing platform of capabilities in the medical devices space to bring cutting-edge technology through to its final stages of development and commercialization in high-value and expanding markets. We believe that an opportunity like this to acquire well-progressed but not yet market-optimized technology on attractive terms provides an exciting and compelling opportunity for our investors to benefit from significant capital value growth. The market for CGM is clear and proven, with the two largest players in the market, Dexcom and Abbott, both currently generating revenues of greater than $1 billion a quarter, based on recently disclosed information. As I've mentioned, we believe that the reusable nature of the sensor applicator, battery, and electronics has a significant impact in terms of the cost of goods of an annual solution using our technology. This can translate into a lower cost of care solution and a significantly lower environmental impact. Trinity's reusable applicator is extremely environmentally friendly when compared to the disposable technology of market-leading devices. Our competitors discard approximately 50 to 70 applicators for every one applicator discarded by Trinity's acquired CGM system, depending on the use life of the competitor product. In addition, by discarding batteries, transmitters, and circuitry with each sensor, our competitor's solutions generate significant pollution and cost. Our reusability is a strong differentiator, as it reduces pollution and waste while also allowing a lower cost solution to users. Additionally, As we look to expand our biosensor capability across other areas, the reusable device should allow for the cost-effective incorporation of additional sensing capability into the device to make it multifunction and increase its measuring capability.