Enzo Biochem, Inc.

Greetings. Welcome to Enzo Biochem third quarter 2021 financial results and business update. At this time, all participants are in a 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'll now turn the conference over to your host, Jeremy Pfeffer.

You may begin. Thank you and good afternoon. Joining us today from the company are Barry Weiner, co-founder and president, and David Bench, chief financial officer. A press release announcing the results and the corporate update was issued this afternoon and is available now on the ENZO website. I will now read the company's safe harbor statement. Except for historical information, the matters discussed in this news release may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934 as amended. Such statements include declarations regarding the intent, belief, or current expectations of the company and its management, including those related to cash flow, gross margins, revenues, and expenses, which are dependent on a number of factors outside of the control of the company, including the markets for the company's products and services, costs of goods and services, other expenses, government regulations, litigation, and general business conditions. Please see risk factors in the company's Form 10-K for the fiscal year ended July 31, 2020. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results. The company disclaims any obligations to update any forward-looking statement as a result of developments occurring after the date of this conference call. During this conference call, the company may refer to EBITDA, a non-GAAP measure, EBITDA is not and should not be considered an alternative to net income or net loss, income or loss from operations, or any other measure for determining operating performance. The company has provided a reconciliation of the difference to GAAP on its website, www.enzo.com, and in its press release issued this afternoon. I would now like to turn the floor over to Barry Weiner, co-founder and president of Enzo Biochem. Barry, please go ahead.

Thank you, Jeremy. Good afternoon and thank you for joining us on our quarterly business and financial update call today. We issued our third quarter fiscal 2021 financial and operating results after the close of the market today, and I hope you've been able to review them briefly. The past quarter and indeed the year has been one of challenges and opportunities as COVID-19 dominated the healthcare industry and a good part of the world news it absorbed. This proved to be a double-edged sword for ENZO. The pandemic resulted in vast changes in healthcare for practitioners and patients alike. Physician offices were shut down with all but emergency testing and treatments undertaken. Academic institutions were initially closed and remained partially so in the following months throughout the country and internationally, impacting demand for clinical and diagnostic supplies. At the same time, massive testing became an international mandate, with ENSO rising to the challenge by providing actionable, accurate, and timely diagnosis for individuals, industry, and educational institutions, among others. For ENSO, it was an environment in which we proved our mettle. We successfully transitioned into COVID-19 with record revenue growth and operating profitability. We demonstrated our scientific expertise flexibility, and nimble operating environment. Our capabilities were also reflected in the promptness and effectiveness with which we deployed our products and services to our community as the pandemic intensified. During this period, we demonstrated the validation of our strategy that was developed and implemented of being a vertically integrated diagnostic company, supporting a new industry paradigm. This contributed to our success of both sustaining and growing our testing capabilities during the most severe supply chain crisis in recent history. It also enabled us to drive enhanced margin improvement in our laboratory operations, counter to the rising cost structure of the environment. Our structure afforded us independence, volume growth, and profitability. Our third fiscal quarter, which our CFO, Dave Bench, will discuss in detail shortly, represented another solid period, both operationally and financially. Quickly, I would just like to highlight a couple of financial points to start. Our total revenue for the third quarter was $32.8 million, an increase of 94% year over year. We achieved gross margins of almost 50% and adjusted EBITDA of $2.7 million, resulting in a $9.7 million improvement from last year's third quarter. These results solidify the trend we have posted over the last several quarters, and we are extremely proud of our team's continued success. I'd like to review some highlights for the third quarter. Our core focus remains on the development and application of high-value opportunities, which we anticipate will provide meaningful initiatives as headwinds remain in the reimbursement environment. The higher margins achieved by our vertically integrated model of our COVID-19 testing are being extended to an increasing range of molecular tests, as well as other types of testing beyond molecular, a cornerstone of our growth strategy. Our open system approach on GenFlex, our molecular platform allows for the highest levels of flexibility and adaptability in the post-COVID-19 environment. The platform's open system architecture enables laboratories to use ENSO's lower-cost reagents or other third-party reagents with ease and flexibility. Within a month, our clinical lab will have installed approximately 20 GenFlex diagnostic platforms, each capable of generating multimillion dollars of annual molecular testing. From a business development standpoint, we are actively engaged in detailed discussions regarding business relationships and partnerships that will enable us to pursue fresh opportunities for our proprietary products and services. These include possible tuck-in acquisitions that will complement existing activities as part of our growth blueprint. In addition, from an approval standpoint, we were pleased to receive FDA EUA clearance for AMPE sample collection kit, which is now available for COVID-19 testing protocols throughout the United States. Another key proprietary innovation that we anticipate will be a strong commercialization opportunity in fiscal year 2022 is our loop RNA probe technology. ENZO's loop RNA probe approach was featured in an independent publication of work derived from ENZO's scientific collaborators in conjunction with ENZO scientists. It details improvements regarding in situ hybridization, reflecting higher sensitivity and lower background noise when compared to current leading commercially available technologies. ENSO's probes uniquely identify a single genetic sequence within a cell, but without destroying the cell structure. This allows for better medical interpretation, accelerated drug development, and improved research capabilities. Our innovative technology may reduce the risk of false positives and false negatives for early stage detection of HPV or human papillomavirus and potentially other RNA-based infections. It's a technological advancement that may have broad implications in the future testing and in drug development. On a logistical front, we are integrating ENZO's campus to include GMP manufacturing, our CLIA clinical laboratory, R&D, as well as sales and marketing capabilities, all within four adjacent buildings at our Farmingdale campus. This integration includes the forthcoming closure of our Ann Arbor, Michigan manufacturing facility this summer. In February, we announced the issuance of a U.S. patent for polyclonal antibodies against the osteoporosis drug target sclerostin. And more recently, in fact, just last week, ENSA received approval from UnitedHealthcare, the largest insurance provider in the United States, as a designated diagnostic provider. This means that UnitedHealthcare members will be guided to labs such as ours for non-emergent lab services, which should expand the amount of products and services we already deliver to UnitedHealthcare customers and members. Focusing on a post-COVID strategy, ENSO successfully navigated the most challenging times of COVID-19. As we indicated last quarter, we have already begun implementing our strategy for a post-COVID environment. With the successful rollout of the vaccine program in the United States, having just hit 42% of the total population fully vaccinated last week, the company has begun implementing operational protocols and a modified sales strategy to address the realities of a post COVID-19 pandemic environment. We were well positioned prior to the COVID-19 pandemic, having successfully navigated our team through these difficult times, and we are confident we will navigate successfully out of the COVID-19 environment. Our ability to change in the COVID environment is indicative of our team's ability to adapt with the times. Just as our teams did at the start of the pandemic, our teams now must remain nimble to the reopening and meeting our customers, vendors, and partners' needs as they evolve. While they still haven't fully recovered, we see the gradual return to regular doctor's visits. On the product side, academic institutions remain partially closed throughout the country. However, in speaking with these customers, we anticipate the majority of these academic institutions plan to reopen by the end of the summer and then reach full capacity by the end of the year. We expect COVID-19 testing to continue due to travel, return to the workplace and the reopening of entertainment venues, albeit tapered to lower levels. We are adjusting and implementing our post-COVID business strategy as follows. On the product side, we have shifted our sales focus from academia to industry. On the services side, We are expanding from primarily doctors to include lab-to-lab and commercial opportunities. Providing a little more color, I would like to take a minute to add on our strategy in the post-COVID environment and the opportunity that now exists. ENSO's go-forward commercial strategy is clear. We are leveraging our higher margin testing model demonstrated during COVID-19 to other markets, such as women's health, sexually transmitted diseases, and other testing needs based on the applications and versatility of the Genfex molecular platform. The platform has already been scaled commercially in our internal lab as we have been processing thousands of specimens per day on our proprietary installations. We are also in the early stage of commercialization into laboratories, academic institutions, and other commercial entities throughout the country. We are currently validating test menus and panel extensions to drive utility in the high-volume molecular space. These areas include chlamydia, gonorrhea, trichomonas, human papillomavirus, and ENSO's full women's health panel. Management will follow this molecular diagnostic test rollout with cost-effective, flexible solutions involving other technologies and platforms, including cytology, immunology, immunohistochemistry, and other key clinical areas. In conclusion, on behalf of the management team, I want to reiterate that we are extremely grateful to all of our employees for their perseverance and dedication to the healthcare providers and patients we serve. We made important achievements in the first nine months of fiscal year 2021, and we are confident our strategic vision and our ability to execute on it in the year ahead. ENSO had another strong quarter as we reported in the recent three-month period ended April 30th. This is evidenced by the results we announced today. We are delighted to be in such a solid position at this point in 2021. Our results for the quarter demonstrated solid achievements Total revenue was 32.8 million, a year-over-year improvement of 94% in revenue. Consolidated gross margins increased to 49%, improving 2,300 basis points year-over-year. GAAP earnings per share was a positive 4 cents for the quarter versus an EPS loss of 21 cents in Q3 2020. An adjusted EBITDA of 2.7 million, compared favorably versus an adjusted loss in the corresponding period a year ago of $7.1 million, an improvement of nearly $10 million. These are just highlights of the quarter's financial accomplishments, which David will expand on in greater detail. Before elaborating further on the quarter, it's important to highlight the company's core objectives, as we have outlined before. It is critical to stress management's commitment to these objectives as they are fundamental to the continued success of ENSO. First, we are transforming into an integrated end-to-end diagnostic products and solutions company. Second, we are building and investing in our infrastructure for growth. Third, we are implementing efficiency measures to better bring in line our cost structure with the market needs. And fourth, we are building out four key platform technologies to address enhanced value in the diagnostic sector. I believe it's important to reiterate these objectives, once again, as they have accelerated ENSO's position as a leading vertically integrated end-to-end diagnostic company. ENSO continues to build its reputation outside of the medical lab community now as it expands testing access on its GoTestMeNow online platform. Our go test me now online portal is our first direct to consumer offering that brings quick, convenient testing to individuals overseen by licensed physicians. We expect this platform to extend this offering to other types of testing within the next few weeks. We finished the third quarter with greater clarity across the business and are targeting full year profitability for our fiscal year ending in July in July. Looking forward, I believe our robust progress for the first three quarters of fiscal 2021 reflects the strong foundation that we have built during the most challenging environment. We are excited for what is the next phase of growth at ENSO as we transition into a post-COVID environment with a new appreciation for cost-effective testing globally. With these insights, I would now like to turn our call over to David Bench, our CFO, for a more detailed review of our third quarter 2021 financials. Thanks, Barry.