Enzo Biochem, Inc.

Greetings and welcome to the ENZO Biochem fourth quarter and full year 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. As a reminder, this conference is being recorded. I'd now like to turn the conference over to your host, Bob Yedit of LifeSite Advisors. Thank you. You may begin.

Thank you, Melissa, and good morning. Joining us today from the company are Barry Weiner, co-founder and president, and David Bench, chief financial officer. The news release announcing the results and the update was issued this morning and is available on the ENSO 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 and 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, revenue, 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, cost of goods and services, other expenses, government regulations, litigation, and general business conditions. We see the risk factors in the company's Form 10-K for the fiscal year ended July 31, 2021. Investors are cautioned that any forward-looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect 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 loss, income 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 its press release issued this morning. I'd like to now turn the call over to Barry Weiner, co-founder and CEO co-founder and president of Enso Biochem. Barry, please go ahead.

Thank you, Bob. Good morning and thank you for joining us on our full year business and financial update call today. We issued our fourth quarter and fiscal year 2021 financial and operating results earlier this morning. I hope you've been able to review them briefly. At the onset, I am pleased to report ENSO marked fiscal 2021, which ended July 31st, with many significant accomplishments. Fiscal 2021 was a validating and extraordinary year for ENSO as our team proved its strength in meeting the challenges of these unprecedented times. As we reflect on the events of 2020 to present, we are increasingly recognizing that the COVID-19 pandemic will be long-lasting, and remain a healthcare priority for some time. As populations increase their vaccination rates, employees return to offices, travel and leisure increases, and masking enforcement loosens, the need for some level of testing is likely to be ongoing. We at ENSO remain committed and are prepared for this fluid environment. After a bit of slowdown with the variant emergent this summer, testing needs have rebounded. More vaccinations, even with greater vaccine potency, should help moderate the course of the disease, as will greater and more careful adherence to masking and other precautions. The recent increase in infection rates demonstrates a new vigor of this virus and its ability to mutate. We intend to remain ready to introduce cost-efficient, flexible solutions to meet any of these new challenges when they arise. We are also committed to innovation with a go-forward strategy, capitalizing on our inherent demonstrated ability to remain at the forefront of scientific and medical innovation. As the market has evolved, we have focused on targeting new channels, including schools, pharmacies, and business as new venues for testing. We are extending our GenFlex platform that has processed hundreds of thousands of specimens this past year for COVID-19 to other diagnostic areas, such as women's health, upper respiratory infections, gastrointestinal infections, and sexually transmitted diseases. We are in the process of regulatory approvals for a number of additional tests to our GenFlex platform. Our pipeline of tests is available in the 10K released today. The pandemic resulted in vast changes in healthcare for practitioners and patients alike, and the impact is still very fresh in people's lives. While physician office visits are returning and hospital inpatient and outpatient services are operational, test utilization levels can vary greatly depending on geography and demographics. During the past year, we capitalized on our GenFlex molecular platform and developed enhancements and improvements to process hundreds of thousands of COVID-19 specimens. We also now recognize the shift in demand for molecular testing in a more direct and immediate setting, specifically at point-of-care facilities. We are actively involved in the strategic development and future commercialization of testing outside of a central lab, including point-of-care platforms and direct-to-consumer offerings. Point-of-care diagnostics require simple performance procedures and rapid, mostly within a half hour, of affordable and accurate results. Using ENSO proprietary capabilities, we have internally generated proof-of-concept strategies that open the path for future development, validation, and commercialization of these types of systems. In addition to our molecular diagnostic opportunities, our novel loop RNA technology targeting use for the study of gene structure potentially allows for better medical interpretation, accelerated drug development, and improved research capabilities. Earlier this year, ENSO's loop RNA probe was featured in an independent publication of work derived from our scientific collaborators in conjunction with ENSO scientists. The publication details improvements in in situ hybridization, reflecting higher sensitivity and lower background noise when compared to leading commercially available products and services. ENZO's probes uniquely identify a single genetic sequence within a cell without destroying the cell structure. This scientific advance allows for better medical interpretation, accelerated drug development, and improved research capabilities. It also may reduce the risk of false positives and false negatives for earlier detection on RNA-based infections such as human papillomavirus. We intend to provide updates on our Loop RNA technology in the coming months. During fiscal 2021, we further validated the strength of our strategy to transition to a more vertically integrated diagnostics company, supporting a new industry paradigm. Our scientific approach has enabled us to carve out a growing and important niche as an innovator with an eye on efficiencies, effectiveness, and affordability. Looking briefly at the ENSO financial summary, our fourth quarter and fiscal year financials, which David Bench, our CFO, will discuss in detail shortly, represented a period of solid execution, both operationally and financially. Quickly, I'd like to point to a few highlights. Our total revenue for the quarter was $24.8 million, an increase of 27% year over year. Fiscal year 2021 revenues were $117.7 million. This is up 55% year over year from the $76 million the year prior. We achieved impressive revenue growth in both the services and product segments this year, which were growth of 81% and 16% respectively. We also continue to focus on cost savings initiatives, and we were able to generate approximately 10 million in efficiencies throughout the full year. These results support the trend we have reported for several quarters, and we are extremely proud of the team's continued success. Looking briefly at the highlights of the fourth quarter and full year, In July, ENSO received an expansion of its emergency use authorization for the company's rapid extraction method on its proprietary test system for the detection of coronavirus SARS-CoV-2, including the genetic variants. The EUA enables laboratories to immediately use ENSO's faster extraction process to reduce the running time by over one hour. or more than 25%, enabling more test runs on a single instrument. Our success in winning the expanded EUA is another example of the differentiation that separates ENSO from many MeToo testing companies and keeps our products and services on the cutting edge of diagnostic technology. Our core focus remains on the development and application of high-value opportunities which we anticipate will provide meaningful long-term benefit to customers as headwinds remain in the reimbursement environment. The higher margins achieved by the vertically integrated model of our COVID-19 testing are being expanded to a spectrum of molecular and other tests. This is key to our 2022 and 2023 strategy. In June, ENSA performed a new collaboration with CLX Health, a developer of cloud-based solutions to provide rapid access to testing locations in New York and New Jersey for COVID-19 PCR tests that are required for international travel. Using this online service, travelers can schedule PCR tests immediately and receive results in advance of travel by using CLX Health's TrustAssure global testing platform. which includes COVID-19 testing partners in more than 81 countries. From a business development standpoint, we remain engaged regarding business partnerships and seek fresh opportunities for our proprietary products and services to add value across the broader testing market. These include possible tuck-in acquisitions that we can scale and will complement existing activities as part of our growth blueprint. Logistically, and from a manufacturing point of view, we have consolidated ENSO's campus to include GMP manufacturing, CLIA clinical laboratory services, R&D, sales, and marketing capabilities, all within four adjacent buildings on our Farmingdale campus. This integration includes the complete transfer of our Ann Arbor, Michigan manufacturing facility, which was finalized this summer as well. We expect to see the efficiencies of this initiative begin to be accretive in the second half of 2022. Now turning to the full year highlights. In April, ENSA received FDA clearance for our Ampi sample collection kit, which is now manufactured under GMP, for distribution under the emergency use authorization. The Ampi sample collection kit is now available for sample collection for COVID-19 testing protocols in the United States, which we expect to further utilize this winter as testing is expected to increase from Q4 levels. In March, the company showed results that indicate its GenFlex platform met new FDA guidance calling for COVID-19 testing developers to assess the impact of viral mutations on testing results. And in September, the FDA released additional conditions of authorization for certain SARS-CoV-2 tests that have received emergency use authorizations, requiring test makers to update authorized labeling and evaluate the impact of variants on test performance. We realize the importance of updating our tests and the needs to continuously evaluate the impact of these viral mutations on test performance. In January, ENSO received an expansion of its EUA from the FDA, authorizing the use of pooled samples containing up to five individual swab specimens with the AmpiProbe SARS-CoV-2 test system, utilizing these tests on three different platforms, including ENSO's proprietary GenFlex automated high throughput platform. The company received its initial EUA in July 2020, and its proprietary platform for the detection of SARS-CoV-2. In November of 2020, ENSO announced the appointment of two new directors to its board, Dr. Ian B. Walters and Dr. Mary Taglieri. Both are highly respected industry leaders with experience in a range of operational areas, including business development, clinical R&D, as well as regulatory and medical affairs. In October 2020, we announced a major milestone for the company when we launched Go Test Me Now. This online platform enables consumers to directly order physician-authorized lab tests, including COVID-19 molecular and antibody tests. Later this fall, we are planning to expand the Go Test Me platform to offer access to testing for sexually transmitted infections and are planning now for future offerings to include women's health panels, upper respiratory panels, and gastrointestinal panels. We believe that these expanded offerings will be attractive to consumers seeking ease of accessing these tests and reflect an important transition in consumer demand for direct access to testing services. And in October 2020, the company launched an affordable, small portable microprotein reader for use with the company's amino assays. and ultimately molecular diagnostics in providing new opportunities in point-of-care medicine, an area that we deem extremely important in the future. This device enables ENSO to offer a complete solution to academic, CRO, and industrial customers. It has been a very focused and a very busy year. On behalf of the management team, I want to reiterate that we are extremely grateful to all of our employees for their unwavering strength and commitment to ENSO during this time. This has been a challenging year, and we recognize the amazing work they have done today. We are confident in our strategic vision and our ability to execute on it in the year ahead. We have made many important transitions in 2021 and believe the ENSO team has laid the solid foundation from which we have pivoted to a vertically integrated, flexible diagnostics company. Before passing the call over to David, it's important to highlight the company's core objectives, which served us well in fiscal 2021, and remain a focus and discipline of ENSO today. First, we are transforming into an integrated end-to-end diagnostics product and solutions company, focusing on molecular and genomic analysis. Second, we are building out our four key platforms and technologies to address enhanced value in the diagnostic sector. Third, we are building and investing in our infrastructure for growth. And fourth, we continue to implement efficiency measures to better bring in line our cost structure with the market needs. It is critical to stress management's commitment to these objectives, as today I can confidently say We have executed across all four of these pillars. As we've prepared for fiscal 2022 several months ago, the management team with the support of the board have outlined the following core objectives to be the guiding principles in fiscal 2022. First, strategic alignment, partnering with government associations, as we have done with the Suffolk County of Long Island in terms of being a provider of COVID-19 testing to that regionality. associations of other business in nature, as well as key industry leaders to accelerate the commercialization of ENSO's proprietary platforms. Second, we are focusing on product and service expansion, expanding our test menu on the GenFlex platform and expanding cost-efficient platforms for diagnostics purposes and leveraging new business channels. And third, expanded efficiency measures. building on the operational and the financial achievements of 2021. As you can see, we are attacking the future with determination and vigor. The ENSO spirit of innovation is alive and well. The opportunities are numerous, and our optimism about what we have done and what we expect to accomplish we really believe knows no bounds. The year has been a remarkable year on so many fronts. With these insights, I would like to turn the call over to David Bench, our CFO, who will give you a little more detailed review of the fourth quarter and fiscal 2021 financials. Dave.