Enzo Biochem, Inc.

Greetings. Welcome to the Enzo Biochem first quarter 2022 financial results and business update conference call. 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 will now turn the conference over to your host, David Holmes of LifeSci Advisors and Investor Relations for Enzo Biochem. You may begin.

Thank you very much, Operator, and good afternoon, everyone. Joining us today from the company are Hamid Irfanian, Chief Executive Officer, and David Bench, Chief Financial Officer. ENSO issued a press release detailing its financial results for the first quarter this afternoon and is now available on the Investor Relations section of the ENSO website. Before we begin, I would like to read the company's safe harbor statements. 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 expectation 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 company's control, including the markets for the company's products and services, costs of goods and services, other expenses, government regulation, 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 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 obligation to update any forward-looking statements as a result of developments occurring after the date of this conference call. During the 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 loss from operations or any other measure of determining operating performance. The company has provided a reconciliation of the difference to GAAP on its website and in its press release issued this afternoon. I would now like to turn the call over to Hamid Arfanian, Chief Executive Officer of Enzo Biochem. Hamid, please go ahead.

Thank you, David. Good afternoon, and thank you for joining us on our first quarter business and financial update call today. I'm extremely excited and encouraged to join Enzo Biochem. I've admired Enzo from afar for its technological and development contributions recognized throughout the industry. While I have been at the helm for a little over a month, been welcomed by management and staff and have been impressed by the level of expertise and dedication of our team. I look forward to building off of the strong foundation and setting a vision and establishing strategies in the following areas. First, market expansion of the current product portfolio. Second, commercialization of diagnostics platforms. Third, utilizing the clinical services segment to benefit of life sciences and diagnostics segment of our business. We expect the implementation of these three strategies will set us on a path toward overall sales and market share growth. We issued our first quarter 2022 financial and operating results just after close of the market. I will begin today's conference call with a summary of the quarter, highlighting notable achievements, and then provide some perspective on the current testing and life sciences market, also providing some clarity and insight into the vision, of the years ahead. Afterwards, I'll pass the call over to Mr. David Bench, the company CFO, to review the financials in greater detail, and then we will open the call for question and answer session. The company's accomplishments during the first quarter have positioned it extremely well to execute into the future. specifically the consolidation of our manufacturing facilities from two locations, Michigan and New York, to the recently completed and redesigned campus at our Farmingdale, New York headquarters. This was a massive undertaking, and I'm very proud to announce that the completion of this milestone happened in October. Enzo first announced this initiative back in June of this year. By bringing these operations under one roof, the company would be able to leverage a series of operational, logistical, technological, and headcount efficiencies which would not have been otherwise achieved under the two-location model. As is to be expected with transition of this magnitude, the Life Sciences Division incurred some added one-time costs related to investments in staffing and temporary delays. These costs were anticipated and part of our budget for the project, but understandably affected the first quarter's financials. While the benefits will accrue over time, We expect to see efficiencies of these initiatives begin to be accretive in the second half of fiscal year 2022. Processes such as these can be complicated and lead to disruption within the operations, and I credit the team with executing an efficient and smooth transition and relocation. ENZO's consolidated campus now combines both logistical and manufacturing benefits, which includes expanded GMP manufacturing and future ISO 13485 capabilities, which includes ISO 9001. Additionally, within the campus, we have our CLIA laboratory services, R&D facilities, sales and marketing capabilities, and executive presence all within newly renovated buildings adjacent to one another at our Farmingdale, New York location. Our centrally located campus in the middle of Long Island offers convenient commuter access to attract our growing need for personnel while also allowing convenient collaborations among leading medical centers, research facilities, and hospitals less than an hour outside of New York City. By investing in our infrastructure growth, we are able to implement greater cost savings and efficiencies that are giving us a competitive edge as we implement the ENSO integrated end-to-end diagnostic products and solutions model. The company has continually focused on cost-saving initiatives and generated in excess of $10 million in these efficiencies throughout 2020 and 2021 year, and the company projects additional savings going forward. Over the past year and a half, we have generated revenues in excess of $50 million based on our proprietary GenFlex platform at Enzo Clinical Lab, enabling our company as a formidable provider of testing for our region. The platform currently runs COVID-19, which includes testing for Omicron variant currently spreading throughout the United States. During the global pandemic, to the credit of the team the company was able to launch the COVID-PCR assay and bring on board a complex molecular platform navigating through a complex FDA EUA process and subsequently generate nearly 1 million test results. Furthermore, in order to gain efficiencies and cost savings, The team worked on means of streamlining the workflow of the GenFlex platform at a highly profitable level, thereby setting a model for other labs to benefit from this commercial system. This was all accomplished in the headwinds of an environment where supplies were limited or non-existent and personnel were not readily available. We've been in the process of commercialization of this platform and are working through cell cycles to place them into laboratories in multiple geographies. Most recently, we have introduced enhancement to our proprietary GenFlex platform, currently operational in our clinical laboratory, including providing a more streamlined workflow which improves the platform's overall cost structure. This feature shortens the turnaround time from sample collection to result. Innovation is continuing at Enso as we continue to enhance, improve, and drive our technologies and platforms to gain a competitive edge in the industry. An example of this is expansion of our product offering through advanced development of a novel molecular point-of-care technology that could address the national need for rapid turnaround time, cost-effective solutions with high sensitivity and specificity. Furthermore, ENSO has expanded its comprehensive intellectual property portfolio via a new patent application with regards to our point-of-care platform, which covers the ability to streamline sample processing and accelerate the rate by which results can be obtained by the physician. We are confident this will result in more affordable and easier-to-use platform while providing testing closer to the patient. Now turning to the lab services side of the business. As management has discussed extensively, and I would like to reiterate, we expect that the COVID-19 pandemic and the need for testing will continue into foreseeable future and remain a healthcare priority for some time. We continue to anticipate ebbs and flows of demand with regard to testing as multiple variables such as a drastic effect on testing volume such as vaccination rates, waning efficacy of antibodies, new variants such as Omicron variant, approved therapeutics, and evolving government guidelines. Our society is becoming increasingly frustrated with a desire to get back to the office travel freely, and in general, return to some social normalcy. Fortunately, ENSO has remained committed and prepared for this fluid environment. We are ready and operational and armed with cost-effective, flexible solutions to meet new testing and diagnostic challenges. I would like to reiterate the confidence I have in the strategy outlined in the past. As end user demand has evolved, we have focused on providing services to our existing customers while targeting new channels, including schools, pharmacies, which are new venues for testing for ENZO. I am proud to report that the first quarter, our team was able to add over 70 new customers, key to building off of our base and expanding our customer reach. Enzo Clinical Laboratories continues to thrive, and we are very proud of the team's achievements. During fiscal year 2022, we will have special focus on ways of leveraging the clinical service segment of our company to provide clinical verification samples and services capabilities tailored for the diagnostic segment. I will provide additional details on future quarterly calls. In addition, expansion into the direct consumer market that ENSO launched in fiscal year 2021 is very exciting. Go Test Me Now is an important platform as it provides access to patients to control their own healthcare. This has been embraced largely in clinical diagnostics marketplace. ENSO is poised to serve that market. And so far we have received inbound interest from customers outside of our typical customer base. The recent launch of sexually transmitted infection or SDI testing using the platform expands that offering and we anticipate additional growth in that space. As physician office appointments are still below typical levels in tri-state area, it is critical that ENZO provide diverse testing services to serve and anticipate changes in patients' behavior. With these insights, I would like to now turn the call over to our CFO, Mr. David Bench, for a detailed review of our first quarter financials. David?