Co-Diagnostics Inc New

Good day, and welcome to the Co-Diagnostics, Inc. fourth quarter and full year 2021 earnings call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star, then 2. Please note this event is being recorded. I would now like to turn the conference over to Andrew Benson, Head of Investor Relations. Please go ahead.

Thank you. I am Andrew Benson, and joining me this afternoon are members of the Co-Diagnostics Management Team, including Dwight Egan, Chief Executive Officer, and Brian Brown, Chief Financial Officer. We will begin the call with management's prepared remarks and then open up the call to questions from our analysts. Before we begin, we would like to inform the listeners that certain statements made by co-diagnostics during the course of this call may constitute forward-looking statements. Any statement about company expectations, beliefs, plans, objectives, assumptions of future events or performance are forward-looking statements. For example, statements concerning 2021 financial and operational guidance, the development, regulatory clearance, commercialization, and features of new products, plans, and objectives of management and market trends are all forward-looking statements. The company believes these statements are based on reasonable assumptions. However, these statements are not guarantees of performance and involve known and unknown risks and uncertainties that may cause the actual results to be materially different from any future result expressed or implied by such statements. Important factors which could cause actual results to differ materially from those in these forward-looking statements are detailed in co-diagnostics filings with the SEC. Co-diagnostics assumes no obligation and expressly disclaims any duty to update any forward-looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events. In addition, the company may discuss certain non-GAAP financial measures during today's call. These non-GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. We refer you to the company's earnings release out shortly before this call, which may contain reconciliations to the non-GAAP financial measures presented to the most comparable GAAP results. At this time, I would like to turn the call over to Co-Diagnostics Chief Executive Officer Dwight Egan. Dwight?

Thank you, Andrew, and thank you all for joining us. On this call, we will provide an overview of our results for the quarter and for the year, updates on key financial performance metrics, and discuss progress against our strategic initiatives. After, we will open the line for questions. Our performance in the fourth quarter contributed to what was an impressive year for co-diagnostics, both from an operations and execution perspective. The dedication of our team, along with our innovative product portfolio, drove strong sales and gross margin performance. We remain committed to improving the health of our balance sheet, which remains strong, and has allowed us to opportunistically invest in growth opportunities that will drive future shareholder value. Most recently, we completed the acquisition of Idaho Molecular, Inc. and Advanced Conceptions, Inc., providing co-diagnostics with all existing and future assets and intellectual property related to the company's proprietary and innovative at-home point-of-care diagnostic device. The acquisition, first announced on December 22, 2021, is expected to streamline the commercialization of our COTI-X YourTest PCR device as it nears completion. The device has been designed to accommodate multiplexed assays as the company expands its future suite of products to include additional respiratory, STI, and other infectious diseases, utilizing our patented co-primer technology. We strongly believe this technology will enable us to reach a broader and more diverse universe of customers. We remain committed to investing in the platform and recently welcomed two new team members that will further oversee the product's development. Dr. Kirk Ryrie and Dr. Carl Witwer, pioneers of rapid and real-time PCR and key personnel in the platform's development to date, were named president of the wholly owned subsidiary and chairman of the company's scientific advisory board, respectively. The chief science officer of CoDiagnostics' newly acquired subsidiary is Mark Poritz, PhD, a Harvard University and UC San Francisco educated molecular biologist with more than 30 years of experience in the application of PCR and related methods to gene cloning, drug discovery, infectious disease diagnostics, and aptamer selection. While at BioFire Diagnostics, Dr. Poritz led the molecular biology development for the FilmArray IVD platform. Dr. Poritz has served as a reviewer for more than 30 different NIH, NI, AID study sections focusing on infectious disease diagnostics. We are also pleased with the recent addition of three new members of our scientific advisory board. Starting with Dr. Ann Wiley, a research scientist of epidemiology at Yale School of Public Health. Dr. Wiley validated and optimized saliva for SARS-CoV-2 detection and developed SalivaDirect, a simple, scalable, and importantly, cost-effective method to help alleviate SARS-CoV-2 testing demands. Dr. Karen C. Carroll, M.D., Professor of Pathology and Director of the Division of Medical Microbiology at Johns Hopkins University School of Medicine, joins us, contributing significant knowledge and experience in medical microbiology and infectious diseases. Finally, we welcome Noriko Kusakawa, Ph.D., and former ARUP Laboratories Vice President of Innovation and Strategic Investments. We are excited to welcome these impressive individuals to the Scientific Advisory Board, and we're confident that their knowledge, guidance, and expertise will help us achieve further growth and profitability. As we move forward with our new team, the strategic vision of co-diagnostics is built on the following four pillars. Number one, COVID-19 with its variants will be a permanent endemic disease. along with the many other endemic infectious diseases circulating throughout the world, just like they did before COVID. As COVID-19 continues to spread, the virus has more opportunities to mutate, potentially resulting in mutation characteristics that increase its spread. Other infectious diseases will also need to be diagnosed and differentiated from COVID-19. Dr. Michael Osterholm recently commented on a blueprint to a new normal in dealing with COVID-19. He said, we're not going to get rid of COVID. It's not going to happen. He also said we can do much better with testing. We believe we are well positioned to address the ongoing testing needed for this disease, along with the many others that exist today. Pillar number two, Inexpensive at-home and point-of-care diagnostics will be utilized everywhere worldwide. Dr. Scott Gottlieb, former FDA commissioner, asserted that testing needs to be operationalized with regular testing and reliable protocols to normalize society. To go back to school, to go back to work, or to travel, regular testing with reliable protocols will need to be done. We agree with Dr. Gottlieb and believe at-home testing will become ubiquitous. and that the at-home rapid test is probably the biggest paradigm shift and change in regulation of medical products to come out of the pandemic. Dr. Gottlieb goes on to say, this is going to open up a whole new field of at-home testing for a range of pathogens. I want to repeat that. This is going to open up a whole new field of at-home testing for a range of pathogens. Going on to pillar number three, The CoDx YourTest PCR platform is the exact prescription for addressing a whole new field of at-home and point-of-care testing for a range of pathogens, meaning infectious diseases that can be detected with real-time PCR enhanced with multiplexing. Finally, pillar number four, CoDiagnostics believes the CoDx YourTest platform includes certain key differentiators compared to other less robust at-home and point-of-care systems. Codex test results are PCR gold standard results compared to less accurate antigen test results. Moreover, going forward, our system will facilitate significant multiplexing results compared to other non-PCR technologies that, while molecular, are too expensive and do not provide the same robust multiplexing opportunities as real-time PCR. Many diseases present with similar symptoms. Syndromic panel testing or testing of several infections with one patient sample with a single test, such as flu A, flu B, RSV, and COVID, will provide more robust testing with multi-target differentiation from a single sample than is possible in non-PCR-based testing protocols from our competitors. To reiterate, the CODI-X YourTest PCR platform takes about the same time and will cost about the same as antigen tests. but the results are gold standard PCR instead of the less reliable antigen tests. Compared to other non-PCR molecular tests, the COTIX YourTest PCR platform will cost significantly less and has more robust multiplexing capabilities. Our platform delivers all three testing objectives of affordable testing, fast and gold standard accuracy. It then goes further to provide robust multiplexing enhanced by co-primers, our patented and proprietary PCR technology. We believe that our new powerful platform represents the future of at-home and point-of-care testing. We continue to invest in the platform and expect that it will drive significant growth and expand our market reach. There is a substantial domestic and international market that remains for COVID-19 testing. especially for advanced and innovative technologies such as the Codex YourTest PCR platform. Our team is highly focused and committed to bringing this exciting device to commercialization. The time required to prepare the device for clinical trials has, unfortunately, been extended. This extension is due to a number of factors, including a major user factor study, that was conducted in order to meet regulatory requirements for a device with an even broader market potential. This study is required in order to simultaneously submit for clearance for both direct saliva and swab samples. Receiving this clearance is critical because the use of swabs will be necessary to collect samples from the throat, such as for Strep A, or from other sample sources associated with STIs. As our knowledge and understanding of COVID has continued to mature, it has presented opportunities to future-proof the device and testing platform. We are firm believers that if a device requires the fewest possible changes to clinical practice, it will accelerate the adoption of the device by experts. Our goal is to deliver a device that is accurate and reliable and becomes a standard in PCR testing. We have focused our efforts on optimization that will enable our instrument to achieve the highest possible standards of performance. Our world renowned design and engineering experts have brought incredible innovation and expertise to this device. And our goal is to position the company as a platform that will significantly contribute to the ongoing science of real time PCR applications in at home and point of care settings. The company is currently executing on final optimizations preparatory to a clinical trial, which we expect will soon enable submission for regulatory authorization. Having the right submission that will facilitate the broadest range of market opportunities once authorized is our most critical objective. We believe others have developed short-term solutions to permanent problems. With our platform, we are planning on providing a robust permanent solution to permanent problems. Our strategic objective to get it right with the Codex YourTest PCR platform should enable the company to play a significant role in syndromic panel testing covering a large number of ongoing pernicious infections. Immediately upon receiving regulatory authorization, the company expects to conduct sales campaigns to a vast number of potential clients, which include outreach to the public sector, including, as applicable, to schools and college campuses, enterprise sales, including airlines, theme parks, cruise ships, restaurants, entertainment venues, the healthcare sector, including doctors and dental offices, and the residential individual consumer sector. Company infrastructure is currently being enhanced to address our product launch. We are also very excited about the centralized lab segment and distributor network covering more than 80 countries. The hard work and dedication of our team to deliver superior service is unmatched and has driven over 170 million in sales over the last two years as we have leveraged our patented co-private platform to provide state-of-the-art diagnostic products to this important business segment. In addition to our suite of COVID-19 diagnostics that have been developed over the last two years, these diagnostics include other coprimer-based IVD products developed either in our U.S.-based laboratory or our joint venture in India, including tests for diseases like tuberculosis, Zika, dengue, chikungunya, malaria, hepatitis B and C, and human papillomavirus. We also continue to see our mosquito abatement coprimer product experience even wider adoption allowing municipal mosquito abatement districts to better serve the public good by identifying the presence of diseases like West Nile virus, western and eastern equine encephalitis, and St. Louis encephalitis in mosquito pools and targeting the areas where those diseases are found. We will continue to prioritize R&D efforts as we grow that product pipeline along with expanding our worldwide network of capable distributors and participating labs. Among the other exciting and innovating product offerings that are actively in development include a multiplex STI panel to detect and differentiate between four prevalent causes of sexually transmitted infections for which analytical performance testing is currently underway in collaboration with clinical partners. Additionally, a malaria test that was designed to differentiate between the different species of the parasite known to be resistant to treatment and also an expansion of our Logic Smart ABC test to include respiratory synctile virus, or RSV. As a technology company, our co-primer platform also has applications that extend far beyond COVID and infectious disease. These include liquid biopsy for cancer detection, the development of which is ramping up as we position the company to take part in this historic and challenging development in human healthcare. The exquisite specificity of coprimers has been shown to have excellent capabilities in the detection of cancer-associated mutations present in human blood. And a panel has been developed that detects six of the most common single nucleotide mutations of the EGFR gene associated with non-small cell lung cancer. This panel is undergoing performance verification with clinical samples, which will also have applications for the paper authored last year, that will be subjected to peer review after the conclusion of the study. Other assays have been developed for several pathogens of significance in dentistry, mental health, and veterinary medicine. Analytical performance is being evaluated for these assays. We continue to make progress in our agricultural vertical, including in our work with Bayer Crop Services and LGC. We signed a contract with Bayer pursuant to an ongoing proof of concept project using our patent pending NGS library prep technology. Bayer is now offering products based on our proprietary co-primary technology to the agricultural market. Overall, we believe that our operational and executional enhancements, including investments in talent and R&D, continue to yield positive results and are further positioning co-diagnostics for future growth. Every action we have taken since becoming a public company has been deliberate. Our strong margins and healthy balance sheet have positioned us well to fully realize our vision and continue to expand our menu of state-of-the-art molecular diagnostics. The Kodiak's YourTest PCR platform has been designed from the beginning with the ability to operationalize testing on a regular basis in at-home and point-of-care settings. We believe it is the optimal solution not only for COVID, but for other infectious diseases that we intend to add to our testing menu over time. It is inexpensive, fast, accurate, with gold standard PCR results and capable of multiple syndromic testing going forward. We believe that our history of remaining ahead of the curve since the onset of the pandemic will continue to drive this trajectory of growth. I would like to conclude my prepared remarks by thanking our employees, distributors and customers for their dedication and action in helping to deliver tremendous results for 2021. This concludes my initial remarks. Let me now turn things over to Brian Brown for a review of the key metrics and numbers. Brian? Thanks, Dwight.