Opgen Inc

Ladies and gentlemen, welcome to the Opgen Second Quarter 2022 Earnings Call and Business Update. Today, Opgen Management will provide an update on the company's current business and outlook for the future. Following Opgen's prepared remarks, there will be a live Q&A session. As a reminder, this conference call is being recorded today, August 11, 2022. and all participants are in a listen-only mode. At this time, we will turn the call over to Alisa Factor, OpGEN's IR representative, to provide the opening statement. Please go ahead.

Good afternoon, everyone, and thank you, operator, for the introduction. Before we begin, I would like to note that any comments made by management during this conference call may contain forward-looking statements regarding the operations and future results of Opgen, including its subsidiaries, Curatus and Ares Genetics. I encourage you to review Opgen's filings with the Securities and Exchange Commission, including, without limitation, the company's most recent Form 10-K and Form 10-Q for the second quarter and the first half of 2022 that will be filed with the SEC, which will identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statement. Factors that may affect the company's results include, but are not limited to, the success of the company's commercialization efforts and partnering strategy, its ability to successfully, timely, and cost-effectively develop, seek, and obtain regulatory clearance for and commercialize its products and service offerings, the company's ability to continue to successfully achieve the expected synergies from the company's completed business combination with Curatus, and to implement its commercial strategy, the impact of the continuing global COVID-19 pandemic on the company's business and operations, and on capital markets and general economic conditions, the company's use of proceeds from recent financing, as well as its ability to access additional financing in the future. the company's ability to satisfy debt obligations under its loan with the European Investment Bank, the rate of adoption of its products and services by hospitals and other healthcare providers in general, as well as during the current COVID-19 pandemic and geopolitical situation in particular, the effect of the military action in Russia and Ukraine on its distributors, collaborators, and service providers. The effects on the company's business of existing and new regulatory requirements and other economic and competitive factors. The content for this conference call contains time-sensitive information that is accurate only as of the date of this live call, August 11, 2022. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call, except as required by law. Joining the call today are Oliver Schacht, Options President and CEO, and Albert Weaver, its CFO. Now I will turn the call over to Oliver Schacht for introductory remarks.

Thank you, Alyssa, and thank you everyone for joining us this afternoon. Albert and I are glad to be here together in Rockville at Options Global Headquarters and look forward to sharing our progress. We're excited about our strong performance throughout the second quarter and developments through the first half of 2022. This past year, we focused on commercialization and our efforts have come to fruition for new and existing partnerships. We look forward to updating everyone on options milestones and achievements throughout this call to highlight our continued growth. Today, I will begin with a recap of previous highlights disclosed during the first half of 2022, followed by recent updates on our products and R&D pipeline. Albert will review the Q2 and first half 2022 financial highlights and offer guidance. I will then provide an outlook on OPTN's ongoing activities and upcoming milestones in business development. We'll close out the call with a Q&A session. We want to start off by highlighting that OPTN has completed two commercial contracts for our ACUTUS AMR Gene Panel in the United States with two major hospitals. Our first commercial deal was completed in June with a large 1,000-plus bed and well-respected teaching hospital in the Northeast, and the second deal was signed in July with a prominent 400-plus-bed children's hospital in the Midwest. Just as a reminder, the FDA-cleared ACUIDAS AMR gene panel allows testing for a comprehensive panel of 28 genetic AMR markers in isolated bacterial colonies from 26 different pathogens in just two and a half hours. This is an exciting milestone for Opgen as they set the stage for more commercial contracts to come. and there are several active commercial contract proposals in front of accounts that we expect to come to fruition here in the second half of 2022. This past quarter has had the healthiest pipeline for partnerships and collaborations throughout our Austrian subsidiary, Aris Genetics Lifecycle. One of these collaborations includes the extension of Aris collaboration agreement with Sandoz, the world's leading provider of generic antibiotics, until January 31, 2025. In the initial phase of the collaboration, ARIS developed a digital anti-infectives platform which combines established microbiology laboratory practices with advanced bioinformatics and artificial intelligence methods to support the identification of effective antimicrobial compounds or compound combinations to address critical pathogens. Sandoz uses this to make portfolio and commercial decisions. In the next phase, both parties plan to leverage ARIS Next Generation Sequencing, or NGS, and bioinformatics technologies to focus further on antibiotic stewardship by enabling genomic surveillance for resistant pathogens. AMR accounts for approximately 1.3 million deaths worldwide each year, and this collaboration is a major step towards reducing this number by providing the information to accurately prescribe antibiotics. Another major milestone for Iris Genetics was the commercial launch of a series of new genome sequencing services globally. To help minimize the spread of AMR pathogens, Iris announced the expansion of its commercial offering of sequencing and analysis services aimed at microbiologists, public health, infection prevention and control specialists. The services include IrisID and Iris ISS Express. IrisID is a sequencing service for the accurate and thorough detection of pathogens, commensals, or environmental microbes directly from native patient specimen or environmental samples. ARIS-ISS builds on ARIS' clinically validated platform from whole genome sequencing, bacterial isolates, and reduces turnaround times by more than 80%. This means that it can provide results in as few as five business days, which allows microbiologists and epidemiologists to analyze and respond to local outbreaks accurately and efficiently. First orders for RSISS Express and RSID have been received. This quarter, we've made significant progress throughout our Univero Urinary Tract Infection Panel Clinical Trial. At the beginning of Q2, we announced the results from an interim analysis on the initial 150 U.S. patient samples across the three trial sites for the UTI Panel. The interim analysis showed that there were no significant variations in results between the testing sites and that the blinded sample and data collection across all sites was executed as planned. The positive results allowed us to continue enrollment towards our study goal of 1,500 prospective samples, which is expected within the third quarter of 2022. In June, we announced our 1,000th patient sample enrolled in the clinical trial for the Univero Urinary Tract Infection, or UTI, panel. We also added a fourth trial site to optimize enrollment and accelerate the trial completion. We're pleased with the momentum of enrollment towards the goal of 1,500 prospective samples as required by applicable FDA guidance. And as of today, we have enrolled over 1,300 patient samples already. We expect to complete the UTI trial and have the final data readout in the second half of this year. This is an exciting milestone as we plan for subsequent submission to the FDA as we believe there is a clear unmet medical need for rapid and comprehensive testing for urinary tract infections. We already see evidence of that in the increasing traction of our UTI research-use-only product sales in the United States. Earlier this quarter, we announced some exciting news for our German subsidiary, Curatus. In June, Curatus entered into a distribution agreement with Leader Life Sciences via their trading company, Leader Medical Supplies Trading LLC, part of the Leader Healthcare Group, for distribution of Univero systems in the United Arab Emirates, or UAE, and Qatar. The agreement has an initial term of three years and can be extended in one-year increments. Leader Life Sciences has committed to a minimum purchase of Univero instruments and application cartridges for a total value of approximately $1 million in revenue to Opgen during the initial three-year term. This is exciting for OPTION as Leader Healthcare Group is one of the Middle East region's leading distributors and has a presence in the region. There are a significant number of hospitalized patients suffering from healthcare associated infections in the Middle East. Therefore, rapid and comprehensive detection of the pathogens and their antibiotic resistance markers with Univera will meaningfully improve the outcomes for patients. This partnership aligns with OPTION's goal to expand our commercial presence as industry leaders in the molecular diagnostics and bioinformatics space. We're increasing our global footprint and plan to continue to work closely with Leader Live Sciences to explore potential expansion into additional countries within the region going forward. We have recently also added KAIS Group as a distribution partner in Kosovo, following their successful bid in a World Bank-funded tender for Univero, We expect to deliver the first system and cartridges in the third quarter of 2022 already and have entered into a three-year exclusive distribution agreement with CAIS. Another relationship we've continued to strengthen is with Menorini Diagnostics, our pan-European distribution partner. Last quarter, we announced the progression of our existing partnership with an expansion of our five-year strategic distribution agreement with Menorini. We previously announced a major increase in the minimum purchase commitments for the coming 12 months by over 50% compared to the last 12 months, and over a two-year period by a total of more than 80% higher minimum revenues compared to the last 12 months. During the second quarter, we also signed a commercial deal for around 70 Univero systems installed in nine different European countries with Menorini as well. We've sent over the invoice for more than $360,000 in incremental revenue in 2022, which was recognized in the second quarter of 2022. Option was featured in multiple peer-reviewed journal publications throughout the second quarter of 2022 that we would like to highlight. In May, the results from a major clinical study using Univero hospitalized pneumonia, or HPN, panel in the Lancet Respiratory Medicine were published. The authors of the publication assessed the clinical utility and impact of the Univero panel in hospitalized adult patients with suspicion of pneumonia, a clinical indication for bronchoscopy, and at risk for infection with gram-negative bacteria, with the study endpoint being the duration of inappropriate antibiotic therapy. The trial clearly demonstrates that using Univero HPN panel in hospitalized pneumonia patients for the examination of bronchoalveolar lavage, or BAL, in combination with antibiotic stewardship, decreases the duration of inappropriate antibiotic therapy of hospitalized patients with pneumonia at risk for gram-negative bacteria and supports antibiotic de-escalation in 66% of patients. Other major findings include a reduction of inappropriate antibiotic therapy by 45% and a decrease in the overall duration of antibiotic therapy by 22.5% in the univiral group. Overall, patients treated in the Univero group had three times higher probability of appropriate antibiotic therapy. This study shows the significant and actionable impact of the Univero hospitalized pneumonia panel on the time to appropriate antibiotic therapy in patients. In July, we announced the release of a new peer-reviewed journal publication from a study conducted at Karolinska University Hospital in Solna, Stockholm, Sweden. This publication demonstrates the ability of the univaro hospitalized pneumonia or HPN panel to detect potential pneumonia pathogens earlier than culture or at the very early signs of an infection. The univaro hospitalized pneumonia panel detected bacterial pathogens from lower respiratory tract samples from critically ill COVID-19 patients at a higher diagnostic yield than bacterial culture. This is a significant milestone because it enables reliable and rapid diagnosis of pathogens in just five hours for patients hospitalized with COVID-19 pneumonia. Overall, we've achieved great progress with our products this quarter and year to date and continue to focus on commercialization. We're excited about the revenue driven by product sales that continue to grow. I'll now turn the call over to Albert Weber, Options Chief Financial Officer. He will review financial results for the second quarter and the first half of 2022, and recent financial developments. Albert?