Zomedica Corp

Good afternoon, ladies and gentlemen, and thank you for standing by. Welcome to Zoomerica's third quarter 2023 earnings results and business update call. I would like to remind everyone that this conference call is being recorded today, Monday, November 13, 2023, at 4.30 p.m. ET, and all participants are in listen-only mode. A brief 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. I will now turn the call over to Elif McDonald in Mr. Relations. Please go ahead, Ms. McDonald.

Thank you, Renju, and good afternoon, ladies and gentlemen. Welcome to Zomedica's third quarter 2023 earnings results and business update call. On today's call, you will hear from Zomedica CEO, Larry Heaton, and CFO, Peter Donato. Before we begin, we would like to remind everyone on this call that we will be making various remarks about future expectations, plans, and prospects that constitute forward-looking statements. These forward-looking statements are based on assumptions, and there are risks that results may differ materially from those statements. As such, Zometis cannot guarantee that any forward-looking statements will materialize, and you are cautioned not to place undue reliance on them. We refer clients and potential investors to the forward-looking information and risks factor sections of our public filings, available on CDAR at www.cdar.com and on EDGAR at sec.gov. forward-looking statements made on this conference call represent Zomedica's expectations as of today, November 13, 2023. Finally, we would like to remind everyone that all figures discussed on this call are in U.S. dollars. I will now pass the call over to Zomedica's Chief Executive Officer, Mr. Larry Hughes. Larry?

Thank you, Alif. I'd like to start by thanking our shareholders for your support. Wish our prospective investors and analysts and others a good afternoon. And welcome all of you to the Zomedica third quarter 2023 earnings results and business update call. I'll start the call by providing an update on the overall business. Then Peter Donato, our chief financial officer, will walk you through our financial results for the quarter and provide a corporate update. After our prepared remarks, we'll open the line and web to your questions. Earlier today, SoMedica released its financial results for the quarter ended September 30, 2023. Overall, this was a remarkable quarter. We delivered record revenues, our highest ever quarterly revenue, beating last year's record fourth quarter, all while maintaining high margins and reducing operating cash burn. Let me take a moment to highlight that revenues were $6.3 million, a growth of 31% over last year's same quarter. with almost all the growth derived organically from previous acquisitions that have been fully integrated over the past year, validating that our strategic plan to acquire, integrate, and grow is working. During the third quarter, we launched our Equine EACTH assay for the Trueforma platform. This assay enables equine veterinarians in the clinic or stall side to diagnose equine Cushing's disease, known clinically as pituitary paris intermediate dysfunction, DBID, and to monitor positive patients as they titrate therapy initially and then for the rest of that horse's life. Accessing such a large and underserved equine market can make a significant contribution to our diagnostic segment. On September 5th, we announced the acquisition of Structured Monitoring Products, SMP, converting our minority interest into full ownership, giving us exclusive commercial rights to VetGuardian products. The VetGuardian platform improves the quality of care for pets in the ICU, during recovery from surgery, and for overnight stays in the clinic. By providing staff with real-time alerts when vital signs deviate from a preset range, it allows the staff to intervene in health issues more quickly. Improving care. It's unique patented Doppler technology allows the metardian system to obtain vital signs in real time without wired leads or a harness on the pet, thus allowing the pet to rest comfortably during recovery. Much like DYE-ACTH, we're pleased with the early indicators and see future upside. Subsequent to the end of the quarter, on October 5th, we announced the acquisition of Corvo Biotechnologies LLC, a wholly-owned subsidiary of Corvo U.S. Inc., focused on the development of point-of-care diagnostic solutions, leveraging their innovative bulk acoustic wave sensor technology in the development of the Omnia point-of-care diagnostic platform designed to perform assays for human patients. along with our Truforma point-of-care diagnostic platform to perform assays for companion animals, which we have marketed under license prior to this acquisition. A primary focus of this acquisition will be on capturing margin improvements by assuming QBT's manufacturing systems, as well as accelerating assay development for the Truforma platform. This acquisition will also allow us to avoid future operating and capital expenses incurred by building R&D and manufacturing staff internally, as we had planned to do, as well as eliminating remaining payments, including license fees, transition fees, and future royalties, which would otherwise be due to Corvo Biotech under the prior agreement. While we also acquired the human health business, currently we have no plans to commercialize it. However, we will continue to explore opportunities to realize value from this asset. Strategically, we continue to actively integrate and grow what we have already acquired, and we will continue to seek M&A opportunities that meet our rigorous internal financial and strategic hurdles, all while adhering to our five pillars. which are improving the quality of care for the pet and the satisfaction of the pet parent, while also improving the workflow, cash flow, and profitability of our veterinarian partners. While we're pleased with the number and pace of acquisitions over only the last two years, we're not going to rest on our laurels. In fact, we have a robust pipeline of deals under consideration applying our five pillars. We're looking for even faster top-line growth opportunities without delaying our pathway to profitability. In other words, we'll remain opportunistically acquisitive. Remembering that we have a strong liquidity position of $118 million in cash, cash equivalents and available for sale securities, we remain well-funded for the foreseeable future. Achieving our strategic priorities requires a combination of growing revenue, efficient manufacturing that produces substantial margins, and investing in commercial and R&D capabilities to enable both organic growth as well as growth. On the R&D front, we plan to leverage our recent acquisition of Corvo Biotechnologies with greater investment in new assays for our Trueforma platform. We'll also continue to expand the capabilities of our TrueView digital microscope platform and the usability of our VetGuardian monitoring platform while exploring new market opportunities. The launch of equine EACTH is one example of where we're seeing signs of early success. This is a growth driver for us going forward and an opportunity to expand product offerings within our already large equine customer base. On the heels of the equine EACTH launch, we will soon launch another set of assays for small animals. These for non-infectious GI conditions like diarrhea and vomiting. One of the top three reasons dogs are brought to the vet on an emergent basis. giving us another shot on goal in the diagnostic segment. Similarly, as we continue to build a sales organization, I'm pleased to announce that subsequent to the quarter just ended, we welcomed a new Senior Vice President of Sales to the team, Kevin Klass, an accomplished executive from an outstanding animal health company. In addition, we continue to invest in sales and marketing programs, and while spending is down this quarter versus last year, we're seeing an increase in year-to-date spending versus levels seen in 2022 when we were first building our commercial infrastructure. We're also pleased to report that we're continuing to see leverage developing on the G&A line as we continue our journey towards cash flow and GAAP profitability. Before I hand the call to Peter, I want to reiterate that we're very happy with what we achieved during the third quarter. and look forward to building on this momentum as we continue to be very optimistic about an even stronger fourth quarter. With that, I'll hand it over to Peter for the financial review and corporate update. After his remarks, I'll provide some closing comments.