SALT LAKE CITY, May 14, 2020 /PRNewswire/ -- Co-Diagnostics,
Inc. (Nasdaq: CODX), a molecular diagnostics company
with a unique, patented platform for the development of molecular
diagnostic tests, releases the prepared remarks for the Q1 2020
conference call scheduled for May 14,
2020. Due to overwhelming participation on the call, the
conference call service was unable to accommodate the traffic. In
lieu of the call, the following remarks have been provided to
update shareholders on recent corporate developments.
PREPARED EARNINGS CALL REMARKS
Investor Relations:
Thank you everyone for joining us today. 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 2020 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 will 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 contains reconciliation
to the non-GAAP financial measures presented to their most
comparable GAAP results.
Dwight Egan --
Chief Executive Officer
Thank you, and good afternoon, everyone. The COVID-19 pandemic
has affected us all in many ways and this global crisis has
demonstrated the importance of diagnostics solutions in treating
infectious disease.
Our patented CoPrimer™ platform is designed to rapidly generate
unique testing solutions, aiding in patient treatment by providing
reliable, actionable results, especially in times of crisis as seen
in our response to the coronavirus pandemic. COVID-19 has
highlighted the overall importance of molecular diagnostics and the
critical role that our CoPrimer platform plays in fighting
infectious disease.
The Logix Smart™ COVID-19 test design and underlying technology
has become an important part of the fight against the pandemic in
many parts of the world, and was the driver of Company revenue in
the first quarter. Following FDA emergency use authorization being
granted just 3 days into the second quarter, orders for our test
expanded even more vigorously. As of the mid-point in the second
quarter we have significantly exceeded the second quarter estimates
of analysts covering the Company, and we are pleased to announce
that we are already solidly profitable for the second quarter based
on results to date.
All in all, we have received orders from nearly 50 countries and
a large number of states in the U.S. We have increased our capacity
for production with our Salt Lake
City facility, our CoSara joint venture facility in
India, and through a third-party
manufacturer in the United States.
In addition to manufacturing more than 6 million COVID-19 tests to
date, we have ordered components for an additional 20,000,000
tests which we will use to fill existing orders, as well as other
orders anticipated in the near term.
At the present time, timelines for effective coronavirus
vaccines and therapeutics remain uncertain. What is widely known is
that the need for testing on a mass scale continues to grow, as the
U.S. and countries around the world strive to create COVID-safe
schools, COVID-safe workspaces, and COVID-safe communities. In
the United States for example
there are more than 76 million students that need to be in school
this fall along with 157 million workers who need to be at
work.
During the pandemic, Co-Diagnostics' ability to utilize its
patented CoPrimer technology in highly accurate tests has
significantly changed the trajectory of our Company. Co-Diagnostics
was the first U.S. based company to receive a CE marking for its
COVID-19 test, giving us an early entry into the European market as
well as other areas of the world that accept CE marking as valid
regulatory approval. In addition, being granted the FDA's emergency
use authorization on April
3rd has been critical in fast-tracking the
Company's COVID-19 diagnostic solution.
We believe that test performance, combined with competitive
pricing and high throughput attributes, makes for a compelling
value proposition. Our COVID-19 test has been the subject of
several independent studies validating its specificity and
sensitivity, which have demonstrated its excellent performance
characteristics. Last week, I read with interest a statement
regarding our technology and test from Clinical Reference
Laboratory, one of the largest privately-held clinical testing
laboratories in the U.S., and a customer of Co-Diagnostics. I quote
the following from that statement with their permission:
"At the foundation of a quality COVID-19 test is the
methodology. For the molecular COVID-19 test, CRL's Molecular
Diagnostics team thoroughly investigated numerous technologies that
could be leveraged for test design. Ultimately, the Co-Diagnostics
Logix Smart Coronavirus COVID-19 RT-PCR assay was selected for the
detection of the virus. This reverse-transcriptase quantitative PCR
assay (RT-qPCR) uses proprietary CoPrimer technology that improves
the specificity of the test compared to others. The test targets
the RdRp gene of the SARS-CoV-2 virus which has a low mutation rate
compared to other regions of the viral genome."
In addition to our technology being utilized by CLIA labs, some
of whom are using innovative sample collection methods such as
saliva or saliva combined with nasal swabs designed to make testing
easier and more accessible, the Company is currently engaged in new
test developments designed to address the challenges of the
coronavirus as conditions evolve over the coming months and years.
Specifically, we have authorized a feasibility study aimed at
developing a test using CoPrimers to simultaneously identify both
the virus and the antibody associated with a past infection in a
single test.
In anticipation of future testing needs, Co-Diagnostics is
developing a multiplex panel to differentiate between the COVID-19
virus and other upper respiratory pathogens. In addition, we have
also already designed a test for the D614G mutation which since
March has become the most common strain in the United States and worldwide. A recent
paper has indicated that the mutation might result in a more
transmissive form of the virus and higher viral load in COVID-19
patients. Our current test is still designed to detect SARS-CoV-2
whether the mutation is present or not. However, if research
confirms that this is a functional mutation, we will respond
quickly with a differentiation test designed to distinguish between
strains with and without the mutation. While the new mutation may
or may not become necessary to identify, we anticipate being ready
with a solution. As we demonstrated in the development of our first
COVID-19 test, the Company is capable of rapid test development as
we pivot and adapt to the ongoing challenges that will be faced in
battling the coronavirus.
We are focused on the COVID-19 pandemic, but without losing
sight of our other important verticals. Beyond COVID-19 testing,
other infectious diseases and molecular diagnostic applications are
an important area of focus for our company and will be a key driver
of revenue growth over the longer term. Our primary initiatives in
infectious disease (including Indian CDSCO IVD-cleared tests for
TB, hepatitis B, hepatitis C, malaria and HPV, and a CE-marked
multiplex for Zika/dengue/chikungunya), along with our AgriBio and
mosquito vector products, all provide opportunities for the Company
now and in the future. All of these initiatives are now in revenue
and we are pleased to see the adoption of our tests and technology
in many parts of the world. We believe that our growing network of
nearly 50 distributors covering over 80 countries will prove
important for future sales.
Reed Benson --
Chief Financial Officer
I would like to highlight a few financial elements from this
earnings release.
Overall gross profit for the quarter was $1.07 million. Of the $1.5
million of sales in the first quarter as shown in our
report, the vast majority were in the month of March as we scaled
up production to fill orders for our COVID-19 test that we received
following our CE marking.
So far in Q2 we have already seen revenue grow significantly to
more than $16.5 million, resulting in
year-to-date revenues of over $18
million in test and equipment sales.
The cost of sales for our tests kits in the first quarter was
approximately 28.5%, which generated margins that we believe would
continue through the second quarter.
Our operational expenses in our Sales and R&D departments
were basically flat year to year. Our G&A expenses were
significantly higher at $1.46
million.
Loss per share was $0.05, compared
to $0.09 in the same quarter last
year.
Our total liabilities and stockholders' equity at the end of the
first quarter was $20.5 million,
compared with $2.2 million at the end
of the first quarter of 2019, as a result of capital raising
activities in this quarter which yielded net proceeds of
approximately $18 million.
So far in 2020 we have fully covered all of our operational
expenses and increases in raw materials inventory totaling
approximately $12 million through
cash collections generated from test sales. Our cash position has
therefore remained fairly constant throughout the ramp up in the
1st quarter and the beginning of the second.
Co-Diagnostics remains debt-free, with a solid balance sheet,
and with revenues that have enabled us to achieve year-to-date net
profit by May 14, 2020.
About Co-Diagnostics, Inc.:
Co-Diagnostics, Inc., a
Utah corporation, is a molecular
diagnostics company that develops, manufactures and markets a new,
state-of-the-art diagnostics technology. The Company's technology
is utilized for tests that are designed using the detection and/or
analysis of nucleic acid molecules (DNA or RNA). The Company also
uses its proprietary technology to design specific tests to locate
genetic markers for use in industries other than infectious disease
and license the use of those tests to specific customers.
Forward-Looking Statements:
This press release
contains forward-looking statements. Forward-looking statements can
be identified by words such as "believes," "expects," "estimates,"
"intends," "may," "plans," "will" and similar expressions, or the
negative of these words. Such forward-looking statements are based
on facts and conditions as they exist at the time such statements
are made and predictions as to future facts and conditions.
Forward-looking statements in this release include statements
regarding the (i) use of funding proceeds, (ii) expansion of
product distribution, (iii) acceleration of initiatives in liquid
biopsy and SNP detection, (iv) use of the Company's liquid biopsy
tests by laboratories, (v) capital resources and runway needed to
advance the Company's products and markets, (vi) increased sales in
the near-term, (vii) flexibility in managing the Company's balance
sheet, (viii) anticipation of business expansion, and (ix) benefits
in research and worldwide accessibility of the CoPrimer technology
and its cost-saving and scientific advantages. Forward-looking
statements are subject to inherent uncertainties, risks and changes
in circumstances. Actual results may differ materially from
those contemplated or anticipated by such forward-looking
statements. Readers of this press release are cautioned not to
place undue reliance on any forward-looking statements. The Company
does not undertake any obligation to update any forward-looking
statement relating to matters discussed in this press release,
except as may be required by applicable securities laws.
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SOURCE Co-Diagnostics