Specialty diagnostics company Precipio, Inc. (NASDAQ: PRPO),
released today the following letter to shareholders from its CEO,
Ilan Danieli.
Dear Shareholders,
I’m writing this letter to you from my home
office where, like many of you, I have been “holed” up for the past
week. Like many companies, our first priority is to protect our
employees and families, so we have instituted a policy that allows
only essential employees to come to our offices. We all respect the
precautionary measures that the CDC is requesting all companies to
adhere to.
This has been a trying time for everyone, but we
are fortunate to be in a healthcare business that continues to
operate under relatively similar conditions, and we have not seen
any substantial downturn in our business. For better or worse, I
suppose cancer patients have more to worry about than COVID-19, and
we are here to make sure we have their backs.
I would like to address some of the many
questions that have been pouring in from our shareholders, and
provide an update on the company’s situation. There are six key
points I’d like to address today.
1.
Employee safety and business continuation
Fortunately, as members of the healthcare
community and as a certified laboratory, we already follow strict
sanitary precautions. To date none of our employees have tested
positive for COVID-19; however, we plan on continuously monitoring
this and once kits are available our employees will be tested as
necessary. We have realigned all lab testing and personnel and
instated precautions to limit employee interactions while
maintaining the services we provide to our customers.
Furthermore, we are reducing shift interaction
and alternating staff attendance in the laboratory to minimize
contact between employees. We are balancing the safety of our
employees with the need to ensure that we continue to provide
consistent quality of service to our customers. As described below,
we have not seen a slowdown in our business volume, and continue to
operate our laboratory in the normal course of business.
2.
Pathology business
We serve oncologists and hospitals who continue
to take care of cancer patients, and as such, require our testing
services. Our customers have continued to operate in their
capacity, and we continue to see a steady flow of biopsies coming
to our laboratory for testing. We do not know if this will remain
the same as the crisis develops. Although in-person access to
clients has, in some situations, been limited, for the most part
our sales team continues to stay in contact with our customers and
provide them with the necessary support.
As announced earlier this week, the transition
of the Oncometrix business has begun and we are seeing cases arrive
to our laboratory from those new customers. We continue to onboard
these customers as part of our normal procedure and welcome them to
our company; we are of the view that even under these circumstances
we will continue to see the increase in the number of customers as
we grow our business.
3.
Products business
Our clinical laboratory segment for our products
business includes laboratories, and many of those laboratories,
both domestic and internationally, are entirely consumed with their
response to COVID-19, are dealing with similar issues of reduced
staff attendance and focusing on incoming work volume. The
integration projects of our technologies such as IV-Cell and
HemeScreen have been placed in a temporary lower priority, although
none of these projects have been cancelled.
The target customers that have explored and
tested our technologies are to our understanding still committed to
bringing these technologies to their laboratories once the current
circumstances change.
Despite the slowdown in the introduction of our
current technologies, we continue to explore other avenues to
promote our technologies. We are currently advancing several
initiatives that could potentially lead to quick and substantial
market penetration, working with an additional segment of the
healthcare community that is less “burdened” by the current
situation. We will have more on this upon the launch of the
program.
4.
COVID-19 testing
Many of you have written to ask if we are
getting set up to test for COVID-19. We have explored the option of
setting up testing for COVID-19 and decided not to proceed down
that path. We are not a virology lab, so getting set up would
require complete construction and segregation of that testing area
from the rest of our cancer lab which will require considerable
cost. Additional credentialing and undergoing an inspection in the
laboratory create further hurdles to this process. Furthermore,
there is no clarity on the ability to obtain ongoing supplies of
testing kits, and there are many issues surrounding reimbursement
for the tests.
Therefore, we have decided that the right course
of action is to remain focused on our business and direct our
resources to executing on our business plan.
5.
Finance & reporting
It is our intention to file our 10-K annual
report for 2019 within the expected requirements and do not, at
this time, anticipate any necessary extensions or delays in our
filing. We will also ensure that the company can raise capital as
necessary to carry us through this challenging period to ensure
that we remain in business.
Fortunately as a revenue-generating company with
several business lines, we have a better risk-profile than other
companies in our industry. We are reducing expenses in all areas
including a 25% salary reduction for the company’s management team,
to manage through this crisis. Inventory management, work hours and
administrative expenses are individually scrutinized.
6.
Share price and future outlook
It is not lost on any of us where the share
price is, and indeed we are again below the $1 mark. I don’t think
anyone could have foreseen the market situation we’ve experienced
in the past 30-60 days, and the impact from COVID-19 will have on
the economy. We recently announced a doubling in our revenue due to
the Oncometrix transaction. Our stock was up 10%, and down the
following day, and continues to fall. In any other business, and in
any other market, one could expect that the doubling of revenue
(assuming the share price reflects some sort of revenue multiple)
would have a positive and sustainable impact on the share
price.
Many of you have expressed concern around
another reverse split (RS), so I’d like to refresh everyone on the
current process (which may be subject to changes due to the market
conditions). Assuming the share price remains below $1 for 30
business days, we anticipate receiving a notice from Nasdaq
providing us with 180 days to enable us to cure the minimum price
requirement either by share price appreciation to above $1, or
through a RS. We may even have the opportunity to file for another
180 day extension (subject to certain rules and naturally with
NASDAQ’s approval), which potentially will provide us with a total
of a year to comply with the requirements. Therefore, there is no
imminent need to conduct a RS, and management will do everything
within its power to avoid that outcome.
Final thoughts
As someone who is a big fan of and frequently
quotes Winston Churchill, I’ll end with one of my favorite quotes
which these days, I find somewhat appropriate:
“If you’re going through hell, keep going”.
- Winston
Churchill
Leadership is tested in challenging times, not
when it's easy going. We will do what it takes to get through this
crisis, and I am confident we will come out stronger. My team and I
have been through tough times before, and we are determined to
prevail. This will not come without pain, but I want you, our
shareholder to know that we will never give up. These times call
for a combination of ingenuity, creativity, and a survivalist
approach – and we possess all those elements.
I appreciate you taking the time to read this
letter. As always, please keep emailing us at
investors@precipiodx.com. We will continue to work hard to deliver
on our vision.
Sincerely,
Ilan DanieliCEO, Precipio, Inc.
About Precipio
Precipio has built a platform designed to
eradicate the problem of misdiagnosis by harnessing the intellect,
expertise and technology developed within academic institutions and
delivering quality diagnostic information to physicians and their
patients worldwide. Through its collaborations with world-class
academic institutions specializing in cancer research, diagnostics
and treatment such as the Yale School of Medicine, Harvard’s
Dana-Farber Cancer Institute and the University of Pennsylvania,
Precipio offers a new standard of diagnostic accuracy enabling the
highest level of patient care. For more information, please visit
www.precipiodx.com.
Forward-Looking Statements
Certain statements in this press release
constitute “forward-looking statements,” within the meaning of
federal securities laws, including statements related to ICP
technology, including financial projections related thereto and
potential market opportunity, plans and prospects and other
statements containing the words “anticipate,” “intend,” “may,”
“plan,” “predict,” “will,” “would,” “could,” “should,” and similar
expressions, constitute forward-looking statements within the
meaning of The Private Securities Litigation Reform Act of 1995.
The Company’s actual results could differ materially from those
anticipated in these forward-looking statements as a result of
various factors. Factors that could cause future results to
materially differ from the recent results or those projected in
forward-looking statements include the known risks, uncertainties
and other factors described in the Company’s definitive proxy
statement filed on May 29, 2018, the Company’s Quarterly Report on
Form 10-Q for the quarter ended September 30, 2019 and on the
Annual Report on Form 10-K for the year ended December 31, 2018 as
well as the Company’s prior filings and from time to time in the
Company’s subsequent filings with the Securities and Exchange
Commission. Any change in such factors, risks and uncertainties may
cause the actual results, events and performance to differ
materially from those referred to in such statements. All
information in this press release is as of the date of the release
and the Company does not undertake any duty to update this
information, including any forward-looking statements, unless
required by law.
Inquiries
investors@precipiodx.com
+1-203-787-7888 Ext. 523
Precipio (NASDAQ:PRPO)
Historical Stock Chart
From Aug 2024 to Sep 2024
Precipio (NASDAQ:PRPO)
Historical Stock Chart
From Sep 2023 to Sep 2024