Genedrive (LSE:GDR) — Financial results for the year ended 30 June 2020

0:03 Good morning, ladies and gentlemen, and welcome to the GENEDRIVE Final Results Investor Presentation. Throughout this presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just simply type in your question in the box below and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it is appropriate to do so. These will be available from your Investor Meet company dashboard. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. We'll be grateful if you could respond to that. And I would now like to hand over to David Budd, CEO and Matthew Fowler, CFO of GENEDRIVE. Good morning to you guys. Yeah. Good morning, Mark. Thank you very much. Good morning, everyone. I'm Dave Budd. I'm the chief executive at GENEDRIVE.

0:57 Thank you for joining us today for the presentation of our operational and financial results to June 2020 and an update on our activities and and

1:05 progress since then. So 2020 has been a really difficult time for everyone around the world and for many companies. However, a few companies such as GENEDRIVE have been able to leverage their experience, their know how, and their intellectual property to develop new products that can help fight the emergence of COVID nineteen virus and the treatment of patients. The emergence of coronavirus fundamentally altered many companies' abilities to run their businesses this year. In our case, we saw two sides of that impact. First, our existing commercial channels were interrupted. Our customers work in diagnostic settings, and they and the clinicians that they support had their attention fully diverted to battling the emergence of COVID nineteen. But secondly, while we saw a slowdown in our core business, the development of our SARS CoV two range of products and the external interest in them demonstrates GENEDRIVE can make a meaningful contribution to this battle, and we're fully committed to the product's potential of both patient care and long term financial growth of the company.

2:06 Following our equity fundraise that we did earlier in the year, we saw a dramatic swing in the percentage of our shareholder base towards retail investors. And in recognition of that, this is the first time we've used the investor meets company platform to more broadly communicate our updates. As Mark mentioned, there has been an opportunity for you to submit questions in advance and as we go through the presentation. And we'll make our, our best attempt to answer them and at least in the in the in the themes and and trends of those questions that come in. Here's the company's disclaimer with regards to the presentation. Although the disclaimer in its entirety is important, I would highlight that the presentation includes forward looking statements and wording such as expects or anticipates, believes, intends, etcetera. And by their very nature, they have a risk element associated with them because they rely on future events or circumstances that may be beyond the control of the company.

2:56 The presentation is also given without any reference to your particular investment objectives. It doesn't constitute investment advice, and you should, of course, always constitute always consult your your financial investor excuse me, your your financial adviser before making investments. So I'm joined on the call today with Matthew, our chief financial officer. Matthew and I both joined GENEDRIVE in 2016. At that time, the company had a base technology platform in the GENEDRIVE reader, but no assays yet available on the market. Since that time, we've worked with our team here to grow the company's portfolio to include four products on the market and a further two in development. We've developed strong commercial and manufacturing partnerships with blue chip companies around the world, which I believe has been really impressive given the small size of our company.

3:42 Companies with multibillion dollar annual turnover such as Sismex, Saitiva, and Beckman Coulter have all chosen to partner with GENEDRIVE and participate in our goal of bringing diagnostics more broadly and to the point of care.

4:02 The assays that we've developed are in nature are in their nature, excuse me, quite disparate. Two of them are focused on low and middle income markets, where hepatitis c and tuberculosis have a very high incidence. Two are focused on western markets with our US military range of biowarfare detection systems and our soon to be introduced antibiotic induced hearing loss assay here in The UK. With the rise of COVID nineteen, we have or are currently developing both the high throughput and point of care products to diagnose active infection. Many of these are market firsts. We were the first company to develop a point of need qualitative HCV test to help find patients that are eligible for new life saving drugs. We're a sole supplier to the US military for a handheld pathogen detection system after they scoured the world for solutions before discovering the capabilities of our GENEDRIVE device. And we were the first people to introduce a point of care molecular testing solution into the world of emergency medicine for neonates with an opportunity to positively change the trajectory of the lives of thousands of sick children every year.

5:07 Having a discrete or disparate assay menu, in our case, is a real advantage. Diagnostic companies primarily focus on selling an instrument platform, and then they try to build an assay menu that can run off that instrument, and that's their path to growth. Typically, their systems tend to be expensive, and they need a suite of tests or a menu of tests to create a profitable business. Because of this, they tend to avoid customers or applications where large menu expansion opportunities aren't as obvious. So as an example, our innovation into antibiotic induced hearing loss means that in future, competition is potentially lower in that area because there's no menu of tests to build there, and competition is therefore less likely to enter. There isn't currently another genetic test to be done right alongside AIHL.

5:54 Similarly, we would expect a tuberculosis lab probably only doing tuberculosis testing, and the same could be said for hepatitis c. And the reason GENEDRIVE can grow a business in this way is because the GENEDRIVE product itself is very is very small, very portable, and it's very economical to build. So it doesn't need a broad menu to grow our revenues in a profitable way where other companies are unable.

6:24 Back in March, we entered into a collaboration agreement with SITIVA, formerly known as GE Healthcare. Utilizing our expertise in PCR and combining that with SITIVA's novel manufacturing processes, we made, to make lyophilizer or freeze dried PCR beads. Together, we developed a PCR product and CE marked that at the end of May twenty twenty. The test is based on GENEDRIVE chemistry, but it's not a point of care test. It's manufactured in a sort of 10 by 14 centimeter plastic carrier, or what's termed a 96 well plate, that can be inserted into a high throughput RT PCR machine, of which there are several prominent manufacturers. After patient samples added, over 90 patients are typically tested within around one hundred minutes.

7:10 There are many thousands of these instruments in the market, and so there's an established installed base on which to sell to. The list price of the test is approximately £950 a plate, and gross margins are in excess of 60% at that price. Our first product was CE marked at the end of May on the Roche LightCycler platform. In order to expand the number of platforms on which the kit could be used, which was a commercial imperative, we added two additional variants, one for ABI and one for Bio Rad instruments. Although the chemistry is identical in each, the actual plastic plate or the carrier in which the beads are held is slightly different in dimensions. So although the headline story is that we developed a test, we did in fact develop three different tests with three different part numbers for three different platforms.

7:58 In parallel to this, we also recognized based on initial user feedback that the resident software systems on the third party PCR platforms were not optimized for reporting results using GENEDRIVE chemistry. So I think we responded quite rapidly to repurpose our GENEDRIVE instrument software, and we created a new downloadable app, which we called GENEDRIVE exporter, one for each version of the PCR platforms. So in effect from our launch at the end of May, we have in fact developed three different reagent packages and three different software packages. Our commercial strategy has been twofold. One is to leverage our existing distribution channels, which we have with Sismex in Africa and Asia Pacific. Secondly, we established new importer routes into India, and we're working with Beckman Coulter to establish a unique offering in The United States market.

8:48 And I'll go into that relationship in a little bit, more detail. But it's really interesting, and it'll allow us to offer a turnkey solution to laboratories wishing to start or scale up their COVID PCR testing in a really meaningful way. We've also signed some additional distribution contracts in smaller countries. We've also thought very careful about carefully about the, the type of customer that we wanna use with our product. There are various types of PCR, whether it's endpoint PCR or quantitative PCR, RT PCR. And we recognize that it's unlikely customers would wanna use a blend of different technologies in their lab and would tend to standardize on one or the other. Primarily, that makes our product ideal for people looking to consolidate on a single type of workflow or transition to a new unified workflow.

9:38 So we've been focusing on larger networks, ministries of health, government tenders, and things like that rather than individual hospital end users.

9:49 In terms of progress to date, we all acknowledge that the regulatory processes for the SARS CoV two has been a lot slower than we would have hoped, and that's obviously impacted our ability to sell. If we don't have regulatory clearances, we can't sell in a market. However, based on our visibility of existing opportunities and our understanding of the remaining barriers, we remain very positive about the financial impact this product can have on our company. I think investors should have confidence on our ability to navigate the regulatory processes despite the delays that we've had. We've previously cleared products in many countries around the world, and we're one of a very select group of companies that have managed to have their products registered with the World Health Organization. These historical processes have always been very time consuming, complex, and technical, but we have demonstrated our capability to do this time and time again. So I think my my first point I'd like to leave with you is that I hope you would have confidence that we can get there in the markets in which we want to. Our recent approval in South Africa shows that we are able to navigate the requirements of regulators.

10:49 We are able to produce good clinical data in evaluation centers and achieve the certifications that we need. Secondly, I'd say the speed of the regulatory organizations are the the speed they're moving, excuse me, has has really surprised us all. When we began our product development or not our well, not sorry, our product development, we did our our our fundraise for SARS CoV two back in in in March. It wasn't uncommon to see companies getting regulatory approval within a week, or in some case, even days. But by the time we submitted in various markets at the end of May, the rate of regulatory approval had clearly slowed down a bit as companies came to market and the availability in markets became more widespread. So while we do have ongoing dialogue with the WHO, we have ongoing dialogue with the Indian regulators and with the FDA, We do understand where we are, and we do understand if they require any more information with us. We've we've last been in communication with all of these agencies, just this month in November, and we've supplied additional data or other requirements as as needed.

11:53 Lastly, the regulatory process for us has also been slightly complicated by having three different versions of the product. In the advanced questions, we had a lot of questions around regulatory and so I'll be able to go into a little bit more detail, I think, at the end. But regulatory is effective regulate regulators themselves effectively want to provide clearances on all three products as a family rather than just as one. And then some cases, that's required us to supply supplemental information and performance of data as we've gone along evolving our product claims, and that's contributed in some case to the slower than expected speed. But again, let me reiterate my belief in our ability to get this over the line, and I'll also comment in during the presentation as we go forward about a couple of other opportunities that are sort of independent of the of the current regulatory processes that we have.

12:51 So I think a few a few things of of of note. The first would be that we've been in the regulatory process a long time. Right? And I think it's not unreasonable to think that we should emerge in the reasonably near future. The product's currently CE marked, so we can sell into countries that accept CE marking. We, we put a a note in the release about a very late stage discussion that we're at with a European country to supply GENEDRIVE as a testing solution for their ministry of health. And if we're successful in this, it would see GENEDRIVE being delivered in the first quarter of twenty twenty one. It has an anticipated value of at least a double digit millions of pounds, and it's sort of exactly the type of opportunity I spelled out to you before that we're targeting. For system level, highly automated, standardized, and I think that's where we can provide a a maximum benefit.

13:40 Now, clearly, it's premature to categorically say that we're gonna win this. The sales process isn't completed, and so we met risk does remain in in in getting this done. But we think the opportunity is is is well advanced. Right? It's a little bit salesman one zero one not to count your orders until you have them, but we thought it was really important that shareholders understand that this sort of opportunity exists and that we're engaged in these. And there are European opportunities that we're using our CE marking to access, and they're not we're not depending on distributors to drive business for us. I'll comment on the next slide about our ongoing work with Beck and Coulter and what that could mean for GENEDRIVE for the American and indeed the the European market. And I'll just again, lots of questions came in around vaccines, etcetera, but I'll I'll just make a a small comment here because I think I'll probably be revisiting this towards the end of the presentation.

14:31 You know, clearly, we all want a safe and deliverable vaccine to be to be developed. Right? But there is huge complexity around supply, the manufacturer, efficacy delivery, and and ultimate utility of of vaccines. But that's gonna take some time. Right? Clearly, ultimately, there's a long term impact, right, provided that we have long term immunity with with people. But the virus needs to be or people with the virus need need to be tested even while viruses are even while vaccines are are rolled out. They need to be measured and they need to be monitored. And and I personally don't think that there's any impact on testing in the short, medium, or the medium long term. Maybe in the long long term, clearly, you know, we can look at other viruses that have existed in the past that we have vaccines for, you know, hepatitis a and b come to mind. You know, those are not things that we now routinely test for, but that's because when you're vaccinated, you might be immune for, you know, ten years or for life. And that still isn't isn't known with these emerging vaccines. So I think we can remain confident that the business opportunity, the size of the market is is still quite intact despite the very positive vaccine news.

15:45 Beckman Coulter. So our collaboration with Beckman Coulter really arose from our business development activities looking for a distribution route or or potential distribution partners into The United States. You know, we were attracted with the idea of automating our assay on a high throughput laboratory robot. And I think back when Coulter was interested in an assay that required a a minimum amount of pipetting and a minimum amount of of plastic tips. I mean, we've commented before about supply chain limitations and and surprisingly, even even plastic pipette tips for for robots and things are limited in the market. So assays that don't use a lot of those, you know, are are are very appropriate for high throughput systems. Now, our collaboration basically seeks to automate the GENEDRIVE assay on the Biomec platform.

16:30 So Beckman themselves make an RNA extraction kit which runs on this. So the robot can extract RNA from the patient, prepare the test, and then our test can come in to do the assay. To date, we validate the use of nasal pharyngeal and oropharyngeal swabs using Beckman chemistry but off the Biomec, and that's been added to our instructions for use and submitted into the FDA. We have a commercial clinical lab in The US that has GENEDRIVE chemistry and BIOMEX I sevens, and they are currently working to validate the entire workflow for both swabs and saliva on the automated platform. Saliva actually has become quite a maybe that's not the right word, not quite at, but has become a more difficult target to verify in The United States based on expanded FDA requirements.

17:19 If you go to the FDA website and look at what you need to do to verify asymptomatic saliva, you need to collect essentially randomly from patients in three different geographies until you have a sufficient number of nasal and swab samples that you could compare results on. You you would end up collecting thousands of samples and we did have companies quote on collecting samples for us here, which were in the millions of dollars. And we all decided it wasn't it wasn't maybe the first port of call for us. So the goal is to basically validate swabs first, move on to symptomatic saliva, and then ultimately asymptomatic saliva if that's the the right thing to do. Now while we've been working with Beckman, we have also established our own independent route into The United States to supply potential future Beckman Coulter customers.

18:13 So that means in terms of establishing an importer, registering with the FDA, etcetera. We hope to have fully automated swab data complete from those trials at the customer site in the next couple of weeks. Now, we've all been waiting on emergency use authorization at the FDA for the product which we submitted way back in May. However, the the FDA actually does have a path that could allow companies to place the product in the market without emergency use authorization provided that you can meet a few criteria. One is that you need to tell the FDA that you're doing it at a time. You need to generate US based clinical data for your product, and it needs to be included into your your package insert.

18:58 So once we get feedback and data packs back from the American lab, we could put ourselves in a position to do that. So I think, you know, given that that's probably a few weeks away, we'll take a call at that point about whether we've heard more from the FDA or not on our emergency use authorization, and We could choose to start supplying The US independent of that. I think that would probably work for, you know, these sort of more targeted Beckman opportunities. But I think more broadly, American customers would prefer and I think do want to have a an emergency use authorization FDA stamp on on product. But I think for these early adopter type of customers, it might be it might be fully appropriate.

19:45 Okay. So the next thing I wanted to cover with you after I move away from our high throughput test is about four weeks ago, we announced progress on our GENEDRIVE point of care version of our SARS CoV two. We've been working on this rapid test that can detect COVID nineteen virus from saliva. The current performance of the test gives you a test positive in approximately fifteen minutes and a negative in approximately twenty minutes. And critically, it does it directly from an extracted virus in saliva. And we think saliva is a really important matrix on which to do testing because it can be easily donated by people themselves, unlike swabs which typically require healthcare professionals to use. So results are generated directly on the GENEDRIVE device, and positive and negative results can be transmitted directly to informatics systems for the purpose of infection tracking.

20:33 The workflow is very similar to our HCV test, which is illustrated on the company website, if you're not familiar with that and you want to get some more detail. There are an awful lot of use cases for point of care saliva testing. The ability to have a highly accurate test, which is better than lateral flow testing, is really important when you need to be really definitive about infection status. Our plans for product introduction are threefold. First, we intend to introduce a product at the end of the year. We anticipate it's probably gonna be research use only at this stage. It allows us to get it out into the market and generate feedback and clinical evidence for the product, and then allow us to move on to CE marking in the first quarter of the calendar year. And then lastly, in order to provide a highly scalable manufacturing and less expensive manufacturing process, we would really like to look at translating the assay or the bead format that we currently work on with Saitiva to our point of care device.

21:29 This would allow a much higher scale of cartridge manufacturer, and as I mentioned, at lower at lower cost. I think we've been really impressed with the bead manufacturing capability at Saitiva and its applicability to our our product range beyond the high throughput, for the future, I think, really encouraging for the company. So I'm gonna move away from coronavirus now. I'm gonna move on to hepatitis c. And this gives you a bit of a a quick overview, and I'm actually not gonna go into a huge amount of detail here on the product other than to point out that this is, you know, one of our key core products that was hit from the emergence of COVID back in March. GENEDRIVE HCV effectively allows for detection of HCV in the patient's blood directly from plasma.

22:19 And we were really proud earlier in the year to receive World Health Organization prequalification status for this product. And and we are really eager to sort of resume commercial activities, you know, once sales rep travel and things like that is is is more more possible. I think, you know, it's you know, I think lots of people don't don't appreciate or or or don't see the day to day difficulties in conducting business when actually you can't you can't travel, you can't take a flight, you can't you can't go out and demonstrate products. It is not always as straightforward as it used to be, but we are engaged in larger procurement processes now for HCV that we can operate remotely. Now that we're WHO prequalified, there are annual tenders and things that come out that, you know, really the point of being WHO PQ is to get on these tenders or framework agreements. So we're actively engaged currently on getting ourselves listed on those.

23:14 Antibiotic induced hearing loss, it's a product that I've always been really enthusiastic about and you know, I think for I've said this to many people before in my working career, probably, you know, one of one of the the types of assays that's so incredibly rewarding simply because I think you're you're you're helping to transform the lives of newly born kids. And and that is that is just a great experience to be involved in. The assay that we've developed is a is a unique assay. Right? Screening for the genetic mutation that underlies this test historically has been available in, you know, like a hospital genetics department. But given that they can often take several days to turn around a result, it's not the type of service that you can use in in an emergency setting when it's required for infants.

24:01 So we developed this point of care test in 2019, and we introduced it into the National Health Service here in Manchester for evaluation back in January of of twenty twenty. Now although testing for the device did slow down a bit due to COVID, our our partners at in Manchester Royal Infirmary, I have to say, did a really amazing job to continue to test babies, you know, throughout the pandemic as they were being admitted into neonatal neonatal intensive care. You know, we did have lots of starts and stops, but, the trial has proceeded and it is scheduled to complete this month. We did originally have a target of doing a thousand, babies, and I think we're gonna probably finish up a little bit over over over 800. Trials themselves have been like a great learning process, for the company and and for our potential customers.

24:49 We, as a company, have never been involved in such a large scale prospective trial before, especially on a device that hasn't been clinically, you know, validated in sort of that robust clinical setting before introduction. And it's been, I think, hugely rewarding to see the benefit of the device. You know, we screened, as I mentioned, a little bit over eight hundred babies and and we've saved two children from lifelong deafness and provided confidence in seven hundred and ninety eight or so families that their children were receiving correct treatment, and I think really, really rewarding. So when the trial completes at the end of November, we'll be in a position to incorporate some of the feedback from this trial into the product. And then the plan is to introduce it into The UK and Ireland through our new distribution partners, Inspiration Healthcare. They are very strong, particularly strong in neonatal care company.

25:38 And in The UK and Ireland, they service that market directly, which is why we're targeting that. So, you know, from the once we incorporate the learning from this introductory phase, we'll launch. And then in future, we have the option, of course, with Inspiration Healthcare to move through their distribution network. They cover around 90 different countries, many of which they're very strong in, and so we've got additional routes to market there. And then lastly, I'm I'm I'm very interested, and the company is very interested about the long term opportunities of putting AIHL into the American market, where clearly the same clinical drivers exist. But, you know, because of the litigious nature of the American market and the commercial nature of their health care system, there is a there is a drive to adapt new technologies like this. You know, you can imagine if you were running a a service at American Hospital and and a and a child came in and suffered deafness as a result of antibiotic treatment, and there was a test available that you could have done and and you and you didn't do it. In an American market that that drives a litigious cycle.

26:45 So the American market is very proactive in in picking up new technologies, and so we're quite encouraged with the market opportunities there.

26:59 For for longer term investors here, you'll recognize The US military program for us has been very long established. It's been very lucrative for the company in terms of revenue and also provided a a high level of non dilutive funding for us to develop and advance the GENEDRIVE unit over the years. Over the past five or six years, we've received in excess of 10,000,000 US dollars from the DOD, and we've delivered around 200 GENEDRIVE units for them. The vast majority of which they've used for infield validation, ruggedness testing, etcetera. So that program was completed at the end of two thousand and nineteen. And earlier this year, we were contacted by the DOD with a desire to transition this development contract onto a standard purchasing agreement.

27:47 And then when we last issued news or an update on the DOD, we told you that they had indicated they wanted to come to Manchester in in October to have all those discussions. And and, clearly, this is another area where COVID has impacted people's ability to to do that. And like a lot of people, the the military actually, the people that we deal with in the military, they've been very COVID focused as well. So that hasn't happened in the time frame that we would have happened to. However, we're still very confident that they should be able to come over very soon in the new calendar year, or or we, in fact, could go them go there on a on a business business necessity basis and try to get this completed. Moderate sales have continued following, you know, our change in cartridge manufacturer over to Saitiva earlier in the year.

28:34 Okay. So that's my my my product update. I'm gonna, at this point, turn it over to Matthew. We've got a couple of slides to cover financials, and then we can go back through back to take questions and things. Okay? Matthew? Okay. Thank you, David. So as David said, I've just got a couple of slides here on the financials mainly focused on performance to June 2020. So revenue to June was 1,100,000, and that was on expectation. Operating costs were 6,700,000, very similar to the prior year, giving an operating loss of 5,600,000. The main cash flows below operating loss, there's 850 inflow from working capital as we tightly managed around the year end.

29:21 And also, 970 inflow from tax. So we're recipients of the r and d tax credit scheme in The UK, and we received a credit in the year of £1,000,000. Also, the projects we worked on in the year to June 20 also will qualify for r and d tax claim. And as soon as the accounts are signed off this well, accounts are signed off now, we will this week be submitting our r and d tax claim for the year to June 20, and so would expect 1,100,000 in thirty to ninety days against HMRC timelines, so broadly January to March time scale. 3.8 outflow therefore from operating. Below operating, there was the fund raising May and also the conversion of GIF, an outflow of 700,000 to satisfy interest on on their loan.

30:10 Therefore, closing cash at bank at June was 8,200,000. We then gave an unordered cash update for the October 31. Our cash was 5.1. This is reasonably high consumption based on a historic rates. So 3,000,000 over four months, so around $7.50. And this consumption was, as discussed at the fundraise to round securing long lead time supplies, especially around enzymes and building some initial stock so that we can service some of the opportunities that David spoke about a moment ago. Without these, our cash consumption normalized would be more like $4.50,500,000 a month and not the $7.50 as we built up this call. Okay. Also got a slide here on on debt.

30:57 Obviously, there's been a lot of activity in the past six months on the debt, and it's, had quite a big impact on our balance sheet. So it's at June 19. Cash debt was 8,200,000. During the year to June 20, the Global Health Investment Fund converted 6,000,000 of their debt. So the balance sheet date June 2020, cash debt was 2,500,000. And then subsequent to this, BGF in September partially converted their debt by 1,000,000. So unaudited but pretty simple maths, the debt sort of now as we speak is 1,500,000. So down from 8.2 sort of fourteen months ago to 1.5 now.

31:43 And the only convertible on the balance sheet is to BGF. And they'll convert that debt to into 6,700,000 shares. So fully diluted will be 64,000,000 shares in issue. And then very briefly, one, other liability on the balance sheet with relates to that convert. It's non cash. It's an accounting entry just to record the conversion and will be settled purely by the issue of shares. So a big liability number, but purely settled by shares and no cash. Okay? Thank you. Okay. Thank you, Matthew. So news flow, I mean, this this basically summarizes the things that we've gone that we've gone through. What is it that you'd expect to see from us from a news flow perspective over the next period of time?

32:33 Clearly in the next now, zero to six months, registration updates, FDA, WHO, India are are clearly all things that we need to achieve in the very short term. And the material contracts that flow from those, of of course, would be things that we want to communicate to you. On the point of care device, as I mentioned, we've got two sort of flavors that we want to get out. An earlier phase, then a c marked in q one. We'll let you know when those go out, of course. And I covered briefly around our commercial launch activities for AIHL with Inspiration Healthcare. So those are all things that are gonna be happening in the short term. Clearly, the top two bullets, I think, of fundamental importance for a lot of people on the phone here today. Six to twelve months update on DOD pro contract progression.

33:18 So, again, we'd expect we've communicated before what we've been told by the DOD in terms of quantum of assays. They've been told we've told us that they probably wanna buy around 500 systems over a period of three years, but they haven't told us what the what the sort of frequency, so the month to month of that is. And they haven't told us the volume of assays associated with that. So there's quite a bit of potential upside to that. So once we get some clarity on that, clearly, we'd wanna communicate that as well. And then I commented about moving GENEDRIVE on to lyophilized bead chemistry from Saitiva with SARS CoV two and then potentially other products as well. Our three year objective as a company has always remained the same. It's around material revenues over the over three assays by June 2023, and that hasn't changed.

34:05 We we believe that SARS CoV two kits will drive good revenue for the company, and they should and they will continue to in the future post any vaccine. Successful transition of a h AIHL in The UK, so that's around the commercial traction that we get to that. And again, we want do wanna expand to other markets either with new distributors through the distribution channels of Inspiration Healthcare or into The United States. And then lastly, in previous presentations, we have highlighted our tuberculosis product. As our company has been focused on SARS CoV-two over the last six months, that program has been on pause. So we do wanna get back to funding that in the near future. And so that slipped a little bit for us, but we think it remains a very attractive and interesting market to get ourselves into.

34:55 That's perfect. David, thank you very, very much indeed, and thank you to Matthew. Ladies and gentlemen, please could I ask you to continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But also just like to remind you that given the significant number of investors that are on this webinar today, the company may not be in a position to answer all the questions during the meeting itself. I'd also like to remind you that a recording of this presentation, along with a copy of the slides and the published Q and A, can be accessed via your Investor Meet company platform. Before we look into the Q and A, I'd like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations.

35:43 David, Matthew, obviously, before we have a look at those questions in the Q and A tab that have come in today, Obviously, investors have submitted a number of questions pre the event. And thank you to all of those investors that took the time to send those questions in. There was a significant number received by the company. And I think just time permitting and also the intention to look at the questions during the meeting, we've kind of tried to put these into some kind of thematic approach. So if it's okay, David, I'd like to ask you the first question. GENEDRIVE has been waiting since June for FDA, EUA and ICMR approval. Are other companies who applied around the same time still waiting? Or is there a particular reason for the delay in the case of GENEDRIVE?

36:31 Well, listen, I as I said in the presentation, we you know, first of all, we obviously agree and acknowledge that the delays have have been frustrating. And and I commented that back in March, you know, it was a slightly different world to approvals. Even even by the time we got to May and we introduced our product, things were were very different. So just to provide sort of some some color to it, I think some of our our regulatory processes have become a bit complicated because of the multiple formats of our kit, as I mentioned in the presentation. So some regulatory agencies just view this as a as a sort of a family of products, and others wanna look at them one by one, which can take some additional time. In the case of India specifically, at the time that we launched the product, we launched the product validated only on the Roche LightCycler system and for use with manual RNA extraction.

37:23 And then once we got the product out into the world and and specifically at in the India ICRM, You know, we we had some issues there, which I'll go into in a second. Now when you're doing when you're doing a test, and I talked about this when we talked about the Beckman robot, there's sort of two stages to the test. The first is that the virus needs to be extracted out of the patient and cleaned up, and then you do the test on that extracted product. And you can do that you can do the extraction process by hand, manually, or using an automated robot like the like the Beckman system. And it's a bit of a a a technical point. And if there's people online that work in labs or have medical backgrounds, you'll you might understand this, but or or have experienced this, I should say. But automated extraction is quite prone to the carryover of alcohol or or ethanol.

38:09 Ethyl and ethanol is an inhibitor of PCR. Right? And when we submit when we submit it into ICRM, it transpired at ICRM that the residual samples that they use testing that they do all the testing on are are developed from automated extraction methods. So we immediately, from day one, had a slight incompatibility between automated extraction and and manual. Now it's not a huge it's not a huge issue. I don't wanna flag it up, like it's it's a catastrophic thing. But if you're running a liquid based test, you can sort of change the recipe a little bit to deal with an automated extraction. But if you have a test like ours, which is fixed, you you can't do that. So your choices are either you have to modify your extraction procedure itself, which a a registration agency isn't gonna do, or you need to modify your own protocol a little bit.

38:58 So we had to modify the protocol of our kit to include automated methods. And if anybody sort of follows the changes or updates to our package insert, we've gone through about eight different versions of package insert that we've published on our website that has taken us from a single extraction mechanism. I think we've got seven or eight of them in there now, several of which are are automated. And it just requires a different a different dilution of the sample before testing, and you can get excellent results. So we've had some back and forth with ICRM in terms of of package insert changes and and putting product back in for them to validate. And and I think to some extent, we got a little bit lost in just bureaucracy with them. We went a period of over two months where we had no communication from them whatsoever despite phone calls and emails, etcetera, and which was which has been really, really disappointing. But I think now, in November, we're we're we're we understand where we are with them, and we are fully engaged with them. And I think it's completely reasonable to expect that we will have any approval in the very, very near future.

40:08 And that should cover all three versions of kit that we have and include the GENEDRIVE EXPORTER software. In the case of the, The United States, The United States is a very different system. So India does evaluations on products and The United States does not. United States is basically a paperwork exercise. They they review the data that you've submitted. And they have a triaging system in The US, which basically just constantly prioritizes the queue of applications based on what their market requirements are. You know, are they looking for lateral flow tests? Are they looking for PCR tests? What is it they they want? Now I think the first thing to say is on a positive side, high throughput PCR, which we have, has always remained on the FDA priority list. So that's very good. We've heard anecdotally from people that the FDA has a backlog or a queue of 2,800 applications.

41:00 So 2,800 applications for people that haven't been reviewed yet. Right? It's that's a staggering change from probably what it was back in March and April last year. Right? But we've had dialogue with the FDA. They've had a review of our file. We have submitted additional data into the FDA. Not really driven, I must say, by their observation that there was any deficiencies in what we've submitted. It was more driven by the fact that we submitted back in May, and some of their requirements for documentation and things have changed in that period of time. So so we've had to resubmit some data. But at least at least we're in dialogue, and and and that's a very positive thing for us. Right? So I think my feeling is we should be close in India.

41:49 USA, as I mentioned, is potentially more in our control if if if new FDA doesn't come through reasonably soon. We have the option, at least in a targeted way, to get into The US by just going in without EU FDA, and we think that's a viable option for us. Thank you very much indeed. Yeah. Perfect. The second question is what exactly are the commercial terms behind your JV with Beck and Coulter? In The USA, on average, a $140 is spent on a test. Do you get paid for the beads, or is this a revenue split with Beck and Coulter? Okay. It's a it's a it's a good it's a good question. Now just to talk about, excuse me, maybe the hundred and forty first. So the American market is is essentially governed by, you know, an insurance based reimbursement system.

42:40 And I think the 140 number is about right, actually. It might be, like, $1.30 or something, but it's it's about the right number. And this includes the cost for a PCR test, the cost of RNA extraction, the interpretation of the result, and the the charge of the laboratory doing the test. So it's not a $140 coming to to GENEDRIVE. It's a $140 going into the lab that does the test. And in The US, not every, but a lot of labs are commercial. Right? So the the lab has all their expenses in running in running their business and the test. And I would say that they would typically expect to buy in on their sort of margins. I can't imagine them paying much more than around maybe $40 for all of that stuff that they need. And then they make their profit from there.

43:27 So the supplier to the lab for RNA extraction and PCR tests probably could charge up to around 20 to $30 altogether based on that reimbursement, which is really high, I have to say. So if you sold direct to an end user customer, from us direct to a customer, I would agree with the comment that you could probably you could probably achieve a higher price than the prices that we've communicated already. If you're going in through a distributor, then the distributor is gonna take a cut of that. And then I think that prices that we quoted previously, 8 to £10 for The US market is is appropriate. The second point of the question, to cover, is our relationship with Beckman Coulter, and we don't we don't actually have a it's not a distribution agreement. It's not a the question asked if it was a joint venture. It's not a joint venture.

44:13 We have a collab sort of a development collaboration agreement with them. Right? And it is sort of at a technology level. Can we get these products working together to provide a combined solution? Right? And everybody wants to achieve that because it does provide something that it's not necessarily unique. There are other automated solutions in the market, but it is very differentiated and very, very different than other things that are are available. So it's a development, a collaboration agreement. How it all transpires commercially at the end isn't isn't yet agreed. I mean, clearly, it might it would be a nice thing for us to have a Beckman sales representative of the Biomek representing the GENEDRIVE test standing in front of customer. That would that would be a a good thing for us, but we're not there yet.

45:01 As I mentioned, you know, we have established our own independent routes into The US, and so we can supply independent of Beckman or we can supply through Beckman. But I think all things in stages, we need to get the collaboration actual current collaboration agreement done to the point where everybody's happy about the performance of product, etcetera. And then in parallel to that, commercial arrangements can be agreed. Thank you very much. A question here around mass testing and and obviously the the news of vaccines. It will be great to hear why GENEDRIVE management believe that mass testing will continue well into 2021 when we have at least one seemingly highly effective vaccine for COVID capable of preventing it. Please, could you explain the role that testing will play and why there is broad distribution of availability of highly effective vaccines?

45:52 Okay. I think the question probably means when there's broad distribution and availability of vaccines. But listen, the I think, you know, for shareholders, the the Pfizer news that came out last last week, I guess it was now, you know, clearly impacted anyone invested in a in a in a COVID stock. That was quite quite clear. I I I would like to think, you know, a bit of a bit of an an overreaction. Vaccine news was always gonna come. I think maybe we didn't expect it to come so quickly. But what we actually need to actually impact the uptake and the use of tests, you need a couple of things more than just news of vaccine. You need to have vaccines that have been able to produce at scale. Remember that vaccines work on a population basis. Right? So they need to be produced at scale. They need to be manufactured and distributed out into into markets.

46:43 They need to be cleared by regulatory agencies. And the most important thing is that they need to confer long term immunity to the people that take it. And I think that last point I mean, I think from the Pfizer news, I mean, if you're following it, lots of things have come out since then around. Okay. It's difficult to transport it. It needs to be frozen and all that stuff. But assuming you can get over all of the all of those hurdles, the key thing is that vaccines need to confer long term immunity to impact testing. Right? If they if they don't confer long term immunity, if they only confer, you know, three month or six month or nine month immunity, then you're always back into a testing cycle because you're never really sure how long you personally are are immune. Right?

47:29 So I think until that news arrives, which I guess only happens after it's launched and we monitor, I can't see how it impacts testing. Right? The type of testing that countries are doing, wide scale population testing, really anyone that's symptomatic for anything needs to be needs to be tested. And even in the short, medium, and longer terms of vaccine introduction, if you've had a vaccine and you develop flu like symptoms, I suspect you'd still get tested. So I personally don't see an impact realistically on testing in the in the short, medium, medium, long term. Long, long term, yes, once vaccines are shown to have long term immunity. But, other than until that's determined, I think we can be reasonably confident in our in our business case.

48:16 Thanks so much, David. We had a number of questions about shareholder engagement. And in fact, I was just looking in the live q and a, and we have a question from Jasvir Jay, who is a shareholder. Please, can we receive regular updates about all products, not just COVID? But particularly, the questions that came through pre submitted is why do you not do more PR or release news more regularly? And perhaps I could just ask you to put a bit of context around that. Yeah. I I think because I think we try to, but I think just because we've had delays, it's it's it's hard to issue news when you don't really have much of substance to stay. Right? And we haven't ever been a company that issues sort of fluffy PR, and that's just the way that we've decided to be. Right? People have different interests. Right? And and our our interest is in is in growing a a long term sustainable business.

49:09 Right? And and and we tend to issue RNSs, news releases, etcetera, around things that are are are in are indicative of that. We've just gone through a period where we haven't had a lot to say, unfortunately, and and I recognize that's that's been difficult for some retail investors and individual investors. But there's nothing there's nothing planned behind it. It's just that we didn't have a lot to say. Perfect. Thank you very much indeed. Well, look, I think just bearing in mind, David, obviously, we've got ten minutes up to the hour. I'm, You can jump over that, no problem. But obviously, some people do have follow on meetings. So I'm mindful not to consume all the time with just the presubmitted. Could I just draw your attention to the live Q and A panel on the right hand side of the screen?

49:55 And perhaps if I could just ask you to read out who the question is from, along with the question and obviously, a response where it's appropriate to do so. And obviously, just to say that, obviously, thank you to all the investors for submitting questions. And if we don't get through to your question, obviously, we'll make it available post the meeting. So if I may just hand back to you. There may be a lot of things that you've touched on in the presentation, but if you could add a little bit of context or alternatively, obviously, things that may you may not have addressed. So over to you if I may, David. Thank you. Right. Okay. So I haven't I haven't done this before. So, there's quite a lot on here that I can I can pick from? But, okay. So I've got a question from Sahil here. It says, are we putting in a bid as part of the recent 22,000,000,000 tender announced by the government either for the point of care or RT PCR tests?

50:45 As I've seen online, someone mentioning that they had a chat with you, and we have been confirmed we're gonna try to bid for our point of care test. So the so the the government has has issued a framework agreement, which covers the four year purchasing plan for all sorts of things, point of care, lateral flow, COVID, non COVID. It's a bit it's a a massive tender over the course of four years. So it includes products that are available now and, I I guess, to be developed as well. So naturally, yes, of course, we will we will submit data or not data. Excuse me. We'll we'll submit it. We'll submit a bid for that. I mean, you know, we we haven't we haven't really been focused on The UK market for our high throughput tests simply because by the time we came to market, you know, The UK sort of supply chain and the infrastructure and the style of testing that they that they were doing was was pretty much established.

51:39 Right? And so we we and given that we didn't have a historical distribution route in The UK anyways, we we didn't we haven't historically focused, into The UK. But given that this is a four year looking framework, absolutely, we will. We'll put in both of our our products and and, and see where that gets us. Okay? And then what's here? So, David David t. Some of these were submitted quite early on, in the presentation, and I think I probably answered some of these. But, David t, in your in, in your view, what's the cause of the sharp share price decline last week? I think, again, it's it's was all vaccine related across across the board. Right? Wasn't particular about about our company. So I think that's that's that. Hopefully, that's a very complicated question.

52:27 Is this the same sorry. Is this the same person? No. Michael t now. Can the timeline of COVID saliva tests be brought forward at all? I'm not sure if the I'm not sure if the question refers to point of care or if it refers to the high throughput test. But I'll I'll answer both of them. I think for the for the COVID test for Beckman on saliva, really, challenge there has been around saliva is a is actually quite a difficult target. It's a variable target. And and I haven't I don't personally have any concern about the performance of our product in saliva. It seems to be working well. They're getting the whole chain, the value chain of the Beckman robot, the Beckman extraction.

53:15 Our kit working on a variety of different saliva collection containers hasn't hasn't been straightforward. I absolutely think that we're all it's resolvable and we can get there, but it's taken more time than we would have wanted. And then if it ref if the question refers to the point of care test, I I think the critical thing about us is making sure that we bring a product that's performing well. Right? We see lots of products that get introduced quite quickly or earlier in the days that really once they get out there, we would you know, you find they don't work very well, and we don't wanna find ourselves in that position. So I think it's important. And I also think that, you know, it's a big world. Right? We I think naturally, by the nature of us being in The UK, we see a lot of UK news, UK government. But our focus really not that we're not focused on The UK, but we are also focused globally. And and and, you know, again, we don't think opportunities are are going away. The most critical thing is around bringing a bringing a product that that works effectively.

54:14 Okay. So the next one, a a k or a I k. You achieved CE marking in May for the GENEDRIVE 96 SARS CoV two kit. Why haven't you why haven't you achieved any sales in Europe to this date? Well, it's two things. We haven't we've never said we haven't received any. We have we have done some sales in Europe. We've also established some new distribution routes recently in Europe. But historically, as I mentioned in the presentation, our routes to market aren't aren't in The UK. Right? We our products historically were focused in emerging markets, and that's where our distribution channels were. And if you're if you're realistic about it, if you think back into sort of May time, we were all quarantined to our homes. Right? We were we were all your ability to travel was was curtailed.

55:05 And and even, you know, sales representatives here, you know, couldn't even visit in in the hospital. So the the the probability of of establishing new routes to market in The UK in the May, June time frame, I think, are are not are not very realistic. So so we put our focus a little bit elsewhere. You know, we we highlighted, I know, a big opportunity that we are working on that we feel we feel positive on that does come off the back of CE marking. So we haven't sat around waiting for distributors to do things. We have done things directly, but The UK itself hasn't necessarily been our been our focus. Mark, how are doing on time? We've got a few minutes left. Yeah. Yeah. Absolutely fine. Just, obviously, take your time. I can see the number of questions for everyone that you answer. There's another one that comes in. So, I mean, feel free just to take what you can and Sure. Yeah, I'll hand over to you.

55:59 I think I've got Simon h. Simon h. In a few years, when hopefully COVID is fully vaccinated against, what opportunities with the systems? Can they be used on something else? So I think listen. I I went through what we're working on and and assays. But there listen. There's a broad range of things that, molecular diagnostics can be applied to. Right? And there are lots of these interesting opportunities that that we can go after. So, absolutely, we have lots of opportunities, Simon, for for menu expansion in the future. Mark h has asked, how many Biomec I sevens are there out there now, or is this completely new? It's not completely new, but I believe it is their most recent advent of the Biomek. I I and I don't know the precise number of Biomek's out there, but it is in the thousands anyways of Biomek's, not necessarily I seven.

56:50 Curiously, as a little side point, you know, when I when I came out of university and just started my first commercial job I ever had was with Beckman was with what was called Beckman Instruments back then. And I was a I was the Biomek 1,000 sales representative. That was, you know, thirty years ago. So Biomek's have been around a long time. The key thing about Biomek I seven though is is we're not necessarily trying to sell onto a new to an installed base of Biomek's. We're trying to package a new offering that we can go in and convert systems, right, and try to standardize them. So given it's their most recent one, I I don't think there's a massive installed base, but I don't think it really impacts our our business strategy so much. And then with two minutes left, let me see if there's another one here.

57:36 David d, what's the annual market global in pounds or dollars for AIHL? So David, we have we've triangulated that to around £30,000,000 a year based on going through distributors. So and the way that that comes about is we say, in The UK there's around ninety thousand babies admitted into neonatal intensive care units every year, and about eighty five percent of those get antibiotics. So when you do the math, it's a little over 70,000 tests a year, assuming that, again, this is market potential, assuming you test them all. And then you say, well, Europe's about five times the size of The UK and The US is about five times the the the size of that. So you get up to a potential of around, you know, seven hundred, 800,850,000 tests a day. End user price, again, will depend on the market. In the in the in European countries, socialized medicine countries, you know, it looks like around 65, $75.85 pounds end user price is reasonable. If you went through a distributor from us, for our transfer price to a distributor might be $25.30 pounds.

58:51 When you go into The United States, it's driven again by their reimbursement system. Reimbursement is lower in The US for this type of product. I think it's around I think it's around 50 US dollars off the top of my head, and that would probably necessitate, obviously, a lower transfer price than £35 to a distributor. But net net, if you if you sort of average it all out and said, oh, I'm gonna go through a distributor, 'll be £30 a test. It's around around £30,000,000 a year. Okay. So, Mark, I think I'll I'll stop there. We're Yeah. Perfect. I do know that you have other, you know, I guess, meetings in terms of your your investor roadshow. So thank you very much indeed for doing that. So I know that investor feedback is important to you and to all the investors that have submitted questions. Obviously, the company will be able to review all of these questions. And any topics or subjects that perhaps have come through those questions that weren't particularly addressed in the presentation. Obviously, we'll be able to, where appropriate, publish those responses.

59:50 David, before we just wrap before we direct investors for feedback, could I possibly just ask you to wrap up? And then as I say, I will direct investors for feedback. Great. Thanks, Mark. Well, listen, I really appreciate the hosting. And and, like, as I said, this is the first time we've used the your your platform, and I think it it does work really well. So we hope to be able to engage our our our retail and institutional investors through this platform in the future. So I think we covered a lot of ground today. I think we've got a lot of encouraging things in the company and a lot of opportunity. We recognize that things some things have not gone on the schedule that we would have hoped, and we realized that there's, a disappointment in that. But, we are doing everything that we can do to rectify those things as as quickly as possible. I I would encourage people, if they do have questions, if we're not releasing our nests or whatever, people are welcome to contact the company and people are also welcome to contract, contact Walbrook PR, our financial, PR company for information if they if they want any further information, if they wanna follow-up.

1:00:48 But, again, thanks, Mark, very much for hosting. No. Absolutely. No problem at all. And thank you both to David and Matthew for for updating, investors today as part of your, roadshow. Could I please ask investors not to close the session as you'll now be automatically redirected for the opportunity to provide your feedback? If you access this meeting from our platform, then the feedback page will appear. If you accessed it via the link sent to by email, you'll simply be asked to log back in and submit your feedback. We would very much encourage you to to express your views to the company. On behalf of the management team of GENEDRIVE PLC, we'd like to thank you very much indeed for attending today's presentation. That now concludes the session, and good morning to you all. Thank you.