Bioporto A/S

CSE:BIOPOR

Earnings Call Transcript 2020-Q1

[Operator]

Hello, and welcome to the BioPorto Company Update Call. [Operator Instructions] Today, I'm pleased to present the speakers. Please go ahead with your meeting.

[Peter Morch Eriksen, Chief Executive Officer]

Welcome to the BioPorto presentation of the interim report for the Q1 in 2020. We're going to do the presentation in English. I will do all Danish investors allow them in the questioning to put their questions in Danish if they feel more comfortable doing that. I'm sitting here together with my CEO (sic) [ CFO ], Ole Larsen, and we will go through the happenings and the actions done in Q1. And -- we'll start with the highlights from Q1, that's me who is going to present it, the Q1 financials is CFO, Ole Larsen. And then I'm going to talk about the regulatory studies. And then the gRAD pipeline, including what we are doing on the COVID-19, and then Ole is going to end talking about the milestones for 2020.If we look at the highlights, we had an impressive sales of our main product, NGAL. We had an increase with 67% compared to Q1 2019. And it's both in the States and in Europe, we are seeing very good numbers. It is impressive that we, with this number, is starting to see that the momentum for NGAL is there. And even though that we do not yet have the clearance in U.S., we also see the interest, and I think that's the foundation for the beliefs in NGAL long term.Highlights also from Q1 is that we have made all the preparations. We are ready to go on our clinical trials for our pediatrics. But unfortunately, due to the COVID-19 situation, the only thing we are missing is being allowed to enroll patients at the 10 sites in U.S. And everybody understand that due to the fact that the hospitals are focusing 100% on the COVID-19 situation, their focus on clinical trial is close to 0 unless you are doing any clinical trials helping with the COVID-19 situation. We hope that it will be -- soon be better. We hear that some of the states will open up sooner than later. And we will start as soon as one of the states that we have some of the sites in that we will start enrolling.A great news in this situation is that we have made some collaborations with the Southern Danish University to develop a test for COVID-19. And it's virus based, that is, to explain it very shortly that we are looking for the active virus and not the antibody. We will also, internally, we are working at producing or developing an antibody test, and we are all using our gRAD technology platform that we have in-house.In the quarter, we also successfully did a rights -- preemptive rights issue completed. And the transaction was that we received around DKK 40 million. It was oversubscribed. So with the situation in mind, an oversubscribed preemptive rights is fantastic. After cost, we'll get approximately DKK 38 million. Guidance for 2020 are maintained because of the strong first quarter.

[Ole Larsen, Consultant]

Thank you, Peter. Ole Larsen here, and thank you all for listening in on our webcast. If we turn to Slide 7, you will see on the left-hand side of the slide, the revenues broken down quarter-by-quarter. And as you can see, in first quarter of 2020, we actually had less revenues than in the year before, despite the NGAL-driven growth we have seen in Q1. The reason for that is the change in antibody strategy.And if you go to Slide 8, you can see the breakdown of our revenues. On the far left side, you can see the NGAL has increased from DKK 1.3 million in 2019 to DKK 2.1 million in 2020 in first quarter. So that represents a very satisfactory growth of 67%. That is offset by the changed antibody strategy. And as you can see, both our ELISA kits and our antibodies are reduced compared to last year. Worth noting, especially for the antibodies, Q1 in 2019 was an exceptional good quarter for antibodies. And that is the main reason for our revenues being lower than last year.If we turn to Slide 9. As Peter mentioned, we did an oversubscribed preemptive rights issue in March-April. And I think you all remember that it happened right in the beginning of the COVID crisis. And because of that, it is also very satisfactory that we saw so many loyal shareholders participating in the rights issue, enabling us to secure DKK 40 million in gross proceeds, which brings the cash position after Q1 and with the net proceeds from the rights issue up to DKK 41 million, which will take us into Q4 of 2020.With this, I will turn the microphone back to Peter.

[Peter Morch Eriksen, Chief Executive Officer]

Thank you. The NGAL test and regulatory study, as all of you have followed us, we had a submission in 2019. And we got some feedback end of 2019 that they wanted additional data. We hope that we are going to be done by the end of Q2. And honestly, internally, all our contracts, all our approvals from the hospitals were ready to go. But when we should start here in April enrolling patients, there was a clear lockdown of clinical trial at all the U.S. sites. And therefore, we were fully aware of.And since we didn't start off the 1st of May as the President in U.S. Trump thought in April, then we have to announce that we are not going to submit the applications before second half of 2020. And of course, we are going to follow that extremely closely because it is very important that when the first door is opening at some of the hospital that we are going to start as soon as we can.The additional data collection is relatively simple. So it shouldn't take a long time when we are allowed to get in. It is -- as described in previous presentations, it is patients who arrived in the ICU and we have a chart review or inclusion/exclusion criteria. And then we will, after hand -- after 48 hours, see if the patient is still in the hospital, they're going to be included in the trial. If they are not at the hospital, they will be excluded. That's the precise message that we got from FDA, and we have been in close contact until end of last month, and that is still the demand from FDA.But a change situation like the COVID is also opening up potential new opportunities. And the ones who have followed BioPorto for a couple of years know that we have talked about that we have a generic rapid platform that we can make antibody test, we can make other tests. We here got the opportunity to try to utilize that platform to help in the COVID-19 situation.BioPorto's patented generic rapid assay, called gRAD, was developed in 2016. It enabled a rapid development of a lateral flow device. So as soon as you have the antibody, you can, within a couple of days, create a functional test.And why do we have the confidence in that? We have done it for a trial basis over the last 1.5 years where we have tested our NGAL assay up against putting NGAL antibodies into the gRAD platform. And the correlation between an automated assay and this gRAD platform is 99.5%. Normally, when you are talking about fast test compared to professional assays, it's around 80%. We have an extremely accurate platform to do this.The gRAD can measure more than one. On these lateral flow sticks, there is a control and then there is an opportunity to measure 2 different samples in a test. It's also described on Page 15 in front of you, where you can look at the product format. It is qualitative, semi-quantitative, quantitative detection of analytes. The key thing here for this product, it's very flexible. It can measure in urine, in plasma, serum, whole blood, saliva, nasal and synovial fluid. So we can use this to test in a lot of different topics.We have not talked about what we currently are doing, and I'll come to that on Page 17. But the key thing here, it's fast, it's versatile, it's easy, low cost and it's scalable. And I think that some of the things right now with the pandemic that we are seeing, I think that speed is of essence. Of course, accuracy is of essence, but also speed because if you are in a hospital, you're feeling not well, it is important for a health care worker to get a test in 10 minutes after you can be told you have to go home or you can continue working with the COVID patients.I think that's really some of the things that we have to get out there. It's a very simple test. So I believe long term that it should be able to be out with GPs or praktiserende læger in Danish. And I do think that it's really going to help the pandemic and the control of it.If we look at how are we using this platform currently? As I said, we are using it for NGAL, and we have been testing it during the last 1.5 years. And the whole intention is the first time we are getting the clearance, hopefully, on NGAL in U.S. The second thing we'll see is that we are going to get gRAD for NGAL approved in the States. So it's up there. It's well documented. It's well described. And it is a bedside test. It is a very fast test and it can be done in all the fluids that we talked about.Then the one we are working with, with Southern Danish University is the COVID-19 active virus where we are looking at the spike proteins in the virus. And I think that's going to be key when we have that in place.We -- internally, we are looking at COVID-19 using the same platform for IgG and IgM. And for people not understanding this, this is an antibody test where you're looking at, do you have created an antibody in your body? Have you been sick? At the same time, we currently are running, using the same platform for sepsis, we are running currently a trial at Rigshospitalet, the state hospital in Denmark, where we currently have enrolled 55 patients also using the same thing. We're looking for NGAL in inflammations. And that's a thing that could maybe be correlated to some of the COVID patients. It is something that we are looking at.NGAL for blast lung, that's something we are working with together with DoD or Department of Defense issues. And then where we also have a proven track record where we can use the platform is looking at NGAL veterinary, primarily in race horses. So the sad situation for the world having this pandemic is, of course, also giving us an opportunity to show off some of the technologies that we have in-house.

[Ole Larsen, Consultant]

If we're looking at the 2020 milestones, the main focus is still to finalize the collection of the data that we need for the FDA application so we can get the NGAL test cleared in U.S. for the pediatrics. And in parallel, we are also collecting supplementary data for the NGAL adults in the adult setting so that we can also, after the clearance in the pediatrics, can submit an application to FDA for an approval in the adult setting.As Peter mentioned, we are also codeveloping on various COVID-19 projects. And this we will, of course, continue with in the fight against this pandemic. And of course, we will also continuously review new opportunities for NGAL. And Peter mentioned a couple of those with both sepsis and inflammation where we are running studies at certain Danish hospitals.And then, of course, a milestone in 2020 is also to grow the total revenue by 10%. And there, we have -- when we announced our guidance for 2020, we have mentioned that we expect the revenues to be back-end loaded with approximately DKK 10 million in the first half of the year, DKK 10 million in Q3 and DKK 10 million in Q4.If we turn to Slide 20, our guidance for 2020, which we have maintained, is revenue of approximately DKK 30 million and an EBIT loss of approximately DKK 73 million. And we continue to work towards keeping this guidance.That concludes the presentation, and we will now open up for questions.

[Operator]

[Operator Instructions] And as there are no questions, I'll hand it back to the speakers.

[Peter Morch Eriksen, Chief Executive Officer]

Okay. Thank you very much for participating today. And thanks for all the investors for the support in connections with the preemptive rights. And I look forward to giving you new updates as soon as we have new updates, both on the NGAL trial development, but also the COVID situation. Have a wonderful day. Thank you.