Biomerieux SA

PAR:BIM

Earnings Call Transcript 2022-Q1

[Operator]

Good day, and welcome to the bioMérieux First Quarter 2022 Sales Results Conference Call. Today's conference is being recorded. And now at this time, I would like to turn the conference over to Franck Admant. Please go ahead.

[Franck Admant, executive]

Thank you. Good afternoon, and thank you for joining us to review bioMérieux's performance for this first quarter of 2022. As usual, I am online with Alexandre Merieux, Chairman and CEO; as well as Guillaume Bouhours, CFO.

Before handing the call over to Alexandre for preliminary remarks, please note that this conference call will include forward-looking statements. I would like to remind you of the usual disclaimer saying that forward-looking statements are based entirely or partially on assessments or judgments that may change or be modified due to uncertainties and risks related to the company's environment, notably those described in the 2021 Universal Registration Document, including, but not limited to, economic conditions, financial exposure to currency exchange fluctuations, change in government policies or regulations, third-party reimbursement policies, timing of the onset, length and severity of flu season, and competition.

Accordingly, we cannot give any assurance as to whether we will achieve these objectives. I will also add that Mark Miller, our Chief Medical Officer, will join us on the call today. I also remind you that today's call is being recorded and that a replay will be available on our website.

I now hand over the call to Alexandre Merieux, and then we will open the call to discussion and questions.

[Alexandre Mérieux, executive]

Thank you, Franck. Thank you. Thank you, everyone, for joining this call. So I will start with a quick review of the activity for the first quarter, and then we'll take time, of course, to go through the announcement today on the acquisition of Specific Diagnostics.

So if I start with Q1. So we recorded sales of EUR 837 million as compared to EUR 845 million a year before, which represents an organic evolution of minus 4.5%, and the reported evolution was minus 0.9%, mainly due to USD currency situations year-on-year. This evolution has been driven by a solid performance, both in industrial applications at plus 6% and in clinical microbiology at plus 5%. While BIOFIRE panel sales have been stable as expected, our Immunoassays franchise has been affected by the headwind that we mentioned in our call 1 month ago, referring to the lower COVID related assays demand versus last year in the first quarter.

Now let's dig into more details for each range of products. I will start on the molecular front. So BIOFIRE FILMARRAY panel sales have been stable at EUR 273 million booked over the quarter, and the respiratory panels demand remained strong in Q1. However, due to impacts from COVID on the essential workforce in January and February, we were unable to completely fulfill the backlog. Respiratory panels, representing a significant part of our sales at 70%, were still increasing mid-single digits versus last year's first quarter. This growth has been compensated by an exceptionally high basis of comparison for non-respiratory panels last year. This one was still increasing in Europe, Middle East, ASPAC, and Latin America, while our respiratory panels registered also a strong increase in Asia Pacific and LatAm.

Instrument sales have been decreasing as expected and still our installed base kept on growing with plus 500 units, 40% of them outside of the U.S., mainly in APAC and Europe, and the total installed base amounts now to a solid 22,500 units worldwide.

To conclude on this molecular chapter, other molecule ranges, including the DNA/RNA extraction and ARGENE ranges have stepped back, but versus also exceptionally high volumes in the previous year.

So no surprise on the Industrial front. I remember commenting on last year performance. We mentioned tailwinds linked to COVID-related assays such as D-dimer and ferritin and those tailwinds are creating a very high basis of comparison that explains mainly the decrease registered this quarter. The other factor affecting also the USA is the continued erosion in the U.S. of the PCT test.

We remain confident for the rest of the year regarding Immunoassays. We have a healthy pipeline of new solutions which have been launched. Chikungunya test should be launched as expected. And also, we are still forecasting CE mark submission of the TBI and the new VIDAS platform.

In Micrology, we showed a very solid performance at about 5% growth and this growth was fueled by robust reagent sales or growth in the ranges such as VITEK and BTX ranges, and I would say, in all the regions for bioMérieux. And in Q1, the equipment sales have been lower than the ones we had in Q1 '21.

Lastly, the industry unit demonstrated a strong start of the year with a plus 6% growth versus first quarter '21. And here, again, the growth was fueled by very robust region sales above single digits, especially in the U.S. And the performance has been solid in both food and health care businesses.

As a conclusion, the start of the year is well aligned with our expectations and still there are uncertainties in the world remaining to COVID evolution. For example, in Asia, we have also a question mark around the inflation and geopolitics. But at this stage, we maintain our '22 outlook as stated in our March communication on both sales and EBIT.

With this short introduction coming on the Q1 result, I propose now that we move into a big topic, which is the acquisition of Specific Diagnostics that we have just announced. And I will start by giving you a snapshot, a review on Specific Diagnostics. So it's a company which was founded 11 years ago. This is based in California in the San Jose area. It's a company which was founded and developed by Paul, a scientific and an entrepreneur, which has been focusing on developing fast and smart solutions for satisfaction of antibiotic susceptibility testing. It's a company that we know well, because we joined -- we invested in this company in 2019. And last year also, we started a core distribution agreement in Europe between bioMérieux and Specific Diagnostics, a company that we know quite well and we are very, very pleased that we have Specific joining bioMérieux.

Because as you know, they are addressing an important topic, very important, I would say, clinical unmet need, which is fast results for antibiotic susceptibility testing. We know that AMR, antimicrobial resistance, is a key public health topic and it's a flagship fight for bioMérieux since the inception of the company. And we call AMR being the silent pandemic. And having fast results for AST is key. Timing is at essence when you are fighting sepsis, which is linked to severe blood infections.

So this company has developed a very interesting and promising system called Specific Reveal, which is really, I would say, providing actionable results for, at this stage, gram-negative bacteria, giving, after positive culture, results in an average of 5 hours. So basically providing fast results for positive blood culture, actionable results, giving the right information to the biologist and to the physician to action the right antibiotic treatment. And also, this is also a platform solution with lots of ease of use. So this is Specific as a proprietary technology based on small molecule sensors with each sensor generating colorimetric, meaning color change, reaction to the metabolic volatiles released by organism during the growth. So this is a smart, innovative and a proprietary technology, giving, I would say, accurate information.

Maybe Guillaume, I can leave you the floor to discuss the key terms of the transaction.

[Guillaume Bouhours, executive]

Yes, with pleasure. Hello, everyone. So I'm very pleased to explain the key terms of this core acquisition. So the acquisition price is 400% of the company's $425 million. I'd say 100% because you know that we have a minority stake. We will pay the acquisition price mostly in cash, but also partly in shares. The reason for partly in shares is that the founder, Mr. Paul Rhodes, asked to have shares actually, which is probably a proof of his confidence in the future and the synergies between Specific and bioMérieux.

Approximately 1% share dilution from this payment in shares, we intend to offset for existing shareholders through a share buyback and cancel program that we will launch, of course, after closing of the acquisition. In terms of revenues, to give you a ballpark, also, of course, it's minimal revenues today. But we expect to ramp up revenues probably above $60 million in year 5, so 2022 being year 1. As the company is in a product launch stage, I remind you that it's a CE mark, not yet FDA approved, so still a product launch stage, and mainly focused on R&D. It will be a dilutive impact on our operating income. We estimate about EUR 10 million impact for 2022, about EUR 15 million impact in 2023, and then to become a positive contribution accretive from 2025.

All these figures are before any PPS or purchase price accounting impact. And final point, we still have some work because it's signing. We expect to close the acquisition in Q2 of this year.

And with that, I hand over to Mark Miller, our Chief Medical Officer, on the key elements that this technology brings.

[Mark Miller, executive]

Thank you very much, Guillaume. Hello, everybody. So I'm pleased and excited to tell you why Specific Reveal is so important to bioMérieux and also to patients and the medical value that it brings to the medical health care community and to patients themselves.

So when you look at blood cultures, the current methodology in most labs, which is unoptimized, gives results in about 60 hours. That's about 2.5 days to wait for an AST or an antibiotic susceptibility result. When you look at what bioMérieux can add to this, we reduced this time for gram-positives. So excluding the Specific Reveal right now, but for gram-positive organisms, with the VIRTUO system, which already is the fastest blood culture system on the market, we can reduce time with the VIRTUO blood culture system, and then adding on mass spectrometry and VITEK 2, we can bring this down to about 42 hours, which is good, but we are always looking for faster AST results in order to really direct specific patient care to fight drug-resistant infections.

So if you look at what we can do with Specific Reveal and gram-negative organisms, again, the faster blood cultures on the VIRTUO system, then we add in our gram staining and our molecular solution with BIOFIRE BCID for identification and the Specific Reveal, which can give results in about 5 to 6 hours, we can now bring down results to the same day, within the same shift in most instances, almost all instances. This means that from the time of a positive blood culture, the clinician knows exactly which antibiotic to give same day, same shift, in order to either escalate or to de-escalate, both of which are very important for patient care.

And now I hand it over back to Alexandre.

[Alexandre Mérieux, executive]

Thank you, Mark. Yes, just to tell you that we are very, very pleased with this acquisition. It perfectly fits, I would say, the strategic agenda of bioMérieux, and as stated also by Mark, it will provide very important medical outcome for the patient. And with this acquisition, I would say that we are reinforcing our leadership in microbiology. As you see the full portfolio of solutions, this is very complementary to our ranges. And also again, we are there to reinforce the leadership also in the fight against antimicrobial resistance, which is a key public health issue where timing is of essence. And we are very, very pleased to have also the team of Specific joining bioMérieux. It's a team of talented people dedicated also to public health and to science.

So with this being said, now we are in the early days. So we'll keep on, I would say, pushing the collaboration we have in Europe. And as mentioned by Guillaume, the product is not still FDA approved, but clinical trials have started. And we know well the technology, we know well the people, and it's a technology with lots of potential and promises, I would say, for the benefit of the patient and the fight against antimicrobial resistance.

So with this being said, maybe Franck, we can open the floor to questions.

[Operator]

[Operator Instructions] We will begin with Maja Pataki with Kepler.

[Maja Pataki, analyst]

I have several as usual. I would like to start with the Q1 results. I think the biggest surprise with Q1 was obviously the close to 16% decline in Immunoassays. You have flagged that there is this COVID headwind coming in that business. But can you help us understand how much are the individual product groups. I understand that you can't say whether D-dimer is being used with COVID patients or not. But it would be helpful to get a bit of a split of the Immunoassays franchise in PCT U.S. or PCT in general, then D-dimer and ferritin just to have an idea how we can model that going forward?

And then my second question with regards to Specific Diagnostics. It doesn't really come probably much as a surprise that you've integrated the company, but what I'm trying to understand is, if I look at the total number of sepsis patients that make it to hospitals in the U.S., but also in Europe, and if I look at the hospital labs in the U.S. and in rest of the world, your $60 million revenue in 5 years seems to be not very exciting. And I'm sure it has a big impact on patient lives. But just from a financial perspective. Is it the typical bioMérieux conservatism that you're applying here or are there obvious things that we need to keep in mind like which will slow down the uptake or have an impact on the financials? And then lastly, I mean, FDA approval, when do you think this would come through?

[Alexandre Mérieux, executive]

Okay. I can start with Specific. First, I think at this stage, this is the CE mark. We believe that the FDA submission will be done in H2 and then we have to wait for the feedback. I don't know, otherwise, I have to say that we are bioMérieux and we are cautious as usual. We believe there's a strong clinical demand for this solution. And that will need some time to do the ramp-up. But yes, we might have better surprises, I would say, but we prefer, at this stage, to mention that we'll be able to be above $60 million in 2026. That's what we prefer to say at this stage, but this is early on, even if we know that, I would say, the expectations coming from the physicians and the patients will be important.

Your first question was on Immuno, you want to take it, Guillaume?

[Guillaume Bouhours, executive]

Yes, of course. So you were asking, I think, a bit more details about the split of the Immuno portfolio. So I think we mentioned a number of times that the PCT is roughly 1/3 of the reagents portfolio. And if we take all the, let's say, COVID related parameters, so it'd be SARS-CoV-2, D-dimer and a few others that were used as emergency for COVID-related patient monitoring. It's about 15%, 20% of the portfolio this year. But this part is, of course, the part that is a significant decrease versus last year when we had a very strong demand in Q1 and Q2 last year, specifically for these COVID-related Immunoassay parameters.

[Maja Pataki, analyst]

Alexandre, can I just quickly ask, since you have been distributing Specific in Europe now for a couple of months, can you talk about what the feedback is from the labs and how often is it integrated? So when people try it, is it really every time integrated, or how should we think about that?

[Alexandre Mérieux, executive]

Yes. I think the feedback is obviously very positive from the hospital and the labs. And this is also why we are doing this acquisition. And I would say you have the performance of the test in terms of the nice coverage we have for gram-negative plus the time to result. That's really also we knew this company. The feedback is very positive from the users, I would say, and this is also what motivated us to go further. I think, most of the tests are still, I would say, in evaluation mode. But the feedback is positive. And again, I think this solution is answering a very important clinical unmet need. And the platform is of use there. So I think, what I would say, checking many, many of the boxes that we were looking for to address [indiscernible] the positive feedback, which led us to move further.

[Operator]

We'll now move to our next caller, which will be Hugo Solvet with BNP Paribas.

[Hugo Solvet, analyst]

I have a few. First, on the sales for BIOFIRE that are being held back by COVID impacting employees in production. Can you give us please an idea of the amount of sales that have been held back? And should we think that it just delayed bookings slipping leaping into Q2 or just missed sales opportunity for you? Second, on the placement trend for BIOFIRE instrument back to 500, which is similar to pre-COVID level. Is it just that hospitals or healthcare centers are putting investment into new products on pause or an increased competitive environment? And on the competitive environment, can you please give us a bit more detail on whether or not you're seeing pricing pressure at the moment or just more competition against you? That'd be all for now.

[Alexandre Mérieux, executive]

Okay. Maybe I can take the first one on BIOFIRE and Guillaume can take the next one. So regarding BIOFIRE sales, it was installation of more than 500 units in Q1. To be frank, for me, from the numbers I gave, it means that we have doubled the installed base these last 2 years. And as we said, we hope to enter into an endemic world of COVID. Now for the challenge, but I would say rather the opportunity for us is now that we have doubled the installed base to be able to promote the non-respiratory panels that we have such as GI, meningitis, BCID and pneumonia.

And regarding competition, no specific moves or pressure to report linked to the acquisition movement that we have seen last year. I believe that everybody has been busy satisfying the market and the demand and nothing to report regarding, I would say, price pressure today on the respiratory panels. Guillaume, I can let you answer on the sales held back.

[Guillaume Bouhours, executive]

Yes, of course. So coming back, the event is that the COVID wave itself impacted our manufacturing teams in Salt Lake City, end of December, January, and even some part of February, which then, of course, impacted our capacity to produce. And now we're all build up. So we were on allocations from mid- to end of January on back orders. We definitely missed sales. The valuation is at least several tens of millions of dollars of missed sales, probably potentially above EUR 50 million. It's always difficult to assess because we see orders, but again, between orders that are for consumption or for inventory buildup, it's difficult to say. But that's our estimate, and we are very cautious on, let's say, to be conservative, it's probably missed sales, yes. And then we're very cautious on the backlog or the back order conversion potential.

[Hugo Solvet, analyst]

Okay. And just one quick follow-up on the price increase topic. Can you please give us more details on how many price increases will you be passing or trying to pass this year in total? And how much would that be compared to what you have historically been doing?

[Alexandre Mérieux, executive]

Yes. So price increases, it's not so much waves of price increases like, I don't know, companies maybe with more catalog approach would potentially do. It's more that we go customer by customer and segment per segment. So we are definitely, in this approach, to see where we can pass through some of the inflation that we have actually in our salary, in our raw material. And that's going on through the year. Again, it's not a specific wave. Also, due to the fact that we have, as you understand, the contracts that are multiyear contracts, with or without inflation clause, and that is to be adapted.

[Operator]

Now moving to our next caller, and we'll hear from Delphine Le Louet with Societe Generale.

[Delphine Le Louet, analyst]

Yes, I have a question on the long term, and so a more strategic question for you, Alexandre. When you think about the next 5 years, so you've been activated, let's say, on the corporate side, which is, to my point of view, a very good news with Specific Diagnostics. It's effectively, as Maja said, very tiny part of the revenue in 5 years, so 1%, 1.2% of the future revenue in 5 years from now. How should we think about the acquisition strategy going forward, both in terms of volume, meaning price, and how much you can put on the table? And also in terms of accretion to the revenue, do we have to satisfy of 1% to 2% on a yearly basis? Is it really spot on, meaning that, traditionally speaking, doing some acquisition very sporadically? Or can we see more of external integration coming up in the future? First thing. And second thing, dealing specifically with the sepsis. Can you tell us or give us the idea of how big today is sepsis within the VITEK, VIDAS and BIOFIRE? And how much should that be in the 5-year time given the $60 million additional revenue?

[Alexandre Mérieux, executive]

Okay. Broad question, but when you look at us, first, we are very pleased with this acquisition because it's what we like to do. It's a strategic acquisition. We acquire a key technology for the long term. We bring onboard talented teams, scientific entrepreneur and experts. So I would say this is quite in the DNA of bioMérieux. And then when we do something like this, it's for the long term. And I believe that this solution will have a great future in the portfolio of bioMérieux. Then you can say we are cautious or not, but I think this solution is here to stay for the long term. It's very nice compared to our other solutions.

When I look at the long term of the growth of bioMérieux, we'll stay open to strategic acquisitions and partnerships. It's something we have always done. But also you have to know that we invest in R&D close to 13%. And I bet also that our internal pipeline of solutions is quite nice, quite busy, and we still have those. We want to reinforce our leadership in microbiology and Specific will be a key component of this strategy. BIOFIRE is still there for the long-term growth of bioMérieux and also that we have announced that we did the FDA filing of new decentralized solution for BIOFIRE. This one also will help us to fulfill the goals of the company. So we said the pipeline will be the first marker of growth for us.

By the way, also, we announced last month that we have VITEK MS, which has been FDA approved. And then again, this is, I would say, a highly differentiated mass spectrometry instrument, which is there for the long term. So it will be a combination of a healthy pipeline with key attributes in terms of performance and medical value, and we'll stay open also to strategic acquisitions and partnerships for the long term. So that's a bit of my answer, which is -- but that's -- we remain ambitious, I would say, to keep on leading the rest in microbiology and also in the syndromic approach.

Regarding sepsis. Sepsis, for us, it's part of the AMR strategy that we have. It's difficult for me to tell you what is the specific revenue we do with the sepsis application. But that this is a key component of our strategy against AMR. And certainly VITEK, VIDAS, BIOFIRE, I would say it's the full range of bioMérieux solutions, which is aiming at tackling this issue. But I don't have specific numbers for sepsis. We know sepsis is of key importance because this is where you need to accelerate fast results. But that's embedded, I would say, in our AMR strategy.

[Operator]

And we have a follow-up from Maja Pataki with Kepler.

[Maja Pataki, analyst]

Yes. Back again with questions. I have three this time, I think. The first is, so we're talking now gram-negative bacteria. How difficult is it to replicate that for gram-positive bacteria? Second of all, I think one obvious question, obviously, is what is the cannibalization effect of Specific Diagnostics of your existing portfolio? And then the third question is with regards to the continuous bleeding on your PCT franchise. Can you help us understand, is it a question of pricing pressure, a question of volume decline because competitors are more aggressive on pricing, or is it a question of the fact that your VIDAS is still not that -- still a low throughput instrument, and therefore, as the PCT acceptance is growing in the market, you just are not offering a sufficient throughput to satisfy the market?

[Alexandre Mérieux, executive]

I will maybe answer to PCT. And maybe Mark, after this, maybe if you want to take the one on the gram-negative bacteria. Yes. So PCT, we are seeing continued pressure on price and volume, maybe not to the same level that we saw maybe 3 years ago when all the key players arrived. But yes, the limitation is due to the fact that there are more players and that PCT is becoming, I would say, more relevant as an indication and that it's moving to higher throughput platform. But then again, VIDAS, this is where we see an impact in developed settings where the market is quite centralized. But in areas which are big cities, where VIDAS is still quite adapted to the throughput of the laboratory, there is still a potential there.

Mark, you okay to talk about the importance of gram-negative bacteria?

[Mark Miller, executive]

Sure, sure. So it's very important to notice the difference between gram-positive and gram-negative in terms of their resistance and the implications for patients. So for gram-positive bacteria -- and this explains why the prioritization was on gram-negatives by Specific and why we will continue that direction. So gram-positive organisms, there's only about 3 or 4 mechanisms of resistance and they can be detected by other methods quite easily, either molecular methods or other methods, and they don't pose the same difficulty in treatment to clinicians as gram-negatives. Gram-negative organisms, on the other hand, have hundreds of different mechanisms of resistance. It is very difficult based on gene analysis or molecular methods to determine the exact sensitivity or resistance of gram-negatives. And that's why phenotypic or growth-based AST is so important.

And hence, that's why Specific, and we agree, has prioritized gram-negative organisms for the Reveal System. It doesn't mean that gram-positives don't work on this system. It just means that the prioritization has been for gram-negatives because of the incredible medical value that it brings to the clinicians and to the patients, because they're so difficult to treat and much more difficult than gram-positives. And so that explains why the focus right now has been on gram-negatives. There's still -- gram-negative infections are still 50% to 60% of all positive blood cultures. So this is very significant, and they are the most difficult to treat by far.

[Maja Pataki, analyst]

Okay. Understood. Sorry, Alexandre -- yes.

[Alexandre Mérieux, executive]

Yes. Sorry, Maja, to answer your question on cannibalization, which I think we did not answer. One of the strength of this acquisition is actually cannibalization is not a big topic. The reason for that is that the vast majority of samples on VITEK are not blood samples. Blood samples are probably around 10% of the samples. And then as Mark just said, then on top of that, inside the blood samples about, Mark said, maybe 30%, 40% are gram-positive. So you see all in. Today, the gram-negative Reveal is applicable for, let's say, 5%, 6% of the volumes that would go to VITEK. And the beauty that this 5%, 6% are the ones where the fast time to result, the fast AST has the biggest medical value, as Mark just explained.

[Maja Pataki, analyst]

Understood. Just quickly a follow-up, Alexandre, on the PCT. Does the launch of the new VIDAS modular system, do you think that's going to have an impact on the growth going forward, or the deterioration of PCT market shares going forward?

[Alexandre Mérieux, executive]

It would be a revamping of the VIDAS platform. It won't be specifically addressing, I would say, PCT. So you'll have to see the next platform of VIDAS as a smart, I would say, life cycle management of the instrument, but I cannot say if it would have a positive impact on PCT.

[Guillaume Bouhours, executive]

We have 2 questions online that maybe we can take from Lawrence. We indicated mid-single-digit growth in RP BIOFIRE sales. Question is on the total BIOFIRE panel sales in Q1 and the decline in instrument sales?

So total panel sales were stable in Q1. And the decline in instrument sales was pretty strong. It's about minus 60% of instrument revenues. But you remember that last year or at the beginning of the year, it was still a very high increase in the equipment phase for the labs.

And the second question is as Specific seems to leverage the BIOFIRE system, should the addition of Specific strengthen BIOFIRE overall customer proposition?

I would say that, maybe Alexandre wants to add, that actually it strengthened our whole portfolio, which as you understand, it strengthened the microbiology offering as well as the VITEK MS PRIME as well as the BIOFIRE fast ID for blood culture. So it's very, very complementary to our portfolio.

[Operator]

We do have another phone question. We have a follow-up from Hugo Solvet with BNP Paribas.

[Hugo Solvet, analyst]

Sorry, Guillaume, to make you repeat. Line broke on the last question. Can you repeat the split of the respiratory and non-respiratory panel test sales and the growth trend for them?

[Guillaume Bouhours, executive]

Yes. So what I mentioned is that the overall reagent sales are stable in Q1 with, as Alexandre mentioned, mid-single-digit growth in respiratory and about roughly 10% decrease in non-respiratory. The 10% decrease might seem a bit unusual, and it is. And the reason the trend didn't change, it's mainly the high comp basis. Because last year, when we got out of back order for BIOFIRE in March, we suddenly had a very strong catch-up effect on non-respiratory back order, actually. So we sold a lot of non-respiratory in March last year. So the Q1 basis is a bit, let's say, inflated by this effect on non-respiratory last year. But we are still very confident on the non-RP trend overall. And I mentioned, I don't know if the line broke, the question was on equipment BIOFIRE sales in H1, which were down 60% in Q1.

[Hugo Solvet, analyst]

Okay. That's helpful. And just the percentage of reagent sales between RP and non-RP in Q1. Can you share that number, please?

[Guillaume Bouhours, executive]

Yes, of course. In Q1, respiratory was 70% of reagent sales. Remember, this figure last year was 72%, and this figure prepandemic was 56% of the reagent sales from RPs.

[Operator]

And we do have another follow-up from Delphine Le Louet with Societe Generale.

[Delphine Le Louet, analyst]

Yes. Have you seen any change in orders regarding the order book at the end of the quarter compared to the beginning of the quarter. And if yes, can you specify it on a regional basis, please?

[Alexandre Mérieux, executive]

Regarding respiratory panels?

[Delphine Le Louet, analyst]

Yes. And ordering patterns.

[Alexandre Mérieux, executive]

We see that the demand remains quite important at this stage. And remember that last year, I think we saw a sharper drop in demand in March, I believe. But now we still see a state that the demand remains quite strong.

[Operator]

And at this time, we do not have any additional questions in our queue. I will turn the call back to your host for any additional or closing remarks.

[Guillaume Bouhours, executive]

Sorry, we have a question on the line regarding the valuation of the deal. Why doing it now instead of waiting for FDA approval? And then the question follows with total addressable market that could be expected, and is the negative impact on EBIT included in the guidance? So maybe I can take part of that.

So of course, it's always a balance of timing for an acquisition, not too early to make sure that new technology is, let's say, proven and its market access also is kind of demonstrated. But also not too late, so that the price remains, let's say, reasonable. So we believe we have found the right balance because we are at a moment where the technology is proven, we've been able to test it, even to test it with customers, as Alexandre explained. We have customer feedback. We know the company for 2, 3 years. So we believe it's a very good timing and FDA approval is not that far away, as mentioned already.

The negative impact on EBIT is not included in our guidance. We will see, but at this stage we don't change the guidance. We will see throughout the year. But obviously, it was not included in the guidance of 2, 3 months ago.

So at this stage, there is no more question on the chat, neither on the phone. Could you confirm?

[Operator]

Actually, we did have another question come back in the queue. We have Maja back in the queue with Kepler. Go ahead.

[Maja Pataki, analyst]

Yes. Last question. On the 500 instruments that you placed or roughly 500 instruments, can you give us a split how much is with new customers and how much is with existing customers? If there are any existing customers who want to continue to place additional instruments?

[Guillaume Bouhours, executive]

Yes. Thank you. And sorry for that because we -- as you understand, we advanced the Q1 sales release compared to our usual timing. So actually, at this stage, we don't have this precise information. I believe the trend is quite similar to the trend that we have discussed for the end of last year. But I don't have the precise figures. And again, we advanced the release also, so that we could announce the Specific acquisition at the same time.

[Operator]

And now confirming no more questions in the queue on the phone.

[Guillaume Bouhours, executive]

Okay. Thank you. So well, thanks to all for your participation to this call and for your questions. Just to remind you that our next formal release will be on August 31 with a webcast to present bioMérieux's half year results covering both sales review and financial performance. By then, we remain at your disposal if you have any more questions. Thank you very much.

[Alexandre Mérieux, executive]

Thank you. Bye-bye.

[Operator]

Ladies and gentlemen, this will conclude your conference for today. Thank you for your participation, and you may now disconnect.