Co-Diagnostics Q4 2024 Earnings Call Transcript

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March 27, 2025
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Operator

Diagnostics Fourth Quarter and Full Year twenty twenty four Earnings Conference Call. All participants will be in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. I would now like to turn the conference over to Andrew Benson, Investor Relations.

Operator

Please go ahead, sir.

Andrew Benson
Andrew Benson
Head, Investor Relations at Co-Diagnostics Inc

Good afternoon, everyone, and thank you for participating in today's conference call. On the line today from Co Diagnostics, we have Dwight Egan, Chief Executive Officer and Brian Brown, Chief Financial Officer. Earlier today, Co Diagnostics released financial results from the fourth quarter and full year ended 12/31/2024. A copy of the press release is available on the company's website.

Andrew Benson
Andrew Benson
Head, Investor Relations at Co-Diagnostics Inc

We will begin the call with management's prepared remarks then open the call to analyst Q and A. Before we begin, we would like to inform the listeners that certain statements made by Co Diagnostics during this call, which are not historical facts, are forward looking statements. This includes statements concerning the company's Kodiak's PCR testing platform, which requires regulatory approval and marketing authorization for diagnostic use and is not currently for sale. In addition to diagnostic test developments and timing for commencement of clinical evaluations, Actual outcomes and results may differ materially from what is expressed or implied in any statements. Important factors which could cause actual results to differ materially from those in these forward looking statements are detailed in Co Diagnostics' filings with the SEC.

Andrew Benson
Andrew Benson
Head, Investor Relations at Co-Diagnostics Inc

Co Diagnostics assumes no obligation and expressly disclaims any duty to update any forward looking statements to reflect events or circumstances occurring after this call or to reflect the occurrence of unanticipated events. In addition, the company may discuss certain non GAAP financial measures during today's call. These non GAAP financial measures should not be considered a replacement for and should be read together with GAAP results. We refer you to the company's earnings release issued shortly before this call, which contains reconciliations to the non GAAP financial measures presented to their most comparable GAAP results. At this time, I would like to turn the call over to Co Diagnostics' Chief Executive Officer, Dwight Egan.

Andrew Benson
Andrew Benson
Head, Investor Relations at Co-Diagnostics Inc

Dwight?

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Thank you, Andrew, and good afternoon, everyone. Thank you for joining Co Diagnostics' fourth quarter and full year twenty twenty four earnings call. Twenty twenty four was an important year for Co Diagnostics. We advanced the development of the Kodiak's PCR platform and associated test pipeline and added important manufacturing infrastructure as we strengthened the foundation for the platform's commercialization. During the course of the year, our team has worked hard to bring our low cost, rapid and easy to use platform closer to launch, and I'm excited to build upon our progress in 2025.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

I'd like to begin my remarks by discussing some recent developments within our test pipeline before discussing some of our key accomplishments in 2024 and our future development plans. Our main objective at Co Diagnostics is to increase the accessibility of affordable, high quality diagnostics in The United States and around the world. In June of twenty twenty four, we completed our first application to the U. S. FDA seeking five ten clearance five ten clearance for the Codex PCR Pro instrument and the Codex PCR COVID-nineteen test for over the counter use.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

The CODIEX team maintained active and collaborative dialogue with the FDA as they reviewed our submission and as we responded to requests for information, providing additional context and support for our submission as needed. As our conversations regarding the submission evolved, we received feedback from the FDA regarding the ability to monitor the shelf life stability of one of our COVID-nineteen test components. We explored several options to address this and concluded that replacing the component was the best course of action to help ensure the reliability and accuracy of the test for our customers and to be successful in our regulatory ambitions. Any change to the design or composition of a medical device under review by the FDA requires the collection of new clinical data to evaluate the device's performance. Because this was not feasible to provide within FDA's review deadline for the original submission, management made the decision to withdraw our five ten submission with the intention of submitting again with updated clinical data at a later date.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

We determined that a new submission with the updated chemistry and supporting clinical data represented the most efficient way to bring the new version of our test before the FDA, while simultaneously addressing the issues brought up by the FDA and improving the probability of a successful clearance. The FDA was extremely informative throughout our review process and we believe we have a clear path forward based on their feedback. Since we believe our COVID-nineteen test represents the quickest path to regulatory clearance and commercialization, we have focused our efforts on completing the design updates for the test that will be used in the revised 05/10 application with the goal of accelerating our submission timeline. We have full confidence in the quality of the test performance and in our team to submit an enhanced COVID-nineteen test to the FDA with an application that is largely similar to that submitted in 2024. I'm pleased to report that the design for the new test has already been completed and undergone extensive verification testing.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Throughout the duration of the FDA's review process, our work on the other tests in the pipeline was furthered by our R and D team's continued enhancements to the platform's capabilities, including aspects of the PCR instrument and test cuts. An important byproduct of the decision to complete a new five ten submission is that we can now also incorporate these new platform developments into the instrument and the test cuts for the COVID-nineteen test in the new submission, which we anticipate will enhance operational and manufacturing efficiencies for future tests in our pipeline. At Co Diagnostics, we pride ourselves on quality and reliability and continue to believe in the potential of our new platform to increase the accessibility of real time PCR technology and play a transformative role in the domestic and global diagnostics landscapes. We continue to make great progress across our test development pipeline throughout 2024 and into 2025, which includes our diagnostic test for tuberculosis or TB, respiratory multiplex and HPV multiplex. These indications reflect diseases where the Kodiak's PCR platform has an opportunity to make a significant impact on the diagnostic standard of care and eventual patient outcomes.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Development efforts by several leading organizations who share our values and our passion for improving the global health infrastructure, including the Bill and Melinda Gates Foundation, Smart for TB and the National Institute of Health's Radix Tech program. Starting with our TB test, we are excited by our 2024 progress, which included the completion of several preliminary analytical studies. TB is a high priority in several countries and regions around the world, including India, where we have a strong presence through our joint venture, Vocera Diagnostics. A limiting factor for real time PCR TB diagnostics at the point of care has historically been finding a way to prepare the patient sample for the PCR process. In place of the sample extraction step performed in high complexity clinical labs, sample extraction is required to make the genetic material of the TB bacterium accessible to the primers used in the centralized labs PCR tests, but incurs additional costs adds to the overall PCR testing time and must be performed in highly regulated controlled conditions to limit contamination risk.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Developing a TB PCR test used at the point of care has required re envisioning how a patient sample can be collected and prepared for the PCR analysis. Key to the operation of the TB test on the Kodiak's PCR platform has been identifying a procedure that would simply and affordably prepare patient TB samples prior to being added to the Kodiak's PCR TB test kit. After an exhaustive and global surge, we have identified instruments that we believe allow us to achieve our performance and cost efficiency targets and to proceed with preparations for our clinical evaluations. We are on track to commence clinical evaluations in both South Africa and India in the second half of twenty twenty five to support regulatory submissions in those countries. In India, we plan to pursue a regulatory pathway through the Central Drug Standard Control or CDSCO initially targeting the point of care, remote settings and local healthcare centers.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

We believe that our tests on the new platform can be a critical asset to the country's goal of eradicating TB. As we continue to prepare for clinical studies, our team has been collaborating with local health officials, potential customers and other organizations to map our optimal go to market strategy. In 2024, we evaluated higher throughput smear microscopy centers where target customers and experts agree that a point of care diagnostic solution could improve upon and help close the accessibility gaps left by outdated testing methods. Our regulatory and commercial pathway also includes the pursuit of clearance in South Africa through the South Africa Health Products Regulatory Agency or SAFRA, which we believe could facilitate registering and marketing our tuberculosis test and the PCR Pro instrument throughout several jurisdictions in Africa as an in vitro diagnostic solution. The respiratory multiplex test developed in part with financial support from the NIH's RadixTech initiative has been designed to deliver real time PCR test results for flu A and B, COVID-nineteen and RSV.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

CODEX completed the pre submission to the FDA earlier this month and we have been assigned a reviewer. Our development team continues to work hard on preparing the assay for clinical evaluations, which are expected to begin in the second half of this year. The burden that respiratory illness has placed on the healthcare system, businesses, families and patients has always been high. We continue to see a considerable degree of interest in this multiplex test and believe interest will remain high as we look forward to completing the steps that will allow us to put it into commercialization. One of the key differentiating features of the platform is its operability via a smartphone with cloud based analysis that can allow de identified data to be provided to health departments at the local, regional, national or international level to help track outbreaks of infectious diseases.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

We anticipate use cases for this situational awareness feature to benefit areas as small as an assisted living center potentially being afflicted by an outbreak of RSV within the community or a reason in India covering several hundred square miles enabling public health officials to target their efforts to deliver TB therapeutics to patients whose need is most urgent. Thanks to the early warning system that this awareness could provide. The development of the HBV multiplex test, which was supported by a grant from the Bill and Linda Gates Foundation, experienced substantial positive movement during 2024. High risk human papillomavirus subtypes can lead to cervical cancer, which caused an estimated three hundred and fifty thousand deaths in 2022. And HBV remains a disease for which there is a vast international need for testing as testing, accessibility and efficiency remains a key constraint to combating the impact of HBV on global health.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Like the other tests on the new platform, the Kodiak's HBV multiplex test utilizes the multiplexing advantages of Kodiak's co primers technology and is designed to use the unique architecture of the Kodiak's PCR Pro instrument to detect eight high risk HPV subtypes from cervical swab samples. And the goal of providing an affordable accessible HPV screening tool for patients around the world, especially in low and middle income countries. The chemistry optimization is complete and we are pleased with the preliminary performance data. We are working with funding partners and other collaborative stakeholders in the project to determine the most appropriate and expeditious pathway towards initiating clinical studies with the CODIEX HPV multiplex test with the goal of pursuing regulatory clearance in India and expanding clearance into other regions. Similar to TB, we believe the combination of our joint venture COCERA and the fully differentiated nature of our platform leave us well positioned to address another unmet diagnostic need in the Indian market.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

In addition to new test development, we also accomplished several goals in 2024 that have positioned Co Diagnostics for the successful commercialization of the Kodiak's PCR platform. In April, we inaugurated a new manufacturing facility in South Salt Lake, Utah, which has been designed to manufacture the Kodiak's PCR Pro instrument test cups and our co primaries technology. This facility will play a key role in supporting our commercialization efforts and will be instrumental in helping us to meet the anticipated demand for our platform upon our initial launch. Later in the year, we inaugurated a second facility in India to support cost effective manufacturing of our co primers olebonucleotides. The facility also has space for future production capacity for our instrument and kits, which will allow in country manufacturing of our platform and tests that we plan to commercialize in the Indian market.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Earlier this month, COCERA received what is known as a test license on Form MD-thirteen from the CDSCO in India, which licenses COCERA to manufacture limited predetermined quantities of Codex PCR Pro instruments, Codex PCR MTB test cups and Codex PCR HPV test cups in its facilities for the purpose of gathering data from evaluations and clinical studies. The data gathered in these studies will be used in submissions to the CDSCO for IVD clearance. While it's important to point out that it does not authorize COCERA to manufacture these items for commercial use or sale, receiving this test license from the CDSCO is a vital step towards regulatory submission and IVD clearance, as well as for qualifying for the Make in India initiative. Manufacturing instruments and test kits in house is required to qualify under this initiative, which will allow the Kodiak's PCR platform to benefit from the cost saving advantages over importing complete instruments and tests into India and is expected to help overcome other hurdles confronting foreign companies doing business in India. In addition to building new manufacturing capacity overseas and in Utah, we also spent time in discussions with potential commercial partners at industry conferences and trade shows around the world.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

We are receiving encouraging feedback on the platform and maintaining a regular dialogue with the valuable contacts made to these efforts. I am pleased with both the quantity and quality of our commercial discussions and look forward to building upon our relationships in 2025. I am proud of our 2024 progress and I'm eager to tackle the opportunities before co diagnostics in 2025. In addition to working diligently to complete a new five ten submission for this COVID-nineteen test and the Codex PCR Pro instrument during 2025, We also are planning to initiate clinical evaluations for all the other tests in our pipeline discussed today on the new platform. I am confident we are taking the right steps to advance the commercial and technical aspects of the Kodiak's PCR platform, which has the potential to revolutionize diagnostic testing around the world.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

With all the work we have done in 2024, including building manufacturing capacity, advancing discussions with potential customers and commercial partners and further advancing our test pipeline, I'm excited to build upon our progress to drive a successful 2025. With that, I will now turn the call over to Brian to discuss our financial results.

Brian Brown
Brian Brown
CFO & Company Secretary at Co-Diagnostics Inc

Thanks,

Brian Brown
Brian Brown
CFO & Company Secretary at Co-Diagnostics Inc

Dwight, and thanks to everyone who joined today's call. For fiscal year 2024, total revenue decreased to $3,900,000 as compared to $6,800,000 in the prior year same period. Grant revenue in 2024 was $3,100,000 and product revenue was $800,000 Gross profit for the full year 2024 increased to $2,900,000 compared to $2,600,000 in the prior year. Total operating expenses for the year ended 12/31/2024 decreased to $43,000,000 from $45,300,000 in 2023. The decrease from the prior year is primarily due to higher expenses in 2023 from platform development and regulatory submission preparation.

Brian Brown
Brian Brown
CFO & Company Secretary at Co-Diagnostics Inc

Research and development expenses in 2024 were $21,000,000 compared to $23,000,000 in 2023. Legal expenses for the year ended 12/31/2024 increased to $7,000,000 from $1,700,000 in 2023. The significant increase in legal expenses is due to funding the defense of two securities class action lawsuits and related derivative suits. As announced on 03/06/2025, the securities and governance litigation team at BakerHostetler, the legal firm retained to represent the company, won complete dismissal on summary judgment of one of the securities class action suits that had been pending against the company in the United States District Court for the District of Utah. For 2024, income before taxes was a loss of $37,600,000 as compared to a loss of $38,100,000 reported in the prior year.

Brian Brown
Brian Brown
CFO & Company Secretary at Co-Diagnostics Inc

Net loss for 2024 was $37,600,000 or a loss of $1.24 per fully diluted share compared to a net loss of $35,300,000 or a loss of $1.2 per fully diluted share in the prior year. Adjusted EBITDA was a loss of $33,500,000 compared to an adjusted EBITDA loss of $33,000,000 in the prior year. We ended the quarter with $29,700,000 in cash, cash equivalents and marketable investment securities. We continue to manage our spend as we look to maintain a healthy balance sheet to position ourselves for a future commercial launch. In 2025, we will continue to make improvements to our operating footprint that will drive efficiency gains and cost savings.

Brian Brown
Brian Brown
CFO & Company Secretary at Co-Diagnostics Inc

We plan to provide for the company's capital requirements through equity financing, seeking additional grant funding and through operational efficiencies. In the near term, we are focused on progressing our development pipeline towards regulatory submission and are managing our allocation of time and resources accordingly. We're very excited about our continued progress and remain optimistic about 2025 and future developments within our test pipeline. I look forward to providing you with more updates on next quarter's call. With that, I will now turn the presentation back over to Dwight.

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Thank you, Brian. To close, we want to extend our gratitude to Co Diagnostics shareholders and our employees who work hard each day to progress our test pipeline and missions. We will now take questions from our analysts. Operator?

Operator

Thank you. We will now begin the question and answer session. And your first question today will come from Yi Chen with H. C. Wainwright.

Operator

Please go ahead.

Andrew Benson
Andrew Benson
Head, Investor Relations at Co-Diagnostics Inc

Good afternoon.

Eduardo Martinez-Montes
Biotechnology Equity Research Associate at H.C. Wainwright & Co., LLC

This is Eduardo on for Yi. I had a quick question whether or not you all would be interested or open to the possibility of developing an avian flu test either for birds or humans?

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

This is Dwight. Thank you for your question. We have developed a H5N1 test and we are very prepared to make additions to that type of test should the need arise.

Eduardo Martinez-Montes
Biotechnology Equity Research Associate at H.C. Wainwright & Co., LLC

Okay. And is it being used actively? Is it the ambition that it be used for obviously human testing rather than bird testing?

Dwight Egan
Dwight Egan
Chairman & CEO at Co-Diagnostics Inc

Our ambition would be that it would have used both for humans and for livestock and birds. It may have some optimizations for the different types of people or animals that it's used for. But we jumped on that opportunity when the H5N1 first became an item of interest and we're prepared as I said to respond if need be.

Eduardo Martinez-Montes
Biotechnology Equity Research Associate at H.C. Wainwright & Co., LLC

Okay. That's good. That's helpful.

Executives
    • Andrew Benson
      Andrew Benson
      Head, Investor Relations
    • Dwight Egan
      Dwight Egan
      Chairman & CEO
    • Brian Brown
      Brian Brown
      CFO & Company Secretary
Analysts
    • Eduardo Martinez-Montes
      Biotechnology Equity Research Associate at H.C. Wainwright & Co., LLC
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Co-Diagnostics Q4 2024
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