OpGen(US:OPGN)2023-03-29 22:22Financial Data and Key Metrics Changes - In Q4 2022, total revenue was approximately $722,000, a decrease from $1.4 million in Q4 2021, while total revenue for the full year 2022 was approximately $2.6 million compared to $4.3 million in 2021, aligning with recent guidance [25][27] - Operating expenses in Q4 2022 amounted to $10.7 million, up from $7.2 million in Q4 2021, primarily due to a $5.4 million impairment of indefinite-lived in-process R&D and tangible assets [28] - The company ended 2022 with approximately $7.4 million in cash, a significant decrease from $36.1 million at the end of 2021, and is closely monitoring cash consumption [13][16] Business Line Data and Key Metrics Changes - Sales and marketing expenses for the full year 2022 increased by approximately 16% to $4.3 million, attributed to the expansion of sales and business development teams and increased on-site expenses due to lifted COVID restrictions [12] - R&D expenses in Q4 2022 were $1.6 million, a 35% reduction from $2.9 million in Q4 2021, and full year R&D expenses were $8.2 million, down nearly 25% from $10.9 million in 2021 [30] Market Data and Key Metrics Changes - The company anticipates significant revenue growth opportunities in the U.S., particularly with Unyvero product sales and Ares Genetics services, with a strong business development funnel [18] - Hospitals are experiencing a backlog of investment needs post-COVID, leading to longer contract completion times, impacting the signing of new contracts [19][62] Company Strategy and Development Direction - The company is focused on expanding its commercial pipeline for the AMR Gene panel and Unyvero products, with ongoing discussions with hospitals [33] - A commercial collaboration agreement with BioVersys was signed for the deployment of the Unyvero platform in a Phase 2 clinical trial [24] - The company is exploring non-dilutive partnership opportunities, particularly in China, to leverage local market potential for the Unyvero A30 platform [41][51] Management's Comments on Operating Environment and Future Outlook - Management noted that the operating expenses remained in line with expectations, with a projected net cash consumption of around $4.5 million to $5 million per quarter for 2023 [16] - The company expects to recognize significant revenue from collaborations and new customer contracts in 2023, with a revenue guidance range of approximately $4 million to $5 million [35][68] Other Important Information - The company completed a 1-for-20 reverse stock split in January 2023 and regained compliance with NASDAQ's minimum bid price rule [44] - The company has a commercial distribution agreement in place with a Chinese distributor, with potential purchase commitments over an 8-year period of up to $180 million [45] Q&A Session Summary Question: What kind of contribution can be expected from Ares Genetics in FY '23? - Management indicated that traction is being seen for the U.S.-based next-gen sequencing lab, with a major project completed involving sequencing over 1,200 isolates [55] Question: Could you provide an update on the progress of the FIND collaboration? - Management confirmed that the feasibility stage collaboration is on track to conclude soon, with a remaining milestone payment of roughly €300,000 [56] Question: What is the potential in China for the pneumonia product and the Unyvero A30 platform? - Management reiterated the potential for up to $180 million in revenue over an 8-year period post-NMPA approval, with no significant competition currently visible [59][61] Question: Do you expect the hospitals' product review time frame to be shortened significantly this year? - Management expressed hope for normalization in review times but acknowledged the backlog of capital expenditure in hospitals due to COVID [62] Question: Could you comment on the trend of gross margin going forward? - Management stated that gross margins for consumables are expected to remain in the 60% to 70% range, with no anticipated changes [63]