Good day, and welcome to the Accelerate Diagnostics, Inc. 2018 Second Quarter Results Conference Call. [Operator Instructions] After today’s presentation, there will be a question-and-answer session. Please note, this event is being recorded. I would now like to turn the conference over to Laura Pierson of Accelerate Diagnostics. Please go ahead..

Before we begin, it is important to share that, information presented during this conference call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements include statements about our future and those that are not historical facts.

These statements may contain expectations regarding revenues, earnings, operations, and other results, and may include statements of future performance, forward sales estimates, timing of clinical outcome data, timelines associated with the severe bacterial pneumonia test kits for use on the Accelerate Pheno system, along with other plans and objectives.

Forward-looking statements include those pertaining to, among other things, the commercial launch and demand for the Accelerate Pheno system and Accelerate PhenoTest BC kit for positive blood cultures, the potential benefits of the Accelerate Pheno system and Accelerate PhenoTest BC kit, including accelerated identification and susceptibility results and estimates of time reduction to results, expectations on placements, sales, and product profitability, the potential of our technology generally, our belief that our expanded manufacturing capability will allow us to meet demand, our expectation of 2018 performance, and other future development plans and growth strategy including with respect to research and development as well as product expansion.

These statements represent only our belief regarding future events, many of which are inherently uncertain.

You are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk and uncertainties and that actual results may differ materially from those projected in forward-looking statements because of various factors.

Information regarding important factors, including specific risk factors that could cause actual results to differ, perhaps materially from those in our forward-looking statements are contained in reports we file with the SEC. You should read and interpret any forward-looking statements together with the reports we file with the SEC.

I will now turn the conference call over to Mr. Lawrence Mehren, President and CEO of Accelerate Diagnostics.

Larry?.

Thank you, Laura. It is great to have you all with us this afternoon. This has been a challenging launch for sure. But as you will see we emerge this quarter with a ton of momentum. And while it's not yet showing in the revenue numbers, the results are encouraging.

As is usual on these calls, I will start with the report on our commercial progress for North America and then EMEA, hand it over to Steve Reichling to review our financial results. And then, I’ll wrap it up with updates on product and geographic development.

So, to North America, we started the year with a simple, but fundamental commercial plan, bringing the right team, data and marketing together and then execute with a goal to drive down the sales cycle, increase market penetration and grow revenues. What we’ve accomplished this past quarter is notable.

Regarding the team, we successfully completed our North American commercial team reorganization and expansion. This included promoting our strongest sales team members to regional leadership and product specialist roles and adding 19 new direct sales reps.

This team and structure is specifically designed to sell the clinical benefits of Pheno often to stakeholders beyond allowed. And while it takes time for new sales reps in new territories to become fully productive their results this quarter were great.

They added more new evaluation contracts this past quarter than we have ever added a quarter, increasing our North American installed base by over 30%. We believe this big jump in our sales force productivity will continue through the rest of the year and beyond.

All in all, a really good start, and we believe a sign of good things to come from this team. Our commercial team's effectiveness is being aided by the signing of numerous key GPO contracts in the quarter. Over the past year we have found that these group purchasing organizations play an increasingly important role in account access and contracting.

So we established a corporate accounts team focused on an aggressive goal to close the top four GPOs in 2018. We signed agreements with Visiant, GSA and a third smaller, but highly compliant GPO this quarter alone and expect the last one of the four to be signed in Q3.

The combination of these networks covers 1,400 hospitals and the vast majority of our current sales funnel. These contracts are already improving side access and we believe they will reduce the length of the contracting process. We also made strong progress driving posters and papers confirming the speed accuracy and benefits of our system.

As mentioned before, we now have over 100 of them and believe they will continue to be a catalyst for sales. And yet we believe the most potent studies for driving adoption will be prospective randomized outcome studies demonstrating the clinical and economic benefits of the system for ultimately making us the standard of care.

As such, this is a top priority of our organization. We have four active outcome studies on target to complete in succession over the next few quarters. The first of these prospective outcome studies to publish will likely come from a customer of ours, the University of Arkansas. Dr.

Rosenbaum, the attending pathologist and lead investigator has been a strong advocate of Accelerate and the Pheno and has studied Pheno’s impact of length of stay among other measures at the university. We expect the team at UAMS to present this data at an upcoming infectious disease conference in October with publications soon thereafter. Dr.

Rosenbaum has had significant success with the Pheno. For example, in a recent publication of the College of American Pathologists, he highlighted the case of a 22-year-old kidney transplant patient presenting with signs of sepsis who was prescribed two broad spectrum antibiotics.

With the use of the Pheno, they were able to quickly remove an unnecessary and potentially kidney-damaging antibiotic. Dr Rosenbaum cited that toxicity associated with routine antibiotics can significantly increase the odds of acute renal injury and can prolong hospital stays for days to a week or more.

It is because of numerous cases like these that Dr.

Rosenbaum advocated for the broad adoption of Pheno in the article by saying, "There is a price difference, but the resources we spend on Pheno are captured back exponentially by the prompt clinical action this instrument enables." We believe the second of these studies to publish will be an independent multi-center government sponsored randomized prospective outcome study at Mayo Clinic, Rochester and UCLA.

The studies endpoints include time to effective therapy, clinical improvement and cost. We have recently received word from the participating site that they expect enrollment will conclude in early Q4. While this study is being managed independent of us, what we've heard has been great.

Specifically clinicians in these highly regarded institutions are surprised and excited to be getting actionable AST results so quickly and the microbiology teams are pleased with the system's reliability and analytical results. We believe this bodes well for the study’s findings and the potential to add these two key reference accounts.

Lastly, we have two new multi-site randomized controlled studies about to launch. These studies were designed by our scientific affairs team to evaluate two important endpoints. The first is designed to evaluate length of stay and readmission avoidance associated with the use of the Pheno in specific patient populations.

The second, we’ll evaluate the same endpoint but compare Pheno outcomes to those using molecular ID panels.

Together, we believe these studies will provide a set of outcome data that directly supports our cost justification model, conclusively confirming our customers real world experience of decreased length of stay, decreased mortality and significantly decreased cost.

The commercial team's performance is also being bolstered by a marketing strategy that amplified also being bolstered by a marketing strategy that amplifies our customers’ enthusiasm and results. This was on full display at our most recent Annual Congress, the American Society for Microbiology’s Annual Meeting in June.

This is the marquee conference in our field and we believe we stole the show. Our booth traffic was significant, our symposia packed to overflowing and the buzz regarding our device apparent. More importantly, we saw a clear shift in the nature of customer dialog from curiosity to specific discussions on cost justification and acquisition time.

We attribute the shift in part to the impassioned advocacy of our current customers. Their presentations confirmed our speed and accuracy and highlighted actual clinical impact of earlier susceptibility results.

Thesis presented by MD Anderson for instance described how they were able to quickly move two patients on ineffective antibiotics to effective therapy day sooner, likely saving lives, so overall, solid progress in North America on the team data and marketing. Now to results.

And while it is still a fight, we are encouraged by what we saw in this quarter. As I mentioned, we increased our North American installed base by over 30% this quarter to 259 instruments of which 193 instruments are evaluation contracts and 66 commercial.

And while revenue for the quarter was light, as we expected, our sources of revenue revealed two important facts about the current status of commercializing the Pheno. First our annuity is strong. We are on track to realize a consumable annuity of between $60,000 and $80,000 per instrument. We also believe this annuity is durable.

Uniformly, our experience has been that customers are seeing the clinical and financial benefits of the system as soon as it is in clinical operation. We believe as clinicians get accustomed to AST results days faster. They will never settle for slower results again.

These factors contribute to a durable annuity impervious to reimbursement pressures and we believe to add momentum for our follow-on rapid test offerings. Second, two of our contracts for capital this quarter were from our original clinical trial sites. These were in process for well over a year and are two of the oldest prospects in our sales model.

Both were held up due to a lack of budgeted capital funds. What does this mean? It speaks to the tenacity of our customers and their relentless advocacy for patients that even our oldest eval prospects we believe will close. This is great. It also highlights the difficulty of securing capital of budget.

It is important to remember that when we launched in 2017, our customers had already locked their 2017 budget and in most cases based on the timing of these capital budget their 2018 budgets as well. This has left us fighting for discretionary and off-budget emergency fund which has greatly slowed down our eval conversions, not so great.

Still given the productivity gains from the reorganized sales force, good data and enhance marketing, we expect more and more customers will want the instrument but won’t immediately have capital budget. Accordingly, we will meet this demand by removing our requirement from select customers and offering an expanded reagent rental program.

Last week we tested this change with five prospective customers where capital budgets wasn't available this year. And in two of the cases we have already received signed contracts back with the remaining three giving us verbal commitment. All five of these at strong consumable prices.

Now, as we plan this year for the majority of contracts in North America to beat for capital. The change in mix will lead to lower revenues in 2018, the scale of which will be determined over the next quarter.

Conversely, we are confident that this change will result in an even higher number of contracts this year, greatly increasing our market penetration and setting us up for a strong future.

Shifting now to EMEA, we made solid progress there, increasing our install base by nearly 20% this quarter to 171 instruments, of which 119 instruments are under evaluation and another 52 instruments under commercial contract. A standout in the region is Italy, where we already have contracts representing 16% of the Italian market.

This is a great success story for a market struggling with rampant anti-microbial resistance and one that should only grow faster, especially when AMCLI, the Italian Association for Microbiology’s clinical care working group includes our solution and guidelines for the treatment of critically ill patients.

In France, we are on the verge of receiving news on the List of Acts Outside Nomenclature, commonly referred to as our RIHN, a government sponsored program to cede important new medical technologies. Should we be selected, the award will fund installation of Phenos across the country and we believe greatly increase adoption.

In the UK, Germany and Nordics, a number of key opinion leaders are evaluating the system. The drivers in these markets are similar to those in the United States. Clinical outcomes and first-hand experience with the systems benefits will drive adoption. And with that, I will turn it over to Steve to review our financial performance.

Steve?.

Thank you, Larry. Good afternoon. Revenue for the second quarter was $1.7 million and year to date was $2.5 million as compared to $699,000 and $1.2 million respectively from the same period in the prior year. These increases were driven by Pheno system and PhenoTest BC kit sales in the U.S. Europe and the Middle East.

Cost of goods sold was $717,000 in the quarter and $1.2 million resulting in gross margins of 58% and 51% respectively. Selling, general and administrative expenses for the quarter were $15.3 million and $29.7 million to date as compared to $11.5 million and $22 million respectively from the same period in the prior year.

These year or year increases were driven by higher personnel and customer evaluation related costs in the U.S. and EMEA. Research and development costs for the quarter were $6.1 million and $12.8 million year to date as compared to $5.5 million and $9.8 million respectively from the same period in the prior.

These year-over-year increases are the result of additional investments in preparing for respiratory clinical trials and expanded scientific affairs activity. Our net loss for the second quarter was $23.2 million and $44 million year to date, resulting in a net loss per share of $0.43 and $0.80.

On weighted average basic shares outstanding of 54 million shares and 54.8 million shares respectively. These net losses contain $3.4 million and $9 million in non-cash stock based compensation expense respectively. Net cash used in the quarter was $17.1 million and $33.2 million year-to-date.

And the company ended the quarter with cash and investments of $197.4 million. We anticipate filing the 10-Q for the quarter ended June 30, 2018 on August 7th. I will now hand it back to Larry to review our development updates for the second quarter..

Thank you, Steve and now on to development and progress. In Q2 we made progress on our second focus area for 2018, the completion and trial of our severe bacterial pneumonia test kit for use on the Pheno system.

First, our discussions with the FDA on this trial and analytical studies are coming to a close and they agree that our endpoints can be achieved with 33% less external testing than was required in the blood trial. This is great.

When you combine this with the decision that the pneumonia kit will follow a 510 (k) regulatory path, we expect considerably shorter and simpler trial and FDA review process than we experience with our blood kit.

We have also made substantial progress on our severe pneumonia sample preparation device and are now configuring the instruments for registration and clinical outcome trials. We have selected our trial sites and contracted many of them.

And we decided to build out our own reference lab for all comparative testing during the trial, which we estimate will save us $2 million over the external reference lab we used in our blood trial. Given this progress, we still expect to announce the initiation of the U.S. regulatory trial on or before our Q3 conference call.

Needless to say we are excited about this new test. Not only will it increase or Not only will it increase our current TAM from North America and EU from a top approximately 4 million patients to over 6 million. It will demonstrate the platform potential of the Pheno and its ability to replace significant portions of the current micro workflow.

Finally, we promised an update on our exploration of the Chinese market opportunity. We conducted an extensive multi-month evaluation of the market, and what we found was very encouraging. First, China has very high rates of antibiotic resistance and adverse antibiotic related events.

The market is substantial rivaling that of the United States with 1,400 Class I and 6,000 Class II hospitals currently conducting ID/AST microbiology testing. The next important question was what price per test the market will support. And here there is great news.

Existing reimbursement codes provide for a higher price per kit than what we are currently getting in the U.S., based on this and other information, we have already started the process for local trials, registration and commercialization to enter the Chinese market. We will keep you posted on our progress over the coming quarters.

And with that we would be happy to answer any questions..

[Operator Instructions] Our first question comes from Brian Weinstein of William Blair. Please go ahead..

Can we just start with guidance, did you reiterate guidance.

Where should we be thinking about, or how should we be thinking about numbers for the back half of the year?.

Brian, we just don’t know yet. As we said in the script, we’ll know more as the quarter unfolds and we will report our guidance sometime in the coming quarter..

So just to be fair, then you are suspending the guidance until probably sometime - until your Q3 call, is that correct?.

Brian honestly, I don't know how to answer that question, so I don't know what suspending guidance means, I would just simply suggest that as we suggested earlier, I do believe that we will see a revenue impact although we just don't know enough yet, so….

And the reason that that you guys are not reiterating the guidance right now, it's because of, sorry shoring up the rates, because of how you are going to market with more reagent rentals expecting a higher number of contracts and increased penetration, but the revenues at least in the near-term are uncertain.

Is that correct or am I thinking about that right?.

I think that's right, Brian. Look, I got to be completely candid. Our ability or rather our record of forecasting has not been great. And I do know that this program has tremendous legs and I am confident that we will see a significantly increased number of conversions.

How many of those conversions come from customers that we’ve already expected to get capital from is unknown and given that the majority of our revenue in North America this year were from capital conversions, it’s difficult for us to state right now given we’ve been at this program for literally a couple of weeks.

What is going to happen to revenue? We will know and the scope and scale of it. I do know that it’s going to be extraordinarily beneficial for the long-term success of the business. How much revenue we’ll have to sacrifice in 2018 is frankly un-notable right now..

Of the systems that are in evaluation, what - any idea how we should think about what percentage of those would actually be under reagent revenue going forward? Is this essentially the new model where you really kind of expect everything to go into reagent rent or out of those ones in eval?.

No, Brian. Definitely do not. The percentage of those under eval that will continue to a capital contract are actually quite high. I think it would be perhaps the majority period.

I think some of the new ones that we have been talking to them about beginning an evaluation will likely go directly to a range of rental agreement as opposed to going through evaluation with the idea of eventually converting for capital. So, I think it’s quite complicated. I think in some cases it’s un-notable.

The fact is difficult to ascertain right now. Is it going to be material? I don't know. I think it will be material for the long-term health of our business, but what will happen to revenue in 2018, I won't know until we get a better sense of how many people will avail themselves with this program..

We've seen the majority of the bump post conference season at AccuMed and ASM in other words did you convert a lot of what you saw is near-term prospects or is there still kind of another bolus to come here in the third quarter and fourth quarter from that?.

No I would - in terms of our momentum, I think it's quite strong and I would expect continually increasing number of conversions and in certain situations an increasing number of evaluations.

Although we are seeing more and more customers skipped the eval and my sense is that given the kind of success we saw in the small pilot program of allowing our sales people to offer reagent rentals.

My sense is we'll see a number of people skipping evals entirely in going directly into a reagent rental, which is good for us and - but for a number of reasons. One it increases our penetration rapidly. It ensures that we own that site and it ensures that if there is any eventual competition they’ll have to recede us.

I think thirdly it gives us reference sites geographically around the country. I could go on and on, but you understand. I think it makes a hell of a lot of sense for us to do this. And the amount of revenue that we’ll have to sacrifice this year if any will be I think relatively to minimum..

And then last question for me. Can you talk about the competitive environment obviously T2 is now in the market have you seen any impact from them as well as any of the other competitors. How does the competitive environment look today in delaying or causing you guys any kind of a headache right now? Thanks guys..

No, the answer is no. Our biggest competition right now continues to be the capital committees and in the hospitals. So, we don’t see competition from any other players, it’s really us working like crazy to provide the evidence necessary to get through these capital committees.

And I think, by allowing our sales people the opportunity to provide rental contracts as opposed to strictly focusing on capital in North America, we'll unstick all this..

Our next question comes from Tycho Peterson of JPMorgan. Please go ahead..

Larry, do you able to say how many placements this quarter were direct acquisitions versus conversions from the eval program.

I may have missed it, could you break that out?.

I think I'll let Steve answer that. I'm not sure, Tycho..

Yes, if you're just talking about the conversions in the quarter, the vast majority were capital, and that's the case in Europe and in the U.S. for the quarter, but certainly as Larry mentioned, we're anticipating a lot more conversions that will be aided by this new program..

And are you able to put any general guidance on how you know what percentage do you think end up region rental if we go forward a couple of quarters, I mean back to Brian's question, I think that's one of the key variables that everyone's going to be grappling with. I think it's the right strategy to move to reagent rental.

But you know how do we think about the band – there the range of outcomes there?.

Tycho. I think it's a great question, and I want to give you an answer, but I'm telling you right now it’s just too early.

I think that we'll know relatively soon what the scope and scale of it looks like certainly in time for our Q3 conference call, if not before and if we – and as soon as we understand that we’ll absolutely report that out to the market.

We think like you do that it’s material information and we want people to understand where we are, but certainly we’re not going to let this go long longer than a quarter and perhaps we'll be able to report out even sooner..

And a couple other quick ones, on the utilization, I think you've previously mentioned the need to build out the ILS interface to kind of close the gap between placements and going live.

Is that still a bottleneck or any update on progress there?.

You know Tycho, I’ll tell you. One of the things that I did not mentioned in the script because it was just getting a bit too long, but I think is important to know is that all of our efforts in terms of sales cycle compression have been quite successful.

So whether it would be the time to eval or the time under eval or the time to connect LIS, all of those have seen a material reduction. For example, the time under eval, we typically thought of it as six months to seven months, we’re now down to three months. The same thing goes for the connection to the LIS.

We’re seeing that trend now to about half of what we originally saw. And the time to eval is also been compressed significantly down to weeks. So we’ve seen great reduction across all of the sales cycle in terms of compression. Now, it's really a matter of unsticking the evals and those customers that just do not have capital budgeted in 2018.

And they've been fighting for emergency capital, they’ve been trying to steal capital from the MRI machine or what have you that’s already been budgeted and we’re getting a little bit along in the year and I think it makes sense for us to open that up and when we do, I think the entire sales cycle will then be compressed to where we want it to be.

So, in general, I think good news there..

And then I guess lastly on just on the sales channel overall, you mentioned hiring the 19 reps, can you just give us any more color on just geographically where they're focused? And I guess have you adjusted their comp structure to reflect the reagent rental initiative? And then could we also get an update on Germany and France reimbursement the back half of the year, I know you mentioned France in your prepared comments, so just curious if those can be a catalyst for the back half of the year? Thanks..

So, in terms of the 19 team, refresh my memory on Tycho’s question, I'm sorry..

The first question was on the sales force and how we’ve organized ourselves geographically?.

So, we in general split territories to allow for more focus. So, and we did that across the United States, of course there are some territories that we did not split, but in areas where we have a lot of traction whether that’d be on the West Coast to the south, we’ve made those territories a bit smaller to allow for more focus.

The salespeople that we hired all have really solid experience in selling outside of the lab and have come to us from other successful organizations. And I think they've been very impactful to how we're doing here. Yes. In terms of France, I do think that if we get aeration which is what they call it in France that could be a significant catalyst.

It would allow for placements of Pheno across the entire country along with government for reagent and it’s a many millions of dollars program for reagents at many millions of dollars programs so significant Germany reimbursement is also going along quite well, and although I don't expect that this year, I do you expect it to happen next..

Our next question comes from Bill Quirk of Piper Jaffray. Please go ahead..

So I guess see the first housekeeping question. The systems versus regions number in the quarter? If you said it earlier I apologize I missed it..

No, we didn't say it, but the - you know the reagents revenue is tracking with our expected annuity at around $60,000 to $80,000 per box. The one thing you have to consider though is that we do have this lag. So once the system is contracted commercially, we have a three-month to four-month lag and then we have that consumable churning on.

And so, you know it's a - the rough mix for the quarter globally is still a majority capital with just a slight minority in the consumable revenue, but still tracking very consistent with overall expectations..

Glad to hear the moving forward with respect to sample prep device for lower respiratory so I guess it’s a two-part question.

You know one is – is there anything left in the sample prep device that you guys are still working through or is that for all intents purposes ready to go? And then with respect to the timing of the clinical trial, it certainly sounds like that’s going to be short in duration should we be thinking that it should be finished by you know call it 1Q of 2019 with some sort of filing by roughly middle of the year, is that roughly the way to think about that?.

So, as it relates to the sample prep device, we are building them over the course of the next month, and they were - our initial build is 32 for the clinical trial, and that's in process right now, and we feel good about that, number one. Number two, I think your expectations for how this plays out could be right.

We'll provide more details in our next - in next quarter. Certainly, we’ll have completed the trial, and have submitted in 2019, that's without a doubt. I think we'll be able to tighten that up significantly in time for our next call..

And then lastly for me is just the timing of the UCLA Mayo study, I appreciate the comment about when they should finish enrollment for that.

How should we think about the – I guess the results being reported out, Larry, is this something where we could see you know a press release coming as just kind of top line results with them to be presented sometime presumably in the first half of 2019, did they assume or something to that effect this publication to follow on.

I'm just trying to, I guess, get a better handle on how we should think about the news flow relating to that study?.

There is nobody who wants those results out more than me. And we're super enthusiastic and optimistic about what they’ll be. Although I think they will be in the midst of lots of other good data, whether they be data from the university of Arkansas or these other studies that Romney, our Chief Scientific Officer and her team have commissioned.

I think they all should come out about the same time. While, we will finish enrollments at Mayo in Q4, how long it takes for the ARLG and the principal investigator to get comfortable or not, so they're willing to release data, I can't say.

And given that it's a completely independent study, it is quite difficult for us to impact the timing of that in any way. And because of that, we've gone ahead and really pushed other studies ahead and they perhaps could be happy for the Mayo UCLA side..

[Operator Instructions] Our next question comes from Alex Nowak of Craig-Hallum Capital Group. Please go ahead..

Larry, this is a longer term question, but as you look at the business plan how big do you forecast the Accelerate business could be in 2020? The reason I ask is, when I look at 2020 street estimates, they range in the highest and the lowest is just over $100 million, so I’m curious what do you think are fair revenue numbers for Accelerate in 2020, so we can all start to narrow our estimates to a fair target?.

Well Alex, that’s a big question to ask right now. And I got to tell you, given the fact that we are in the midst of understanding the impact, our reagent rental program on this next quarter it's difficult for me to stand here with any confidence and provide you with something that I can stand by for 2020. Absolutely that will come.

And what I can say with confidence is that, we've got a lot of momentum in our business and I feel more confident than ever. And I think we all do here that we're on track and that we've got a great business, a business that has legs that's relevant and that's going to change the practice of medicine.

And I think that will turn into very nice numbers in 2019 and 2020, the specifics of that frankly you're going to have to wait for. We're just not ready to talk about that yet. And when we can talk about with confidence, believe me we will..

Just a question on the lower respiratory trial, does the sample prep device, is that need to get FDA approved separately then the lower respiratory assay?.

It does not actually, the sample prep device, we’re fortunate, and it does not require FDA approval..

And then just on the four outcome studies you mentioned that we’re going to be reading out over the next couple of quarters.

You said these are going to be randomized, or is it safe to say that these studies will have multiple arms on them allowing for some sort of comparison of Pheno versus standard care or is that just going to be the Mayo UCLA study that will have multiple arms?.

No, all of them will have multiple arms and in particular, I think this might have been missed in my remarks, I stumbled a bit there.

One of the studies is going to be us versus a molecular panel from BioFire, so I think it should be quite interesting to see the clinical outcome of the Pheno versus a molecular panel such as BioFire and see who ultimately creates more clinical impact. I am confident we will.

And so, we're eager to get that study out and demonstrate how much clinical impact we can create over the clinical newest standard of care, while allowing the kind of the standard of care that many people are using..

Absolutely. Looking forward to seeing that readout.

And then just last question from me, what's a rough ballpark estimate for when you can enter the Chinese market with a CFDA approved product?.

Too early to tell, Alex. I'll tell you the one of the one of the challenges that we have experienced is that, the CFDA is in the process of revising all kinds of guidelines right now. We're going ahead with the clinical trial.

We're going ahead with securing reimbursement and all of those things, but the timing of it is ultimately going to be dependent on where the regulatory authorities in China come out. So, I feel like I'm repeating myself to you and to others please wait. As soon as we have confidence and know and we'll be able to tell something turnable we will.

Right now it's just a bit too early..

This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Lawrence Mehren for any closing remarks..

Thank you. And I want to mention - I mentioned on a call a few quarters ago that this is a fight and it's a fight we are going to win.

And I'll tell you winning we are, our team has responded by reorganizing the entire sales force, working with our investigators to create a compelling body of data and our marketing team and customers are spreading the word and that word is, the word is that accelerate save lives, save money and preserves our vital stock of antibiotics, and this is having a positive impact.

Our sales cycle has decreased materially. Our contracts are increasing significantly and now by unshackling our sales people and customers, I am confident we will see significant conversions.

And while it's frustrating for sure that we will have to give up or forego a bit of revenue this year, it is with thoughtful intense, we believe we'll be driving a tremendous future. So, thanks to all, who are assisting us in this effort to improve the way that patients with infectious diseases are treated.

Thanks to our dynamic and incredible team, who's driving every day, our measured and thoughtful board and our steadfast shareholders. Thanks to you all. We are on our way. Appreciate it..

The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect..