Cammy Duong – MacDougall Biomedical Communications Evan Jones – Chairman and Chief Executive Officer Tim Dec – Chief Financial Officer.

Yi Chen - H.C. Wainwright.

Good afternoon, and welcome to the OpGen, Inc's First Quarter 2017 Financial Results Conference Call. At this time all, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a q-and-a session. As a reminder, this call is being recorded. I would like to turn the call over to Cammy Duong. Please proceed..

Thank you, Operator. Thank you all for participating in today's call. Before we begin, I would like to caution that comments made during this conference call by management will contain forward-looking statements regarding the operations and future results of OpGen, Inc.

I encourage you to review the Company's filings with the Securities and Exchange Commission, including, without limitation, the Company's Forms 10-K and 10-Q, which identify specific factors that may cause actual results or events to differ materially from those described in the forward-looking statements.

Factors that may affect the company's results include, but are not limited to, the rate of adoption of its products and services by hospitals and other healthcare providers, the success of its commercialization efforts, the successful completion of its new product development efforts, the effect on its business of existing and new regulatory requirements, and other economic and competitive factors.

The content of this conference call contains time-sensitive information that is accurate only as of the date of the live call, today, April 26, 2017. The Company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call.

I would now like to turn the call over to Evan Jones, OpGen's Chairman and CEO.

Evan?.

Thank you, Cammy. And thank you for joining us today. This afternoon we will review our Q1 2017 financial results, and provide an update on our business plans. Because we held our most recent earnings call about the month ago, our call today will focus primarily on our financial update.

However, before turning the call over to Tim Dec, I would like to briefly review the data we presented this past weekend at the European Congress of Clinical Microbiology and Infectious Diseases, or ECCMID, and some additional highlights from the meetings.

The ECCIMID meeting once again underlined the urgent need to develop new methods for combating the spread of any microbial drug resistance. On the therapeutic side, several companies presented data on new drugs for managing serious multi-drug-resistant Gram-negative infections.

In the scientific sessions, key opinion leaders described how knowledge of genetic determinants of resistance of often needed to guide the appropriate use of these new therapies. Our new Acuitas Rapid Test that is in development and the Lighthouse Knowledgebase are being developed to help address this growing clinical need.

Another takeaway was that there is a growing and rapidly emerging market for syndrome-specific DNA multiplex testing in the microbiology market. This trend, along with the push towards automation is negatively impacting our QuickFISH business for testing positive blood culture samples.

On the positive side, our new Acuitas test that we anticipate being available for research use, in the fall, fits into this emerging paradigm with a highly multiplexed solution for helping treating physicians make clinically significant decisions.

The scientific data we presented at ECCMID on our new informatic [ph] algorithms for predicting antibiotic resistance and susceptibility based on resistance gene information were ground-breaking and generated considerable interest. The results of testing over 1,900 E.

coli isolates with PCR yielded strong prediction of phenotypic antibiotic resistance for seventeen antibiotics representing seven antibiotic classes with accuracies ranging from 77% to 97%, resistance for 12 on the antibiotics were predicted with 90% accuracy or greater.

Putting these data in context, the early identification of a resistant pathogen followed by the use of the most appropriate antibiotic therapy can not only result in better outcomes for patients, but also help combat the rise of resistance through avoiding the inappropriate use of antibiotics.

As recently as April 14th, the impact of this was highlighted in an article in Time magazine. The article described the decline in the use of fluoroquinolones because reduced efficacy against resistant microbes had effectively changed the risk benefit assessment for this important class of drugs.

This increase in resistance has effectively rendered fluoroquinolones a last choice for treating many infections. One of the antibiotic classes highlighted in our ECCMID poster was the fluoroquinolone class mentioned in the Time article. Our rapid molecular AST interpretation algorithm was 93% accurate in predicting fluoroquinolone resistance.

These data suggest that when used in conjunction with an Acuitas gene test for the targeted genes that the Acuitas Lighthouse Knowledgebase could be used to help physicians accurately identify fluoroquinolone resistance days ahead of current test methods.

This breakthrough technology could lead to patients being managed with the right therapy much faster than is possible today. Based on the interest in our posters that we saw at ECCMID and the discussions we had there, this potential is increasingly recognized in the infectious disease community.

I will now turn the call over to Tim Dec, our Chief Financial Officer, who will provide a brief summary of our first quarter 2017 results.

Tim?.

Thank you, Evan. Total revenue for the first quarter of 2017 was $800,000, a decrease from $1.1 million in the first quarter of 2016. As discussed on our previous calls, we expected our revenue to decline in this quarter due to the phase-out of our legacy business.

However, we are excited about our new Acuitas Rapid Test kits, with a research-use-only launch date anticipated in the second half of 2017. Total operating expenses excluding cost of product and service expenses for the first quarter of 2017 were $5.2 million compared with $4.9 million for the first quarter of 2016.

Research and development expenses were $2.1 million in the first quarter of 2017, as compared to $2 million in the first quarter of 2016. It should be noted that even though R&D was flat period-over-period, we expect to see R&D costs decline as we move through the remainder of 2017.

In Q1, 2017, we completed certain milestones that require third-party development costs that we expect to not incur in future quarters. These third-party development costs in Q1 have totaled approximately $400,000.

General and administrative expenses were $2 million for the first quarter of 2017, as compared to $1.5 million in the first quarter of 2016. This increase was primarily due to payroll and legal costs. It should also be noted that our annual audit costs are incurred each year in Q1, leading to increased public company expenses.

These Q1 expenses were approximately $200,000. Sales and marketing expenses were $1.1 million for the first quarter of 2017, as compared to $1.4 million in the first quarter of 2016. This decrease was primarily due to market studies and payroll costs.

Net loss available to common stockholder for the first quarter of 2017 was $5 million or $0.19 per share compared with net loss available to common stockholders for the first quarter of 2016 of $4.5 million or $0.36 per share.

The balance sheet had cash and cash equivalents of $1.7 million as of March 31, 2017, compared with $4.1 million as of December 31, 2016. Successfully financing OpGen has been an area of continued focus. We raised $15.1 million in gross proceeds during 2016 through a private placement offering and an aftermarket public offering.

And important goal for 2017 is to further strengthen our balance sheet through corporate financial activities that build value and position the company for growth in the coming years.

We anticipate that the remaining ATM capacity, as well as additional strategic funding transactions we are currently pursuing will provide working capital as we work to complete several strategic corporate milestones. We are also working diligently to obtain non-dilutive sources of capital to help fund our development programs.

As discussed on previous calls, we remained mindful of expenses in our cash burn. We are committed to developing and advancing our portfolio of products, and will continue to invest in our technologies to get them to market as efficiently as possible. I will now turn the call back over to Evan..

Thank you, Tim. As I noted earlier, we believe that OpGen is well-positioned to become a global leader in using genomic analysis technology and informatics to help combat and manage drug-resistant infections globally.

In the time that remains, I will touch on several of the key accomplishments from the first quarter, and highlight several anticipated corporate milestones.

As noted previously, we moved our Acuitas Rapid Test for complicated urinary tract infections and infection control into full development with the goal of implementing the technology for external research use in the second half of the year.

Genomic and antibiotic resistance testing of 10,000 multi-drug resistant organisms to support initial development of the first Acuitas Rapid Test kits and deployment of the Acuitas Lighthouse Knowledgebase is underway.

We have completed genotype phenotype testing for 4,000 clinical islets from the Merck's SMART surveillance network and clinical sites in support of the Acuitas Lighthouse Knowledgebase. Our genomic testing pipeline is operating at full capacity and we anticipate completing the majority of the planned islet testing in the second quarter.

We have selected the instrument platform in chemistry for the new Acuitas Tests, preliminary performance data and time to results metrics are encouraging. We are working to complete the development and transfer into manufacturing with the goal of making commercial product available in the fourth quarter.

An important next step will be the completion and announcement of an in-vitro diagnostic instrument supply and cooperation agreement to support global commercialization of the Acuitas Rapid Test.

Later in the year, we will be establishing Acuitas Rapid Test early access and performance verification programs to support regulatory approval clinical trials and publications.

We also anticipate entering into informatics collaborations and agreements to support the global rollout of our Acuitas Lighthouse Knowledgebase and related product offerings.

Finally, we are working to establish an additional distribution and partnering relationships to support commercialization of the Acuitas Rapid Test and the Acuitas Lighthouse Knowledge base in international markets.

Our team has been working to win several outstanding federal contracts from government agencies, who are working to combat drug resistant infections. We are also pursuing additional sources of non-dilutive funding. I'm pleased to announce that tomorrow morning we will be announcing that Dr. Tina Nova has joined the OpGen Board of Directors. Dr.

Nova is known for building Genoptix and selling the company for approximately $0.5 billion, she brings decades of experience in the molecular diagnostics business and we are proud to have her joining the OpGen board.

We anticipate that 2017 will be a year of significant accomplishments, we are on track with the development of our Acuitas Brand of genomic based rapid diagnostics and parallel with building our Acuitas Lighthouse Knowledgebase that will help guide appropriate antibiotic decision-making.

All of us at OpGen are committed to building a world class company that will help play an important role in the fight against drug resistant infections.

We've made significant investments over the last several years to accomplish this vision and in 2017, the results of these investments should begin to bear fruit, we appreciate your support and we look forward to realizing our potential as a company in 2017 and beyond. That completes our prepared remarks, and now we can take your questions.

Operator?.

Thank you. [Operator Instructions] And our first question comes from Yi Chen from H.C. Wainwright. Your line is open..

Hi, thank you for taking my questions.

My first question is, going forward, do you expect the QuickFISH revenue to remain relatively stable, or you expect further decrease?.

Thank you for your question, Yi. That's a good question. I think if you look at the FISH franchise over the last three or four years, that's had steady declines. That having been said, we are winning new accounts with the FISH business. So, I think that the prudent thing to do is to look at the first quarter results and extrapolate them through 2017..

Okay.

So, what was the cash burn for the first quarter and for the rest of year, what is your expected cash burn and cash needs?.

So, Yi this is Tim. The net cash burn for the quarter was about $4.3 million. That's pretty much tracking to our historical numbers during the first -- during the four quarters of 2016.

We haven't provided guidance going forward as our cash burn, but as we alluded do kind of in my remarks, you can expect to see R&D numbers trending down, and the G&A numbers trending down because of the audit completing in the first quarter.

So, I think you would see probably a downtick, and here we mentioned I think on our last call that we're continuing to try to focus on reducing our burn, I think, March last time we were cutting our burns between $3 million and $4 million this year..

Okay, got it.

And you mentioned in your prepared comments that you expect a commercialized product in first quarter this year, do you have any expectation regarding what kind of commercial revenue we can expect for either this year, or next year?.

We haven't provided any kind of guidance for certainly the back-half of this year. We will be providing input in the future on -- let's just call additional calls, as to the prospects for that product, but we think it's significant. And the first step will be to release that as the CE Mark product in early 2018.

Just maybe to come back to your question about the back-half of this year; we do anticipate progress in terms of potentially third-party funding and collaborations through our clear laboratory..

Okay.

And before that, we should be able to see the results from the test of 10,000 samples, right; MDR samples?.

That's correct. Well, that's underway. You can see what was presented at ECCMID were kind of an early look into the data, and the remaining testing is really to build out that database and get it ready for in-vitro diagnostic use..

Okay, got it. Thank you..

Sure. Thanks for your questions..

[Operator Instructions] And at this time, I'm showing no further questions..

With that, I want to thank you for joining this afternoon, and we look forward to updating you on our next conference call. Thank you very much..

Thank you..

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Everyone have a great day..