Kim Golodetz – LHA Investor Relations Evan Jones – Chairman and Chief Executive Officer Tim Dec – Chief Financial Officer.

Mitchell Spector – H.C. Wainwright Howard Horberg – Horberg Enterprises.

Welcome to the OpGen First Quarter 2018 Conference Call. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will hold a question-and-answer session. [Operator Instructions] As a reminder, this call is being recorded Tuesday, May 8, 2018. I'd now like to turn the call over to Ms. Kim Golodetz.

Please go ahead, ma'am..

Thank you, operator. This is Kim Golodetz with LHA. 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.

I encourage you to review OpGen'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, its ability to successfully, timely, and cost effectively develop, seek, and obtain regulatory clearance for and commercialize our products and services offerings; the rate of adoption of its products and services by hospitals and other healthcare providers; the success of its commercialization 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, May 8, 2018. The company undertakes no obligation to revise or update any statements to reflect events or circumstances after the date of this conference call, except as required by law.

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

Evan?.

Thank you, Kim, and thank you, everyone for joining us today. This afternoon we will review our 2018 first quarter financial results, and provide an update on our business plans and progress towards achieving key objectives for the remaining months of 2018.

During the first quarter, we were pleased with the operational, research and development and financial progress we made at the company. We introduced the first of our new Acuitas products Acuitas AMR Gene Panel u5.47 research use only or RUO test for infection control purposes and pharmaceutical surveillance studies.

The test detects 5 pathogens and 47 gene targets that convey resistance to nine classes of antibiotics directly from urine and bacterial isolates. Results from the clinical verification studies that began during the quarter are encouraging with results that are generally in line with our expectations. Following discussion with the U.S.

Food and Drug Administration in recent weeks, we are finalizing the regulatory strategy and clinical trial protocols for our AMR Gene Panel 510(k) submissions. We continue to anticipate making initial filings during the fourth quarter of 2018.

We entered into a second global supply agreement incorporate Thermo Fisher Scientific’s real-time PCR technology in our Acuitas AMR Gene Panel tests. Products covered under these agreements include the QuantStudio 5 Real-Time PCR System and TaqMan Real-Time PCR reagents.

This supply agreement is an important foundation for the commercialization of our tests. We are already installing the QS5 in laboratory sites that are early evaluators and potential customers. The labs will interpret results using OpGen's cloud-based Acuitas Lighthouse Software to manage genomic analysis data.

At last month’s European Congress of Clinical Microbiology and Infectious Diseases, we presented Acuitas AMR Gene Panel RUO analytical validation results for detecting multidrug-resistant pathogens and antibiotic resistance targets.

We presented use of test results to predict antibiotic resistance using the bioinformatic capabilities of the Acuitas Lighthouse Software.

For samples tested from the CDC & FDA Antibiotic Resistance Isolate Bank, Acuitas AMR Gene Panel and the Lighthouse Software accurately detected the organisms and resistance genes in our test with agreement to conventional microbiology ranging between 88% and 100%.

I want to highlight our collaboration with Beth Israel Deaconess Medical Center in Boston with AMR Gene Panel clinical verification study and Lighthouse Software.

This collaboration which we announced in March is one of several ongoing collaborations with prestigious health centers in order to clinically verify the performance of our new Acuitas products.

In April, we announced successful completion of a prospective clinical trial evaluating the impact of using rapid diagnostic testing for identification and treatment of bacteremia and fungemia in hospital intensive care units in the country of Colombia.

The study showed significant improvement in survival and reductions in antibiotic usage for patients receiving the OpGen rapid diagnostic test. Results will be presented at the American Society for Microbiology ASM Microbe 2018 meeting this June.

This conference is being held in Atlanta from June 7 to June 11 after which we will provide more detailed information. We are using our work in Colombia and the contacts we have nurtured increase our presence there and throughout South America.

During the quarter, we established a subsidiary to commercialize our precision medicine products in Colombia and more broadly through South America.

Our market entry into Colombia with our FDA cleared QuickFISH products, anticipate completing the registration process with Colombia's regulatory authorities and commencing product sales in the second quarter.

Colombia will serve as a reference market for further expansion in the region and for subsequent commercialization of our Acuitas antibiotic resistance detection product offerings.

As Tim will tell you in a moment in his review we were pleased to increase revenue during the quarter while significantly cutting expenses and get two new invest in our future.

Looking forward revenue growth is anticipated to come from our new Acuitas products, third-party development contracts, and ongoing revenue from our FISH-based rapid pathogen ID products with incremental revenues coming from our international activities. In February, we completed a public offering with net proceeds of $10.7 million to the company.

Combined with the proceeds from our public offering last July, we now have capital and a path to operate into the first quarter of 2019. The January offering was necessary as part of our successful effort to regain compliance with NASDAQ continued listing requirements for both minimum stockholders' equity and stock price.

I will now turn the call over to Tim Dec, our Chief Financial Officer, who will discuss our financial results.

Tim?.

R&D expenses were $1.5 million in the first quarter of 2018, down from $2.1 million in the first quarter of 2017; general and administrative expenses of $1.8 million, down from $2.2 million last year; and sales and marketing expenses of $300,000 compared with $1.1 million in the first quarter of 2017, reflecting reduced cost associated with our sales and marketing team that we made in June of 2017.

The company reported a net loss attributable to common stockholders of $3 million for the first quarter of 2018 or $0.75 per share. This compares favorably with a net loss attributable to common stockholders of $5 million or $4.77 per share for the first quarter of 2017.

Turning to our balance sheet, we had cash and cash equivalents of $10.3 million as of March 31, 2018. As Evan mentioned, in February 2018, we completed a public offering, raising gross proceeds in $12 million and net proceeds of $10.7 million. Each unit sold include one share of common stock and one warrant to purchase one-half share of common stock.

These warrants have a five-year term from the date of issuance. Proceeds from the warrants, if exercised, could be as much as $6 million. We also have $2.7 million capacity under our ATM, with Cowen and Company.

We also completed a one-for-twenty-five reverse stock split in January of 2018, reducing our shares outstanding from approximately 56 million shares down to 2.3 million in shares. After the public equity raise in February, our shares outstanding are now approximately 6 million shares.

As discussed on our last few calls, in June of 2017, we began implementing a strategic realignment of our operations to reduce our cost structure and our uses of cash. Our goal was to reduce operating expenses by 25% to 30% in the second half of 2017 and maintain that structure going forward.

We more than achieve this goal with a 33% reduction, which has generated a significant reduction in our quarterly cash burn. These actions have had a positive impact on our cash burn, reducing our adjusted EBITDA loss from roughly $4.5 million per quarter in 2016 and first half of 2017 to roughly $2.6 million per quarter in the second half of 2017.

And an even further reduction in adjusted EBITDA $2.4 million in the first quarter of 2018. We achieve this reduction, while maintaining our quarterly revenue from our QuickFISH product lines, as well as continuing our investment and our u5.47 R&D initiatives.

We will continue to look for ways to incrementally manage our cash burn throughout the balance of 2018. As Evan mentioned, we therefore expect our current available cash to extend in the first half of 2019. And that does not include any strategic non-dilutive investment or uses of our ATM facility.

We are optimistic that the investments we’ve made an OpGen’s future growth, along with continued thoughtful use of funds will support improved shareholder value through the remainder of the year. With that, I will turn the call back to Evan..

Thank you, Tim. We believe that OpGen is well-positioned to become a global leader in using genomic analysis and informatics to help combat drug resistant infections. In the time that remains, I will expand on several of the key accomplishments from the first quarter and recent weeks, and highlight anticipated corporate milestones.

Over the last four months, we've been working through the 510(k) pre-submission process with the FDA for our Acuitas products. Agency has completed detailed reviews of our pre-submissions for the AMR Gene Panel u5.47 test and Acuitas Lighthouse Software, which includes our prediction algorithms.

The FDA has set a high bar for the technical data derived from our analytical and clinical performance studies necessary to support our regulatory submissions.

We have continuing dialogue regarding the specific studies, product labeling and the content of what will be multiple FDA submissions through face to face meetings and the pre-submission process. Given the complexity of the plan clinical trials and submissions, we expect this work with the FDA to continue through 2018 and into 2019.

Several highlights and updates are as follows. Our first FDA submission is anticipated to be a traditional 510(k) AMR Gene Panel testing a bacterial isolates. The work for this FDA submission involves testing hundreds of bacterial isolates by OpGen and third-party laboratories.

Samples tested will be from the Merck SMART surveillance network and other sources. A manageable number of fresh bacterial isolates from patients will also be tested. We anticipate submitting this first 510(k) to the FDA in the fourth quarter of 2018. Our second FDA submission will be a de novo 510(k) for the AMR Gene Panel u5.47 urine indication.

A clinical trial to support this submission will include approximately 1,500 and freshly collected urine samples. This is an expansion from our previous estimate of approximately 800 samples. We will work to complete this FDA submission in the fourth quarter of 2018.

The larger sample accrual is anticipated to be a gating item that could push the submission timing for the de novo 510(k) into the first quarter of 2019. Testing requirements and data analysis for both of these submissions are significant.

All samples will be DNA sequenced tested by conventional microbiology and most samples will also be tested using the AMR Gene Panel. The testing data analysis and adjudication will follow with patient specimen approval process. We anticipate an increase in research and development expense in the third quarter in conjunction with these activities.

The third submission will be compiled for the Acuitas Lighthouse Software based on ongoing discussions with the FDA, we anticipate a de novo 510(k) pathway. There will be some additional lab work to support this software submission. Timing for this third FDA submission is targeted to be the first quarter of 2019.

While there are still several important areas to be resolved, the overall turn of our discussions with the FDA has been collaborative. With the first 510(k) following a traditional predicate device approval pathway, we are cautiously optimistic that the FDA will provide a timely review and clearance following our FDA submission.

Something we are successful with this process, our financial plans have the FDA cleared product contributing to revenue as previously discussed in the first half of 2019. We continue to work to establish an initial customer base for our RUO product offering, an infection control applications and for pharmaceutical surveillance studies.

Our goal is to have 10 to 20 institutions using the test or performing clinical research by year end. We currently have installations at three large health systems and three to four additional installations anticipated for the remainder of the second quarter.

This initiative will help build an installed base for our AMR Gene Panel test prior to the commercial launch of the FDA cleared product. We believe that the data presented at ECCMID will be supportive of these efforts.

Our CDC contract to develop smartphone-based clinical decision support solutions for anti-microbial stewardship and infection control in low and middle income countries is progressing according to plan, we anticipate beginning the initial deployment phase in Colombia during June.

In April, we successfully completed the move of our FDA cleared QuickFISH product manufacturing to our Gaithersburg, Maryland facility from Woburn, Massachusetts. We also completed a successful ISO 14385 inspection and approval for the Gaithersburg facility. We are proud of the effort the OpGen team put into these important activities.

In summary, we made solid progress with our research and development, operations and financial activities during the quarter. We encouraged by the progress to date with our ROU U.S. AMR Gene Panel for complicated urinary tract infections. And we are working towards our various strategic objectives during 2018.

Our cUTI test is expected to be the first in the series of OpGen test that will help address the global antibiotic resistance crisis, identifying antibiotic resistant pathogens in under three hours.

Along with the Acuitas Lighthouse Software or interpretation of our genomic results, this family of products has the potential to help improve patient outcomes globally. We expect to advance the following business objectives during the remainder of 2018, as OpGen transitions to the commercial phase of its molecular information business.

Plan to derive revenues from the sale of the RUO Acuitas AMR Gene Panel u5.47 to large hospitals and pharmaceutical clinical research organizations. To file a first 510(k) application with the FDA in the fourth quarter for the Acuitas AMR Gene Panel u5.47 IVD to support full commercial launch for clinical use.

To add QuantStudio 5 and QIAGEN EZ1 Advanced XL revenue-generating system placements. To enter into additional supply and cooperation agreements in support of the new Acuitas product family under development.

Complete the CDC contract demonstration project in Colombia for development of smartphone-based clinical support solutions for anti-microbial stewardship and infection control in low and middle-income countries. And we will continue to seek third-party funding for our development programs.

Finally, we will maintain cost reductions and overall cash burns extend operating cash runway. All of us at OpGen are committed to building a world-class company that will play an important role in the fight against drug-resistant infections.

We have made significant investments over the last few years in pursuit of this vision and the results of these investments should become evident in the coming months. We appreciate your support and thank you for your time this afternoon. Operator, we are now ready for questions..

[Operator Instructions] and our first question is from the line of Yi Chen from H.C. Wainwright..

Hi there, this is Mitchell on for Yi. Thank you for taking our question today. My first question is the detection within two hours going to be the standard for the Acuitas AMR Panel is going forward..

Yes, that is correct..

Okay. And so today how many samples have you collected for the – to be tested in for the 510(k) filing for the AMR Gene Panel u5.47, sorry..

Okay, and thanks for your questions. As I mentioned in my prepared remarks, we're. pursuing two separate 510(k)'s. There is a 510(k) based on a predicate device pathway is testing of bacterial isolates. Those isolates are in the OpGen archives. They will be provided to third-party sites who will perform the testing.

There's no IRB requirement that we are aware of. And as I mentioned there are some fresh samples that work is I would just described it as relatively straightforward and will be accomplished through the middle of the summer and then used to prepare an FDA submission.

The testing of – what you would think of as the prospective clinical samples of 1,500 urines, that will follow the isolate clinical testing. There may be some parallel work, but that the actual protocols are being finalized as we speak..

Okay, thank you. And then sorry, go ahead..

I was just going to say we've now tested hundreds of samples from our clinical sites and they are also testing in those sites for our clinical verification studies where we describe as the RUL product. And the IVD product when it is distributed for the clinical trials will be labeled as investigational use only..

Okay, thank you.

And then do you have any revenue guidance for 2018?.

Yes. This is Tim. We have not provided revenue guidance..

Okay. Thank you, guys..

[Operator Instructions] And our next question is from the line of Howard Horberg from Horberg Enterprises..

Hi, guys. I was wondering what the benefits of getting the results in under three hours are to one the patient, two to OpGen and three to someone like Merck..

Well, I’ll try to take a crack at that. And thank you for your question [indiscernible]. First of all today, it can take several days to get the answer from you know the clinical microbiology workflow both for a urinary tract infection, but also a bloodstream infection.

During that time, there are many well documented negative outcomes from being, whether it's to be on the wrong antibiotic or your infection gets worse. So having a two hour test that could be used to guide, what will be initially getting the patient on the best impaired therapy could have significant positive benefits to patients.

It's important commercially, because it differentiates OpGen from the companies that are trying to do this work based on what people in industry would call phenotypic analysis or growing the microbes. The bar for DNA testing on the best in class is one to two hours. And so that process in that test range.

And certainly as your question with regard to Merck, is that they have been very supportive of what we’re doing and speaking for Merck and other pharma companies that we have spoken to.

What these companies would like to see is a rapid testing, modality to guide antibiotic decision making that can be diffused to large numbers of labs globally to help guide with pharma business..

Okay. With regards to patients, are you talking going to be a matter of life or death or what are you think of the timing decrease..

So I would view at as the couple of different examples, there are certainly situations in hospitals, where this information is life or death to determine us to have the drug resistant infection, it’s a get the wrong antibiotic, there’s a 50% mortality for certain cases.

In other cases, this will save the hospital money for instance that they have a patients sitting an emergency room, trying to determine to they need to met that patient some on average $3,000 per day..

Okay, thank you. No more questions..

Thank you..

[Operator Instructions].

If there are no further questions and I thank you all for joining this afternoon and we look forward to providing our next update on our Q2 conference call in early August. Thank you very much..

Ladies and gentlemen that concludes your conference call for today. We thank you for your participation and ask that you please disconnect your lines..