Good day, everybody, and welcome to the Trinity Biotech First Quarter 2020 Financial Results Conference Call. All participants today will be in a listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note, today’s event is being recorded.

I would now like to turn the conference over to Kevin Tansley, Chief Financial Officer. Please proceed, sir..

Thank you, Eric. Now before we begin with our prepared remarks today, we submit for the record the following statement. Statements made by the management team of Trinity Biotech during the course of this conference call that are not historical facts are considered to be forward-looking statements subject to risks and uncertainties.

The Private Securities Litigation Reform Act of 1995 provides a Safe Harbor for such forward-looking statements. The words believe, expect, anticipate, estimate, will and other similar statements of expectation identify those forward-looking statements.

Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, but not limited to, the results of research and development efforts; the effect of regulation by the United States Food and Drug Administration and other agencies; the impact of competitive products, product development, commercialization and technological difficulties; and other risks detailed in the company’s periodic reports filed with the Securities and Exchange Commission.

Forward-looking statements reflect management’s view only as of today. The company undertakes no obligation to publicly release the results of any revision to these forward-looking statements.

In addition, there is uncertainty about the spread of the COVID-19 virus and the impact it will have on the company’s operations, the demand for the company’s products, global supply chains and economic activity in general. So with that, I will take you through the results for quarter one 2020. Beginning with our revenues.

Total revenues for the quarter were $21.2 million compared to just over $22 million in quarter one last year. Ronan will provide more details on revenue for the quarter later in the call. So I will move on now and discuss the other aspects of the income statement.

Our gross margin this quarter was 43.8%, which represents an improvement on the 42.4% reported in quarter one last year. This improvement was due to the impact of lower instrument placements, which tend to have a lower average margin, in addition to a lower depreciation charge during the period.

This was also achieved in the face of slightly lower revenues and foreign currency headwinds due to the increased strength of the U.S. dollar. Moving next to our indirect costs. In total, they have fallen by over $400,000 in the quarter to $7.6 million.

Within this, R&D expenses during the quarter increased very slightly from $1.3 million to $1.4 million due to the normal fluctuations in this expense caption. Meanwhile, SG&A expenses decreased from $6.6 million to $6.1 million. This time, we are seeing the impact of cost savings and lower depreciation charge again.

And then our share option expense also decreased from $176,000 to $134,000 in the quarter. The net result of this has been an increase in our operating profit from $1.3 million to $1.7 million. Moving on to our financing costs, which includes the impact of our exchangeable notes.

Our financial income for the quarter was $31,000 versus $140,000 in the comparative period. And this is primarily reflective of lower levels of cash deposits. Meanwhile, financial expenses for the quarter were $1.2 million. And of this, $1 million relates to the cash interest element of our exchangeable notes.

And the remaining $200,000 relates to the notional financing charge relating to lease payments as a result of IFRS 16. That results in a non-cash financial expense of $200,000, which is disclosed further down the income statement. And that relates to the accretion interest on our exchangeable notes.

Meanwhile, our tax charge for the quarter was $129,000. And this represents an effective tax rate of approximately 7.5% of operating profit, which is broadly in line with last year. In terms of overall results, the profit before tax and non-cash interest for the quarter of $500,000 compared to $200,000 in 2019.

And similarly, profit after tax also increased from $100,000 to $400,000 this quarter. When non-cash interest is taken into account, the profit after tax for the quarter was approximately $200,000. The basic EPS for the quarter, excluding non-cash items, was $0.017 compared to $0.005 in quarter one 2019.

Meanwhile, fully diluted earnings on the same basis was $0.053 compared to $0.044 last year. The numbers I’ve just quoted are before the impact of a once-off item, which relates to the closure of our Carlsbad facility, which we had mentioned on our previous call.

You will recall that we made the decision to close this plant, given the ongoing migration of Lyme confirmatory testing away from our Western Blot test to other formats, which resulted in production volumes, which were no longer economic to produce.

The closure provision relates mainly to inventory write-offs, closure costs associated with exiting the leased premises and redundancy costs. Finally, on the income statement, earnings before interest, tax, depreciation, amortization and share option expense for the quarter was $2.6 million.

I’ll now move on and talk about the significant balance sheet movements since the end of December 2019. Property, plants and equipment decreased during the quarter from $9.3 million to $9.2 million. This was due to additions of $300,000 being offset by a depreciation charge of $400,000.

Meanwhile, intangible assets increased from $43.6 million to $45.5 million, an increase of $1.8 million. And in this case, this is due to additions of $2.2 million less amortization of $400,000. Moving on to inventories.

You will see these have increased by $600,000 to $32.7 million, which is mainly due to an increase in instrumentation inventory due to lower shipments this quarter due to COVID-19.

Trade and other receivables have decreased from $21 million to $20 million, a fall of $1 million, most of which was due to a decrease in trade debtors following improved cash collections during the quarter.

Meanwhile, our trade and other payables, including both current and non-current, have increased from $37.1 million to $38.7 million, an increase of $1.6 million.

This was mainly due to the $2.4 million closure provision for our Carlsbad facility, which I mentioned earlier, and an increase in the interest accrual in relation to our exchangeable notes of $1 million.

This in turn was offset by the payment of the final tranche of our HIV-2 license of $1.1 million and a reduction in trading and other payables of $800,000. I’ll now discuss our cash flows for the quarter. Cash generated from operations for the quarter was $2.5 million.

But this was offset by working capital movements of $1.4 million, much of which related to the increase in inventories and accounts receivables that I’ve mentioned earlier. Capital expenditure in the quarter was $2.8 million, which represents a decrease of approximately $400,000 on the corresponding quarter last year.

And we have lease payments of $800,000 in relation to leased premises. Finally, there is the final tranche of the HIV-2 license that I also mentioned earlier. The net result is that we had a decrease in our cash for the quarter of approximately $3.2 million, bringing the quarter-end balance to $13.2 million.

Before handing back to Ronan, I want to discuss some of the impacts of COVID-19 and the company at present. Ronan will take you through more detail later on in relation to the revenue aspects and will mention that it quickly became apparent to us that COVID-19 was going to have a substantial negative impact on our revenues.

And in response to that, we implemented a number of measures to protect us against the expected sudden fall in revenues. As a first step, we furloughed a large part of our workforces in the U.S., Ireland and Brazil with a particular emphasis on those plants which will be most heavily hit by reduced revenues. Shortly after this, the U.S.

government launched its Paycheck Protection plan to help companies which have been impacted by COVID. As a result, we applied and received $4.5 million of loans under that program.

As mentioned in the press release, these loans will be forgiven in the event that companies return to their pre-COVID workforce levels in the eight-week period immediately after the loan is granted. In the event that this isn’t the case, some or all of the loan will remain repayable over a 24-month period at an interest rate of 1%.

In response to this program and are availing others, we brought back all of our U.S. employees from furlough. And as a result, we expect that most of the loans will thus be forgiven. Meanwhile, in Ireland, where many of our employees remain on furlough, we are availing of governmental support, which subsidizes those remaining non-furloughed workers.

We have also been quick to reduce as much non-wage expenditure as possible with the obvious example being travel costs. Though in most places where we operate, travel is either not permitted or impractical, but either way, we are getting the cost savings. We have also been seeking to reduce any other discretionary costs wherever possible.

And as it is impossible that this remove to be exact, based on the measures we have taken so far, we believe we should end the quarter with no overall reduction in our cash balance from that, which we’re showing today at the end of quarter one. I’ll now hand over to Ronan..

Thanks, Kevin. I’m just going to review our revenues for quarter one before opening the call to the question-and-answer session. Our revenues for quarter one were $21.2 million compared to $22 million in the corresponding quarter last year, which is a decrease of 4%.

Point-of-Care revenues were $3.3 million compared with $3.2 million in the corresponding quarter last year, which is an increase of 5%. Clinical Laboratory revenues were $17.8 million compared with $18.8 million in the corresponding quarter last year, which is a decrease of 5%. Moving back at Point-of-Care.

Our revenues increased this quarter by 5% when compared to the corresponding quarter. However, given that the company exited the HIV market in the U.S.A. at the end of 2019, the actual increase in our HIV revenues in Africa for the quarter was 19%. Moving on to our Clinical Laboratory business.

Our revenues for the quarter were $17.8 million, which compared – when compared with $18.8 million is a decrease of 5% to the corresponding quarter last year. During the quarter, we suffered a currency headwind, which amounted to $250,000. And the major component of this are also the consequence of the weakening of the Brazilian real.

Our hemoglobin and diabetes business grew 4% in quarter one when compared with the prior year with 42 instruments being placed in the market.

We regard this performance as strong when taken in the context of the onset of COVID and the fact that no instruments whatsoever sold into China, given the restrictions in place at the time and also given the strong currency headwinds in Brazil. Meanwhile, our Premier Resolution FDA submission has been delayed due to the COVID closedown.

But we are confident of making a submission before the end of August of this year. Receipt of FDA approval will enable us to enter the U.S. market but will also enable the commencement of the Chinese regulatory process. These are high-value markets with few competitors.

And we believe that with our best-in-class instruments and reagents that we can take significant market share. Receipt of FDA approval will enable us to enter the U.S. market but will also enable the commencement of the Chinese regulatory process. These are high-value markets with few competitors.

And we believe that with these products, we can grow our revenue significantly. Meanwhile, our autoimmune business grew 5% this quarter when compared with the corresponding quarter last year. The specialist reference laboratory business performed well with significant growth coming from our business with the two U.S.

mega labs and from our Sjogren’s product range. The 5% growth was a good outcome particularly in the context of a severe tailing-off of our laboratory business in the last two weeks of the quarter. Meanwhile, our infectious disease business decreased 19% when compared with the corresponding quarter last year. Our U.S.

business declined due to our previously announced withdrawal from the Lyme Western Blot business in the U.S.A. as that business migrates to Lyme immunoassay and also due to continuing migration from ELISA to random access platforms. On a positive note, our non-U.S.

infectious disease business, comprising China, Europe and the rest of the world, performed well during the quarter with revenue up 2% compared to the corresponding quarter.

Meanwhile, our monoclonal antibody company, Fitzgerald, which carries a range of COVID monoclonal antibodies and complementary reagents, has experienced a significant increase in revenues over the past two months. And we anticipate that this business will perform strongly for the rest of the year. Moving on to COVID.

The company has now completed the development of a COVID-19 IgG ELISA antibody test. The transfer of the product into our manufacturing facility in Jamestown, New York has been completed and we are now in the validation phase.

We anticipate submitting the validation documentation to the FDA and gaining Emergency Use Authorization, or EUA, by the end of next month, just by the end of June. At which point, we are free to sell the product. We will then submit the product to the FDA, who will perform their own testing on the product.

And assuming a successful outcome, we will then be granted an umbrella Emergency Use Authorization. As previously indicated, our ELISA production capability is very significant and the instrumentation platforms that perform this type of testing are available in virtually every laboratory in the world.

The company is also developing a rapid point-of-care COVID-19 test to detect antibodies, both IgG and IgM, to the virus that can be run in 12 minutes using one drop of blood procured by spring-loaded lancet or a finger prick.

Like the ELISA test, this test will determine which individuals within the population have been exposed to COVID and are therefore now immune.

We expect to complete the development of this test and transfer into manufacturing over the coming months and again believe that the product is exhibiting performance characteristics that will enable us to gain FDA Emergency Use Authorization.

We already have in place existing and substantial automated manufacturing capability for such a test, given that we have already – that we already manufacture every year many millions of HIV tests on an automated platform. In addition, sales of our transport medium and sample collection device for COVID-19 are increasing.

And we are currently expanding our production capabilities. This FDA-approved product is used to store the nasopharyngeal swab, which contains the COVID sample, and stabilizes it, prevents bacterial growth and maintains its integrity until such time as the test is run in the laboratory.

Our product does not require refrigeration and is a key component in the identification of COVID-19 positives in the population. As Kevin mentioned earlier, we were quick to appreciate that COVID-19 was going to have a significant impact on our revenues.

In particular, we had identified that in many countries that testing for non-acute conditions was likely to be severely reduced as patients would be reluctant to visit their physicians or hospitals and run the risk of contracting COVID and that subsequently – and consequently, that they would opt to defer or forgo such testing.

It does come as no surprise to us that we saw a sudden falloff in diabetes and autoimmune testing. For autoimmunity, this first manifested itself in our reference lab in Buffalo while for diabetes, we first saw it in our direct sales – direct markets in the U.S. and China and Brazil and then later impacting our distributor market around the world.

In the case of diabetes, we also expected that instrument sales, which were already lower in quarter one due to COVID, would likely remain so in quarter two as hospitals and clinics were less likely to purchase new equipment in the midst of an unrelated pandemic.

I would, however, mention that at this point, we are beginning to see the reemergence of such testing as lockdown restrictions are being eased in many of the countries in which we sell. In terms of HIV, we saw the suspension or reduction of HIV testing programs in certain countries in Africa.

And this, combined with supply chain difficulties caused by the major reduction in air traffic to Africa as well as general uncertainty as to how quickly COVID would spread throughout Africa, has led to a slowdown in orders. However, the impact of COVID is not entirely negative from a revenue perspective.

For example, the company is benefiting from sales of our FDA-approved transport medium, which I mentioned a month ago, and sample collection device for COVID-19.

This product is used to store the nasopharyngeal swab, which contains the patient’s sample, allowing it to be transited in a stable environment in advance of the test being run in the laboratory. We expect to see demand for this product to remain strong in the months ahead.

We are also seeing higher sales of some of our point-of-care respiratory products, such as Legionella disease and Strep pneumonia, given the increased testing for these conditions in light of COVID. With regard to our life science supply subsidiary, Fitzgerald, we are also seeing some increased revenue in relation to COVID-19.

Fitzgerald currently sells a range of COVID monoclonal antibodies for which we expect demand to remain strong for the rest of the year. So when taking in the combination of these positives and negatives into account, we expect the quarter two 2020 revenues will be in the $13 million to $15 million range.

But despite much lower sales in quarter two, given the furloughing of employees, the U.S. Paycheck Protection Program, the elimination of travel, et cetera, we believe we will be profitable in quarter two and then quarter two with a stronger cash balance than at the end of quarter one.

So at that point, could I now hand you back, please, to the operator?.

Thank you. We’ll now begin the question-and-answer session. [Operator Instructions] Our first question today will come from Paul Nouri with Noble Equity. Please proceed with your question..

Hey, good morning. .

Good morning, Paul..

I forget if you brought this up on the prior call.

But do you have an annualized savings that you’ll realize from closing the Carlsbad plant?.

Yes. We have – I think we’ll have a saving of about a $2.5 million from the closure of that plant. Obviously, there’s an offset in terms of revenues. And by the way, that closure will proceed on the 13th of June, Paul. It’s on track..

Okay.

And the $2.8 million in capital expenditures this quarter, is that an amount that we should think normal going forward?.

You will have noticed that number used to be somewhat higher. In previous years, we’ve taken this from run rate. So as I’ve said before, the – you can expect over time that the product development aspect of that will drop over time.

So typically speaking, we do about maybe $300,000 or $400,000, maybe a bit higher on PP&E and the rest is product development. At its height, it was about over $3 million per quarter. I expect it to remain at similar-type levels as we’re seeing at the present. It will fluctuate though from time to time, depending on trials, costs and what have you.

But the internal cost of such will remain reasonably static or even falling over time..

Okay. And I realize – or I see here that the – you still made a payment on this HIV license fee.

But I thought that, that was associated with the product that you sell into America? Is that not the case?.

That is a – that’s a final payment that we required to make, which on a license that we had raised a number of years ago – that we have entered into a number of years ago..

Okay. And then the inventory, still really high.

Can you tell me what the largest components of the inventory are?.

What I will say is that because we manufacture virtually all of what we sell, we have a lot of raw materials, work-in-progress and finished goods. So in some cases, when you’re comparing with other companies, they don’t necessarily have all of those.

We also have a large instrument aspect to our business and therefore are required to keep a significant amount of spare parts. And in relation to older instruments, we’ll have to carry them for a number of years.

We also have strategic purchases in relation to some of the biologicals that we would use in our production, which would – and therefore, it makes sense to buy significant quantities of that rather than changing repeatedly from batch-to-batch, thus causing a lot of operational efficiencies.

A lot of the inventory would be in relation to our hemoglobins, our diabetes line as such, where we do have a lot of the instrumentation-type inventories I referred to earlier. So as well as having your normal raw material, work-in-progress and finished goods, you also have the spare parts aspect.

And in this quarter, the fact that instrumentation slowed up during quarter one as the first sign in relation to COVID, we would have seen an increase in such inventories at the end of quarter one..

Okay.

And given that – given the current conditions with COVID and it’s difficult to tell which countries might open back up sooner than others significantly and which will start going to the doctor again regularly, are the instruments, you can place them in any country? Or is each instrument you produce placed for like the EU, America, Brazil, et cetera?.

They’re essentially location-agnostic. So yes, I mean if one place turns up – turns on quicker than the other, we can just direct our instruments there and as such, though that isn’t a particular problem. We’re not going to – if you’re saying, are we going to end up with the wrong type of instruments? The answer is no. The instruments can go anywhere..

Okay, thanks..

Thanks, Paul..

Our next question will come from Jim Sidoti of Sidoti & Company. Please proceed with your question..

Good afternoon.

Can you hear me?.

Yeah. Hi, Jim..

Hi, good afternoon. Glad to hear you guys are well. A couple of questions. First, on the antibody tests, they’ve been in the news a lot here in the past few days about their accuracy. Some of them are very sensitive, others aren’t very specific.

Can you give us a sense on how yours performed?.

Yes. Jim, Ronan here. Yes. And obviously, we’ve seen that as well as maybe just in defense in general of antibody tests. I’m not sure on what basis the sort of the suggestions that some of the tests are only at 48% sensitivity and 50%, that kind of thing. I’m – that surprises me.

It may be that, in some instances that they’re taking samples which are positive. Bear in mind, you don’t develop an antibody for sort of, say, the IgG antibody, you’re not going to develop it for about two weeks.

So if you’re taking sort of somebody who’s just contracted the virus a week ago or four days ago, he may kind of come up negative because clearly, well, because the antibody won’t be present yet. So there maybe – it could be some element of unfairness there.

But just to talk about our own test rather than anybody else’s, I made a point that our test is fully developed in R&D. It’s transferred into manufacturing.

But for us basically to sell the product and get the EUA, which is the Emergency Use Authorization from the FDA, we have to actually – we have to transfer into production and do validation batches, so full commercial batches, right, and then run the actual trials on those batches. So those batches have just been completed at the moment.

So therefore, I can’t kind of recite my sensitivity and specificity at this moment in time because clearly I need to reproduce the accuracy that I got in R&D. I need to reproduce that into validated batches – production batches. But I’m not going to sort of say a percentage for sensitivity and specificity.

But I will say is that they are – they exceed the requirements of the FDA, which, by the way, are 90% sensitivity and 95% specificity. So basically, what I’m saying is you can’t basically EUA the product unless you achieve that milestone, right. Now there were some products that went out earlier basically before the EUA mechanism was put in place.

And some of those products possibly don’t meet the requirement. And I think the FDA are weeding through them. I mentioned also in my prepared remarks that then we were going to go for an umbrella authorization, EUA. And what that means is that we actually send our product to the FDA.

And they actually – unusually for the FDA, they actually run the trials themselves. They run the samples themselves, right? And so basically, they would have basically known positives and known negatives, qualified samples. They run them on them.

And on the basis that they meet their requirement, which is 90% and 95%, you then get the umbrella EUA, okay? They actually use – I think they use the National Cancer Institute for that, the NCI. So basically, what we're going to do here is basically by the end of June, we will have the validation batches complete.

We'll have run our trials with our samples, ourselves. We will submit all the documentation to the FDA. And that enables us to sell it from that moment, right, with an EUA. We then will send – in addition to that then, we will send product to the FDA. And basically, they will run their umbrella trials.

And we would hope that basically that will confirm what we've already basically tested internally and we'll have the added advantage. So an umbrella EUA is an enhanced EUA as such, so we expect to get that. There's a bit of a waiting list on it. So it's unclear how long the waiting list is. I think it's about sort of three or four weeks.

But we will be free, for the moment of EUA, to sell the product. So basically, that's the plan there. And so I'd say we're exceeding the 90% – we're exceeding – we're significantly exceeding the FDA requirements..

Okay.

Do you have any incoming requests for the product? Do you think you'll have customers right away once you get that initial approval?.

Yes. We believe we will. And we have all our sales reps around the world investigating and talking to potential customers..

All right. And I was a little surprised to hear you say you think you'll still be profitable in the second quarter even with the lower revenues. I assume that's partly due to the $5 million loan from the U.S. government.

Will that be as an offset to SG&A expense in the quarter?.

It will depend where the actual underlying – well, I actually don't know. I'd imagine there's going to be some pronouncements as to how one accounts for this. It's a question of whether it be – that will go as an offset purely against SG&A or whether it will go against where the actual costs themselves were. It could end up being either.

So I think we're at early stages in our program. But there will be an offset. And as I say, that's the reason why that we're going to remain profitable because, in essence, we are having eight weeks of U.S. payroll effectively being paid for by the U.S. government, for which we're very grateful.

Although it's characterized as a loan, the reality is that all but none that are – maybe none of it entirely, but I mean, there's an order process that has to be gone through. But basically, it won't be repayable. Or if it is, it will be a very minuscule percentage of it. Because we've acted honorably. We took literally every single individual back.

We've complied to what they requested us to do. So our U.S. employees were only furloughed for, I think, 1.5 weeks. So we reversed it and brought everybody back in. So – and in addition to that then, remember, we're furloughing some of our people in Ireland. Our people in Brazil are working 25% of the time and getting paid to 25% of normal.

And in addition to that then, a lot of our variable overheads have been eliminated due to travel, et cetera, various other factors.

So the overall impact to the whole thing is that we believe that we will be profitable in quarter two despite the reduction in revenues and indeed that our cash balance will be stronger at the end of quarter two than at the end of quarter one.

And then in terms of looking forward, we're already seeing, for example, in our laboratory in Buffalo, we're seeing that our volumes of tests are significantly improving. Like we went – I mean we went – we were only at 33% normal in April. And we're back to that sort of 66% of normal in May. That's kind of where we're at.

Because clearly, people aren't running routine tests at this moment in time. They're kind of trying to avoid going near doctors or hospitals. And so we see that changing. So – and while we don't have much visibility on quarter three, any visibility in quarter three, we would expect that, if anything, that we'll get a bounce.

Because bear in mind, if you take, for example, a diabetic who hasn't done his A1c for a number of months, it will be a catch-up. So we think, if anything, it will be a bounce. So we would expect that unlike sort of the automobile industry or whatever else, that our business will come all back with possibly a small element of bounce as well..

Okay.

So quarter two will be the low point for the year?.

Absolutely. I mean, as I say, I don't really have visibility on this. But I would be disappointed if quarter three didn't give us a complete return of all of our business, if anything, but a bit of a bounce..

All right. Well, that's kind of where my next question was going really was all about quarter three. But if we look out to 2021, I know you won't have the U.S. HIV business and you won't have the Lyme business. So that's – I think you said last quarter, that was roughly $5 million of revenue.

But aside from that, if you compare 2021 to 2019, is there any reason why you shouldn't get to that level of revenue in 2021?.

I didn't quite follow the question. I think you're asking would growth in other areas make up for the loss in HIV and in Lyme.

Is that your question, Jim?.

Right.

Well, when you compare 2021 to what you reported for 2019, will the growth in those other areas be sufficient so that you'll still get to that $90 million of revenue?.

Yes. Yes, the answer is absolutely yes. I mean we've lost $5 million. So if you look at what's happened, we basically had a declining HIV business in the USA, which we eliminate. And then [indiscernible] with declining Lyme Western Blot, and we've eliminated that and we've closed the factory.

So basically, because of both businesses were – had been declining over a period of years, the fact that we can eliminate the production line in Ireland and we can limit the entire factory in San Diego will mean basically that the loss of that $5 million of revenue, which was declining, will actually be from a P&L and a cash flow perspective be positive, right, which should make that point.

And beyond that, we've lost $5 million and you're asking me basically from the end of 2019 to the start to 2020, can we recover that in terms of organic growth within the rest of the business? And the answer is absolutely yes, no doubt whatsoever.

If you look even at just – I mean even on its own, hemoglobin A1c would be achieving that level of growth..

Okay, all right. Thank you..

Thanks, Jim..

Our next question comes from Jonathan Sacks with Stonehill Capital. Please proceed with your question..

Hi, all. Thanks for the call as always. Jim's questions on the antibody accuracy were helpful. I had some of the same or some related questions. For the antibody tests, it sounds like a lot of companies have come out with those already.

Is Trinity's test different, better or worse, more accurate, less accurate, costs more, costs less? If you could just help us understand functionally.

And otherwise, do you expect there to be material differences between Trinity's tests and competitors' tests?.

Well, yes, I mean I'm reading the same as you are about antibody tests that aren't performing particularly well. What I would say is that is that in terms of Trinity Biotech that we have pedigree in this area.

I mean we are a long-established, for nearly 30 years now, supplier of – a manufacturer of high-volume levels of infectious disease ELISA tests. We supplied Quest and LabCorp until a number of years ago with all of their infectious disease range of products. And we supply some of the biggest laboratories around the world still.

So I think we have pedigree. And so we – our products are excellent without exception, we believe. And we believe that we have developed an excellent IgG antibody test for COVID. And we believe that we know that the characteristics – performance characteristics of the products exceed the FDA requirements. So we're basically in the high 90s.

I'm just reluctant to quote because, as I said, they're still subject to finalization on that. The actual – the numbers that are going to the FDA submission will be of the validation batches, which are just being manufactured at the moment.

So – but I'm confident that we will replicate what we did and that the performance from R&D will be replicated on validation batches. So all I can say, Jonathan, is that we have a very, very good product. There are other products out there that are very, very good.

I mean, for example, I know that the Abbott and the Roche products are good, their antibody tests. But remember, they run on a slightly different format than the ELISA, but they're very good. Clearly, it's a very crowded space. There's many, many products in there. And some are not very good, I recognize that.

So look, I'll just speak about our own, anyway. We believe that ours is excellent and it's right up there with the best of them..

And any rough sense of price point that you could give to us even if it's not been finally determined but just approximate?.

Yes. I mean I think it's going to be selling, and this is just a broad range, somewhere between kind of $500 – $500, maybe $800 to $900 per plate, which translates to a like $5, $8 – there's 96 in a plate, so $5 to $8, $5, $8, $9 a test, that kind of thing. It's quite a – which is a strong price.

I'll give you, let's say, a Toxoplasma or a rubella sort of standard ELISA plates, we'll be selling probably $2 a test or even less..

Okay.

And that would be Trinity's sale price?.

Yes. That would be – no, that would be the price that we would sell to distributors and laboratories all of the world, yes..

Yes. So the price that's Trinity is receiving, not what the end consumer is – it's Trinity sale price..

Yes..

Okay. Great. And then you discussed a little bit about the transport medium and growth in that. But I don't know that we've heard too much about that business in the past.

Can you give us a sense of the magnitude of that business or tell us a little more about it?.

Well, just to clarify. So basically, when somebody gets – is being tested for COVID, you know that they basically will go and that they will get a swab, which is put down – or puts up their nose and basically into their mouth. And then that swab then is put into a tube, which is sealed, right? And it is that swab and that tube that we manufacture.

So it's a very integral part of the whole thing. And that then is transported without refrigeration to a laboratory, where the PCR test or the molecular test is run.

So our test – our swab and collection device basically has reagents inside that preserve the sample, that stop for bacterial growth, that actually provide nutrients to the virus to maintain it for basically subsequent testing. It's an FDA-approved device and, as you could imagine, is proving to be in extremely strong demand at this moment in time.

And for us really, the challenge is one of manufacturing rather than finding customers and enhancing our manufacturing capability. In terms of its potential, I think in quarter – in this quarter, we could be looking at, maybe depending on how quickly we can ramp up and all that kind of thing, maybe $2 million.

But it has enhanced potential beyond that in the near subsequent quarters..

And pre COVID, approximately-what was the run rate in revenues on that product for a year, just approximate, to give us a sense?.

Jonathan, let me just – suffice to say, modest..

Right.

Like low hundreds of thousands of dollars or something?.

Yes..

Okay. Thank you very much. I’ll hop off, good luck to getting the FDA approval and with everything else. Appreciate it..

Thanks, Jonathan..

[Operator Instructions] Our next question will come from Bill Lapp, a Private Investor. Please proceed with your question..

Hello, Bill?.

Yes..

Yes. Are you ready for me, Bill Lapp. [PH].

Yes. Hi, Bill..

Yes. Just two quick questions. If that's too much, I can stop at one. As a follow-up to Jonathan's question on the transport medium product, is there – what is your competition on that? Because there's been some problems with that. And if your device is superior, it seems like there there's a great amount of demand.

Is there anyone else making that type of transport medium product?.

Yes. There are quite a number of people in that market, yes. But as you can imagine, at the moment, the demand around the world is really strong. So I mean, Bill, as I explained, for us, it's really the challenge is being able to make it rather than sell it..

Where are you manufacturing it?.

We're manufacturing it at the Jamestown factory in New York..

Okay.

One other – do I have – can I have one more question, a quick one?.

Of course, Bill..

I'm not clear about what you're doing about the Trinity screening. You're holding off. Can you give a little more flavor on that? I mean I realize with the COVID-19, it's a problem.

But are you – can you give us a little more guidance on where that's going to go?.

What happen was we were really just finishing our trials in three countries, which are in Africa. And basically, we're just literally within the last probably month on those trials. And they all just closed down because of COVID. And that's how things remain. So basically, we expect that they will open up in the next month to six weeks.

And as soon as that happens, we will complete. Our countries are South Africa, Kenya and Ivory Coast, right? So it depends, it could be different openings in each country. But I would imagine that sort of, I don't know, by September, let's say, that we'll be able to submit to the WHO.

What we have actually done is – I mean the WHO submission is kind of like it's kind of box loads of documentation that you send in. You will need a truck for it all. So what we've done is we've sent everything else in, right, all the factory stuff, all the various documentations.

We've sent sort of three quarters of the truck basically load of documentation to them. And so the last piece then that will catch up will be the actual trial data..

Do they start doing anything? Do they start looking at that data?.

They've acknowledged receipt. But obviously, we don't know exactly what they're doing, the extent to which they're doing it. But we assume that they are reviewing it..

So that's good. So you're not going to….

I think we should have everything in within two, three months, that sort of thing, depending on how each of those individual countries opens up..

Is there still a demand for those prescreening tests? I mean is Alere doing still a big volume on that?.

Yes, absolutely. And I mean I know that will have been – there obviously will have been a slowing down as we've experienced of the African HIV business. But I mean it will all be back within a few months, we believe..

Okay. One other question, if I may. I'm not clear on your sales. In other words, you got the test that you're going to be selling to the lab.

Who – I mean who do they go to have the test performed? I mean does the lab just notify different medical people that the lab – that the test is available if they want to use the Trinity test? And then how does that also relate to – when you do the finger – when you do the rapid test, is there an instrument you can find out the answer in 15 seconds or whatever you said it was, 15 minutes? Is that – that's not at a doctor's office or anything, right? Where would that rapid test be performed?.

Just in terms of our customers, we would sell to hospitals and clinics. So basically, the places where the actual testing is taking place. So we ourselves don't actually recruit for patients and we don't actually come in and contact patients or patient samples.

The only exception in our whole group is in relation to in autoimmunity, where we do have a reference lab. But even still, a lot of our samples there will come from Quest and LabCorp or from people like that.

In terms of rapid tests, they again would be carried out, probably less so in physicians' offices, but would happen in hospitals and clinics as such.

But at a later stage, you can expect that there'll be some sort of rollout of various testing programs and rapid testing could form a part of that, just depending on what approach various governments or public bodies take.

And – similarly in relation to private companies as well, a lot of private companies will be looking at screening their employees for antibodies just to determine how safe it is for them to return..

But do they need a separate machine to read it? I mean what kind of – draw the blood, is it you're going to give them a machine to read it?.

It's like a pregnancy test. It is a change of color. You can just look at it..

Okay. I understand. Okay. I see. All right, thank you. No more questions. I appreciate. Thank you..

Maybe last question from Paul, please..

Our final question comes from a follow-up from Paul Nouri with Noble Equity. Please proceed with your question..

So for the Africa study, can you remind us what the size of that is?.

You caught me on that, Paul. I just can't remember. I won't make up an answer, let me think. Three sites, I think, if I had to guess, I'd say 500, probably 250 each.

I'll tell you in an e-mail later on that, right?.

Okay, thanks. And then….

Probably about – I'd say maybe 1,000 per site, maybe 500 positive, 500 negative. I can't remember offhand exactly what the size of each trial is. But it's of that magnitude. And then….

And then the – on the rapid test, you have a couple of months, I guess, you've given yourself for development. Are you – maybe you can talk about where you're at in the process, what kind of hurdles you're trying to get over to get it to the point of validation.

Is it a whole new product you're putting together? Or are you basing it off of technology that you've already been using?.

So we're talking now about the rapid test?.

Yes..

Okay. So just to clarify for people, what we're talking about here is a rapid 12-minute test. So it will operate exactly like the HIV test and it look exactly like it, so like a pregnancy test. So you take a drop of blood that you get from a spring-loaded lancer, right, or like a finger prick.

You put that drop onto basically the blotting paper, which basically is onto the cassette. You add 4 drops of wash solution. And then the sample migrates basically by lateral flow along the cassette. And then what you have is you'll have a test line, a control line to show the whole thing is working, a color change.

And then above that, you're going to have an IgG line and an IgM line, all right? So it's actually a dual test. And what the – so the – basically, IgM comes earlier, IgG comes later.

And so what you're really only missing probably is the first about three days, four days of infection, right, which, of course, the PCR test will catch, although in reality, most times, the PCR test is run much later than three or four days after infection. But anyway – so basically, that's what it does.

So it tests IgM, which basically – so after infection with COVID, the first antibody to be actually developed is the IgM and subsequent to that, the IgG.

And what this test is going to basically tell you is it's not typically used to determine whether somebody basically has a live infection but rather to tell whether somebody has had the infection in the past and is therefore regarded as immune. Now I know there's a big debate going on as to whether or not people will be immune after they get COVID.

And I know WHO have been kind of casting a little bit of doubt on that. But from a particle point of view, if I was betting, I'd say there's about a 99.9% – actually make that 99.99% chance that basically if you get COVID and then you develop antibodies, you are immune.

In fairness, okay, it might be only for two or three or four years or something of that, but you will be immune. And of course, that's one of the big values of the antibody tests to know that, in effect, if you've had it, you can wander around an ICU department with no gown and no mask because you're basically immune. So it's very useful information.

So that's basically the test that we're developing. Just to be really clear about it, we're not the only people in the world developing such a test. But again, just like in ELISA, we believe that we have really good pedigree here. We are one of the biggest manufacturers of rapid tests and we are the confirmer of choice for HIV, for example, in Africa.

So our test will be good. We have a fully automated production line, so we can manufacture in volume. And we're confident. And just to make a general point, I know it may appear that we're not particularly quick in doing so in developing this test, but basically sometimes to develop something very, very good, it does take time.

To do it more quickly, we'll have to be compromised on quality..

Just a last question then.

Are you developing this for a product that's going to give the consumer an answer in their home? Or are you developing it for the doctors' office?.

We're developing it for any of those uses and beyond into the public health, whatever. It can be used in many, many instances, be it in the doctors' offices, that can be used. I mean it's not our focus actually to sell into the home for home use. That's not our focus, but for use in out-clinics, [indiscernible] around the world, any uses..

All right. Well, thank you..

I mean in the same way that Abbott's or Quidel's tests are being utilized in that basis. All right. Thanks, Paul..

So I think at this stage, maybe we closed – we have no more questions. So we'll close the conference call and say thank you very much for your support, and talk you soon. Good afternoon..

The conference has now concluded. Thank you very much for attending today's presentation. You may now disconnect..