The conference call transcript--Part 1
Dwight Egan — Chief Executive Officer
Thank you, and good afternoon, everyone. The COVID-19 pandemic has affected us all in many ways and this global crisis has demonstrated the importance of diagnostics solutions in treating infectious disease.
Our patented CoPrimer™ platform is designed to rapidly generate unique testing solutions, aiding in patient treatment by providing reliable, actionable results, especially in times of crisis as seen in our response to the coronavirus pandemic. COVID-19 has highlighted the overall importance of molecular diagnostics and the critical role that our CoPrimer platform plays in fighting infectious disease.
The Logix Smart™ COVID-19 test design and underlying technology has become an important part of the fight against the pandemic in many parts of the world, and was the driver of Company revenue in the first quarter. Following FDA emergency use authorization being granted just 3 days into the second quarter, orders for our test expanded even more vigorously. As of the mid-point in the second quarter we have significantly exceeded the second quarter estimates of analysts covering the Company, and we are pleased to announce that we are already solidly profitable for the second quarter based on results to date.
All in all, we have received orders from nearly 50 countries and a large number of states in the U.S. We have increased our capacity for production with our Salt Lake City facility, our CoSara joint venture facility in India, and through a third-party manufacturer in the United States. In addition to manufacturing more than 6 million COVID-19 tests to date, we have ordered components for an additional 20,000,000 tests which we will use to fill existing orders, as well as other orders anticipated in the near term.
At the present time, timelines for effective coronavirus vaccines and therapeutics remain uncertain. What is widely known is that the need for testing on a mass scale continues to grow, as the U.S. and countries around the world strive to create COVID-safe schools, COVID-safe workspaces, and COVID-safe communities. In the United States for example there are more than 76 million students that need to be in school this fall along with 157 million workers who need to be at work.
During the pandemic, Co-Diagnostics’ ability to utilize its patented CoPrimer technology in highly accurate tests has significantly changed the trajectory of our Company. Co-Diagnostics was the first U.S. based company to receive a CE marking for its COVID-19 test, giving us an early entry into the European market as well as other areas of the world that accept CE marking as valid regulatory approval. In addition, being granted the FDA’s emergency use authorization on April 3rd has been critical in fast-tracking the Company’s COVID-19 diagnostic solution.
We believe that test performance, combined with competitive pricing and high throughput attributes, makes for a compelling value proposition. Our COVID-19 test has been the subject of several independent studies validating its specificity and sensitivity, which have demonstrated its excellent performance characteristics. Last week, I read with interest a statement regarding our technology and test from Clinical Reference Laboratory, one of the largest privately-held clinical testing laboratories in the U.S., and a customer of Co-Diagnostics.
I quote the following from that statement with their permission:
“At the foundation of a quality COVID-19 test is the methodology. For the molecular COVID-19 test, CRL’s Molecular Diagnostics team thoroughly investigated numerous technologies that could be leveraged for test design. Ultimately, the Co-Diagnostics Logix Smart Coronavirus COVID-19 RT-PCR assay was selected for the detection of the virus. This reverse-transcriptase quantitative PCR assay (RT-qPCR) uses proprietary CoPrimer technology that improves the specificity of the test compared to others. The test targets the RdRp gene of the SARS-CoV-2 virus which has a low mutation rate compared to other regions of the viral genome.”
In addition to our technology being utilized by CLIA labs, some of whom are using innovative sample collection methods such as saliva or saliva combined with nasal swabs designed to make testing easier and more accessible, the Company is currently engaged in new test developments designed to address the challenges of the coronavirus as conditions evolve over the coming months and years. Specifically, we have authorized a feasibility study aimed at developing a test using CoPrimers to simultaneously identify both the virus and the antibody associated with a past infection in a single test.
In anticipation of future testing needs, Co-Diagnostics is developing a multiplex panel to differentiate between the COVID-19 virus and other upper respiratory pathogens. In addition, we have also already designed a test for the D614G mutation which since March has become the most common strain in the United States and worldwide. A recent paper has indicated that the mutation might result in a more transmissive form of the virus and higher viral load in COVID-19 patients. Our current test is still designed to detect SARS-CoV-2 whether the mutation is present or not. However, if research confirms that this is a functional mutation, we will respond quickly with a differentiation test designed to distinguish between strains with and without the mutation. While the new mutation may or may not become necessary to identify, we anticipate being ready with a solution. As we demonstrated in the development of our first COVID-19 test, the Company is capable of rapid test development as we pivot and adapt to the ongoing challenges that will be faced in battling the coronavirus.
We are focused on the COVID-19 pandemic, but without losing sight of our other important verticals. Beyond COVID-19 testing, other infectious diseases and molecular diagnostic applications are an important area of focus for our company and will be a key driver of revenue growth over the longer term. Our primary initiatives in infectious disease (including Indian CDSCO IVD-cleared tests for TB, hepatitis B, hepatitis C, malaria and HPV, and a CE-marked multiplex for Zika/dengue/chikungunya), along with our AgriBio and mosquito vector products, all provide opportunities for the Company now and in the future. All of these initiatives are now in revenue and we are pleased to see the adoption of our tests and technology in many parts of the world. We believe that our growing network of nearly 50 distributors covering over 80 countries will prove important for future sales.
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