OPKO Health Inc (OPK) 2025 Q3 法說會逐字稿

Good afternoon and welcome to the OPKO Health third quarter 2025 Financial results conference call. All participants will be in listen-only mode. (Operator Instructions)

Please note this event is being recorded. I would like to now turn the conference over to Yvonne Briggs. Please go ahead.

Thank you, operator, and good afternoon, this is Yvonne Briggs with Alliance Advisors IR. Thank you all for joining today's call to discuss OPKO Health's financial results for the third quarter of 2025. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward-looking and as such are subject to risk and uncertainties that can materially affect the company's results.

Those forward-looking statements include without limitation the various risks described in the company's SEC filings, including the annual report on Form 10-K for the year ended December 31, 2024, and subsequently filed SEC reports.

Furthermore, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast today, October 29, 2025.

Except as required by law, OPKO undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this call.

Regarding the format of today's call, Dr. Phillip Frost, Chairman and Chief Executive Officer, will provide opening remarks. Dr. Elias Zerhouni, Vice Chairman and President, will then provide an overview of BioReference health and OPKO's therapeutic segment. After that, Adam Logal, OPKO's CFO, will review the company's third quarter financial results and discuss OPKO's financial outlook, and then we'll open the call to questions. Now I'd like to turn the call over to Dr. Frost.

And thank you for joining us today, during the 3rd quarter, OPKO Health continued to execute well against our strategic priorities. We completed the sale of BioReference Health's oncology division and related testing services. This transaction is a significant milestone designed to streamline our lab business and ensure profitable growth.

The sale provided USD192.5 million at the closing and USD32.5 million in a performance-based earnout. Our reference is now focused on our core clinical testing operations in the New York, New Jersey region and driving adoption of a 4K score test nationwide.

We're devoting a portion of the sale proceeds to our stock repurchase program, reinforcing our commitment to increasing shareholder value. So far, during 2025, we repurchased USD25.1 million worth of stock. As of September 30th, we had USD126 million remaining under this program.

On the pharmaceutical side, we are advancing our pipeline of innovative therapeutics with four candidates now in the clinic and several more in the pre-IND stage. We're pleased to have significant partnerships to provide non-dilutive funding to support the development process for several of these programs.

This morning we announced a research collaboration and license agreement with Regeneron, a leader, an innovator in antibody-based therapies. This program will leverage ModeX's MStar platform with Regeneron's proprietary binders to discover and develop multi-specific antibodies that allow us to explore several indications of mutual interest.

Currently, ModeX has 3 programs in phase one clinical trials. Our most recent candidate, MDX 2004, a multi-specific immune rejuvenator entered the clinic last month.

Our most advanced immuno-oncology medicine, MDX 2001, is a T-cell engager enhancer directed at two tumor antigens, CME and TOP2 found on a variety of solid tumors. An abstract on this program was presented at the recent ESMO meeting in Berlin, Germany.

It has advanced to its fifth cycle of escalation, which is approximately 10-fold higher than the initial starting dose with acceptable safety and tolerability. Based on the outcome of these studies, we anticipate further phase 1B expansion cohorts for next year.

Our EBV vaccine being developed in partnership with Merck has advanced for immunogenicity, safety and tolerability evaluation in phase one human trials.

Enrollment in this ongoing trial is progressing well, and the data will inform the phase 2 trial design.

Our next immuno-oncology candidate MDX 2003, a tetra specific T-cell engager expander that targets B cell leukaemia and lymphoma. We expect this compound to enter the clinic early next year after appropriate regulatory review.

Finally, MDX 2301 is our bi-specific tetravalent antibody designed to prevent and treat COVID infections funded by BADA; we expect phase one safety and immunogenicity studies to begin early next year.

The ModeX multi-specific COVID antibody neutralizes all known strains of the virus, including the most recent variants. It is designed to confer broad protection against evolving outbreaks, particularly for subjects with underlying immune impairment, such as cancer patients, diabetics, and the elderly.

Thus having great medical value potentially and global health impact.

Our collaboration with water continues to advance the development of broadly protected multi-specific antibodies for both COVID and influenza viruses.

We're progressing our development of OPK 88006 for the treatment of mash and obesity for both subcutaneous and oral administration. We have partnered with Antero Bio for the development of the oral formulation. The subcutaneous program is expected to enter the clinic in early 2026 with the oral formulation to follow later that year.

Our international operations, including OPKO Health, [Eberrome] and Ergen Pharma, continue to provide steady sales growth and meaningful cash flow to assist in funding our R&D efforts.

Overall, we remain highly committed to maximizing shareholder value through strategic actions such as the sale of select BioReference assets, the execution of our share repurchase program, the advancement of the ModeX portfolio products and clinical trials and a new ModeX R&D alliance. We are focusing our operations to provide growth opportunities while returning capital to investors. We are confident in our strategic direction, our team, and our ability to deliver on our milestones.

With that overview, I'll turn the call over to Elias. Elias?

Thank you, Phil, and good afternoon, everyone. As Phil mentioned, in mid-September, we closed the sale of BioReference health oncology assets to LabCorp. BioReference now operates as a streamlined clinical laboratory, focused on its core services in the New York, New Jersey region and correctional facilities nationwide. In addition, its 4K score test franchise for prostate cancer risk assessment is poised for growth, with a recent FDA label expansion allowing use of the test without the requirement of the digital rectal exam, which opens a significant new market of primary care physicians who currently perform over 90% of PSA screening tests but rarely perform digital rectal exams.

Excluding the assets sold to LabCorp, by reference testing volume increased by approximately 5.3% in the third quarter compared with the year ago period.

Our approach is to increase profitability by focusing on and expanding existing customer segments, optimizing our test menu to increase our operating margins, and implementing additional operational efficiencies where possible.

We're also strengthening our market position by forging novel relationships with additional ACOs, IPAs, FQACs, regional health system, and specialty healthcare companies.

In addition, we have begun pursuing new revenue streams to bolster growth such as direct to consumer lab testing companies, employer-based testing, and early phase clinical trials. The 4k core test volume increased more than 20% in the third quarter versus the comparable year ago period.

As for our sustained efforts to drive operational efficiency, the BioReference employee headcount now stands just over 1,500 people, and this represents a 25% reduction from January.

As a result of improved margins realized by these expense reduction efforts and strategic divestitures, BioReference is now well positioned for sustained growth, profitability going forward.

Now, Turning to our therapeutic segment, we were delighted to enter into a license and collaboration agreement with the Regeneron. Under this collaboration, we will apply our MSTAR platform with Regeneron's proprietary binders to develop medicines capable of targeting multiple biological pathways in a single molecule that will include these indications of mutual interest to Regeneron and ModeX Therapeutics. Now Regeneron will be responsible for funding the entire development process and all commercial commercialization efforts.

As part of the agreement, we will receive milestone payments for research expenses, development, clinical, and commercial achievements for each program, which, taken together, could total over a billion dollars if multiple programs successfully advance. In addition, we'll be entitled to receive royalties up to the low double-digits on global net sales.

We're particularly excited to be working with Regeneron, given its leadership and experience in antibody therapeutics. I myself and some of the ModeX's teams have already worked with Regeneron's R&D Group in the past, and we look forward to reconnecting. And expanding the scope of our collective efforts. Now, moving to the most advanced clinical study, our collaboration with Merck on the phase one Epstein-Barr virus vaccine trial is progressing according to plan, and preliminary safety, tolerability, and immunogenicity data are becoming available. Over the coming months. This data will guide Merck's decision on the design and execution of phase two studies.

We have several programs in our immuno oncology and immunology portfolio that are advancing in development. Our lead product is MDX 2001, a first in class tetra specific T cell engager as described by Phil, with two cancer targets, CET and Trop 2, and two T cell engagers, CD3 and CD28. It has progressed to its fifth dose level, which is 10 times the starting dose in a phase one clinical trial.

We are noting acceptable safety data at this level. After enrollment of the highest possible dose cohort, we will focus on assessing signals of efficacy in select tumors in an expansion cohort. We're also pleased to present a poster on our progress with MDX 2001 at ESNO 2025.

MDX 2004, now is a new first in class multi-specific immune rejuvenator that has the potential to treat a variety of oncology and immunology indications. MDX 2004 stimulates T cells to proliferate through three signalling pathways to achieve optimal activation and proliferation. Of note, it is a first in class multi-specific antibody directed to CD3, CD28, and 41 DB that stimulates key stem cells to undergo self-renewal. And gives rise and give rise to mature T cells, and that is the reason for its designation as an immune rejuvenator.

We announced this week that phase one studies on this new medicine have begun. The first patient has been administered drug at the starting dose in Australia, and this trial marks clearly another significant milestone for our technology platform.

And this week we'll make a presentation on MDX 2004 at the Society for Immunotherapy of Cancer Conference, or SICC.

MDX 2003, a tetra specific CD3 CD28 T cell engager for lymphoma and leukaemia targeting both CD-19 and CD20 is in the pre-IND stage, and we expect this program to enter the clinic early next year.

We continue to work with BADA on our COVID and influenza programs. The main focus of these programs is to advance multi-specific antibody protein candidates that provide broad and potent coverage against all known circulating strains in phase one clinical trials. Our work to develop the COVID multi-specific antibody.

It's focused on the unmet needs of in patients with underlying immune impairment, as Phil mentions, such as patients with cancer, diabetes, or the elderly.

Who respond poorly to vaccination and are highly susceptible to severe complications of or deaths from COVID infection and we anticipate commencing phase one studies early next year.

In addition, we're advancing our pre-IND influenza program against both A&B to achieve universal protection, and we will seek additional funding to accelerate its clinical development.

Through the close of the third quarter, we have received $22 million in non-valued funding from BADA for these two programs.

We're also continuing our development efforts with respect to OPK-88006, which is a novel long-acting GLP1 glucagon receptor dual agonist to treat mash and obesity.

We're developing a subcutaneous formulation and in collaboration with Entera Bio, we're also developing an oral formulation.

At the ENO conference in July, we presented favorable pharmacology and microkinetic in vivo animal data demonstrating excellent bioavailability for the oral tablet formulation. We're in the pre-IND stage with both of these programs and anticipate entering the clinic next year. We're also working with Entera Bio on an oral GLP-2 tablet for short bowel syndrome.

Recent positive pharmacokinetic data from preclinical animal models indicate an extended half-life and robust oral bioavailability, which results, these results were presented in September at ESPN or the European Society for Clinical Nutrition and Metabolism Congress.

This program has the potential to transform the treatment paradigm for patients with short bowel syndrome who currently rely on daily injections.

Our international pharmaceutical operations continue to provide operating cash flows, and despite foreign currency pressures, have executed their growth plans in local currencies. Realdi has offset the volume declines resulting from the inflation Reduction Act to the realization of a higher netized price and achieved year over year revenue growth.

So in conclusion, we're really pleased with OPKO's strategic direction with BioReference voice for profitable, profitability and growth, as well as the advancement of our pharmaceutical programs and partnerships into clinical trials.

So now, let me turn the call over to Adam to discuss our financial results. Adam?

Thank you, Elias. We ended the third quarter with over USD428 million in cash equivalents, and restricted cash, more than sufficient to fund our ongoing operations and development plans. Capital allocation remains on track within our plans.

Our strong cash position allowed us to repurchase 11.1 million shares during the third quarter of 2025. And for the full year we have repurchased nearly 25 million shares for approximately USD33.5 million.

We have USD126 million remaining authorized under our buyback program and expect to continue to make additional common stock repurchases throughout the end of the year.

We have deployed nearly USD100 million so far this year in convertible note repurchases and conversions and common stock repurchases and over USD215 million since the start of 2024, demonstrating our commitment to strengthening our balance sheet and returning capital to our shareholders.

Let us turn to our financial performance, starting with our diagnostics business. Revenue for Q3 2025 was USD95.2 million including USD19.5 million from the oncology assets recently sold to LabCorp.

This compares to USD121.3 million in Q3 2024, with the decline primarily due to revenue attributable to the LabCorp transactions that closed in September 2024 and 2025.

Revenue in our continuing business has delivered strong growth highlighted by an increase in 4K score volumes and resulting revenues of nearly 20%.

Total costs and expenses were USD115.2 million down from USD184.2 million last year. This includes USD25.2 million related to the oncology assets that we sold and approximately USD4.2 million and expected non-recurring costs for severance during the 2025 quarter.

Costs and expenses were partially offset by the gains recorded related to our transactions with LabCorp, with USD101.6 million in gains recorded in 2025 and USD121.5 million recorded in the 2024 quarter. As a result, our diagnostic operating income improved to USD81.6 million compared to USD58.5 million in the third quarter of 2024. Depreciation and amortization expense came in at USD4.7 million down from USD6.1 million in 2024.

Importantly, the actions we've taken throughout the year are expected to deliver over USD25 million in annualized cost savings, and we remain on track to achieve break even operating results in Q4 2025 and are well positioned as we head into 2026 for sustained and growing profitability.

Turning to our pharmaceutical business, revenue was USD56.4 million up 8% or USD4.1 million from 2024's USD52.4 million.

Product revenue was USD37.7 million down slightly from 2024 is USD39.1 million reflecting lower sales in Chile, as well as foreign currency headwinds within our Latin American businesses. These sales were partially offset by increased revenue from Rialdi, Rialdi contributed USD7.5 million during Q3 2025. The 29% increase from 2024 is USD5.8 million primarily reflecting lower government rebates during the 2025 period, which more than offset an approximately 20% decline in volumes.

IP transfer revenue rose to USD18.7 million up from USD13.2 million which includes our Pfizer profit share payments of USD8.8 million reflecting a 25% increase from 2024's USD7 million. We remain optimistic about the efforts Pfizer has made and we expect them to make throughout the remainder of 2025 and into 2026 on the effectiveness of their global commercialization program.

In addition, BADA funding increased to USD8.2 million from USD5.5 million reflecting expanded activity for our infectious disease antibiotic programs.

Costs and expenses were USD80.6 million down from USD84.6 million driven by cost containment activities throughout our Iber America Rialdi commercial organizations, partially offset by increased R&D investment.

R&D for 2025 totaled USD29.6 million up slightly from USD28.2 million for the 2024 quarter, primarily due to our ModeX development activities.

As a result, our pharmaceutical operating loss was USD24.2 million a 25% improvement compared to last year's operating loss of USD32.2 million. Depreciation and amortization expense with USD18 million in both.

For our consolidated financial results, consolidated operating income of USD48.1 million improved from 2024's USD14.2 million as a result of the improved results at BioReference. Both periods benefit from gains from the disposition of assets.

Resulting in net income in Q3 2025 of USD21.6 million or USD0.03 per basic and diluted share compared to USD24.9 million or USD0.04 per basic share and USD0.03 per diluted share in Q3 2024. You will recall the 2024 period benefited from gains on certain underlying investments.

Looking forward, we're continuing to execute our multi-phase plan to drive profitability within our diagnostic segment by reducing the fixed infrastructure costs and improving operating efficiency.

Following the oncology transaction closing in September, the remaining BioReference business was a clear path to cash flow positive and profitable growth, excluding any non-recurring or non-cash items.

We are resetting the Q4 outlook for 2025 to reflect the disposition of the oncology business.

As a result, we expect total revenue to be between USD135 million to USD140 million with revenue from services of USD70 million to USD75 million revenue from products of USD40 to USD45 million and other revenue of USD25 million to USD30 million including our Pfizer profit share of USD10 million to USD12 million and revenue from BADA grow USD7 million to USD9 million.

Total costs and expenses are expected to be between USD175 million and USD180 million excluding any non-recurring or restructuring costs.

Research and development expense is expected to be between USD30 million and USD35 million dollars offset partially by the barter revenue, and depreciation of the amortization expense is expected to be approximately USD24 million.

As we look forward to 2026, we're providing some high-level guidance which will more fully detail early in 2026.

We expect BioReference to be profitable and to grow revenue in the low single-digit percentages. We expect to see our inline pharmaceutical businesses, including rialdi, to grow in the mid-single-digit percentages and to improve its operating income by approximately low double-digit percentages.

We expect in general profit share payments to increase to approximately USD32 million to USD35 million.

Finally, we plan to invest up to USD100 million in our R&D programs, net of any partnering reimbursement, as we expect to have up to 6 phase one programs enrolling patients during 2026.

This concludes our prepared remarks. Operator let's open the call for some questions.

(Operator instructions)

Maury Raycroft, Jefferies.

Hi congrats on the priors and thanks for taking my questions. I had one for 2001, wondering if you could say how many patients you dosed at the fifth dose level and will you proceed to dose level 6 with the program and is there anything more you can share on the safety profile and potentially what are you seeing any efficacy signals at this point as well.

Well, I'll let Gary answer that question. Gary, would you like to give those details?

Sure, yeah, hi, Gary Neel, I'm the CEO of ModeX.

We're in our fifth patient at the fifth dose level, and again, the when the suitable observation period has been complete, that then we go on to the next, in terms of signals.

I think at this point it would be probably not wise to comment on efficacy because any responses that you see with this small number of patients are anecdotal and I think that really the time to take a look at efficacy would be as Elias and Phil were mentioned when we go to the expansion cohorts. In in phase 1B, we're just as interested as you are and can't wait to get those results, but I'm afraid we just have to, follow the process and we'll certainly share any news as soon as it becomes available.

Just to be clear, Maury, Gary's mentioning 5 patients at the current dose level, but the total number of patients is higher, obviously, that we've exposed and obviously we're interested in continuing which based on all the data we have.

Got it. Yeah.

Total numbers are close to 30 or so, but, yeah, 5 in this go as Elias has mentioned.

Okay, and you will go to dose level 6 as well.

We would expect.

Okay. that's helpful and had a quick question on the 4K score for that label expansion and the 20% growth that you mentioned, is the growth directly related to the expansion and how should we think about the importance of this product as a contributor going forward?

Yeah, that's a good question, Maury. No, it's not. The growth is really based on the former label. The label was really changed this quarter and obviously what it does is it really expands the market to the primary care doctors. In the past, and the urologists would have to order the test because they had to determine whether they needed to do a biopsy or MRI.

Now, because you don't require the digital rectal exam anymore, which we've proven with the data that we have accumulated, Dr. Jane Shaw was, telling the FDA that it didn't add anything, much to the accuracy of the test. And so that was a point that the PCPs, the primary care doctors kept asking us, we would like to have the tests performed after we do our PSAs. And that is the expansion market that we're talking about, but we're just in the, at the beginning of doing that. And as the 4K score franchise is a national one, so it takes time to get going with that, but it's doing well on its own with the old label, and we hope it will grow significantly with the new label.

Yeah, just to put a little bit of an exclamation point on that, through June I think we were up 12% or 14%, and we saw the acceleration picking up before that label change came through, so we're certainly excited about that and obviously we are working with payers to ensure we align volume potential with the payer policies as it relates to the DRE.

Got it. Okay, that's helpful. And is this something you could provide more granularity on going forward just with helping us better track the progress there.

Yeah, for sure.

Okay. Thanks for taking my questions.

Yi Chen, H C Wainwright.

Thank you for taking my questions. My first question is, could you give us some more color on the collaboration, whether the program, is exclusively focused oncology or it could be some candidates in other therapeutic sectors and also can you comment on how many total programs are currently ongoing.

Let me start and then I'll give it over to, so there's no exclusive on the field oncology or immunology. We've really agreed to work on 4 programs which may have more than one product, obviously, but 4 specific programs for specific indications which cover metabolism, ecology, as well as immunology.

And with that, I'll turn it over to Gary to give you more specifications on how exactly the collaboration is going to work forward.

Yeah, thanks, Elias.

There, as Elias mentioned, one of the reasons we're excited about this collaboration is that it will allow us to work in areas that we haven't worked on in the past, and they will include the area's metabolism and more activity in the area of immunology, as well as some selected oncology opportunities. As Regeneron has a very Deep library of human antibodies that are monoclonals, we have the capacity to put those together into the formats that allow us to make multi-specific, so together we can do things that neither of us can do alone, and that's always the mark of a good collaboration.

As Elias pointed out, and it's in our press release. There are 4 targets to start with, but the agreement is written in a way where that can be expanded should we find something of interest. So, a lot of work to do to explore the initial candidates, but we're very excited to work with them because they're, deep expertise in the antibody area and their success in bringing products to patients in the past.

Got it, and could you tell us whether the milestone payments include both preclinical as well as clinical milestones? And also, could you give us a rough estimate as to the time frame, to, for the first milestone? Is this something we can reasonably expect to occur in 2026?

Well, the answer is yes and yes, so we have pre-clinical milestones and then post, phase one milestones if Regeneron takes it over, Regeneron will reimburse us, for all the preclinical studies and costs, and then there will be milestones for progression, within that all the way to phase one, and then after that, they take it and there will be the typical milestones development approval and commercial following that.

Okay, thank you.

Kevin DeGeeter, Ladenburg Thalmann.

Hey, thanks for taking my questions. Maybe two for me. The first one is on 2001 can you walk us through your current thinking on how you're thinking looking at patient selection for the phase 1B expansion cohorts, are there specific tumor types that makes sense based on how you think about the profile of this.

Yeah, well, based on what we've done so far, we obviously read out the safety and tolerability and different types of tumors, and then we narrow it down, but I let Gary be more specific on that, Gary.

Yeah, I would say there are, criteria that we apply in the first part of phase one where you're just trying to explore and confirm safety, we're pretty agnostic to the tumor types. Once we've maximized the dose and we're seeing, and once we see biologic activity in our patients, what we then do is we look at the tumor types.

Where we see the highest levels of CMAT and COP2 and also the tumor types that are have shown, I'd say the property of being more immunogenic, that they are more likely to respond to immune therapies. We will ultimately explore, the harder targets as well, but we'd like to establish efficacy where we have a better chance of succeeding first.

High on our list, are tumors like lung cancer, like non-small cell lung cancer is very high on our list, and then depending on availability of patients, tumors like renal cell carcinoma and perhaps some of the PD1 failures in melanoma, but after that, any tumor type, and there are 13 different tumor types. That express CET and Trope 2, we essentially will go down that list and at some point we may do a what we call an expanded basket trial as well to where we look for signals of regression, but the first expansion cohorts will be based on levels of expression and expected. A response to immune therapy in humans.

That's very helpful thanks. And then here's my follow-up question, Adam, you, with regards to the guidance of getting the diagnostic service business to, profitability.

Yeah, how do you, what's sort of the baked in assumption with regard to the sustainable gross margin of the your remaining diagnostic services assets?

Yeah, so gross margins we expect you know Q4 to be in the mid-20s and then with the main reason being in the mid-20s and not the high 20s is just the challenges around the holiday season in December in the first half of next year, we would expect that number to get into the high 20s to low 30s.

Great, thanks for taking my questions.

Sure.

Our next question comes from Ted Tentoff of Piper Sandler. Please go ahead.

Great, thank you very much and congrats on all the progress, including the new Regeneron deal. It really feels to me like ModeX just the gift that keeps giving. Is there other updates that maybe could be happening on the partner front in infectious diseases, beyond obviously the great, EDV deal, with Merck?

Gary respond. Gary, can you respond?

Yeah, well, needless to say, we do, as you point out, we do have other infectious disease targets that we're working on besides COVID, we're very encouraged by the early data with flu, with the caveat being that that's all pre-clinical at this point, but with BADA we're hoping to move those products into phase one. As well. We also have a program for HIV, and have discussed with, the various, major players, the pharma's involved in HIV, particularly now looking at opportunities to either improve treatments or eventually to try to effect cure in some patients with some of our immune therapies. And then the last thing I should point out is that our new molecule, MDX 2004 that just started in the clinic this week, as an immune rejuvenator has potential for treating a variety of different viral. Infections and nonviral infections to rejuvenator of the immune system. So after we established the safety, which is the goal of the first studies, we'll be exploring that as well. So, we continue to update partners or potential partners on our progress, and at the appropriate time, we'd be delighted to work together with the relevant experts in the field.

That's really helpful and I'm so glad you brought up 2004. What are other indications where it might make sense to develop this unique, multi-specific?

Well, there are a number. One that comes to mind is, hepatitis B. We know for example that hepatitis B, a certain percentage of cases will clear with time if the immune response is strong enough, and so, again, after safety is Address that would be one area that we would want to explore further and there are variety of ways to do that.

Even for chronic diseases, even where there's chronic infection, for example, in diabetics, where the immune system is really not functioning correctly, there's some potential value to providing, a boost to the immune system to protect against, everyday pathogens and perhaps even to enhance vaccine elicited responses. HIV, chronic HIV is another example. So we do think for MDX 2004, in addition to the immuno oncology applications that that's an aspect that we would be very interested in doing further studies.

And sorry to keep asking, but each of your answers prompts another question. Could you envision a day where you combined 2004 with the multi-specific, cancer, assets?

Yeah, it's a great question, and the answer is yes, we could imagine using combinations of that sort, and it doesn't need to be limited to just the ModeX immunotherapies. You could imagine you doing combinations with PD ones, with CAR T cells, so there is a range of potential, obviously early days we need to. Get some experimental data for it, but there are a number of indications that I think would be worthy of further consideration.

Very helpful, thanks, Gary.

Okay.

Yale Jen, Laidlaw & Co.

Good afternoon and thanks for taking the questions. Just a few here. The first one is in terms of the EBV virus, the vaccines, data, first phase one data, do you anticipate to report that data in near term or you think that Merck may not report that data? Just go ahead for.

The phase two.

.

Yeah, you should because you're on the coordinating committee, so.

Yeah, thanks, Elias, and thank you for the question. We were in very close contact with Merck. Merck is obviously responsible for executing the trials, but we work together closely and look at the data and discuss what is the best way forward. The decision about when and where to report will of course be Merck's. I, it is something we've discussed, and I think they understand that there is an obligation to present data that's part of the NIH guidelines on doing clinical studies in humans. So, I think that and as Merck is very science and data driven, so I would expect that at the right time, which I think is when the data is complete and we can understand what it means. I would be surprised if they didn't report it. And I, how that relates to the start of phase two, I can't say at this point, my guess is that it would be somewhere, within a time frame where they've made their decision and would be progressing the study, but they're very, science driven and I think responsible in their clinical development.

And maybe follow-up on that is that would either Merck or you guys will at least inform the public that the program will heading to or starting phase two study.

Well, when the decision is made, for sure, yes, I think that will be shared and for those phase two studies, as you can imagine for EBD it you have a select population that you're going to be studying you have, you're looking for subjects who are EBV negative, and that's actually a minority of our population and you're also looking for patients who are highly susceptible to the effects of infection and particularly to infectious mono. So, I think that you would almost have to make the trial known to those people. I think many of them will be, early college age students who will be at risk of acquiring. Infectious mono when they start school and they're exposed to EBV through their classmates. So, I think very much so it would be something that would be out in the public domain once it starts.

Okay, great. That's very helpful. Maybe the last question here is that you have mentioned that you have a program which is targeting CD 19 and CD 20 together. The question is that at least in many tumors that cancers that the CD 19 and CD 20 seems very much overlap in terms of their time of expression in the, as the sales progresses. So, what was the rationale in terms of design this product with highly sort of overlapping expression period. Just curious about that and thanks.

Yeah, okay.

I'll just try. Go ahead, Gary. Go ahead.

I just wanted to, no, I just want to correct something. It's not always overlapping in things actually we know, that in in cases of lymphoma and leukaemia sometimes what you see the CD 19 disappears and then there is a clonal extension of CD 20.

Or if you do the CD 20 only, you can see CD 20 going down, then the clonal expansion of CD 19. That's the idea of having two targets because then you prevent, or delay, the appearance of resistant variants. Correct me if I'm wrong, Gary, but I thought that was.

Clear that we, we're not addressing tumors that have both CD 19 and 20. Obviously, some will have that, but the population that resists therapy usually, often has the emergence of a clonal CD 20 or a clonal CD 19 that then recurs, that makes the disease recurrent.

Gary have that if I missed anything.

Yeah, no, I think you said it, I think another way to state it is that when many lymphomas arise, you're correct that there is both CD 19 and CD 20 on those lymphomas, but what we're seeing increasingly is that after treatment and within in some cases with [glofiumab] as a T cell engager. Or with CAR T cells, which often will target CD 19, sometimes CD 20.

Once you start selecting against those tumors, you then promote the outgrowth of variants that now are down regulating the first antigen in many cases CD 19, and they become resistant to the therapy. So the idea would be That at the start, this a dual targeted antibody would allow us to treat the escape mutants from those other therapies. Now, should it prove to be effective and we think there's a good chance it could if it works, then it could allow you to move up in the treatment line that you would actually use that earlier so that you wouldn't have give the tumors a chance. To develop to down modulate and to escape. So this is a way of in the long run we hope of preventing tumor escape and to provide better upfront coverage. There's already some data in the CAT cell world that some of the dual targeted carte cells say against CD 19 and CD 20. Do better than CD 19 alone. Our approach now does this with an engager like molecule which is a lot easier to administer to patients and so we think it's worth advancing this for, more so it would be available for more patients.

Okay, great.

Let me add one point that may escape a lot of folks. Our quarry specific does not need to engage both CD 19 and CD 20 to be active. If it engages CD 19 alone, it will be effective. If it engages CD 20 alone, it will be effective. It doesn't have to be simultaneous, and that's really an important concept because What you see early on, you have a dominant clone, dominant CD 19, 90% of the cells are CD 19 positives and then You may have a much lower proportion of CD 20. It doesn't matter because our antibody will attack the CD 19. They will regress and then the CD 20 will emerge, and then at that point you attack the CD 20. Or if they're both equivalently present, then both of them may be engaged and attacked at the same time, you see what I'm saying? We don't depend on having both. The CD 19 and the CD 20 engaged for the for the therapy to be effective. I think that's an important basic concept.

Okay, great. That's a very clear explanation. I really appreciate that.

By the way, it's the same for 2001. You don't have to engage both CMAT and [TROP2] to make it happen, but it does help in controlling the heterogene of the disease, depending on how many CMAT or COP2 receptors you have. The same is true for CD 19, CD 20.

Okay, great. That, that's very helpful. I appreciate that.

Michael Petusky, Barrington Research.

Hey, good evening, guys. Thanks for all the information tonight. Hey, Adam, I just want to clarify something real quick. The USD4.2 million in severance, that's in addition to the USD25.2 million of expenses, cost and expenses associated with the assets that are being sold, is that correct?

That's right.

Alright. Great. And then, yeah, I guess, one of the earlier callers sort of alluded to increase granularity. I'm going to actually give it a shot and ask for it now.

Would you guys be willing to share, sort of year-to-date revs through 9 months of 4K score or 3rd quarter revenue associated with the test?

So, we haven't separately disclosed it yet, Mike, but we certainly are, we'll take it back and we'll start to provide more clarity there.

Okay. Could I ask, in terms of the guide and I really super appreciate the 26 high level guide in terms of the low single-digit growth that you guys expect in the lab business, what are you assuming around volume growth and pricing? I mean, I don't know, is pricing, a sort of a neutral, a bad guy? Can you just sort of talk about how what you expect in terms of volume growth and pricing for 26 things.

Yeah, thanks for the question on that one. So we would expect volume growth to be in the low single-digit numbers. We're assuming stable pricing. I think, as we see more success with the, some of the conversations around 4K score, we see potential upside for overall reimbursement, which would drive up total ASPs but Beyond that change, ASPs would be would be pretty consistent with what we've seen this year.

Okay, and then just last one and sticking with the 26 high-level guide, the Pfizer profit share guide that you gave to me feel, feels a little lighter than I would have guessed. Can you just talk about what's going on there in terms of conversion to weekly and just any other sort of data points you can share around that relationship and that effort to get that business going thanks.

Yeah, so the overall market, I think is converting slower than what we thought, and I think what many in the industry thought. There's not many daily patients today that are converting as quickly as what we expected to see in the original models, so that that phenomenon is going to continue, I think, even though there's 3 players out there with and 2 competitors. And we think the market is, should start to pick up steam, but it just it hasn't. We think Pfizer has done well from a global perspective. We think based on the data we look at from Symphony and IMS, we think that data shows that Pfizer has about 1/3 of the overall long-acting market, so they're competing globally quite well.

They've got a bunch of efforts to increase share in each one of the territories they've got the product in, and we think they're going to be successful. We've talked a little bit about the expansion trials that will increase the number of indications that it will have access to, and we know they're pursuing those and hope to get approval for those in a few years' time. We've taken a 10% to 15% increase over current year forecast for the profit share certainly, we'd love to see it come in better than that, but I think that's consistent with what we saw this quarter in the last couple of quarters where we think they'll be at this time. Hopefully that helps. Okay.

Great. It really does. Let me just sneak one last one in just around and this is this should be a quick answer, I think 4K score, I think you said the test volumes are up 20% in the quarter would revenue be up approximately 20% or would that be lagging that 20% figure things?

It's the same.

Awesome thanks.

This concludes our question-and-answer session. I would now like to turn the conference back over to Dr. Frost for any closing remarks.

Well, I want to thank everyone for your participation and good questions, and we look forward to continuing the conversation three months from now. Thank you.

This concludes today's conference call. You may disconnect your lines.

Thank you for participating and have a pleasant day.