Earnings Transcript for NCYT.L - Q4 Fiscal Year 2023

Operator: [abrupt start] and welcome to the Novacyt Investor Presentation. Throughout the recorded presentation, investors will be in a listen-only mode. [Operator Instructions] [Foreign Language] I'd now like to hand over to the management team from Novacyt. Good morning.

Lyn Rees: Good morning, everyone and thank you for taking some time to join us this morning. Just by way of introduction, I'm delighted to be sat here today, having newly been appointed as the CEO of Novacyt on the 1st of May. For those who don't know me or worked with me before, I've spent the last six years being the CEO of Yourgene Health, driving the acquisition strategy and the growth strategy of that business. And prior to that, I was the CEO of an organization called the BBI Group. So, I've been in the diagnostic industry for about 25 years and I'm really pleased and excited to be here today as your CEO. I'd just like to hand over to Steve to do a quick introduction as well. Steve?

Steve Gibson: Thanks Lyn. Good morning, everyone. So, I'm the CFO. I was appointed to that role in the start of this year. Prior to that, I was Group Finance Director for around four years. And I've been with Novacyt management around seven years. Prior to that, I spent around 10 years working at Hewlett Packard in various different roles. Thank you.

Lyn Rees: Excellent. Thank you, Steve. Okay. So, I think the first sort of slide I really want to run through is kind of how the Group has been structured post the acquisition of Yourgene. So, you'll see from this picture, we've got the Novacyt Group, which is obviously our head company. And underneath that, we've got three very distinct business units. On the left-hand side, as I'm looking on the screen, you'll see Yourgene Health. And this is where we have our clinical assays, our DNA size selection and the core product offering from Yourgene. In the middle, we have Primer Design. These are our research qPCR kits. This part of the business has got a tremendous reputation in the global marketplace for developing primers and probes to make products. And we've taken Primer Design back to its core offering. So, this is research qPCR kits. And then on the right-hand side of the diagram, we have our IT-IS and our Range Technology. This is where we're making instruments for machines that our customers can use to run our content. The main markets that we work in, in human health or reproductive health, precision medicine and infectious disease. And in our non-human applications and in our research use-only market, it's veterinary, animal health, food, water, agriculture, and plant genomics. Let's turn to the next slide. In terms of our footprint as a business, the picture you can see on the left-hand side of your screen is our Manchester location. In addition to that, we also have a facility in Southampton and a facility in Stokesley. We have a small sales office in the U.S. We still have our Taiwanese facility, and I'm sure we'll be giving you an update on that a bit later in the presentation. We have a commercial office in Singapore. We have a manufacturing and R&D presence in Canada. And more importantly, we kind of got commercial presence in over 65 countries now. So, truly a global player in this market space. We're headquartered, obviously, in France, we're listed on the stock exchange on the AIM market in the U.K. and on the Euronext market in France. Now, before I hand you over to Steve, who is going to run through the numbers and give you an overview of our financial results, I'd just really like to talk about some operational highlights that the business has been through. Obviously, the most -- the biggest thing that happened to Novacyt in the last 12 months was the acquisition of Yourgene. Novacyt was pursuing a clinical strategy and was trying to develop a clinical business to support the RUO business. But buying Yourgene meant that that was completed on day one. So, the acquisition of Yourgene has brought a complementary set of clinical products and services to Novacyt. I think that was a significant achievement of the business in the last 12 months. In addition to business development, we recently announced that we've become a compatible partner for a PacBio. PacBio have launched a new sequencing capability in the global market, long-read sequencing and after some trial and some validation work, I think that the Ranger Technology really enhances and supports their new systems. They've put about 200 new sequencers into the market over the last 12 months. And I'm delighted and very proud to be able to say that our Ranger Technology supports that platform in the market. The regulatory landscape is changing constantly in the industry. And for those of you that keep an eye on the market space, you'll have read a lot about the IVDR Certification. I think the need for IVDR is we pushed out again by another year or two. But Novacyt remains ahead of the curve on that. We've already got our DPYD assay accredited. And we've already submitted applications for our reproductive healthcare range of products as well. So, being able to take the right product to the right market with the right regulatory requirements is essential. And I'm delighted to say we've made significant progress on our IVDR journey with a great quality team that we have at Novacyt. The Board has been strengthened. Obviously, myself and Steve have joined in our capacities as CEO and CFO. But we also welcomed Jo Mason on to the Board. Jo has got extensive experience developed and really cutting-edge molecular product. And I think as we move this business forward, content is going to be the key to our success. Having more products and services is really important to the organization. In addition, we welcomed John Brown on to the Board as well, extensive experience in the diagnostic market as well as the general city stock market. So, real enhancement and bringing a lot of industry people on to the Novacyt Board. In terms of product development, we've launched MagBench, which is an automated DNA extraction platform for our NIPT workflows. The Primer Design part of the business has launched Co-Prep, which is another automated DNA and RNA extraction. So, these are things that allow our customers to process samples more quickly. And Primer Design rather excitingly has launched mastermix alongside its sort of core assay offering. So, historically, if you were to buy an assay from Primer Design, you need to go and buy a mastermix from another provider. We now make our own mastermixes available to the market. So, it's kind of a ranged sell that we've launched this year. I'm going to talk a little bit more about products and services and where our growth plans are, but before we do that, I'm going to hand over to Steve who's going to talk us through the numbers.

Steve Gibson: Thanks Lyn. Good morning, everyone. It's great to be with you today to chat you through the Novacyt FY 2023 financial results. Now, as you read the financial statements, please note that they cover 12 months' worth of trading activity of the legacy Novacyt business with only four months' worth of trading activity of the legacy Yourgene business. And this is the post-acquisition period, September through to December. So, we'll kick off from a revenue perspective. Group revenue totaled £11.6 million for the year, down from £21 million in the prior year. Now, this decline was driven by a reduction in COVID-19 sales of £14 million, offset by the inclusion of Yourgene revenue. If we look at revenue from a business unit perspective, the legacy Novacyt business delivered sales of £6 million and that was split £5 million Primer Design and £1 million IT-IS with the remainder £5.6 million linked from Yourgene. And the Yourgene share was just under 50% of the total Group revenue. Now, what we expect to see going forward is that Yourgene will deliver over 70% of the total Group revenue in the future. From a geographic perspective, the acquisition has really helped broaden Novacyt's international reach. And if we look at it from a regional perspective, the top three regions are as follows. In first phase, the U.K. delivered just under 30% of total revenue, and that's where we have the largest number of sales staff on the ground as you'd expect. Next, Europe, excluding the U.K., delivered around 25% of total revenue or £2.9 million. Now what we expect to see going forward there is that France is going to be a key player because of its strongly established NIPT customer base that Yourgene brings with it. And then finally, the Asia-Pacific region delivered just under 25% or £2.8 million. But importantly, we saw a year-on-year increase of nearly 50%. And again, that's because of the inclusion of Yourgene sales where they have a heavy number of in-region sales staff there that is helping to drive growth in that area. From a gross margin perspective, we delivered a gross profit of £3.7 million or 32% for the year. Now, the margin was heavily impacted again by further stock provisions, mainly as a result of providing for all the remaining COVID-19 associated stock. Now, if we exclude the impact of these items that totaled over £3.3 million, the gross margin would have been in excess of 60%. And this is an important metric for such a business. This is what we're looking to achieve post-acquisition. If we move on to OpEx costs, Group OpEx costs fell by around 10% or £1.9 million. And that's largely as a result of the restructuring programs that we've undertaken during the year. Now, we would have seen further reductions in our OpEx cost, but it was offset by the inclusion of costs in relation to the Yourgene business. From a headcount perspective, we kicked off the year at Novacyt with 137 some and it fell down to around 118 pre-acquisition. And when we closed the year post acquisition with around 237 on the books and we're at a similar number now. Post-acquisition, we've made really good progress on reducing the bottom-line cost of our business. And we've -- that actions will deliver over £4 million of savings to the bottom-line. However, we're not finished. We're still on this journey rightsizing the cost base of our business and we need to do more. From a profitability perspective, our EBITDA was broadly flat year-on-year at a loss of £13.7 million. Now, in addition to the EBITDA loss I just talked us through, we've seen exceptional costs totaling around £11.7 million and it's made up of five key points. Firstly, there were impairment charges that totaled around £5.8 million and that was split £4.1 million in relation to Primer Design and £1.7 million in relation to the IT-IS acquisition. Next, we incurred around £1.9 million of costs in relation to the ongoing DHSC dispute is in this trial. We then incurred £1.7 million of acquisition-related fees. Now, importantly, this excludes the deal advisory fees incurred by Yourgene, which totaled around £2 million, as these are treated as a pre-acquisition cost. Next, we incurred around £1.6 million of restructuring expenses and that was predominantly redundancy payments. And the balance, around £700,000 was a combination of other expenses. Our other financial income and expense netted to an income of just under £1 million. And within that, we received over £2 million of interest on our cash flow. So, this meant, overall, the group reported a loss after tax attributable to the onerous in the business of £28.3 million. Now, if we just focus on the results from a pro forma perspective, as if Yourgene had been acquired on the 1st of January, 2023, then the group would have reported sales of £22.8 million and we would have generated a net loss of over £50 million a year. Now, Yourgene house pre-acquisition results included various one-off charges totaling over £13 million and there are two big items in there. First one was obviously acquisition-related costs and they totaled over £8.5 million and one of the big items in there was the £6.5 million contingent liability crystallized upon the acquisition. And then there's around £5 million of other exceptional costs covering items such as stock provisions, bad debt provisions and impairing the ROU assets. As such, if you look at the pro forma loss for the year, it's not a good indicator of our likely future performance of the business. If we just turn to the next slide. So, from a balance sheet perspective, what you'll see is there's a number of moving parts and nearly all of the balances have changed. And that's all by the acquisition [Technical Difficulty] and that's because -- apologies about that just got the phone off. So that actually has changed substantially year-on-year. And that's as a result of including all the assets and liabilities of Yourgene now in the Novacyt balance sheet. If I just pick up a couple of the big items. So, goodwill has increased year-on-year substantially and that's as a result of creating a circa £19 million asset on the purchase of Yourgene. And this has been offset by impairment charges totaling around £4.4 million in relation to Primer Design and IT-IS. And the other large viewer is ROU assets and lease liabilities. They've increased by over £10 million. And that's predominantly as a result of the inclusion of the long-term lease liabilities associated with City Labs and Skelton House in the U.K. From a cash perspective, we closed the year with around £44 million in the bank, down from £87 million at the start of the year. Now, the main driver clearly this decrease in our cash position was the acquisition of Yourgene. And that consumed in excess of £27.5 million, including the cash consideration that we paid. Now, that was a quick run-through of the FY 2023 financials, which can be viewed on the company website. Now, I'll just give you a quick update on how we've kicked off the year from a trading perspective. So, for the first four months of this year, April -- until the end of April, we delivered sales of just under £7 million, £6.9 million, and the Yourgene business contributed to over 70% of that number. And this run rate is a reasonable indicator of our likely full year revenue position. From a cost perspective, as I mentioned earlier, we've delivered savings already that we'll deliver over £4 million this year and we're still on this journey in rightsizing the cost base of our business. As a result, we're not in a position to give full year guidance at this stage. From a cash perspective, we closed April with £36.3 million in the bank, down from £44 million at the start of the year. So, cash outflow of £7.8 million in the first four months of the year. And there were a couple of large exceptional items in there that included items to do the DHSC legal fees and the Coastal Genomics deferred consideration. That was a short summary of how we kicked off this year and I'll now hand that back to Lyn, who will give us an update on the integration.

Lyn Rees: Thank you, Steve. Very comprehensive overview on the figures there. Okay. Looking at this slide, I think the most important bullet for me on this slide is probably the last one. We are obviously on track to deliver the £5 million of annual cost savings that we identified on the start of this integration project. I think more importantly though, as Steve has said, we've delivered about four of that. I think there's a lot more to go after. As for corporate mantra I think for the next 12 to 24 months has got to be to cherish our cash. Cash is king currently in the marketplace. And we want to make sure that we really look after the cash that we have in the business so that we can invest in R&D and we can push the right products into the right markets. So, there's a key focus at the moment on making sure that we right-size the cost base of this business. And Steve and I are working very, very closely together on that. We've kind of been in partnership for only a month now in terms of me being in my seat. So, we're going to take our time over the next couple of months to really, really get an understanding of the numbers, get an understanding of what the potential synergies and cost base of this business could really be. And then hopefully, we'll be coming back to the market in the future to give you an update on what that looks like. So, that's the real focus of the integration project for me. It's preserving cash and making sure that we cherish our cash in this organization. To do that, we're going to be utilizing the strength and expertise that we have from this combined leadership team. I mean, for existing Novacyt shareholders, when you acquire Yourgene, you acquired a lot of diagnostic horsepower and experience. And it's been a joy to watch that experience being deployed all across the business in all of the facilities and all of the product ranges and all the decisions that we make. We do bring a much wider product technology portfolio to the table now. Novacyt was invested in clinical and trying to develop a clinical market. Novacyt doesn't need to do that now because it fundamentally acquired a clinical business. So, we've accelerated the route-to-market. We've got a very strong end-to-end customer offerings, so whether it's assays, whether it's custom development or whether it's hardware or technology to use those assays, we've got an offering for our customers. We spent a bit of time rationalizing our distributor and our sales organization. As I said, there's not much synergy between the types of customers. Yourgene customer is typically a clinic that's running a result that's going to make an impact on a patient outcome, whereas Primer Design or the old legacy Novacyt business is more kind of research institutions, academic centers, et cetera. So, there's not a huge crossover in terms of the actual customers that the both businesses supply. But there is a crossover in the way that we get to the market. Most of our distributors have researched our clinical sales. So, we've been able to really rationalize and leave ourselves as a high-quality distribution network and a direct-to-customer market network as well. We've refocused the Primer Design business to be an RUO business. I just mentioned that you bought a clinical business when you acquired Yourgene. So, we don't need to redevelop that or recreate that. That exists now within the Group post the acquisition of Yourgene. Primer Design was known for being the best developer of primers and probes for the research global market, world-class leading organization in that space. We come back to basics with that, which we'll have more conversations with customers. We've made our regulatory systems in our side of the business, fit-for-purpose and on clinical systems, which are lumpy and complicated. Nice flexible research use quality systems, which allow us to return or respond to a product inquiry within about two weeks to get a product out the door. We supply a mastermix for those products now. So, there's a real focus on bringing Primer Design back to its past glories and the initial signs are really positive in that side of the business. We completed the integration of all the operational departments. We cleared up the back office, whether it was two teams. There's now one team where we've been able to share skill sets and experiences. We've certainly done that, which has led to the elimination of multiple duplicate corporate functions. We've got a strong balance sheet to accelerate growth in key areas such as NIPT, Ranger, Precision Medicine, and rebuilding of the Primer Design business. And when it was first -- when I first discovered that at Novacyt we're interested in acquiring Yourgene as being the CEO of Yourgene at the time, it just felt like an amazing fit. Yourgene had all of these opportunities, but it found it difficult to raise money and had a cash constraint. Post-COVID, Novacyt had all this cash. I was wondering in what direction to take the business. So, by putting the two entities together, I think personally we got a really, really strong story. Steve and myself are going to spend the next five to six months guys, keeping working on the cost base, making sure we have very accurate numbers so we can come up to you and share those updates with you in due course. Again, it's going to be a bit of repetition now. I kind of sort of laid out how the business is split out. You can see that from this diagram. On the left-hand side, we've got our clinical NIPT products, non-invasive prenatal screening and cystic fibrosis, rapid aneuploidy tests. These are all things that the moms and babies get tested with either their first trimester or when baby is born. Our Precision Medicine, DPYD, I'll talk a bit more about that later on. And our infectious disease products, the Winterplex products. All of those get sort of lumped into one clinical category using the same sales force distribution, regulation, product management, et cetera. Then in the middle, we have our instrumentation. These are the brilliant team-up in Stokesley that make the MyGo products, our trusted team in Vancouver the manufacture our LightBench and our Ranger Technology and consumables. And then, of course, we have this Research Use Only business, which is the legacy Primer Design business, focusing on human health, agriculture, animal health, and veterinary, environmental. And we do organize Yourgene's own service offering, which is whole exome and whole genome sequencing into that side of the business as well. In a bit more detail, reproductive healthcare. I think what's happening in the market right now, we continue to see governments adopting the technology. Of course, when I first started presenting about this six years ago, it was really emerging technology. I think it is the go-to-technology now, national routine screener. And there hasn't been a commoditization of the market. If anything, the market is asking to test for more things at 12 weeks when mom-to-be comes into clinic. So, microdeletions, CNVs or copy number variations. We just see there are a wider range of things that the patients are looking to be tested on, which continues to I think increase the demand for this kind of product offering and the democratization of that product offering because nobody likes to wait for these samples, especially when you're 10 to 12 weeks pregnant and desperate to find out the results of that work. Cystic fibrosis, as Steve mentioned earlier, that APAC is growing like a weed at the moment, 50% up year-on-year. A lot of that's driven by the reimbursement and the way that new babies are tested for cystic fibrosis. We obviously have a world-class cystic fibrosis product. And as a result of that change to reimbursement, approval of new drugs and gene therapies, we're seeing significant growth in that product range in the APAC region. Precision Medicine, for those new to the story, we have a product called DPYD, which is used for patients that have unfortunately have to have the 5-FU chemotherapy. 5-FU is the most widely used chemotherapy in the world. There's about 2 million prescriptions written for it each year on a global basis. 10% to 30% of those patients will suffer severe side effects, hospitalization, et cetera, as a result of taking that drug and up to 5% of the population dies as well. So, our DPYD assay screens to see if this life-saving treatment they're about to have, if they're genetically able to take that. We've seen an uptake driven by government reimbursement. It's now been introduced into most cancer care clinical pathways. There's even FDA drug label changes in the U.S. as a result of some fatalities in that market because patients didn't have a DPYD assay. So, lots of future opportunities there. There is no competition for this product. We were kind of the only company that had launched this product two years ago. As always happens, people are jumping on the bandwagon. And so I think it's important that as an organization we continue to refresh that offer and making sure it is up-to-date as possible. And hopefully, with the capital that we can deploy from the Novacyt Group, develop some more products and services to sit around what is currently an orphan product at the moment. When we look at Ranger Technology, opportunities across multiple markets. The key industry challenges remain, how can we process more samples more quickly at higher purity? And the good news for them and for us and for you, I guess, is that Ranger Technology does that. So, I think the partnership with PacBio certainly gives us a significant increase to the number of conversations we can have with customers. And our brilliant marketing team have been spending a lot of time doing trade shows, traveling throughout the world post-COVID with that to be able to shake hands with someone looking in the eye and talk to them about your technology is open for us. So, we're certainly taking advantage of that. So, the market conditions, I think in a summary, that's really, really positive for our business. In terms of sort of strategy and growth drivers, let's keep this simple. We want to do more sales. So, the rennet for the sales organization is more face-to-face meetings, more time with customers and we're seeing that coming through. We just signed up our first South American NIPT system. So, congratulations to our Americas team. We've launched MagBench in APAC and Middle East. And we've got really strong growth of cystic fibrosis that we've seen as I've already mentioned in APAC. The second strategy is just to rebuild this RUO business to take what is a fantastic business with an unbelievable reputation in its marketplace and just go back to basis. We've got 1,200 products that we've developed that are on the shelf. So, if there's a monkey pox outbreak in South Africa, which we're currently seeing at the moment, we've got a product that we can just stock perfectly into that supply chain. In addition to that, we've delivered 500 new projects and custom assays. So, if we have something that the customer doesn't -- if we don't have something that the customer wants, we can develop it ourselves. There's nine new genetic products. And we've got a new range of complete assays and mastermixes to sell. So again, lots of opportunities. And I think those two need to be complemented by R&D. We've got Jo Mason joining the Board, which is just excellent. Jo and her team, really high caliber, highly experienced in terms of getting new products and new technology into the market. Somewhat having left over the last two years at Yourgene because of the inability to raise money and to properly support those initiatives. But having received IBD approvals for DPYD in November 2023, just now going through the process with our reproductive healthcare range of products. I think the future is really exciting. And I look forward to watching Jo, because I said, we certainly won't be presenting that -- present to you her product pipeline and the plan moving forward in the future. And we have to be realistic of the size of the organization that we are as well. So, business development partnerships are critical to get that announced that we're partnering with PacBio. You know we've already got other existing partnerships and collaborations that we've already launched before. And so a willingness to partner to help expedite our growth journey. And I guess, bringing that all together into like one summary slide before I hand back and we open the floor to some questions. We are an international molecular business. We sell products in 65 countries. We've got a deep focus on expertise on reproductive healthcare, precision medicine and infectious disease. Novacyt was kind of looking what was the next big thing for them and they started this journey of developing clinical products. That journey stopped when Novacyt acquired Yourgene because you've now got clinical products in your portfolio and an exciting set of new products to come as well to give scale and diversification to this business. Our technology portfolio is broadening up. The capability in qPCR development that the Primer Design team brings to the table for the Yourgene and the commercial lines to really take advantage of the sell is really exciting. We've got multiple platforms for next-gen sequencing into qPCR in multiple markets, again, given great diversification for investors that we're not a one-trick pony relying on a single product in a single market. We've seen a benefit from the early synergies. We were already at £4 million of the £5 million cost plan. But Steve and I are not satisfied that £5 million is the top. There's more to go after here. And as I mentioned at the start of his presentation, we need to cherish our cash as an organization. And the key to doing that is taking on all of these synergies, having complete transparency and controlling the costs. And it's a pleasure to work with a CFO like Steve, who has that attention to detail on the numbers. So, Steve is going to concentrate on the numbers, I'm going to concentrate on the sales, Jo Mason is going to concentrate on bringing the new products to market, and hopefully, that's a nice clear concise summary of what we're going to be trying to do over the next couple of months. So, I think I'm going to hand the presentation back now because we finished our slide deck.

Operator: That’s great Lyn, Steve, thank you very much. [Operator Instructions] Lyn, Steve, you received a number of questions from investors ahead of today's event and number of throughout your presentation. So, firstly, thank you to everybody for your engagement. I think what the guys have done is they've tried to package some of these questions into a number of different themes. First, really around cost synergies. Where have you made the cost synergies and what's left? And that really touches upon a number of the live questions.

Steve Gibson: Sure. So, I think I'll take that point. So, I think Lyn briefly touched upon it in his presentation and I think I've touched upon it, but maybe just to call out a few of the key areas. So, the first one, obviously, was we refocused the Primer Design business on being an RUO business. So, we removed a significant amount of clinical associated costs. So, that's one big bucket of cost out of the business. Next, we obviously had duplicate listing fees. So, when you obviously buy another company that say listed, it has onboard fees, it has open buyers' fees, and some RNA [ph] cost. So again, we've removed the duplicate costs there. And then the other large key cost bucket was from the leadership perspective. So, we had two management teams. And post the acquisition, redefining the management team. So, those are sort of the main core areas where we've been able to generate the most savings. And I think in terms of what's left, well, I think no area was untouched. I think we continue to look at all areas of the business for future cost savings. And like I said I think during my presentation, we're rightsizing the cost base. We haven't finished that and there is more to go after and there's more to do for us in the business.

Operator: That’s great. Thank you very much indeed. I guess, the next topic that we received a number of questions around was around capital raising. Will you need to raise money if you lose the DHSC case?

Lyn Rees: Yes. Honestly guys, I'm unable to comment on that. I mean, we've been waiting for this DHSC case to arrive. The court date is the 10th of June. So, we're a couple of weeks away from starting that process. There are a range of possible outcomes. As you've seen throughout the last six to 12 months, every time there's an update, we update you. But I'm not able to specifically comment on that topic because it could -- as I said, there's a range of possible outcomes and we'll keep you updated as that process takes place.

Operator: That's great. Thank you very much indeed. I guess, another kind of category, a lot of questions around kind of potential M&A. Are you pursuing additional M&A opportunities?

Lyn Rees: I mean, a great question. I mean, the market has certainly turned into a buyers' market for the first time that I've seen in the last couple of years. But I think the acquisition of Yourgene is probably enough for the business to be focused on at the moment. And I think as we keep mentioning, cherishing cash and just making sure we've got the right cost base for this business is absolutely critical in the next six months and I don't want anything to disrupt us from that. I mean, as I said, Steve is in my working relationship at CEO to CFO level is a month -- we're a month into it. So, we've got a lot of work to do over the next five to six months to understand the true potential of this business, the true cost base of this business. And I think looking at M&A opportunities -- and a lot of the M&A opportunities that are out there at the moment are out there because they need cash. And that doesn't really support our message of cherishing our cash. So, for the foreseeable future, I'm focusing on the business and nothing else.

Operator: That's great. Thanks so much Lyn. Next question reads as follows, if I may just read it out as it was received. What are the latest developments with the Taiwanese business? Are you still looking for a buyer? And what are the costs of running this business?

Steve Gibson: Yes, certainly. So let me take that one then. So, I think we should acknowledge that first of all, it was disappointing that INX called out the prior transaction. But in terms of that business, it's business as usual at the moment, while we evaluate a number of options that we hear with the best return for our stakeholders.

Operator: That's great. Thank you. Why are you no longer pursuing UKCA for your multiplex infectious disease tests?

Lyn Rees: Yes, I mean, when the two businesses got together, one of the first things we did was review the multiple R&D projects and opportunities that are in the business. And as I mentioned earlier, the acquisition of Yourgene fundamentally gave Novacyt a clinical platform. So, I see no need to double up on that effort. We prioritized certain clinical developments there, because as I said, we just don't need to do that now because those products exist in Yourgene. So, what we focused on is making every product that comes from Primer Design to be strong for the research use only market. And I think we're already seeing steady interest from our customers. We're re-engaging with them again. These are customers that we didn't really access or weren't able to access during COVID because we were making such high volumes of COVID products. So, this is the customer base that we've gone into. We've re-engaged with. We've asked them what it is they want from us. So, that's where the mastermix discussions come from. And we're really focused on just growing and rebuilding our reputation in that research use only in the market and leaving the Yourgene side of the business focused on the clinical side.

Operator: Thank you very much indeed Lyn. A number of questions, I guess, around partnerships. Is your partnership with Eluceda to develop a novel biosensor technology still an ongoing project?

Lyn Rees: Yes. And great investor memory for whoever posted that question. A very straightforward answer, no it isn't. Again, nothing to do with the technology or the opportunity in the biosensor market. It was just that we felt we had more of an opportunity in some of the pipelines that were a little bit more developed within the enlarged group. So, you can't do everything, because if you try to do everything, you will always, always end up failing. So, we focused on -- I'd say, Jo Mason is focused on a small number of projects to maximize the opportunity of succeed in those R&D projects. So, as a result of that, the Eluceda opportunity was put on the back burner and we're currently not exploring it.

Operator: Thanks Lyn. Thank you very much indeed. I guess, a number of questions again around profitability from investors today and ahead of today's call. When do you expect to be profitable?

Steve Gibson: I should probably take that one, Lyn.

Lyn Rees: Yes.

Steve Gibson: So, I think our expectation then is that we can reach breakeven mostly on to profitability without needing to raise additional capital. So, though we've also got a very healthy balance sheet and we think we can start on our way to breakeven and profitability. We've obviously already delivered savings through bottom-line of over £4 million and we're not stopping there. We've still got a way to go to deliver further savings. So, I think just trying to be really sure that internally we're working on a plan that does not require external funding, because at the moment, in the market, it's very difficult to do. So, am I going to give a date in this stage, no, because there are so many plans to work internally. But when we are ready, we're going to then present a refreshed story of the business and set out a forward-looking three-year plan in the future.

Operator: That's great. Steve, Lyn, thank you very much indeed. I know we've got a lot of questions given the attendance on today's call. And if we haven't read-out your questions specifically, we hope we've covered a lot of the themes of those questions. And of course, if there are any other responses, we can make those available post today's meeting. Lyn, Steve, I know that feedback will be particularly important to you both, and I'll shortly redirect those on the call to give you their thoughts and expectations, but before doing so, Lyn, if I may just come back to you for a couple of closing comments.

Lyn Rees: Yes. I'd just like to obviously thank everyone for their time and commitment today to listen to this update, and we really do appreciate your support. And we're working hard for you to ensure that we maximize this fantastic opportunity of bringing these two businesses together. I made the comment earlier, it just feels like such a strong collaboration. Two businesses that almost were destined to become one. And Steve and myself was we're very early in our tenure as your CEO and CFO. We are determined, as I said, to really focus hard on initially the cost line of the business so we can cherish cash and make sure that we've got money that we can hand to Jo Mason and her team to continue to develop world-class leading projects and products that continue to grow our sales because we've got this international sales footprint that we need to sweat. And the more content we can give them, the more we get on our return on our investment there. So, I'd like to ask for a bit of patience. Steve and I are only one month into this. We look forward to coming back in due course with a much clearer plan of strategically what we're doing with our products in the business with a much clearer understanding of the numbers. You just heard Steve say now that there's not our intention to raise money again, we're going to get to profitability and we just need a bit more time having made significant progress already integration with these businesses, we need to complete that work. And I can't wait to come out and present that result to you and that story to you in the forthcoming months. So, thank you everybody for your time today and we look forward to following up again with you soon.

Operator: That's great. Lyn, Steve, thank you once again for updating investors. Could I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that management can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team at Novacyt, I would like to thank you for attending today's presentation and good morning still to you all.