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Edited Transcript of AKER earnings conference call or presentation 11-Apr-17 1:00pm GMT

Thomson Reuters StreetEvents

Full Year 2016 Akers Biosciences Inc Earnings Call

Thorofare Apr 11, 2017 (Thomson StreetEvents) -- Edited Transcript of Akers Biosciences Inc earnings conference call or presentation Tuesday, April 11, 2017 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Ben Simons

Vigo Communications - IR

* John Gormally

Akers Biosciences, Inc. - CEO

* Ray Akers

Akers Biosciences, Inc. - Vice Chairman

* Gary Rauch

Akers Biosciences, Inc. - VP, Finance

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Conference Call Participants

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* Marc Robins

Catalyst Financial Resources - Analyst

* Jules Augus

Aegis Capital - Analyst

* Jeff Kobylarz

Diamond Bridge Capital - Analyst

* Scott Billeadeau

Walrus Partners - Analyst

* Satiyan Shah

- Private Investor

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Presentation

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Operator [1]

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Good day, everyone, and welcome to the Akers Biosciences, Inc. 2016 earnings call. Today's call is being recorded.

Now for opening remarks and introductions I will turn it over to Mr. Ben Simons. Ben, please go ahead.

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Ben Simons, Vigo Communications - IR [2]

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Good morning, everyone. Thank you very much for joining us. On the call today we have John Gormally, the CEO of Akers Biosciences; Dr. Ray Akers, the Vice Chairman; and Gary Rauch, the VP of Finance. Following the Safe Harbor statement, John and Ray will provide an overview of progress in 2016 and then Gary will provide a summary of the financial results before we open up the line for questions.

Before we get underway, I would like to very briefly ask everyone to take note of the Safe Harbor paragraph that appears at the end of the news release detailing the Company's financial results which were published this morning. This paragraph states that any forward-looking statements that the Company makes speak only as of the date made; are subject to inherent risks and uncertainties, including those described in the Company's reports filed with the Securities and Exchange Commission and should not be unduly relied upon.

Except as otherwise required by the federal securities laws, the Company disclaims any obligation or undertaking to publicly release any updates or revisions to any forward-looking statement contained herein or elsewhere to reflect any change in our expectations with regard to any changes in events, conditions, or circumstances on which any such statement is based.

With that read, I would like to hand over the call to Akers Bio CEO, John Gormally.

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John Gormally, Akers Biosciences, Inc. - CEO [3]

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Thank you and good morning, all, for joining us. 2016 was a turnaround year for our firm. Global sales were approximately $3 million, which represented a 40% increase in total revenue and a 65% increase in product sales versus prior year.

Our profitable growth performance was driven largely by an 85% sales increase of the Company's flagship assay for heparin-induced thrombocytopenia, or HIT. We successfully implemented our evidence-based outcome value proposition that supported our price position for these rapid manual point-of-care tests.

In parallel with growing revenues, the Company introduced the strategic and disciplined process to manage costs and, accordingly, we reported reductions in all key areas of expense. This campaign resulted in a markedly reduced net loss of $3.3 million, down 65% versus the prior year, as we work towards the cash flow breakeven inflection point and overall company profitability.

Before I provide more retailed view of operations, I would like to turn the call over to Ray Akers, who co-founded the Company and invented most of the platform technologies on which our tests are based, in order to provide those that are new to Akers Bio with some background on our technologies.

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [4]

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Thank you, John. The Company has developed several proprietary technology platforms that formed the basis for various rapid diagnostic and screening tests. Our goal is to increase the speed at which health information is delivered, either directly or via their caregiver.

Our two most advanced technologies are antibody tests that look for biomarkers of a condition in a small drop of blood obtained from a finger-stick sample or those that look for biomarkers of a medical or health condition present in a person's exhaled breath. Akers Bio has proven through numerous studies that biomarkers given off in your breath have a very close correlation to those in your bloodstream. As most people would prefer to blow into a tube rather than have a blood draw, we believe this is a very valuable testing technology platform with multiple applications.

Our most-developed test and one that generated the majority of revenues in 2016 is a rapid antibody blood test for an allergy to the very widely-used blood thinner heparin. We call this test the PIFA Heparin/PF4 rapid assay, or PIFA Heparin for short. The condition it tests for is called heparin-induced thrombocytopenia, or HIT. It is a life and limb threatening potential combination of heparin therapy.

Heparin is the most widely-used blood thinner in the world because it is inexpensive. However, the bad reaction known as HIT is occasionally seen in patients who are on heparin therapy post cardiac or orthopedic surgery. There are 4 million tests for HIT run in the US alone every year, but the vast majority are performed the old-fashioned way: sending a blood sample off to a laboratory and waiting 24 to 72 hours.

While the doctors are waiting for the result they usually take the patient off heparin and onto significantly more expensive drugs only to find out one to three days later that the patient is not suffering from HIT, as is commonly the case. Our test takes just 10 minutes. It is FDA approved and highly accurate. It's also approved in the European Union and China.

It is a very valuable rule-out tool. The money it can save a typical US hospital in unnecessary alternative drug therapy costs and extended hospital stays is in the region of $1 million per hospital per year.

[All of the] 4 million of reference laboratory tests each year could be replaced with our test. With an average selling price between $100 to $125 per test to the hospital, the market is very large in the US and of equal size in the rest of the world and that is why we are very excited about the potential of this test. Even if we just converted a percentage of those 4 million pre-existing tests, it would be transformational for our company.

John Gormally will elaborate on the growth strategy for this test shortly.

We have also developed or are in the process of developing other rapid blood tests based on the same proprietary technology platform as the heparin allergy test for other conditions including chlamydia. We completed a highly successful clinical trial during 2016 for this rapid chlamydia test, which saw an overall agreement between our test and the reference laboratory blood testing method of 96%. We hope to commercialize the rapid chlamydia test later this year, pending regulatory approvals, and are very excited about its potential since chlamydia is the most prevalent sexually transmitted disease in the world.

As I mentioned just now, we have also developed proprietary and transformational ways to test a person's health by analyzing their exhaled breath with our digital health and wellness platform. Our newest line of breathalyzers for the health and wellness industry also sync with the reading device and an app for using on your smartphone or tablet.

With this breath analysis technology, we have developed a breath test for ketone levels associated with weight loss and a breath test for monitoring oxidative stress levels, which are a good indicator of a person's overall health and well-being. The clinical study undertaken in 2016 demonstrated a 99.5% correlation between our breath test for oxidative stress and the standard reference laboratory blood testing method.

Further down the road, we will also be looking to commercialize breath tests for biomarkers of diabetic ketoacidosis, asthma, COPD, and lung cancer, all of which are in development. In fact, the clinical trial for the diabetic ketoacidosis breath test undertaken in 2016 showed a 92% agreement between our breath test and the gold-standard hospital blood testing method.

These accuracy statistics really underpin our belief that Akers Bio's technologies platforms will over time replace older testing methods in our key areas of testing, all of which are very large potential markets.

I will turn it back over to John Gormally now to talk about the commercial and operational developments in the period.

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John Gormally, Akers Biosciences, Inc. - CEO [5]

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Thank you, Ray. Now I would like to give you a little bit more insight into our strategy for our flagship PIFA Heparin test, again, the test for heparin-induced thrombocytopenia.

Our PIFA Heparin test is currently sold into two markets, the US and China. Sales in the US are growing steadily via our strategic partner, Typenex, independent manufacturer reps, a number of heavyweight distributors including Cardinal Health and Thermo Fisher, and via our salesforce, who are focused on commercialing our brand to integrated delivery networks rather than just single hospitals.

We experienced a big win in December with the Greater New York Hospital Association's group purchasing award -- we'll call that GNYHA -- with whom we signed a three-year agreement to introduce our test across their network of over 300 member hospitals and health system. Traction is underway with this perspective end-user and we continue to believe the relationship with GNYHA gives us a powerful level of access to their membership.

Concurrently, we are developing other global business opportunities for our PIFA Heparin test, specifically in Western Europe. Yesterday, we announced our entry into the Puerto Rico market, where there are a significant number of hospitals for us to target with the support of our channel partners.

The next significant market for the commercialization after the US for our PIFA Heparin test remains China. We recorded $0.5 million in sales for this test in China during 2016. The delay in obtaining product pricing approvals in key provinces, unfortunately, meant that we did not realize our projections in 2016, but we are very confident that we have the right partner. And when pricing approvals are obtained, we are well-positioned to receive substantial incremental business from China.

I would also like to note that we have signed a distribution deal with our rapid over-the-counter test for cholesterol to be sold under the very popular First Check brand, which can be found in the shelves of major retailers including CVS, Rite Aid, Target, Kmart, and many others. This resulted in an initial order and we should see this play a part in the revenue mix for the current year and beyond.

We were also pleased with the commercialization progress of our BreathScan OxiChek, which is our test for oxidative stress, which works with the BreathScan Lync and the new Bluetooth-enabled reading device that we have developed, to enable users to monitor oxidative stress via a mobile device. We are targeting the large anti-aging, functional, and integrative health and wellness treatment practitioner market in the US. We have a number of marketing initiatives planned throughout this year to drive sales of this product, including major trade conventions and a national television campaign.

While it only accounted for a marginal amount of sales in 2016, we believe this product will make more of an impact this year as awareness grows.

Now I would like to turn over to Gary Rauch, VP of Finance, to give an overview of the 2016 financial performance.

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Gary Rauch, Akers Biosciences, Inc. - VP, Finance [6]

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Thank you, John. Total revenue was up 40% to $3 million in 2016. This was driven by the PIFA Heparin test sales, which accounted for just over $2.5 million of that figure. Our gross profit margin is up significantly on last year to 63%, up from 55% in 2015, and we expect it to stay in this zone throughout 2017.

While revenues are going up, expenses have been going down. This is the result of rigorous cost management, which will continue going forward. In particular, we reduced general and administrative expenses by 25%, cutting them down to $3 million, a result of reductions in all G&A areas, including professional services and stock market-related expense. We reduced the sales and marketing expense by 16% to $2.1 million as we reshaped the sales team to suit the strategy to go after large customers which require fewer, but more senior, personnel.

We also shrank R&D costs by 15% to $1.2 million, while still managing to carry out some major clinical trials and studies in the year in support of the chlamydia, OxiChek, and diabetic ketoacidosis tests in development. It's also notable that we reversed bad debt of approximately $1.3 million in the year as a result of our settlement with a former distributor in exchange for inventory and a prepaid royalty. These factors all contributed to a much reduced net loss of $3.3 million, down 65% from prior year.

The final metric I would like to address is cash and marketable securities. By December 31 we had depleted quite significantly to around $123,000, largely as a result of the delay in the majority of the $2.5 million PIFA Heparin order from China, while certain provincial pricing approvals are being attained. However, I'm pleased to say that this cash and marketable security position has been addressed through the raising of $3.6 million in net proceeds in two offerings, one in January and one in March, resulting in a more comfortable cash and marketable securities position as of last week of approximately $2.3 million.

With growing revenues and reducing expenses base, we expect that this will reach a cash flow breakeven inflection point during the course of 2017.

I would now like to hand the call back over to John for some closing remarks before we invite questions.

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John Gormally, Akers Biosciences, Inc. - CEO [7]

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Thank you, Gary. I hope that provides a good overview of our 2016 performance and achievements and, more importantly, our path forward.

Looking ahead, our strategic plan anticipates further profitable growth in our flagship PIFA Heparin product line. I expect to see increased sales of our rapid Tri-Cholesterol test and enhanced sales from our next-generation of app-connected wellness products. In addition, subject to regulatory approvals, we aim to launch into the market the first rapid blood test for chlamydia and a breath test for nutritional ketosis. Certainly there's a lot to be excited about and we would be pleased now to take any questions that you may have.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Marc Robins, Catalyst Resources.

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Marc Robins, Catalyst Financial Resources - Analyst [2]

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Congratulations. You have accomplished quite a bit this last year and should all be very proud for what you've been doing.

Going into 2017, is it likely you [could see] some huge declines in absolute (inaudible) of your costs or are we probably pretty much where you plan on being going forward?

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John Gormally, Akers Biosciences, Inc. - CEO [3]

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Could you repeat it, Marc?

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Marc Robins, Catalyst Financial Resources - Analyst [4]

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Repeat it again? I apologize for being on a cell phone. Let's try one more time. Regarding your costs, you've done a tremendous job last year reducing costs; should we expect some more decline in absolute terms?

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Gary Rauch, Akers Biosciences, Inc. - VP, Finance [5]

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I'm going to answer that in the affirmative. We have done a very good job of evaluating expenses and doing analysis prior to working with this type of expense: professional services, stock market fees that are related to various listing activities. The changeover in the sales and marketing team from working with -- trying to sell individual hospitals to now trying to concentrate on large facilities is reducing travel expenses, so we expect to see the decline in overall expenses to continue to climb. I would be hesitant to say what kind of percentage we're looking at, but definitely less than last year.

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John Gormally, Akers Biosciences, Inc. - CEO [6]

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And if I could chime in here -- this is John Gormally -- there is an inflection point, a tipping point when you make cost reduction at a point that it compromises top-line growth. We monitor that very closely here at Akers Bio and we continue to make sure that that is a primary focus throughout the course of the year.

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Marc Robins, Catalyst Financial Resources - Analyst [7]

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Well, the two new tests, the chlamydia test and then I guess I think it's an oxidative stress test, do you -- can you give any kind of guidance as to when you might expect those to be introduced, like first half or second half that kind of a thing?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [8]

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Marc, this is Ray. The oxidative stress test is already on the market. We introduced it last year and John and his commercial team have put together a marketing strategy, a marketing plan for it and that's in full swing right now.

We fully expect chlamydia will be on the market in the US early in the third quarter of this year.

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Marc Robins, Catalyst Financial Resources - Analyst [9]

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Third quarter, okay. Ray, thank you very much. Help me, because it's kind of like watching a ping-pong match but with more than one ping-pong. The PIFA test is going and going well; would you review the other tests that you have on the market just very quickly for me?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [10]

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Certainly. The tests that are on the market are the two versions of the PIFA Heparin test, the classic device and then the stat point-of-care device. We also then have the test for oxidative stress, OxiChek is on the market.

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Marc Robins, Catalyst Financial Resources - Analyst [11]

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OxiChek, okay.

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [12]

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Our test for cholesterol, our own brand is called Tri-Cholesterol, but the brand for Alere is First Check and that will be shipping this quarter. We also have our BreathScan alcohol test on the market at several different cutoff levels.

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Marc Robins, Catalyst Financial Resources - Analyst [13]

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Very good. I'll get back in the queue. Thanks very much.

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Operator [14]

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Jules Augus, Aegis Capital.

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Jules Augus, Aegis Capital - Analyst [15]

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Good morning, gentlemen. Very nice call this morning and very optimistic. Question: You are expected to show substantial growth in your revenues this year; are you going to be in need of any more financing this year?

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John Gormally, Akers Biosciences, Inc. - CEO [16]

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Thanks, Jules; this is John Gormally. We are not anticipating that, but to be perfectly candid, from time to time based on market conditions, if an opportunity were to present itself to us where it would make sense for us to bolster our balance sheet and promote the launch of these exciting products that we have shared this morning, we would bring that under advisement. And it would be a Board decision from there.

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Jules Augus, Aegis Capital - Analyst [17]

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Thank you.

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Operator [18]

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(Operator Instructions) Jeff Kobylarz, Diamond Bridge Capital.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [19]

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Good morning, guys. Congrats on all you have accomplished so far. I'm just curious about a couple things. Can you elaborate a bit about chlamydia? You expect that to be on the market early in third quarter, so the FDA 510(k) approval is going to come the second quarter then?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [20]

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We think that the 510(k) will be cleared early in the third quarter and John and his team are putting together the marketing plan right now.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [21]

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Okay. So the dialogue -- you are in dialogue right now with the FDA over whatever final hurdle is required?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [22]

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We are in dialogue. I can't tell you if they are final.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [23]

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Okay. And curious about the Puerto Rico situation. I believe Puerto Rico is part of the GNYHA network and --.

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John Gormally, Akers Biosciences, Inc. - CEO [24]

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Yes, this is John Gormally, Jeff. GNYHA has approximately 29 hospitals on Puerto Rico. There are about -- there's greater than 65; don't hold me to that exact number of hospitals, but we opened it up to the entire provider segment. We have secured a contract with our strategic partner and we have already hired an independent manufacturer rep to cover exclusively Puerto Rico. Tremendous opportunity for us in the short and long term here for Akers Bio.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [25]

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Right, I was curious why those hospitals. The 29 that are part of the GNYHA; I didn't know if they had to wait for whatever trials that are being done by GNYHA --

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John Gormally, Akers Biosciences, Inc. - CEO [26]

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Great, great question.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [27]

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-- and just how they -- are jumping ahead or what? Can you talk about also the trials that are at the GNYHA hospitals? How far along they are and when you expect those to be completed?

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John Gormally, Akers Biosciences, Inc. - CEO [28]

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When we signed the agreement back in December we were working on a two-part strategy and the first part of the strategy was that they would identify -- GNYHA would identify two member institutions to do a clinical evaluation and also an economic benefit, a cost-benefit analysis for us.

But shortly after that in business meetings with GNYHA in the early part of January, they came to the collective decision to forgo that path and they said just release it. We are confident in the information that we got back from five institutions that were using the PIFA Heparin brand and that encouraged them to bypass that. And we saw that as a great opportunity for the organization to, as we call it internally here, release the hounds.

And so we have gone after the 300 membership very aggressively, very strategically and with cost in mind. We already have engagements underway as we speak with seven to nine systems under the GNYHA umbrella that are at various stages of progression toward conversion. And so that is monitored here very closely at our headquarters down in Thorofare, New Jersey, and we're excited about the promise of our engagement with GNYHA, which is our primary focus for heparin in the United States today.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [29]

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Okay, that's good news. So these seven to nine groups within GNYHA, does that make up -- how much of that, of the 300 hospitals does that make up?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [30]

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Just about a third, just north of a third.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [31]

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Got it, good. And when I back into the numbers for the income statement, the gross margin for the fourth quarter dropped to 44%. What was the reason --? Every other quarter it was over 60%. What was the reason why the fourth quarter had the dip in gross margin?

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Gary Rauch, Akers Biosciences, Inc. - VP, Finance [32]

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We went through and did a significant amount of inventory cleanup during the fourth quarter, so it resulted in a hit to cost of goods.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [33]

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Okay. So it's just the one time?

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Gary Rauch, Akers Biosciences, Inc. - VP, Finance [34]

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Yes, it shouldn't be an ongoing, recurring situation. We have always tried to strive towards that 65% to 70% range and I see no reason why we won't be in that range this year.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [35]

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Great. Okay, thanks. Did you say the First Check order was shipped in the second quarter?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [36]

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No, no. We got the PO for the First Check order and we are in the process of shipping that and that will happen in the second quarter. So that's not reflective -- that will not be reflective in our 1Q numbers.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [37]

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Right, okay. And then just lastly, what is the share count outstanding today?

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Gary Rauch, Akers Biosciences, Inc. - VP, Finance [38]

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I can't tell you right off the top of my head, but it's right in the area of 8,850,000 shares.

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John Gormally, Akers Biosciences, Inc. - CEO [39]

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That's pretty close, Gary.

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Jeff Kobylarz, Diamond Bridge Capital - Analyst [40]

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Good enough. Thank you very much.

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Operator [41]

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Scott Billeadeau, Walrus Partners.

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Scott Billeadeau, Walrus Partners - Analyst [42]

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Morning. I am wondering -- you went through some numbers -- G&A was $3 million, sales and marketing $2.1 million, R&D $1.2 million. I come up with a math of a little over $6 million. Are those numbers that we should use for this year?

I'm just trying to figure out getting into breakeven you would -- with 63% gross margins you need -- my math puts me at about a $10 million run rate to get there. Or is there some G&A and sales and marketing costs coming down yet? Maybe if you could just walk through that that would be great.

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John Gormally, Akers Biosciences, Inc. - CEO [43]

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There's still some G&A. Actually there's some an across-the-board costs that are still going to be coming down. We look to target our cash -- our weekly burn rate on the cash flow between $80,000 and $82,500 a week, so our breakeven is right around [$6.2 million], right in that neighborhood.

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Scott Billeadeau, Walrus Partners - Analyst [44]

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Then could you talk just a little bit on the China situation? What needs to happen and what visibility, if any, do you have on getting the pricing approvals and so forth?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [45]

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Sure, Scott; this is Ray. This situation is a bit out of our control. There are two things that are playing here. The first is that NovoTek needs pricing approval, which is very similar to our insurance reimbursements here, and they are working diligently in a number of provinces to get that.

They do have 90 large hospital customers in the waiting, so as soon as they get approval they have a lot of pent-up demand. And they also have signed up a number of key opinion leaders, so they are ready to go with a big splash once these approvals happen. Internally, we steeply discounted the sales into China this year because it is out of our control. So we look at this as a great potential upside for the Company.

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Scott Billeadeau, Walrus Partners - Analyst [46]

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Then another just quick question on the chlamydia test you expect sometime in the third quarter. In terms of marketing, what is the game plan there? Are you looking to partner with someone, even a current partner? What's your plan there, if there's anything you can disclose at this time?

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John Gormally, Akers Biosciences, Inc. - CEO [47]

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We see this test -- and I'm going to have to be a little cryptic here and be generic in my response. We see this test as having a very strong niche in many clinics or the indigent patient population in the United States today, specifically that's going to be the first targeted market.

What I mean by that, today when the uninsured go into these mini clinics like a Planned Parenthood, using that as an example, and they are tested using a blood test or a cervical swab, better put, which they would farm-out to a national or regional reference laboratory, 70% based on our marketing intelligence suggests that they don't return for the follow-up test and the medical episode isn't finalized. And when that happens, there's no reimbursement.

Our test is a simple blood test that's done right at the patient collection site. Gets results within five minutes and if they are positive for chlamydia -- and it's specific for the assay chlamydia -- the pharmaceutical mediation would take place and this would turn into a revenue stream, if you will, for that institution, that provider. So that is the targeted market.

One of the ones that we are looking at reported did 4.5 million tests. Our test is going to come on the market about $9.50 a test. Generally speaking, the reimbursement is $22, so the financial argument is compelling. You can do the quick math on that at $9.50 a test to see why we're so excited about that test.

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Scott Billeadeau, Walrus Partners - Analyst [48]

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Okay. Great, guys. Thanks much.

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Gary Rauch, Akers Biosciences, Inc. - VP, Finance [49]

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This is Gary again. We did a quick look up on the outstanding share count. We are standing right now 8,853,745 outstanding shares.

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John Gormally, Akers Biosciences, Inc. - CEO [50]

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Thank you, Gary.

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Operator [51]

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(Operator Instructions) [Satiyan Shah], private investor.

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Satiyan Shah, - Private Investor [52]

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I think the previous callers have basically answered some of my questions, but I had one additional question regarding the breath alcohol test. Is there any reason we may expect revenue to -- might see some revenue potentially with what's going on in France? What's sort of your view there?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [53]

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This is Ray, Satiyan. The law is still on the books in France but the government hasn't enforced it, so the reality is that none of us that were competing for business there really have much in terms of prospects going forward.

However, we are revitalizing our breath alcohol franchise currently and have a number of international distributors that are selling into various markets of industrial safety. In addition, here in the US, we plan on entering the transportation industry where 20 million transportation workers are tested randomly throughout the year under Department of Transportation licensing regulations. So I think that as we enter the second half of this year you will see more in terms of contributions of breath alcohol to overall revenue.

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Satiyan Shah, - Private Investor [54]

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Got it, okay. Then just a generic question; I know this is going to be difficult to answer given sort of the current confusion in Congress and the government with another potential healthcare law. Is that going to in any way, shape, or form significantly change the way you potentially go out and market in terms of insurance reimbursement and whatnot? Or is it too difficult to tell without any legislation really out there?

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Ray Akers, Akers Biosciences, Inc. - Vice Chairman [55]

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It is a little difficult to tell because Congress doesn't even know what they want to do, but there are two things though that should be considered when answering your question. The first one is that our heparin test, which is 85% of revenues approximately, is not tied to insurance. Heparin-induced thrombocytopenia as hospital-acquired and, therefore, is not reimbursable. Our test is a means for a hospital to reduce those costs, so that is completely insurance-independent.

Secondly, the Trump administration is greatly aiding us with the chlamydia test, because in defunding clinics such as Planned Parenthood and other city health clinics they need to make up the shortfall. The people that go to these clinics are not going to go away and they need to be taken care of, so they will be looking for other ways to increase their income. And we believe, through detailed discussions, that performing tests such as ours which allows them to get reimbursed will be a significant source of income for them. So we are actually pretty bullish about the current situation.

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Satiyan Shah, - Private Investor [56]

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Interesting. Okay, great. Thank you very much.

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Operator [57]

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Gentlemen, at this time there are no other questions in queue.

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John Gormally, Akers Biosciences, Inc. - CEO [58]

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Thank you very much. We look forward to speaking with you in the very near term as we advance our position here at Akers Bio.

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Operator [59]

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Ladies and gentlemen, thank you for your participation. This does conclude today's conference. You may now disconnect.