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Dwight Egan

Thank you, Andrew, and good afternoon, everyone. Thank you for joining Co-Diagnostics fourth quarter and full year 2024 earnings call. 2024 was an important year for co-diagnostics. We advanced the development of the Co-Dx PCR platform and associated test pipeline and added important manufacturing infrastructure as we strengthen the foundation for the platform's commercialization. During the course of the year, our team has worked hard to bring our low-cost rapid and easy-to-use platform closer to launch, and I'm excited to build upon our progress in 2025.
I'd like to begin my remarks by discussing some recent developments within our test pipeline, using some of our key accomplishments in 2024 and our future development plans. Our main effective at Co-Diagnostics is to increase the accessibility of affordable, high-quality diagnostics in the United States and around the world. In June of 2024, we completed our first application to the U.S. FDA seeking 510 clearance -- 510(k) clearance for the Co-Dx PCR Pro instrument and the Co-Dx PCR COVID-19 test for over-the-counter use. The Co-Dx team maintained active and collaborative dialogue with the FDA as they reviewed our submission, and as we responded to requests for information, providing additional context and support for our submission as needed.
As our conversations regarding the submission evolved, we received feedback from the FDA regarding the ability to monitor the shelf life stability of Near COVID-19 test components. We explored several options to address this and that replacing the component was the best course of action to help ensure the reliability and accuracy of the test for our customers and to be successful in our regulatory ambitions. Any change to the design or composition of a medical device under review by the FDA requires the collection of new clinical data to evaluate the device performance. Because this was not feasible to provide within FDA's review deadline for the original submission, management made the decision to withdraw our 510(k) submit application with the intention of submitting again with updated clinical data at a later date.
We determined that a new submission with the updated chemistry and supporting clinical data represented the most efficient way to bring the new version of our test before the FDA and while simultaneously addressing the issues brought up by the FDA and improving the probability of a successful clearance. The FDA was extremely informative throughout our review process, and we believe we have a clear path forward based on their feedback. Since we believe our COVID-19 test represents the quickest path to regulatory clearance and commercialization, we have focused our efforts on completing the design updates for the test that will be used in the revised 510(k) application. With the goal of accelerating our submission time line, we have full confidence in the quality of the test performance and in our team to submit an enhanced COVID-19 test to the FDA and with an application that is largely similar to that submitted in 2024.
I am pleased to report that the design for the new test has already been completed and undergone extensive verification testing. Throughout the duration of the FDA's review process, our work on the other tests in the pipeline was furthered by our R&D teams continued enhancements to the platform's capabilities including aspects of the PCR instrument and test cups, an important byproduct of the decision to complete a new 510(k) submission is that we can now also incorporate these new platform developments into the instrument and the test cups for the COVID-19 test, in the new submission, which we anticipate will enhance operational and manufacturing efficiencies for future tests in our pipeline.
At Co-Diagnostics, we pride ourselves on quality and reliability and continue to believe in the potential of our new platform to increase the accessibility of real-time PCR technology and play a transformative role in the domestic and global diagnostics landscapes. We continue to make great progress across our test development pipeline throughout 2024 and into 2025, which includes our diagnostic test for tuberculosis or TV respiratory multiplex and HPV multiplex. These indications reflect diseases where the Co-Dx PCR platform has an opportunity to make a significant impact on the diagnostic standard of care and eventual patient outcomes. We have been supported in our development efforts by several leading organizations who share our values and our passion for improving the global health infrastructure including the Bill & Melinda Gates Foundation, Smart for TB and the National Institute of Health's RADx Tech program. Starting with our TB test.
We are excited by our 2024 progress which included the completion of several preliminary analytical studies. TB is a high priority in several countries and regions around the world, including India, where we have a strong presence through our joint venture, CoSara Diagnostics.
A limiting factor for real-time TV diagnostics at the point of care has historically been finding a way to prepare the patient sample for the PCR process. In place of the sample extraction step performed in high complexity clinical labs, sample extraction is required to make the genetic material of the TB bacterium accessible to the primers used in the centralized labs PCR tests, but incurs additional costs adds to the overall PCR testing time and must be performed in highly regulated controlled conditions to limit contamination risk.
Developing a TB PCR test used at the point of care has required re-envisioning how a patient sample can be collected and prepared for the PCR analysis. Key to the operation of the TV test on the Co-Dx PCR platform has been identifying a procedure that would simply and affordably prepare patient TB samples prior to being added to the Co-Dx PCR TB test kit. After an exhaustive and global search, we have identified instrument, we believe, allow us to achieve our performance and cost efficiency targets and to proceed with preparations for our clinical evaluations. We are on track to commence clinical evaluations in both South Africa and India in the second half of 2025 to support regulatory submissions in countries.
In India, we plan to pursue a regulatory pathway through the Central Drug Standard Control Organization, or CDSCO initially targeting the point-of-care remote settings and local health care centers. We believe that our test on the new platform can be a critical asset to the country's goal of eradicating TB. As we continue to prepare for clinical studies, our team has been collaborating with local health officials potential customers and other organizations to map our optimal go-to-market in 2024, we evaluated higher throughput some microscopy centers, where target customers and experts agree that a point-of-care diagnostic solution could improve upon and help close the accessibility gaps left by outdated testing methods.
Our regulatory and commercial pathway also includes the pursuit of clearance in South Africa through the South Africa Health Products Regulatory Agency, or SAHPRA, which we believe could facilitate registering and marketing our tuberculosis test and the PCR Pro instrument throughout several jurisdictions in Africa as an in vitro diagnostic solution. The respiratory multiplex test developed in part with financial support from the NIH's RADx tech initiative has been designed to deliver real-time PCR test results for flu A and B, COVID-19 and RSV. Co-Dx completed the pre-submission to the FDA earlier this month, we have been assigned a reviewer. Our development team continues to work hard on preparing the assay for full evaluations which are expected to begin in the second half of this year. The burden that respiratory is placed on the health care system businesses, families and patients has always been high.
We continue to see a considerable degree of interest in this multiplex test and believe interest will remain high as we look forward to completing the steps that will allow us to put it into commercialization. One of the key differentiating features of the platform is its operability via a smartphone with cloud-based analysis that can allow de-identified data to be provided to health departments at the local regional, national or international level to help track outbreaks of infectious diseases.
We anticipate use cases for this situational awareness feature to benefit areas as small as an assisted living center, potentially being afflicted by an outbreak RSV within the community or a region in India covering several hundred square miles, enabling public health officials to target their efforts to deliver TB therapeutics to patients whose need is most urgent, thanks to the early warning system that this awareness could provide. The development of the HBV multiplex test, which was supported by a grant in the Bill & Melinda Gates Foundation, experienced substantial positive movement during 2024.
High-risk human papillomavirus subtypes can lead to cervical cancer, which caused an estimated 350,000 deaths in 2022 and HPV remains a disease for which there is a vast international need for testing as testing accessibility and efficiency remains a key constraint to combating the impact of HPV on global health. Like the other tests on the new platform, the Co-Dx HPV multiplex test utilizes the multiplexing advantages of Co-Dx Co-Primers technology and is designed to use the unique architecture of the Co-Dx PCR Pro instrument to detect eight high-risk HPV subtypes from cervical swab samples and the goal of providing an affordable, accessible HPV screening tool for patients around the world, especially in low and middle-income countries.
The chemistry optimization is complete and we are pleased with the preliminary performance data. We are working with funding partners and other collaborative stakeholders in the project to determine the most appropriate and expeditious pathway towards initiating clinical studies with the Co-Dx HP multiplex test with the goal of pursuing regulatory clearance in India and expanding clearance into other regions. Similar to TB, we believe the combination of our joint venture, CoSara and the fully differentiated nature of our platform leave us well positioned to address another unmet diagnostic need in the Indian market. In addition to new test development, we also accomplished several goals in 2024 and that have positioned Co-Diagnostics for the successful commercialization of the Co-Dx PCR platform.
In April, we inaugurated a new manufacturing facility in South Salt Lake, Utah which has been designed to manufacture the Co-Dx PCR Pro instrument, test cups and our Co-Primers technology. This facility will play a key role in supporting our commercialization efforts and will be instrumental in helping us to meet anticipated demand for our platform upon our initial launch. Later in the year, we inaugurated a second facility in India to support cost-effective manufacturing of our co-primer, oligonucleotides. The facility also has space for future production capacity for our instruments and kits which will allow in-country manufacturing of our platform and tests that we plan to commercialize in the Indian market.
Earlier this month, CoSara received what is known as a test license on Form MD13 from the CDSCO in India, which licenses CoSara to manufacture limited predetermined quantities of Co-Dx PCR Pro instruments, Co-Dx PCR MTB test cups, and Co-Dx PCR HPV test cups in its facilities for the purpose of gathering data from evaluations and clinical studies. The data gathered in these studies will be used in submissions to the CDC and for IVD clearance. While it's important to point out that it does not authorize CoSara to manufacture these items for commercial use or sale, receiving this test license from the CDSCO is a vital step towards regulatory submission and IVD clearance as well as for qualifying for the Make-in-India initiative, manufacturing instruments and test kits in-house is required to qualify under this initiative which will allow the Co-Dx PCR platform to benefit from the cost-saving advantages over importing complete instruments into India and is expected to help overcome other hurdles confronting foreign companies doing business in India.
In addition to building new manufacturing capacity overseas and in Utah, we also spent time in discussions with potential commercial partners at industry conferences and trade shows around the world. We are receiving encouraging feedback on the platform and maintaining a regular dialogue with the valuable contacts made through these efforts. I am pleased with both the quantity and quality of our commercial discussions and look forward to building upon our relationships in 2025.
I am proud of our 2024 progress, and I'm eager to tackle the opportunities before Co-Diagnostics in 2025. In addition to working diligently to complete a new 510(k) submission for this COVID-19 test and the Co-Dx PCR Pro instrument during 2025, we also are planning to initiate clinical evaluations for all the other tests in our pipeline discussed today on the new platform I am confident we are taking the right steps to advance the commercial and technical aspects of the Co-Dx PCR platform, which has potential to revolutionize diagnostic testing around the world.
With all the work we have done in 2024, including building manufacturing capacity, advancing discussions with potential customers and commercial partners and further advancing test pipeline I'm excited to build upon our progress to drive a successful 2025.
With that, I'll now turn the call over to Brian to discuss our financial results.

Brian Brown

Thanks, Dwight and thanks to everyone who joined today's call.
For fiscal year 2024, total revenue decreased to $3.9 million as compared to $6.8 million in the prior year same period. Grant revenue in 2024 was $3.1 million and product revenue was $0.8 million. Gross profit for the full year 2024 increased to $2.9 million compared to $2.6 million in the prior year. Total operating expenses for the year ended December 31, 2024, decreased to $43.0 million from $45.3 million in 2023. The decrease from the prior year is primarily due to higher expenses in 2023 from platform development and regulatory submission preparation.
Research and development expenses in 2024 were $21.0 million compared to $23.0 million in 2023. Legal expenses for the year ended December 31, 2024, and increased to $7.0 million from $1.7 million in 2023. The significant increase in legal expenses is due to funding the defense of two securities class action lawsuits and related derivative suits. As announced on March 6, 2025, the securities and governance litigation team at BakerHostetler, the legal firm retained to represent the company one complete dismissal on summary judgment of one of the securities class action suits that had been pending against the company in the United States District Court for the District of Utah.
For 2024, Income before taxes was a loss of $37.6 million as compared to a loss of $38.1 million reported in the prior year. Net loss for 2024 and was $37.6 million or a loss of $1.24 per fully diluted share compared to a net loss of $35.3 million or a loss of $1.20 per fully diluted share in the prior year.
Adjusted EBITDA was a loss of $33.5 million compared to an adjusted EBITDA loss of $33.0 million in the prior year. We ended the quarter with $29.7 million in cash, cash equivalents and marketable investment securities. We continue to manage our spend as we look to maintain a healthy balance sheet to position ourselves for a future commercial launch. In 2025, we will continue to make improvements to our operating footprint that will drive efficiency gains and cost savings. We plan to provide for the company's capital requirements through equity financing seeking additional grant funding and through operational efficiencies.
In the near term, we are focused on progressing our development pipeline towards regulatory submission and are managing our allocation of time and resources accordingly. We are very excited about our continued progress and remain optimistic about 2025 and future developments within our test pipeline. I look forward to providing you with more updates on next quarter's call.
With that, I will now turn the presentation back over to Dwight.

Dwight Egan

Thank you, Brian. To close, we want to extend our gratitude to co-diagnostic shareholders and our employees who work hard each day to progress our test pipeline and missions. We will now take questions from our analysts. Operator?

Question and Answer Session

Operator

(Operator Instructions) And your first question today will come from Yi Chen with HC Wainwright.

Yi Chen

This is Eduardo on for Yi. I had a quick question, whether or not you all would be interested or open to the possibility of doing an Avian flu test, either for birds or humans?

Dwight Egan

This is Dwight. Thank you for your question. We have developed a H5N1 test, and we are very prepared to make additions to that type of test should the need arise.

Yi Chen

Okay. And is it being used actively is the ambition that it be used for, obviously, human testing rather than bird testing?

Dwight Egan

Our ambition would be that it would have used both for humans and/or livestock and birds. It may have some optimizations for the different types of people or animals that is used for. But we jumped on that opportunity when the H5N1 first became an item of interest, and we're prepared, as I said, to respond if need be.

Operator

This will conclude our question-and-answer session as well as conference call. Thank you for attending today's presentation. You may now disconnect your lines, and have a great day.