Welcome to the Accelerate Diagnostics fourth quarter 2022 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note, this event is being recorded. I would now like to turn the conference over to Laura Pierson. Please go ahead. Before we begin, it is important to share that information presented during this call may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements include projections, statements about our future, and those that are not historical facts. All forward-looking statements that are made during this conference call are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. These are discussed in greater detail in our annual report on Form 10-K for the year ended December 31st, 2022, and other reports we file with the SEC. It is my pleasure to now introduce the company's President and CEO, Jack Phillips. Thank you, Laura. Good afternoon, everyone, welcome to our fourth quarter earnings call. Today's call will focus on our fourth quarter and full year results. I will also provide an update on three important strategic priorities. One, building financial strength. This includes restructuring our current debt obligation and reducing our cash burn while improving our operational efficiency. Number two, growing market share through our Becton Dickinson partnership. Number three, delivering on innovation by advancing our next generation susceptibility platform. Before providing additional detail on each of these areas, I would like to hand it over to our outgoing Chief Financial Officer, Steve Reichling, to review our fourth quarter financial results. Steve? Thank you, Jack. Good afternoon, everyone. Net sales were $3 million for the quarter and $12.8 million year to date. This compares to $3.3 million and $11.8 million for the same period in the prior year. This represents a decline of 9% as compared to the fourth quarter of 2021, while full year revenues grew by 8% year-over-year. This fourth quarter 2022 decline was due to fluctuations in the timing of capital revenue. Meanwhile recurring revenues continued to grow sequentially quarter-over-quarter and over comparable periods from the prior year. As communicated during our last earnings call, we came in just below the low end of our annual guidance of $13 million-$14 million. Cost of goods sold were $2.1 million for the quarter and $9.4 million year-to-date, resulting in gross margins of 28% and 26% respectively. This compares to cost of goods sold of $6.7 million and $12.2 million, inclusive of a one-time $4.5 million inventory write-down, making this year-over-year comparison not meaningful. We continue to see headwinds from a gross margin perspective, inflationary pressures on both direct and manufacturing costs among other contributing factors. Selling, general, and administrative expenses, excluding non-cash stock-based compensation expense were $6.8 million for the quarter and $30.7 million for the year. This compares to $8.3 million and $31.6 million for the same period from the prior year. SG&A reductions over these periods were driven by streamlining our spend within sales and marketing within the scope of our BD commercial collaboration. Non-cash stock-based compensation expense in SG&A was $2 million in the quarter and $8.5 million year to date, compared to $3.2 million and $17.6 million for the same period in the prior year. ReseARCh and Development costs, excluding non-cash stock-based compensation expense, were $5.7 million for the quarter and $25.5 million year to date. This compares to $4.8 million and $17.8 million for the same period in the prior year. These increases were the result of accelerating investment in our next generation AST platform, WAVE. Specifically, our recent investment included delivery of approximately 20 development units of the Accelerate WAVE instrument and purchasing of equipment to finalize our consumable manufacturing line. Non-cash stock-based compensation expense in R&D were $0.4 million for the quarter and $1.4 million year-to-date. Our net operating loss excluding non-cash stock-based compensation expense, was $11.5 million for the quarter and $52.2 million year-to-date. Our GAAP net operating loss was $14 million for the quarter and $62.8 million for the year, resulting in a net loss of $0.15 and $0.76 respectively. Net cash used was $9.8 million for the quarter and $50.4 million for the year, excluding cash flows from financing. We ended the year with cash and investments of $45.6 million. Before I hand it back to Jack, I wanted to take this moment to thank my hardworking team, our analysts, and our investors for these past 10 years. This will be my last earnings call with Accelerate Diagnostics, and I'd like to introduce you to David Patience, who will be joining Jack on the rest of this call and to lead Accelerate into the future. I have worked closely with David, and he has my complete confidence, and I wish he and the company tremendous success. I will now hand it back to Jack to review our fourth quarter results and 2023 priorities in greater detail. Over to you, Jack. Thanks, Steve. I will quickly cover our fourth quarter results and turn my commentary to our company priorities. In the fourth quarter, the U.S. contracted three new Pheno instruments and brought another five instruments live. We ended the quarter with a revenue-generating install base of 325 Pheno instruments and a backlog of 69 Pheno instruments pending implementation. While our fourth quarter commercial results did not meet our expectations as mentioned on the last call, we restructured our commercial team late last year and turned our focus to setting BD up for success. We remain encouraged given the strong momentum being built with our BD commercial partnership. Now I would like to provide an update on three important strategic priorities: financial strength, market share growth through our Becton Dickinson partnership, and delivering on innovation by advancing WAVE. Starting with financial strength, I want to provide an update on our debt restructuring. As you may know, our 2.5% convertible senior notes matured and became due and payable on MARCh 15th of this year. On MARCh 9th, we entered into a forbearance agreement with the notes trustees and an ad hoc group of holders of approximately 85% of the outstanding notes, which became effective on MARCh 13th. Pursuant to the forbearance agreement, the holders agreed and directed the trustees to forbear from exercising their rights and remedies under the indenture in connection with certain events of default under the indenture until MARCh 29th. We continue to work with the holders of the notes and other key stakeholders and have agreed to an extension of the forbearance period to facilitate those continued discussions. Moving to our next priority, growing market share with Pheno and ARC through our Becton Dickinson partnership. As a reminder, last quarter, we announced the formation of an exclusive global commercial partnership with Becton Dickinson. BD is a global leader in microbiology, with thousands of customers spanning most countries globally. Nearly every clinical microbiology lab in the world uses at least one of BD's products. Much of the quarter was spent taking the necessary time to train the BD commercial organization. Activities included training on the clinical value of rapid positive blood culture susceptibility with our proven body of evidence and combining our sales processes into a single joint sales process. Together, we successfully launched the only end-to-end complete microbiology workflow for combating bloodstream infections with our combined BD and AXDX product portfolios. This end-to-end product offering from specimen collection to growth and detection of positive blood culture samples, and finally, through identification and susceptibility testing, enables faster reporting of targeted antimicrobial therapies to pharmacists and physicians. This exciting value proposition is truly unique within clinical microbiology and the rationale for bringing our portfolios together to combat sepsis burden and growing antimicrobial resistance. There are three principal drivers for us joining forces with BD. First, to significantly improve our commercial reach, both in the U.S. and abroad. Second, to improve our selling effectiveness by combining our offerings with BD's portfolio. Lastly, to collaborate on future innovation. In the U.S., we launched our commercial partnership in January of this year after spending the fourth quarter aligning our sales and marketing teams to ensure we improve both our commercial reach and selling effectiveness. Since launch, our sales activity has dramatically increased, which is an encouraging indication of our commercial reach is strengthening. Specifically we saw a 400% increase in new opportunities thus far in Q1 versus our sales funnel from the fourth quarter of 2022. We have a joint target of bringing significant new Pheno opportunities into our sales funnel this year. We are tracking ahead of plan thus far. Improving our sales effectiveness is our second focus. Our joint sales process highlights key roles and responsibilities between the BD territory managers and our Pheno specialists to drive meaningful funnel progression, winning more accounts, and faster clinical implementations. Our joint marketing, sales, and contracting processes are focused on delivering improved deal economics by offering strong synergies across our highly customized bloodstream infection workflow solutions. For example, we have an active program which allows customers to renew existing BD systems, and as a part of the renewal, customers can evaluate and implement Pheno for rapid susceptibility. We anticipate many of our current and new opportunities will close in the second half of 2023 and early 2024, driving meaningful market share growth. In summary, we are quite enthusiastic from the early progress in the U.S. to date. There is still work to be done. In EMEA, we launched our commercial partnership this month. EMEA is a more complex healthcare system, delivery system requiring country by country logistical and market access considerations. For example, we are adapting our commercial playbook to serve tender-driven markets such as Italy and the U.K., which differ from capital acquisition markets such as Germany and the Nordic countries. This led to a slight delay in launching abroad, but we are encouraged by the team's enthusiasm and progress in the early days. We are commercializing both ARC and Pheno in EMEA, thus bringing an even more cost-effective and automated workflow solution to combat bloodstream infections. An Italian evaluation site will be presenting an ARC abstract during the upcoming ASM in June, and the author will be publishing a full study readout in a local European journal. We will be leveraging this peer-reviewed publication for our selling efforts in EMEA in the future. We continue to see strong market demand for ARC in the U.S. and are eager to bring our commercial learnings to the U.S. with ARC after FDA approval. The U.S. market is eager to gain access to an automated, cost-effective sample preparation solution for positive blood cultures. As discussed on our prior calls, we continue to pursue ARC as a Class II 510(k) device with the FDA and remain in active dialogue with them. We will not have a forecasted launch date in the U.S. until we begin clinical trials, which is expected in Q2. Lastly, with our BD partnership, we will begin to collaborate on future product developments. The first area of focus is streamlining our upfront workflow for WAVE, for positive blood cultures and isolated colony samples. In summary, our work with BD is off to a good start. We have launched in both the US and EMEA with strong customer engagement and focus from our joint commercial organizations. Turning my comments to our third strategic priority, delivering innovation with our next-generation platform, WAVE. We continue to make very good progress with our WAVE development program. As discussed previously, we have taken delivery of over 20 alpha instruments, which are up and running in our core laboratory. This is very exciting and has significantly set up our development efforts. As a reminder, the WAVE platform will be able to provide rapid susceptibility test results for both positive blood culture and isolated colony samples on a single system with significantly improved platform economics over Pheno. Our customers have confirmed a consolidated susceptibility approach will have a superior advantage over traditional isolate-based platforms on the market today. For Accelerate, WAVE significantly expands our revenue and wallet share per customer while restating our platform economics. Our target is to have our pre-clinical data readout complete by the end of the year and start clinical trials shortly thereafter. In summary, we will be looking to update the market with further details on our three strategic priorities, building financial strength, growing market share with Becton Dickinson, and delivering on innovation by advancing WAVE. On a personal note, I wanted to take the opportunity to thank and recognize Steve Reichling for his years of service as our CFO. I look forward to continuing to work with Steve in an advisory capacity. Moving forward I have great confidence in David Patience as our new CFO and look forward to everyone getting to know David as he takes over for Steve. I would now be happy to answer questions from our analysts. Should others on the call have questions not addressed, we would welcome you to send these questions or requests for a follow-up meeting to investors at axdx.com. Thank you. Our first question is from Bill Bonello with Craig-Hallum. Please go ahead. Okay. Good afternoon everyone, and good luck to Steve with his future projects and welcome, David. You know, the first, I guess, couple questions here is really around the BD partnership. I mean, how should we be trying to think about tracking the success of the launch of the of you know, so far? You know, we are not getting sales guidance right now. You know, is it fair to say it's limited visibility? I mean, how should we be thinking about it? Because when we take the 400% comment, you did 19 placements in 2022, 400%, I guess, the 8 systems. Do you think you could place 8 systems in the second half of this year? Hi. Hi, Alex. It's good to hear from you, and this is Jack, and David's in the room with me as well. Great first question. As we said in the commentary, the BD partnership's going very well in the U.S. We've, you know, we are off to a later start in EMEA, based on just the complications of doing business in EMEA with the multiple countries. We are looking at providing more, actionable guidance as we go throughout the year. We are not providing it right now, Alex, just because, again, we just went live in January. Live meaning that, you know, we literally have BD sales reps, about 50 plus of them selling in the U.S., that we just literally trained at the end of Q4. We were at their sales meeting. It was a really great meeting. We also had a lot of extensive follow-up training with them. We're off and running. In the first, you know, 2, 3, almost 3 months now of this new year, I mean, we're very excited about the activity around reach and access. We are making a lot more sales calls about funnel improvement and progression. We are adding more accounts to the funnel. We are also progressing a number of deals thanks to this BD partnership. It is gonna take, as I said, it's gonna take some time to really start getting these deals through the funnel. We restructured our sales force back in August. Significantly downsized our sales force. So really, we are left in that transition period of training BD, getting them up to speed, and so forth. We, again as we go through the year, in the next couple of months, we look to provide more specific guidance. We believe again, the greater growth in new account closes we'll see will be in the second half of the year. We are very optimistic about that for Pheno. You know, obviously with ARC, we have got to get on market from an FDA approval standpoint before we can significantly start marketing ARC in the U.S. Okay. That all makes sense. Can you remind us again on BD, I mean, are they really a funnel driver at the end of the day, and it's for you all to Accelerate and your sales team to close those deals once you get those inbound inquiries? You know, how is the handoff between BD and the Accelerate team go? Ultimately, how does compensation work between the sales teams? Yeah. I'll turn it over to David to answer that. You know, obviously taken over the reins from Steve as the CFO, but prior to David stepping into this role, he's literally his life has been focused on a successful integration with BD. He's been very much down into the weeds on all these topics. Again, good question from you is basically how does the sales process work, David? I'll let you go ahead and respond. Perfect. Yeah. Thank you, Alex. As Jack mentioned in his prepared remarks, it's about reach and effectiveness. Reach would be, you know, just bringing folks into the funnel for us. We spent, you know, the better half of the fourth quarter very much focused on integrating our sales process with their sales process. That is the roles and responsibilities by sales stage. You'd imagine that, you know, we are very good at, you know, certain aspects of the sale and that would be, you know, driving clinical value through rapid susceptibilities. Also BD has a very thorough relationship with the hospital, the labs and all the key stakeholders. It is, you know, an amalgamation of bringing our specialties together. By no means is it, you know, them feeding us opportunities. They are a true partner in this, in this process. The BD rep and the Accelerate rep are working in tandem to identify key stakeholders by stage to drive more effective closes as we, you know, move these new opportunities through the funnel into close. Does that answer your question? Yeah. It does. Yeah, it does. I guess maybe the last question I'll ask here is a kind of multi-parter again here, but, you know, the big elephant in the room here is the debt overhang. You know, we've reached the end of the forbearance or the original forbearance extension. I mean, can you give us what the new extension date on the notes is? What the kind of the terms around that extension are? Just bigger picture, I mean ultimately how to resolve this. What additional details can you give for whether it be shareholders or debt holders, around getting this resolved in a, in a good way for, you know, the company and ultimately the stakeholders? Yeah, absolutely. Expected the question. First of all, I totally recognize that for our shareholders, for also our employees and also the debt holders, I mean, this is the big question. I would say this first and foremost, we're working day and night to come up with a good solution here. We are in active dialogue with an ad hoc group of debt holders. About 85% of the overall debt holders are represented in this ad hoc group. The reason why we're extending the forbearance again is because we are in active dialogue, in productive dialogue. I can share that the forbearance extension is through April 5th. That is, I would also say that's extendable beyond that to April 14th right now. We have extended it to April 5th. We will come to resolution on this in some way. Again, we are optimistic at this point that you know, hopefully it'll be a consensual agreement that we come to. Again, we're working literally day and night on resolving this. You know, I can say in the next couple of weeks, I'm confident that we'll have an update on where we're at in the form of an 8-K likely. Okay. I appreciate the update. Thank you. Thank you. The next question is from Andrew Brackmann with William Blair. Please go ahead. Hey, guys, this is Dustin in for Andrew. Maybe just a question about current access levels. Obviously, this has been mentioned many times in the past, but I think Andrew has attested to your ability to sell there. What are access levels like now, as the pandemic, you know, fades away and elsewhere you're not seeing any more impediments to selling in labs and reaching out to lab directors? Yep. Hi, Dustin. One of the, one of the metrics that we're tracking, frankly, every week, we look at this every Monday morning, is access. Number of sales calls we've made, both in person, sales calls that we've made on Zoom that are remote. We're looking at this across the entire, for now, U.S. organization. We'll be doing it in EMEA as well. I would say without a doubt, the amount of access that we're getting both from a in-person and on a Zoom type call meeting is, you know, exponentially greater than where we were at over the past year. It's absolutely, you know, playing out the way we expected it to, which is, you know, with BD's access and reach, they have, you know, over 50 people selling in the U.S. and then a lot of marketing and support folks as well. That's one factor. I would say that hospitals are continuing to, the access in hospitals are continuing to improve as well. The open positions and open head count within hospitals is also starting to, I would say, maybe settle down a little bit, but it's still... that is still a bit problematic as well. The turnover that healthcare is dealing with is real, and it is something that's a challenge. Overall, very optimistic about the reach from where we were at. Always looking to do better and we're tracking that again. Literally every week I have an 8 A.M. call to look at these metrics. Understood. Related to that, how are you guys thinking about hospital CapEx expectations over the next few months and year? Kind of related to that, do you see any potential benefit from BARDA happening in the next year or 2? If so, what will be the magnitude of that potentially? Yeah, great. You got two questions there. I'm gonna let David take the CapEx, healthcare question, and then I'll address BARDA. Thank you for the question. When it comes to hospital CapEx, it has obviously been a bit of a rocky road since COVID. I think the one thing that we're very excited to see is the BD reach into the hospital has created an opportunity for us to access more capital just in terms of the size and the scope of the deals they're doing with the institutions. We're, you know, prior to the partnership, we were a one-off standalone acquisition, and with that, we're now being, you know, part of larger hospital considerations. At the end of the day, you know, we did, you know, see less capital last year than we were used to. We're, you know, looking forward to seeing the capabilities that BD has in terms of contracting going forward. You know, when it comes to the hospitals, there is capital, it's just very finite how they're spending it, and they tend to be on larger products and there's no better partner than BD with their total lab automation. We fit right in the center of that with Pheno and R. Dustin, as a follow-up to your second part of your question, which is BARDA. As a reminder, we still have an application in with BARDA that's still active. We recently submitted this, you know, over the last month or so, have not heard back from BARDA. I would also remind, you know, everyone that the problem of antimicrobial resistance continues to be the much larger pandemic globally. It's regularly now seen and written about by CDC. BARDA, it's still a major initiative for BARDA. Globally, this is still a major problem in healthcare and the lives of people globally. Needless to say, it's still a priority in the U.S., it's still a priority for BARDA. While we're not counting on BARDA from a funding standpoint in our financial planning models, it is something that is still a possibility for us that we're still pursuing. Okay, understood. Lastly, just some more specifics on the BD deal. Wondering how your products fit in with the existing BD Phoenix system? More broadly, how are you guys thinking about competition now that you're partnered with BD, against some of the other existing players on the market? Okay. So great question. First question is around Phoenix. Just for everybody's, you know, knowledge, Phoenix is a BD platform that's a very successful platform for Becton, Dickinson and Company. It's a platform that actually produces susceptibility results through basically isolates. It does not do positive blood like Pheno does, and it's not considered a rapid susceptibility system. With that, Pheno is a true complement to Phoenix in a big way. The way this is that for rapid susceptibility testing in positive blood culture, it's really the choice is Pheno. You can run ID, AST on one platform. You could run another ID and run AST only on Pheno. Then for the workflow of customers that have Phoenix as well, for those isolated colonies where they need to run susceptibility, they would just run those on the Phoenix platform, sorry. On the Phoenix platform. It's not duplicative. It's actually additive. It's a, it's really, as David mentioned in his earlier comments, it's one of these selling effectiveness opportunities where it allows a BD rep to really kind of work with their Phoenix customers or new opportunities on Phoenix and bring in Pheno together as a solution that would really be a total solution for all susceptibility testing. Moving forward, you know, down the road, WAVE will be that competitor to a Phoenix because WAVE will have the ability to offer both susceptibility testing in an isolated colony format, but also in positive blood, both together. In that situation, that's where there's going to be a competitive situation with Phoenix. Again, that's our next-generation platform. BD is very involved in that platform, by the way. We are doing regular innovation updates. I think you had a second question, and I'm totally... Emerging competition. Oh, yeah. Thank you, David. The second question was around emerging competition. As expected, it's not a surprise. This market is becoming more crowded with competitors. I think it's, you know, it's a resounding indication of why, you know, this is a much underserved need in healthcare to provide rapid susceptibility testing for sepsis patients for the reasons of antimicrobial resistance that I stated. With that, there's more and more competitors emerging. We believe we are well suited, very well suited with BD as a partnership to compete with not only the competition of today, but the emerging competitors. With our, you know, our total solution of rapid ID AST on Pheno, with our AST only solution for those customers that want an AST only platform, working with BD on bundling opportunities and bringing total solutions together with BACTEC and Phoenix and Pheno, it's a great total solution opportunity. In Europe, not yet in the U.S., in EMEA, I mean, you have got ARC as well. That's a great opportunity to optimize workflow and throughput for ID on multi-platforms follow that up with Pheno and AST susceptibility. Again, we believe we have multiple options for customers. We give customers flexibility. With BD, it's a, just a tremendous complement to their total solutions that they're selling. One last thing I would mention that is, I think, an important mention here. I mentioned it in the prepared remarks, but BD and Accelerate, we've jointly collaborated on a lot of things over the past quarter: training, sales alignment, pricing models, et cetera, et cetera. One of the really exciting work streams that I was a part of was the bloodstream infection workflow solution that was spearheaded by BD's global marketing folks and our team. Really it lays out very, very clearly, the benefits of looking at bloodstream infections in a holistic manner, from sample collection all the way through to rapid susceptibility testing on Pheno. This is something that, if it's not yet, will be available on BD's website. It will be showcased in ECCMID next month in Copenhagen, Denmark. It will be part of their overall pitch and strategy at the ECCMID conference, which is the largest global microbiology conference in the world. That will be showcased there. Clearly, Pheno will be there and ARC will be there as well, which is a big part of this bloodstream infection strategy for BD. Dustin, did we answer all your questions? Do you have any follow-up questions? No, you answered all of them. That was great. That's it for us. Thanks for taking our questions. Yeah, great. Thank you, Dustin. Gary, are those all the questions for today? Yes, sir. There are no further questions. Okay. Thank you. In summary, first of all, you know, I wanna welcome David Patience to the leadership team of Accelerate as our new CFO here. As you heard today, David wasted no time in jumping in. He's been deep into all aspects of our business from many aspects of finance, but all the way through in the commercial business and then obviously the BD integration. We're thrilled to have him on board. Thanks, Steve, again for his tremendous contributions over the past decade at Accelerate. I wanna remind you of, you know, three important strategic priorities as we close out. Very near term is the financial strength and stability of Accelerate. I just rest assured want everyone to know that we're working day and night to solve our debt overhang issue with the current debt holders. We expect in short term to have a resolution that we'll be able to clearly communicate to all shareholders and investors. More to come on that, rest assured we are in good faith negotiations currently, and we expect them to continue and lead to a productive and positive outcome. The second thing I would say that I know investors, shareholders are wanting more information on is how are things going with BD? How is this producing market growth opportunities? How is it producing new placements, new deals? Rest assured that is another item that we are working on hard every day. We are up and running. We're active in the US. We're coming along in EMEA. Again, we expect closes to be more towards the back half of the year, but we will and do expect to provide more detailed metrics and update on our progress. Overall, going very well and what a great partner that we have in BD. It's a true complement. Our solutions are just a total complement for microbiology and susceptibility testing globally. The last thing that we'll continue to update on that is extremely exciting is our next generation platform WAVE as we drive innovation. Also what I didn't talk much about today is ARC and really continuing to move ARC forward as we work with the FDA to get ARC on market in the US. WAVE is an exciting platform that will really change the financial dynamics for Accelerate because of the cost of goods sold. From a market standpoint, it's going to open up an entirely new segment of the market for us. That high volume, low acuity market in susceptibility testing that's focused on isolate samples. But we'll also be backing that up with, you know, our legacy system, our legacy solutions in positive blood cultures as well. It'll be an integrated platform. We're looking at pre-clinical readouts at the end of the year in Q4. We're looking at starting clinical trials sometime thereafter. Again, it will be an exciting leap forward for Accelerate as we continue to move the needle in this space. With that, I'll bring this call to a close. As I mentioned in my remarks, if you would like a further dialogue or have questions, please go to the website and request a meeting or ask those questions, and David and I will certainly respond, in a short order. Thank you very much, and I hope everyone has a great day. Bye-bye. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.