Earnings Call: Q4 2020

Mar 11, 2021

Good afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the Diasporin Full Year 2020 Results Conference Call. As a reminder, all participants are in listen only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Carlo Rota, CEO of GESOLIN. Please go ahead, sir. Thank you, operator, and good afternoon to everybody, and welcome to the year end result conference call for BioSorin. I would like to make an initial statement that has to do with some rumors that have been reported about the company. And so it is very clear, as you know, that in line with our strategy, we will truly explore transaction opportunities with strategic partners. And this is an example to create long term value for our shareholders. So I will not comment on any rumors about potential M and A transaction until such disclosure is appropriate or required. Now let's move to the discussion about results and how we see the business progressing in 2021. I would like to focus on quarter 4. Quarter 4 is important because it's a project company results into 2021. And I'm going to comment the results, as you know, as usual, at the constant exchange rate to avoid any misunderstanding on due to the exchange rate that you know has been impacting company results significantly in 2020 because of the mainly the dollar fluctuations. So in Q4, the first news that we need to discuss is that the ex COVID business is flat in spite of the 2nd pandemic wave that is North America and Europe. And this is a good news. This means that the routine business that suffered significantly during the first wave now did not really suffer in the second wave. So hospitals and patients especially have learned how to manage their routine testing in spite of the COVID situation. Now if you look at the COVID business, for us, Q4 was a record quarter. We had over €100,000,000 of revenues, which is very significant. The majority of these revenues were related to our molecular COVID product, the right was serology. And not only revenues were right, our revenues in Q4, but also placement systems. So if we look at the XL, we have placed throughout the year more than 600 systems and quarter 4 placement was 180. So again, which are almost a third of the systems were installed in Q4. When it comes to the Liaison MDX, so the Alnyazone platform, similar picture, 650 NDX placed in the year and 200 players in quarter 4. So the rate of placement is not stopping and it continues to progress. When we look at the different geographies, clearly, we see a strong growth in U. S. And Europe. This is the effect of base business stabilizing and additional COVID business. China is still weak, but it is a significant improvement compared to previous quarters. So China, as you know, for us as for many other companies did not represent a COVID opportunity because of the Chinese regulations and the fact that none of the foreign products for COVID have been approved by the China FFOA. So let's look at now that we understand the 2020 and Q4, let's make some statements about 2021. And let's discuss COVID and how we see it. So and let's start from molecular diagnostics. We continue to believe that molecular testing remain above standard. You know that today, 2 technologies are offered to the patients. 1 is molecular, the other one is anti contestant. And we see molecular because of performance remaining as the gold standard technology inside the labs and inside the hospital labs, whereas the antigen opportunity picked up significant business outside the hospital. So in the same time, selling with point of care. I think it has been brought to everybody attention recently the fact that the point of care antigen testing volume has been suffering significantly. I see one company recently reported 30%, 40% decline in antigen testing. If you remember how we did comment technologies for COVID in the last few quarters, we always said that we believe that antigen would have been the first to decline, whereas we believe that there is more resilience on the monoclonal testing, and this is simply because of the type that remains within the hospital, big reference technology. So in Forum 1, we see that our ability to ship roughly 1,000,000 tests a month of molecular COVID test remain. Because we don't see a decline in volume as far as our molecular testing is concerned. Clearly, we saw from the guidance indication. We don't know what to expect in the second half. There are lots of variables that may affect this. But for the time being, we keep seeing strong revenue flow coming from Allegra. Now let's talk about our the second component of our COVID strategy, which is antigen trust. As you know, we have developed an antigen test that was launched in Q4 and that is for routine labs. So no CompuCare routine labs on the LIAISON XL platform. The product has been CE marked and has been submitted to the ADA for EUA approval. EUA approval has not come yet. This is because the FDA is taking longer than before to approve these products. Today, they are really focused on OTC, leaving it that we are close to receiving approval in the next few weeks, but we are still waiting. Although we are commercializing in the U. S. The product under the UN, What What is the strategy for this product? It's very clear to us that the success of this product is related to the ability of some of the large commercial labs to gain contracts from state from for antigen testing for reopening. So we see that there is going to be an opportunity for consolidating anti resistant or not critical care into commercial apps. You have seen that LabCorp, a week ago or so, they issued a press release where they said that they have a partnership with Hyosaurin for the gliason antigen test, which has been implemented in all their labs. And we together with LabCorp, we expect that LabCorp will get contracts from the reopening and then we may benefit from volume coming in the U. S. With the pandemic first. In Europe, we have seen volumes increasing, although soft volumes. And this is because in Germany, there has been a shift from the laboratory testing more into the point of care in OTC. And therefore, we've seen interesting volumes and interesting business develop across Europe, but less than what we originally projected, although it is getting traction in Europe. We don't have the registration of this product still in some of the emerging countries, where we believe this is going to be a substitution in most countries where molecular is too expensive, substitution of another protecting and we expect that they're going to receive some of these approvals in Q1, Q2. Now let's talk about the 3rd component of the strategy, which is the antibody protein. As you know, we did comment in the last call that we believe this business, so antibody testing for COVID, is going to be the one that will stay with us and we've been in the 3 for many years. And this is because people are getting vaccinated and there's going to be a need to test individuals and see how long the vaccine is going to last, how long the protection is going to last. And in fact, we see this happening. We see a strong demand for our antibody testing. We see double digit growth. And we have recently launched our new generation of serology, IgG assay, which has been developed on purpose to pick up response after vaccination and test immune status monitoring of patients after vaccination. In fact, this is the only product on the market that is in the planned primary spike protein of the virus, which is the same problem that is used by the different vaccines, RNA vaccine or the RNA vaccines. And this vaccine actually elicited the production by the different sense of the process that is recognized by the immune system and give us an immune response. So we believe that we are online in line with our expectation with antibody and we are expecting the approval of the new product in the U. S. In the coming few weeks. Now I would like to talk about the other strategic products that we have, as you know, throughout 2020, sometimes without too much success, we've been trying to draw the attention of everybody to the fact that COVID is certainly strategic, but then they are soaring as a COVID company. And therefore, we have announced throughout 2020 certain partnerships, which are strategic. I remind all of you everyone will limit. And also, we announced the fact that we were completing clinical studies of key products that either being launched in 2021. Specifically, Lyme has been the product that has been CDMark and Lyme QuantiFERON, sorry, has been CE Mark and the product is being launched this week when the season starts. We have a lot of expectations about this product. Clearly, the product will require a specific reimbursement to be issued in certain countries like Germany, for example, that is a big market for Lyme. We are working with our partner, QIAGEN, to expedite some of this work in order to maintain the investment and marketing effort in order to let the product mold, the acquisition is in place. So we are confident that LINE has discussed long term strategic plan will become one of the key products of our T cell strategy that we developed with our partner, QIAGEN, and we'll go in parallel with the tuberculosis product to create a franchise around T cell. I remind all of you that we believe with CAGR since the beginning that TB has been a success, but there is a need to expand around TB the concept of CECL testing and this is the commitment that the 2 parties have discussed many times in the last quarters. Now the second one is the TB. As you know, 2 sarcolosis was approved in the U. S. At the end of 2019. 2020 has been an interesting year. We are not the standing pandemic. We were able to close good business in the U. S. Together with Caiogen going after the SendOut business. Today, there are numerous of tests that are sent out from the periphery from hospitals to the core lab and our strategic intent was to actually provide these customers with opportunity of bringing the test in their lab, which happened with success. In 2021, we will see conversion of certain key customers to the LIAISON technology, the conversion that we manage with the support of QIAGEN. And it was done because we believe that it's very interesting for the 2 partners to continue to provide customers with the opportunity to use this technology versus all their technology or other things in the market, which clearly are not so favorable in terms of throughput. The third element that I would like to comment on is hepatitis MHAV. As you know, the full line of hepatitis M HIV was approved by the FDA by December, and we are now in the U. S. In full launch of this product line. There are a handful of companies in the U. S. That are able to provide these products on the automated platform. And we believe this is going to be key strategic for the ASORM because we will be able now to serve all the installed base of Exel sorry, of the Exel that we installed in 2020 because of COVID in the U. S. Now with this product line. So we believe there is going to be an accelerated pickup of these products by customer. Not to mention and not to forget the fact that in the U. S, we work with Bachmann. Bachmann is our partner, Forex Heavy and Hepatitis, and they also will pursue a campaign to go after the large accounts with an automation that now Beckman has and he'll be able also to implement the use of the Liaison Excel together with the Beckman statement. So 2021, let me just summarize and then I'm going to leave the podium to Oresta. But on 2021 is going to be an interesting year where we will continue to pursue the opportunity for COVID. As I told you, we will see what is going to be the second half. For COVID, we really don't know because second half testing opportunity is going to be a combination of, I believe, few elements. The first one is the variant that, as you have seen now, is creating a 3rd wave in certain European countries, still not in the U. S. The second element is vaccination How fast is vaccination going to be performed? It looks like in the U. S, the U. S. Is ahead. Europe is delaying this gap, and we have an effect in terms of the adoption of diagnostic testing volumes. And the 3rd element is the next season of flu, where we believe that there is going to be a transition from COVID only product to a mini panel concept where flu and COVID are going to become a routine test during flu season to monitor respiratory diseases. So now I'm going to leave the podium to Mr. Coton, who is going to Thank you, Carlo, and good afternoon, good morning, everybody. In the next few minutes, as usual, I'm going to walk you through the financial performance of the start with what I believe are the main highlights of the period. So we closed the year with an increase in revenues at constant exchange rate of 27%, some 2 percentage points above the full year guidance, which was calling for an increase of 25 percent CER. Q4 2020 confirms the trend of the previous quarters, a steady recovery in the ex COVID business, minus 3% year on year at constant exchange rate and the strong contribution of the COVID franchise, mainly driven by PCR testing. Karl already went through all of these elements. As expected and anticipated during the last quarter course, Q4 gross margin ratio at 67.6 percent of revenues is below what we saw in the previous quarters, mainly because of higher COVID molecular sales, which enjoys slightly lower margins. 2020 full year gross margin at 68.4% is for the very same reasons slightly lower than 2019, which follows at 69.2%. 2020 full year EBITDA at €385,000,000 or 43.7 percent of sales is slightly better than the guidance. The increase towards 2019 at constant exchange rate is 42%. Q4 2020 EBITDA closed at EUR 128,000,000 or 47 percent of revenues. Let me please remind you that during Q4 'nineteen, we booked some one off restructuring costs, which makes the year on year comparison at plus 94% CER even more favorable. We keep maintaining our ability to generate a very, very healthy free cash flow of €232,000,000 in the year visavis €180,000,000 in 2020. The net financial position is positive for €305,000,000 with no debt and €340,000,000 positive cash position. The difference is always between the two is driven by the right of use introduced by IFRS 16. Finally, the Board of Directors approved to propose the distribution of an ordinary dividend of EUR 55,000,000 equal to €1 per outstanding share. Now if we move through the main items of the P and L, 2020 revenue at €881,000,000 drew by 25 percent or €175,000,000 compared to 2017. COVID revenues contributed for EUR 266,000,000, 75% of which were PCR driven. Quarter 4 revenues at EUR 271,000,000 grew by 50% compared to Q4 2019, 55% CER. €100,000,000 or so were revenues were COVID related, whereas the XCOVID business at €170,000,000 from the recovery we have discussed about. As expected, the appreciation of the euro against almost all the currencies in which we do business has caused some material FX headwind in the 2nd part of 2020, therefore, closing the year with a negative effect of more or less EUR 15,000,000. The gross margin at EUR 603,000,000 grew by 23% compared to last year, closing 2020 with a ratio of revenues of 68.4%, 80 basis points below 2019. The decrease in the ratio of revenues is mainly driven by different product mix, lower CLIA sales and higher molecular sales, which we said enjoy slightly lesser margins. The increase of the molecular franchise, 29% of total 2020 sales, as discussed, has been mainly driven by COVID tests. 2020 operating expenses at €267,000,000 or 30 percent of revenues have increased by 2.6 percent or €7,000,000 compared to last year. The OpEx ratio of revenues is 30% vis a vis 37% of 2019. This variance is a result of 2 effects of opposite side. On one side, especially in Q2 and Q3, we've had a slowdown of activities and the consequent reduction in costs caused by the widespread lockdown measures that interested all the geographies in which we do business. On the other side, we have sustained an increase in costs, mainly driven by the investment we made in the U. S. At the beginning of the year and the commercial team aimed at supporting our hospital strategy. 2020 other operating expenses at €12,000,000 are higher than 2019 by €1,000,000 or 11%. As discussed during Q1 call, the biggest driver of this variance is an unforecasted loss we suffered in South Africa. 2020 EBITDA, because of what just described, closed the year at EUR 324,000,000 with an increase compared to 2019 of EUR 106,000,000 49%. The EBIT ratio of revenues is at 37% visavis31 percent of 2019. Q4 at €111,000,000 increased by 112% or €59,000,000 compared to 20.19. 2020 tax rate at 20 2.7% is higher than 2019, which closed at 19% because of the booking in the last quarter of the previous year of the deferred tax assets related to the intangibles, which we moved to Italy in connection with the shutdown of the Irish manufacturing site. Net of these positive one off, 2019 tax rate would have been substantially in line with 2020. 2020 net result is €248,000,000 or 28 percent of revenues compared to €176,000,000 of the previous year, therefore, recording an increase of €73,000,000 or 41%. Lastly, 2020 EBITDA at €385,000,000 is better than last year by almost €110,000,000 The EBITDA ratio on revenues is 44 percent visavis39 of 2019. Q4 closed at EUR 128,000,000 or 47% of revenues. The substantial margin improvement towards last year, both in the full year but even more so in the quarter, is driven by the operating leverage resulting from the increase in revenues amplified by a muted increase in operating expenses, which in Q4 accounted only for 26% of sales. Let me now please to the net financial position and the free cash flow. We closed the period with a positive net financial position of €305,000,000 €340,000,000 of cash. During the year, the group generated €232,000,000 free cash flow visavis 100 and €80,000,000 in 2019. The year to date free cash flow has been affected by an increase in working capital, mainly driven by higher accounts receivable and higher inventory to sustain the COVID testing volume, higher CapEx driven by the acquisition of the TCP license and higher installment to our platforms. And all of these are partially offset by lower tax cash out, mainly coming from a positive phasing of the from a positive phasing of tax cash out and the one off €60,000,000 exit tax we paid in 2019 when we closed our Irish manufacturing site. Lastly, let me please move to 2021 guidance. As usual, at previous year constant exchange rate, We expect for the first half of twenty twenty one total revenue to increase at a rate of around 40% and an EBITDA margin at around 45%. Please consider that because of the possibility of forecasting the period of rollout of the SARS CoV-two vaccination program, the unknown effect of the potential mutation of the virus and the possible development of new treatment, we are not in a position to provide a full year guidance. We will review our business in the remainder of the year. Before concluding, please let me remember you that the Southern Financials are highly exposed to the U. S. Dollar and even more so now that the United States represents 40% of our group sales. Therefore, remember, as a rule of thumb, that for every $0.01 movement of the dollar against the euro, diastolic revenue moves by about €3,540,000 on a yearly basis. Now let me please turn the line to the operator to open the Q and A session. Thank you. Thank you. This is the Chorus Call conference operator. We will now begin the question and answer session. The first question is from Katherine Tennyson with Bank of America. Please go ahead. Hi. Thank you for taking my questions. I have 3, if I may. My first one, Carlo, as you mentioned earlier, some diagnostic players in the U. S. Have been talking about a substantial drop off in antigen testing volume. Can you just give us a little bit more color on the molecular demand that you've seen, in particular, in January and the February exit rate this year. And I recall in Q3, there was an ambition to reach the 1,000,000 molecular So So given you have visibility on H1 now given the guide, what level of capacity are you baking into that number? And then just finally, what level of base business recovery is baked into that, please? Thank you. Yes. As far as the metal volume, I believe I made a comment earlier in my speech, which I'm happy to repeat. I believe that as far as we are concerned and the visibility that we have today, the molecular volume is stabilized. So if they don't, we don't see a decline as antigen testing companies have been discussing about the antigen test. So today, as we have discussed in the last call, we got to the €1,000,000 VOK per month. Volume of distributed product worldwide, of which I would say is almost 60% in North America, 40% is the rest of the world. And we have a capacity of roughly 1,200,000 tests, and so we are working at 19% capacity, give or take. And we believe that in the first half, we should be able to continue to sell roughly 1,000,000 tests of molecular. We have no visibility whatsoever on the set of up, and this is why we are not commenting year end, if more by a concept. To me, it's very clear that COVID will become part of the differential diagnosis for respiratory disease. So it's going to be relevant in the next flu season, notwithstanding the fact that vaccination is going to be hopefully widely available. Differential diagnosis between COVID and flu is going to be implemented. Therefore, we believe that the business, recorded only that thing is going to be switched to COVID platform. Let me remind you something very interesting that we noticed, as everybody knows, in 2020, as a result of all the measures that have been adopted by people in terms of behavior, masks and so forth, flu from the military did appear. So there was nothing. And even in our projections or manufacturing where we had volume that was dedicated to flu, eventually we converted that volume to COVID because flu simply was not there. We believe that in 2021, we explained that in the respiratory flu season, a liability of vaccine and the fact that certain measures will be so the repretions are not going to be there. You're going to see more flu next season. When it comes to the antigen, what has been disclosed by certain companies, I said already in 2018 that my expectation was that antigen will be the first one to vote. And this is because eventually, we all understand that antigen testing has pros and cons. The cons is that can be decentralized much faster than diagnostic. The core is certainly that sorry about the noise. The cone is certainly that there is sensitivity issue with the technology and that technology becomes viable only if you increase the frequency of testing. So I'm not surprised at all by the fact that antigen testing is softening with us. For the time being, molecular testing is holding up. As far as our forecast for the 2021, I believe the fundamental assumption is that the current business, so non COVID volumes, should go back in line to what they were in 2019. Clearly, you're going to still have a little lingering effect in quarter 1, and then you're going to see a pickup of that volume to where it used to be related to the deployment of the vaccine. The question though that is interesting to do with China because there are no news that are not but there are no news at all on China. What we see from our business is that there are certain regions of China where lockups lockdown are implemented. And when there's a lockdown in China, then your base business suffers. Other regions where the situation is more relaxed and you see business as usual. Unfortunately, lockdown happens in very populated areas where there is a lot of business. And this is why we see a recovery of China that is slower than the rest of the European and the U. S. Countries. Last but not least, vaccination in China, we have no idea how it goes. Data shows that they are very slow in vaccinating people, so they're relying more on heart lockdown with 2 to 5 hotspots. So as far as China is concerned, we're still baking the numbers, volumes that are below the 2019 numbers. That's super helpful. Thanks very much. The next question is from Scott Bardo with Berenberg. Please go ahead. Yes. Thanks very much for taking my questions. So the first question, please, just relates to the nature of guidance that you've given this year. I appreciate that this is not a normal year for DSO. But it was my understanding through previous conversation that you were looking to give a COVID and non COVID guidance for the full year. So I wonder if or what changed your mind in the way that you guide? And the second related question, please. Of this 40% growth that you've guided for the first half, clearly very good growth. But I think that this can be broadly achieved by a normalization of your base business and the current run rate of molecular, assuming no incremental year over year growth in serology. So I guess the nature of the question is, can you please help us outline or outline please what is your explicit assumption for serology and for antigen tests within the H1 guide, please? And last question, please, Mr. Rosa. Clearly appreciate that you don't want to comment on bid speculation, of course. However, I think it is no secret that you want to deploy capital for M and A opportunity. Can you help share with us please what you believe the financing power of the business is, what leverage you believe is a comfortable leverage for the company and whether you would entertain issuing equity if the right target come along? I would ask Mr. Stedon to actually take the first two questions, and then I'm going to comment on rumors and what Scott has been asking on financing. Did you? Yes. I will take the first two questions. Thank you, Carbo. So Scott, I believe that the thing is there are really a lot of moving parts. And being more specific in terms of what part of the growth in H1 2021 is going to be driven by COVID and which path by ex COVID and inside COVID, which part by molecular, by IgG, IgM testing and which part by antigen is very difficult. There are many, many moving parts. So I believe you really need to allow us here some flexibility, also look at what other peers we have report whichever reported before us have done in terms of giving COVID and non COVID guidance. I believe the majority of them, if not the vast majority, didn't give that kind of breakdown. So obviously, we have around several different models, simulations, what can go up, what can go down. But again, there are so many moving parts that we feel comfortable playing all of our different models with a 40% upside H1 on H1. But I believe that we really didn't feel like we wanted to go down into detail of what is COVID and molecular, what is antigen or immuno and what's the rest. Okay. So let me take the one on M and A. Look, it is very clear that Diasorin has an ambition to grow and diversify its product portfolio. It is very clear that although we want to maintain our key characteristic of specialty company because that is what makes a biosore inspection unique in the space. That is what our customer base is appreciating. And so if I can, I'll just give you a strategic direction, very good we see ourselves potentially moving vis a vis expanding private portfolio by internal effort or by external acquisition. The second point I would like to make is that what COVID did to us is certainly make the molecular franchise more relevant and more significant than it was pre COVID. And as discussed, we have developed a business that originally was a U. S.-based business. We developed that business into Europe. To a point that today, 40% of our molecular tumor is coming from European where the vast majority of new customers were actually we're taking. So COVID is my view in COVID clear. COVID, and I really hope, is going to go away and it's going to become part of our respiratory authority panel. We are going to have roughly 800 customers that we need to serve with products. As you know, we do have in mind and in the company, we have an internal effort to develop new generation of the MDX platform. The MDX platform, which has been a very, very successful platform, clearly was developed almost 10 years ago, and we are undertaking the effort of developing the MDx 2nd generation platform, which we'll expect in 2011 sometimes in 2022 that we'll replace the current MDX. And we are working on the fact that we believe technology for multiplexing is the need that if you want to become a player in this space, The 3rd important development we believe that decentralization and total capital for this space is going to happen is happening. We believe that the current platforms were designed for a certain level of decentralization, which is not what we have seen with COVID, with doing testing in parking lots. So strategically, we are also looking into the development of that kind of platform. So this is where our M and A combination of internal development, M and A, the licensing, the strategic partnership is going. In terms of if the question is, how much can you leverage the company's scope? I'm not I really am not able to answer the question. We have a very prudent view about that. And sometimes that have been working against the company because people say we have to prove them, but I think most of the time has been working in front of the company because carrying that is a liability percent. So we believe that we certainly have the ability to make an acquisition with leveraging the company. I think we're going to be always prudent on the leverage. And our shareholders has always said that he is available to support our M and A strategy through the proper tools. So let's wait when an opportunity will materialize, but certainly, I believe we have the financial ability we have the ability to finance a decent level of an acquisition. The next question is from Alex Gibson with Morgan Stanley. Please go ahead. Hi, good afternoon. Thanks. I think I have three questions left. My first one is just again on the underlying business and trying to understand, when do you expect the quarterly sales to return to the kind of level that you had planned before COVID? You had, I think earlier, Quest saying that they could get there by the end of the year. Do you think that's possible? And then once you're at that point, you think your business will still be growing at the 5% to 9% you kind of expected before COVID? Or should we expect faster underlying growth coming from Lyme TB Hepatitis? That's my first question, a couple of lump in there. Second one is just on your first half guide. And if you include the approved serology and antigen testing in the U. S. Already in your guidance or is that the upside? And then lastly, if you could just comment on what your expectation for pricing is for PCR tests for your first half as well? That would be helpful. PG, can you take the first question about the underlying business? And I will work on the H1 guideline and the pricing? Absolutely. So yes, Alex, I believe I need to repeat what Carlos said. Again, the fact that we didn't give guidance for the full year, it means that we don't have visibility for the full year. But I think that it's fair to say that by the end of the year, we should go back to that kind of level that we saw pre COVID. But again, we didn't give a guidance for the full year, right? And then in terms of growth rate, I think that the 5%, 9% number you quoted is a fair ballpark number. Very difficult to understand the speed of the pickup, but as a board number, I believe that's a good one. Okay. Now if I go to the H1 guideline and pricing. The on the H1 guidance, yes, we do have back then the fact that we have the Trimareka provenators. Keep in mind that today, we already have an assay for IgG determination for lens with the S1S2,000 in the U. S. That is approved and we are selling. Primarily, it will be an improvement because also we'll have a full competitive claim, which is needed semi quantitative, which is needed for immune status determination. But yes, they are back in our numbers. As far as pricing is concerned, look, I believe that we built a model whereby we expect starting from the second half to have a 10% price effect, which means that if you have a 10% price decline on second half, we analyze it, we believe it's overall a 20% price decline. Again, this one, we pulled it from the sky, as you can imagine, because so far we don't see a price effect and reimbursements in the U. S. Are hefty. Still $50,000,000,000 of that is being added to the Biden proposal. So there is lots of money in the U. S. For Turkey. But again, just for purposes and modeling, and then we will see what is going to happen in HP is 10% HP, annualized 20%. Okay. That's great. And if I could just follow-up on the that first half guide, and you mentioned it like Quidel gave the guidance yesterday that they're trying to say this is a floor, this is kind of the bottom of where they really expect they're going to come out. Do you think you could you would agree with that with your guidance? Do you think this is a floor that we should be working at? Or is it not as conservative as that? Look, I'm you know that I'm not I'm refusing to give flavor because numbers are numbers, assumptions are assumption, and I don't think it's necessarily professional to say, I'll give you a number, but it's not the worst case or the best case. So we gave you our best number, best assumption in terms of what we believe the business will do in H1. And again, I think we all need to realize that there are a lot of moving parts, not necessarily in my opinion about the base business, where I'm not comfortable with, but about the development of the COVID business. So I think you appreciate the fact that we are all in the same situation we are trying to forecast for 2021 in H1. Okay. Thank you. The next question is from Peter Welford with Jefferies. Please go ahead. Hi. Yes. Thanks very much for taking my questions. SBIR. I wonder if you can just outline for us in the Q4. And how much of the sales of the EUR 101,000,000 related to molecular? And were there any antigen sales at all in the Q4? I know you said the remainder was serology, but if you can help us a little bit in the Q4, that would be great. Just then on the molecular platform, I wondered if you could give us any insights there into the placement of instruments you've seen. And are there still new instruments being placed in the Q4? You mentioned that a lot of it was new customers in the U. S. Though have you seen a lot of existing customers increase their placements at all? It would be great if we could get some sort of clarity on what's the trend you saw during the period and you see the early part of this year. And then just finally on costs. I guess if we think about this year, I mean clearly again, there'll be somewhat of a COVID windfall. How should we think about your ability to want to I guess incrementally invest in things like R and D this year versus on the other hand, should we think about basically the cost base is the cost base and therefore there will be operating leverage if COVID revenues do exceed or underperform expectations? Thank you. Okay. So let me start from the last one. I believe when you think when you talk about cost, I assume you're talking about OpEx, right? So if you want to understand if we need to increase our OpEx line, And the answer is no. We believe that what we have is in line. And clearly, the development and the OpEx increase that we have historically is year on year is what is needed to fuel our projects, both from an R and D perspective and marketing perspective. As far as the first question on Q4, look, we said we said I can give you a ballpark number. We had 80% of revenues or pretty much is COVID and COVID molecular and 20% liver pain is a COVID non molecular combination of antigen and antibody testing. I said as far as placement is concerned, I said that Q4 was a strong quarter for placing so roughly 200, we have owned NBS and 200 new loan excels were placed in the quarter. So it was a very good quarter for us, which is telling you that the pipeline is which is not only driven by COVID, granted that the molecular pipeline certainly driven by COVID, but the XL pipeline is not driven by COVID at all. It's a combination of pantyphurone stool and the fact that we, by the way, concluded the 20 the Siemens project. Siemens project means that we have now stopped the distribution of our lives from Siemens. We have converted all the customers. So really, we should read the Agilexel places really not really that much commentary related, but more into the base business. Now if you're asking, if I understood correctly, you want to understand moving forward, what would be the current business growth for this? I believe that moving forward, we will return to the base business growth that we had historically fueled by all the new projects we have. And certainly, the fact that some of the drags that we had in the past are not there any longer, so we realized that strong where we used to be because we converted and then we killed the Aliso Mine. I believe that will allow a solid growth of the base business. Is there anything you want to add? No, I believe, Carlos, you covered it all. And also the number you referred to in terms of split amongst molecular and immune sales for Q4 is the right ballpark number. That's right. Thank you. The next question is from Maja Pataky with Kepler. Please go ahead. Hi, good afternoon. Thanks for taking my questions. I have a couple of questions with regards to 2021, just to understand and put your comments into perspective, Cabello. I understand that you don't want to give us too many details. But I think it was in the Q3 call or even on the H1 call when you were talking about serology testing and you said it didn't develop as you anticipated and one should look at 8,000,000 to 10,000,000 revenues per month just as it was developing. So my first question is with regards to what you've commented on the strong demand for serology, should we think that this €8,000,000 to €10,000,000 is now higher? The second thing is when we talk about the base business recovering, if we look back to Q4 2019, it was just about the time when we had the latent TB test coming through and then COVID-nineteen came. So the whole going back to the base business, is that basically giving a base where we should then start to think what the opportunity for you would be on the latent TB side and Lyme disease that would come on top of the base business? Or is this really a recovery to the sales number, including latent TB and Lyme? And then lastly, when we talk about the antibody test sorry, about the antigen test, and it's true you have been talking about the antigen test moving or falling off the cliff as the first test. But nevertheless, you have been quite positive about the opportunity also in more developing countries like Brazil due to the lack of molecular testing. Is that now something that you think will come through but at a later stage? Or is that something that you think, well, it's actually the situation has changed and it's not going to come through this way? Maja, the first thing I feel has been very fair is that EUR 10,000,000 that was volume and not sales. I believe that Cara, I'm sorry if I interject. I believe that what we quoted was $8,000,000 to $10,000,000 per quarter, not that month. It was €8,000,000 Correct. Sorry, it's a quarter. Yes, sorry. I had no no 3 quarter, my bad. Okay. Okay. Sorry for the disconnect, but for the first time, Tia and myself, we are not in the same place. Okay. Okay. So as I told you, as I said, in the in Q4, 20% of the revenues were more molecular. So I think you can do the math in terms of what would be the baseline for the non molecular, which is Ramiro Seraody and some antigen because it just launched. As far as the base business sorry, as far as the antigen test look, look indeed, I believe that the antigen test for Core Lab is an opportunity for some of the emerging countries, and we don't have registration yet. So the only registration that we have today is CMI in EU in the U. S. And we Canada, we apply for Brazil, we apply for Mexico, for some of the other geographies, but we don't have that yet. And we believe that, that will become an opportunity of growth. Certainly, strategic growth should come from the U. S. This is why I was remarking before you saw the LabCorp press release. And I think LabCorp is a very strategic customer player. So more than a customer is a company we are ready in this business with. So basically, we both believe that we'll be attending the point of care and hope we see opportunity for antigen testing. There is an opportunity also for antigen high quality antigen testing in the lab. We do result because we bank on the fact that LabCorp and some other smaller commercial lab will be able to win tenders, mainly at the state level, for collecting swaps and then having those tested under quality requirement in Colab. And certainly, Julius, our way to understand how this will be developed in the next few months, but definitely is the antigen opportunity. Base business recovery, I think, Maja, there are a couple of things that we can note on the base business, which are fairly relevant compared to 2019. The first one that everything was completely forgotten in 2020, but everybody knew that was going to happen. The first one is the fact that vitamin B was transition out from Quest because of the fact that Siemens won the contract. So in 2020, we had a good business. And again, well, good meaning that with business that then was hit by volume and then eventually quite transitioned out. So starting from 2021, our base business does not have that component. The other thing is that we have been phasing out Eliza in 2020, which is not going to be there in 2021. So notwithstanding on this, so you're asking me how do see 2021 finishing the April 2022. If you look at last quarter notwithstanding this, the lack of vitamin E and notwithstanding certainly the Eliza, our overall business exco is fairly flat to last year. So this should be the baseline in terms of once 2021 all over, how to expect growth of a cleaner business, cleaner meaning that without the drags, so despite the loss at the Quest Plus ELISA starting from 2022 forward. Understood. Thank you. The next question is from Andrea Baloni with Mediobanca. Please go ahead. Yes. Thanks a lot for taking my question and good afternoon, everybody. My first question is about Juan Tifron. If you could give us more color about what to step into 2021 as we are seeing some very positive comments from ClearGen, how should we model this level of sales that was almost in 0 in 2019 and I guess the same in 2020? And my second question, I'm sorry for that, I lost the answer about the pricing environment for the molecular test in the U. S. And Europe, if you can repeat it again. And my very last question, sorry for asking again, is a follow-up about H1 'twenty one guidance. I understand pretty well there are many moving parts. But what I can see is that the largest part of this moving part are suffering from the positive. I mean, if you compare with EUR 380,000,000 reported last year, a 40% increase is around EUR 150,000,000. If I sum up the recovery of the test we have lost last year, which were around $60,000,000 If you sum up, molecular test that should have production capacity 3x compared to the level of last year. And then there is also serology and new antigen test. Is it correct that the only negative part is the one related to vitamin D and the rise that you have just commented? So the only reason why your guidance looks to be quite cautious is related to these two items. Carlos, do you want me to take the question on the guidance? Please. But also, please remind that when they say that in Q2, we had €47,000,000 of serology peak last year. So serology COVID last year was unsteadingly strong in 1 quarter. So don't forget that. But could you please take through the guidance. Yes. I mean, I don't want to do the modeling for him, but I will try to give some color. So yes, I mean, in H1 last year, we had almost €100,000,000 of COVID sales. It is true that the negative elements that we discussed about are and those are the ones that Thiago just commented, right? It's the vitamin D in Quest, and it's the former ELISA, Siemens Eliza, Eliza business. And for all the rest, Andre, I'm sorry, I can't do the modeling for you. I believe that we stand behind the 40% increase in H1. We said Considering the visibility we have in the 1st part of the year, the ex COVID business, we said is going to be back to normality. We believe by the end of the year, that's a much more predictable business in a way as long as you are not going to have a second measure of lockdowns because of new mutation of the virus, which are going to make the vaccination program less effective. And that's very great. Okay. And your question was about Pifron and pressing to Malacroix? Karl, do you want me to take it? Or you want to take it, the one for QuantiFERON? We can do Quantiferon, and we can do molecular because there is a repeat of what we said over a few times during this call. On QuantiFERON, I think you can take the comments that Caius made because we see that what we expect that notwithstanding the fall of volumes that happened in 2020, I believe that we believe that in Kadin stated that in 2021, volume should go back to what they were in 2019. So to that part, we need to add the growth coming from conversion at higher price plus the fact that send out, which we are planning to capture in the U. S. But watch out because when you said that in 2020, quantifiable is 0, that's not really an appropriate statement because in 2020 in 2019, we had launched the CE Mark product in Europe. So we had granted had lower volumes because of COVID. We had other European business that was actually developed and with over 250 accounts using our products in Europe. So it's not 0 at all. Did you do molecular? Yes. So I did what we said regarding molecular pricing is that so far we're not seeing any pressure or any material pressure at all. We didn't give any guidance for H2, but what we believe it might happen, but as Caro very clearly said, it's just broad based assumption is that we are expecting some sooner or later some price pressure there. And what we said is you can say if you need a ballpark number, 10% in the second part of the year. So far, no price pressure. It's broad assumption that we made thinking about half 2, but nothing has been seen so far. Okay. And thanks all for repeating about the price. This concludes our Q and A session for today. Mr. Rado, the floor is back to you for any closing remarks. Thank you, operator, and thanks, everybody. First things are along with us. Thank you.