Earnings Call: Q3 2020

Nov 11, 2020

Good afternoon. This is the COSCO conference operator. Welcome and thank you for joining the DiaSorin Third Quarter 9 Months 20 20 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 Rosa, CEO of Dara Soren. Please go ahead, sir. Yes. Thank you, operator, and good morning, good afternoon to everybody. Welcome to the Q3 conference call of Viasorin. I will I think this time, we are going to make some short comments, and then I'm going to leave Mr. Tedran to go through the numbers and then we're going to leave ample time to for Q and A because I see there are lots of questions not, I believe, necessarily related to the results, but to the environment, the ecosystem after the final announcement a couple of days ago. So I would start and comment on revenues. As you have seen, the quarter has been a very strong quarter, I think in line with what we have seen also from other players in diagnostic. And we need to look at the revenue from perspective of COVID opportunity and from what the rest of the business is doing. Rest of the business is recovering better than expected. We were coming in Q2 from a minus 35%. Now in the and that was pretty much generalized in all the different geographies. In quarter 3, now we are at minus 7% with a different mix. We have U. S. And Europe with strong recovery. We're almost close to where we were last year, whereas China is still like in the eye. And I'm going to make some comments about China specifically. U. S. And Europe, we have seen constantly that testing volumes in the major geographies in the countries in Europe are going back to last year levels pretty much. And this for us is a combination of regular prescriptions so that we see, again, going back to normality and then combination of new business as we closed last year and growth of our product lines, the gastro the gastroenteric line is notwithstanding the COVID situation is growing over 20% year on year, which is phenomenal. And then the TB program, that certainly is fully incremental for us and is firing up. It did fire up well in Europe and it has been firing up in the U. S. As well. So in U. S. And Europe, a combination of recovering of testing volume and our traditional programs firing up, we see the traditional business doing okay. When it comes to China, we still have a red flag in China, and I think I heard also other diagnostic companies making similar comments. And the reason we believe is the fact that, as you know, in China, there is no so medicines practice, right, at the hospital sites. And so hospital sites additionally are extremely crowded. And I believe still the general population does not want to go to see the doctors except for emergency cases because they don't want to be exposed to the risk of infection. And this is the only way I think all of us can explain why in understanding what is happening in the rest of the world. China is still lagging behind visavisvolumes. And so we will watch carefully what happens in quarter 4, and we hope that eventually volume is going to go back. But so far, I don't think we have lost visibility. Now when we now let's talk about COVID, which is the elephant in the room. Certainly, the business is doing extremely well. And we need to look at, I think, 2 components of COVID, on one side, serology and on the other side, molecular. Serology, Q2 was phenomenal and this was because there was lots of excitement about the adoption of serology epidemiological studies and then the viability of serology to support lack of testing capacity from a molecular side. So lots of hype that eventually dies pretty fast. And if you have seen comments on the major labs in the U. S. As well as other competitors, the spike really lasted 2, 3 months. And then Cerrogy went back to where I think it deserved, which is an interesting tool to follow-up at this point all the patients that are hospitalized. So more clinical use than general use. In quarter 2, I remind everybody that we had roughly EUR 45,000,000 revenues on serology. This is in quarter 3. It's not there. Certainly, it's not there anymore. We are I think that our projection to see serology more around between €8,000,000 and €10,000,000 per quarter, which is what we believe is physiological use of serological tools, especially in those countries like Brazil, India and some of the export countries where lack of swabs and molecular testing is somehow compensated by the use of IgG and IGM, which is, let's say, that we have launched a couple of months ago. As far as the molecular is concerned, look, today, I think everybody is in the same situation. There is growing, growing demand of molecular testing. And molecular is considered, as we all know, as the gold standard. And it is used both for clinical use, so to diagnose acute phase and also today to try to identify the asymptomatic carriers. Sales are proportional to manufacturing capacity. In Q3, we had versus Q2 50% growth rate of our molecular testing, which is pretty much in line with increased manufacturing capacity. We are a little bit far ahead compared to what we said was our goal. If you remember, we said we would have 1,000,000 test of more than 12 per month of capacity by the end of the year. And I think we were able to anticipate a couple of months that capacity. So we are enjoying good, good growth. Price is stable. We have positioned our assay as specialty product for triage in admission. We have a relatively small system, our MDx, that has been very successful into the hospital setting. Because we sell the ability to triage within 45 minutes. We are able to triage patients and properly redirect the COVID positive and COVID negative patients. So far as the installed base is concerned, we have we've been able to place roughly 500 systems, additional systems for molecular. A good chunk of it is in Europe. Prior to COVID, as you can imagine, our installed base is primarily U. S. Driven. After COVID, the installed base has been growing significantly in those countries where we have elected to sell the product. Certainly, we had to make certain decisions in terms of priorities. And as I think we have stated from the beginning, U. S, Italy, we are the primary market that we decided to serve, followed certainly by Spain and France and few other placements in other European countries. So COVID is doing fine. The positioning, I believe, the correct positioning. And we now have another goal, which is to get to 1 200,000 tests around February time frame, which would be the next step of increased capacity. At the same time, we have also launched our flu assay, which now is compatible with COVID. So we can follow the trend of differential diagnosis in patients that do show up with the same symptoms. Although I think as we have seen in Australia, now it's also fairly clear in U. S. And in Canada, where we have a big installed base, the influenza season looks like it's going to be fairly mild. And I believe that this is the consequence of all the social distancing and hygiene measures that were adopted because of COVID. The results in Australia that I've seen were unbelievable, whereas last year in June, there were 7,000 cases a month of reported flu. I think it went down to 50 a month. And so clearly showed that this influenza season is going to be very mild, which is a living space to actually manufacturing more COVID. And so we are actually balancing today our manufacturing more toward COVID than food. There is another program that for us is very strategic is antigen testing. Antigen testing was clearly was made available a couple of weeks ago. So it's not part of the quarter three results. However, these antigen tests that we launched, I believe, is a very strategic product, has been the first one. And so far, the only one to be launched with certain characteristics is public information is ortho, clinical and is Diasor is the only 2 high throughput assay launch. Our assay though is different than ortho because it's quantitative and allows the determination of the viral load, which we believe is a very relevant characteristic of this product. And by the same token, the positioning is specific because there is there are a lot of there are a lot of point of care antigen tests available out there that have been deployed in different settings to be used. These products, which is a high throughput and is actually run on our LIAISON platform, has a better clinical performance than some of these rapid antigen testing. And that's this comes without saying because the technology, the cheminuminescence technology is a much more powerful technology than this laminar flow. It guarantees traceability, which is something that some of the laminar flow point of care agencies don't do today. And this is key in my opinion. So increased sensitivity and traceability is very relevant in order to allow the identification of asymptomatic carriers. You know that today, for diagnostic, there are fundamentally 2 uses. 1, the swab, remolecular testing is used more to for clinical identification and for diagnosis and to release patients to guarantee that they're not infectious any longer, whereas the antigen testing would be the use of it would be a widespread use in the community to identify hotspots and asymptomatic carriers. I would say because of the sensitivity that it has, it does allow certainly the identification of symptomatic and this is how we are positioning it. So we expect we launched it 10 days ago, it's doing very fine. And now we are commercializing it in the U. S. Under UN and submitted for EUA approval, which we expect to come in the next few weeks. Last but not least, we are working on a new product, which is a new serological assay that we intend to submit to the agency and in the next few weeks. And this assay is intended to be a post vaccination test. And the idea shortly is to use the same protein that has been used by the vaccine companies, which is a very specific spike protein. And then they use that protein to understand the vaccine and the response of the patients of the vaccine in the individual to the vaccine. It's a bad certainty because today there are no guidelines that do recommend post vaccination testing. But if that comes and there is going to be a utilization of serology, we believe that this assay is superior to what is existing on the market because it's been specifically designed with, again, the same protein, S protein that has been used as a candidate for most of the vaccine programs. At this point, I'm going to leave the mic to Mr. Tedron. He's going to take you through the numbers, and then we're going to take questions shortly thereafter. Thank you, Carlo, and good morning, good afternoon, everybody. In the next few minutes, like usual, I'm going to walk you through the financial performance of Tia Sorin during the 1st 9 months of 2020, and I would also make some remarks on the contribution of the Q3. So we closed September year to date with an increase in revenues at constant exchange rate of 17% or €91,000,000 As a result, if you might remember, a soft Q1 mainly driven by volume reduction in China due to COVID and a very good in second, third quarter. Specifically, Q3 saw an increase in revenue to comparable FX of 34 percent of €60,000,000 Karl has already discussed at length the reasons behind these variances. As expected and anticipated during last quarter call, Q3 2020 gross margin ratio at 68.3 percent of revenues is below what we see in Q1 2020 and Q2 2020, which closed at 69.1 percent mainly because of higher sales of COVID molecular tests. Year to date gross margin, though at 68.8%, is just slightly lower than 2019, which closed at 69.1%. September year to date EBITDA at €258,000,000 records an increase at constant exchange rate compared to last year of almost 25%. Year to date EBITDA margin, which is comparable rate, is 42.3 percent visavis39.8 percent of 2019. Q3 2020 EBITDA at €104,000,000 or almost 46% margin registers record performance with an increase of 54% at comparable rates. Lastly, we confirm our ability to generate a very healthy and predictable free cash flow, €153,000,000 in the 1st 9 months of the year, thus bringing the net financial position of the group to positive €256,000,000 Let's now get a little bit to the main items of the P and L. We said the year to date revenues at €610,000,000 grew by 16% or €85,000,000 compared to last year. The growth at constant exchange rate is 17%. The impact of COVID revenues, again at comparable rates, has been EUR 166 €1,000,000 year to date and €73,000,000 in the quarter. As expected, the appreciation of the euro against almost all the currencies in which the group operates has caused some material FX headwind in the quarter, therefore offsetting the tailwind we saw during the first half of the year. Considering where the U. S. Dollar is trending now compared to 2019, I believe it is fair to say that we will experience a similar €7,000,000 or thereabout negative currency effect also in the last quarter of the year. Gross margin at €420,000,000 drew by almost 16% compared to last year, closing the 1st 9 months of 2020 with a ratio of 68.28%. Q3 gross margin increased compared to 2019 by almost 30% with a ratio of revenues of 68.3 percent visavis, as I said, 69.1 percent of H120. The slightly decrease in the quarter gross margin ratio compared to the 1st 2 quarters of this year is mainly the result of a different product mix. To be more precise, lower clear sales and higher molecular sales, which enjoy, as we have discussed several times, lesser margin slightly lesser margin. The increase of the molecular franchise, 34% of the total quota sales has been mainly driven by COVID testing. Total year to date operating expenses at €195,000,000 or 32% of revenues have increased by less than 2% or €3,000,000 compared to last year. The OpEx ratio of revenues is 32% visavis36.5 percent of 2019. Here, we have 2 effects of opposite sign. On one side, we have 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 operate. On the other side, we have sustained an increasing cost, mainly driven by the investments we made in the U. S. Commercial team aimed at supporting our hospital strategy, again, as discussed a few times during this call. Year to date, total operating expenses at €11,000,000 increased compared to 2019 by €5,000,000 As discussed, the biggest driver of this variance is an unforecasted loss we suffered in our South African subsidiary during the shutdown process, for which we have activated our group insurance policy. And we are hopeful that the old claim process will be completed within the 18 months. As a result of what just described, year to date EBIT at EUR 214,000,000 or 35 percent of revenues has increased compared to 2019 by almost 29%. Q3 2020 closed at EUR 19,000,000 with with an increase of 62 percent or €34,000,000 compared to last year. September date tax rate is in line with 2019. This brings us to net results of the 1st 9 months at €163,000,000 or 26.6 percent of revenues, which is higher than previous year by €36,000,000 or 28%. The increase in the quarter is almost 60% or €25,000,000 Lastly, September year to date EBITDA at €250 8,000,000 is better than last year by €49,000,000 EBITDA ratio on revenues is 42.3% at constant FX, visavis39.8 percent of 2019. Q3 closed at €104,000,000 or 45.7 percent of revenues. The substantial margin improvement toward last year, both in the year to date 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. Let me now please move to the net financial position and the free cash flow. We closed the period with a positive net financial position of €256,000,000 and €284,000,000 cash. In the 1st 9 months of the year, the group generated €152,000,000 free cash flow visavis €138,000,000 of 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 and sales, higher CapEx driven by the acquisition of the PTP license and higher installment of our platforms. And all of these are partially offset by lower tax cash out, mainly coming from a positive phasing and the one off of €6,000,000 exit tax that we paid in 2019 when we closed our Irish manufacturing site. Lastly, the full year 2020 guidance. At 2019 exchange rate, we expect revenues to increase at around 25% and an EBITDA ratio at around 43% of revenues, all at 2019 exchange rate. Please remember that the Australian financials are highly exposed to the U. S. Dollar and even more so now that the United States represents more than 40% of the total sales of the group. Therefore, as a rule of thumb, consider that for every $0.01 movement of the dollar against the euro, the solven revenues move 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. Excuse me. This is the CorVel conference operator. We will now begin the question and answer session. The first question is from Katherine Tanison of Bank of America. Please go ahead. Hi. Thank you. I have 2 questions, if I may. So if I could, could you just help us understand what are your expectations for the phasing of the antigen testing opportunities inside 2021? And secondly, obviously, after this new flow, what are your expectations for how that vaccine impacts your business into 2021 as well? Thank you. Catherine, sorry. The line was not the greatest. So I hope I was very you were very choppy, so very difficult to understand. So if I understand correctly, you want to understand the antigen opportunity in 2021 and the effect of the viability of vaccination on the business. Is this correct? Yes. That's the start. And then I'll have a quick follow-up after that. Okay. As far as antigen testing is concerned, as said, antigen testing, I believe, is going to be used fundamentally to trace asymptomatic in the population. And today, this requires lots of volume, lots of test volume. And today, because of the lack of capacity for the molecular swab, this cannot be done using the molecular test. So I believe that as long as there will be a need to pick up asymptomatic individuals in the general population, there is going to be a substantial demand of antigen testing. How long is this going to last, which I think ties to the second question? I think that anybody honest in the industry will tell you no idea. We have not because I was very surprised last night when without any scientific data made available, a statement was actually made by the vaccine industry saying, hey, we have 90% protection. But already today, lots of people are asking really sure the data and let's understand exactly what the vaccine is, how it works, how effective it is. And there are lots of questions that I don't think we will have an answer to by the time the vaccine is going to be launched, and one of which is for how long is this protection going to last. And then the other question, I believe, is going to be adoption rate. Today, I'm amazed to read the statistics both in U. S. And Europe that says that half of the population does not want to get vaccinated, okay. So to make a long story short, I have no idea of what would be the impact of the vaccine because we don't know what kind of vaccine we have. We have no idea in terms of how long this is going to last, and we have no idea about the deployment, okay? So I think we need to understand, and we're going to understand later in the year, I think, be presented with data, more secure data about efficacy and of the vaccine. All said and done, I just want to make sure you understand that personally, I hope that this vaccine will have 100% efficacy so that COVID goes away. So I'm tired of spending my weekend in a lockdown on my balcony in Milan, as I already said a few times. But all said and done, very difficult today, in my opinion, to make up projection. Antigen testing is a very good tool as long as you need to pick up asymptomatic people. It's also a very good tool when it comes to secondary geographies. And we already seen in India and in Brazil and in Mexico, some of these geographies where there is a capacity issue with molecular, then IGM and serology was used and then antigen testing will become a very nice and better way, improved way to actually also diagnose the acute infection. So we see an opportunity on the couple of 1,000 systems that we have today installed in the secondary market. As far as molecular, as said today, we have we don't have enough. I believe that what will happen eventually when the pool of testing is going to shrink, the first one to go is going to be the antigen testing. And the molecular will continue to be there because the gold standard is the same clearly more sensitive than any antigen testing. And it is going to be used and it's going to be extremely relevant in my opinion until the virus is going to be completely eradicated for a differential diagnosis because don't forget, what you need to do right after the vaccine is going to be made available is still to identify hotspots. And as soon as they have been identified, then you need to proceed with lockdown. And lots of testing in that particular population. And it will be used again next season, next flu season for differential diagnosis, will still be there. By then, I don't think that the virus is going to be eradicated. So you're going to have symptomatic people that will show up with symptoms and you still want to know is it COVID or flu. And in fact, I project that next year there's going to be lots much more use of flu and COVID combined than what we have seen in this season. But to be honest with you, this is as much as I can tell you because I don't have a crystal ball. That's helpful. If I could just squeeze in a very quick one. Now in Europe, as we're seeing the 2nd wave pick up again, I was seeing localized locked lines. From what you're seeing in the communications of hospitals, can you see that as an impediment to the recovery of the base business back to flat in Q4? And also just a reminder, in case I missed the rest of the call, what does your full year guide imply for the recovery of the base business? Thank you. Again, we today, we don't see it as an impediment because I think that hospitals are much better organized in terms on their ability to first triage and so they have what they call the clean side of the hospital and the COVID side of the hospital. And therefore, viability of testing right there, triaging has allowed immediately to separate the different patients and then admit patients in a clean air and keep it clean. And I think that today has been understood by patients and we don't see right now a problem with testing volume, okay. Anything can change, okay. But so far, if I need to look at October November, we still continue to see the recovery of the base business. The next question is from Andrea Baloni of Mediobanca. Please go ahead. Yes. Good afternoon, everybody. Thanks for taking my question. It's a competition for a strong set of results. The first question is a very general one. I understood you and Tabo Crystal Ball, but in any case, how do you suppose 2021 could evolve quarter by quarter, assuming the launch of vaccine in terms of your 3 COVID-nineteen tax, I mean, the molecular antigen and strategy, what should we expect, not in terms of guidance, absolutely, but just in terms of general market trend? And my second question is about the antigen and molecular test. I don't understand why I shouldn't assume that antigen test may at least partially erode some market share to the Molecular 1. I mean, for example, if I believe to have flu before doing a molecular test, I may try an antigen test. And if this is negative, in the end, I don't do any monoclonal tests anymore. And my last question is about the routine test. I didn't get your answer to the previous question. Which kind of recovery do you expect for next year? Is it feasible to assume volume returning to 2019 level? Okay. I'll start from the last, go into the first. As far as next year recovery, I believe that for sure the availability of vaccine is going to make the recovery faster. The general level of confidence, I believe, is going to return back. And this could be a problem, but there is a strong expectation by people that a regular vaccine is going to address the problem. So even psychologically, I think that people will feel better about going to the doctor, going to the hospital and so forth. So I think when we look at 2021 production, we projected that volumes are going to go back to what they were in 2019. As far as antigen testing and why it does not cannibalize because the use is completely different. Today, the PCR assay, which is the gold standard, is used for clinical diagnosing. And but it's not enough. I keep saying, look at the U. S, the U. S. As I said that today, they do 1,000,000 PCR a month, so 30,000,000 a day. So 30,000,000 TCR a month. And they said that in order to coexist and reopen certain activities, fly and being able to go to watch football, you need to do much more testing. And that cannot be done by molecular because it's too complex and is too expensive, by the way. And it should be done by a cheaper alternative, which is the antigen testing. By the way, you said if I do an antigen test and a negative, I feel comfortable. I wouldn't, to be honest with you, because one of the issues with the antigen test is sensitivity. And today, there has been a work that has been published by the French Health Authorities, which I so far, I found it to be the best evaluation ever that I've seen on antigen testing. And what they prove is that antigen testing sensitivities compared to PCR is 75%. Okay. So 75% means that you're going to be missing 1 out of 4, which is good enough if you want to use it for testing or asymptomatic in areas with relatively high prevalence. But then if you go to the individuals and you want to rule out with symptoms, rule out whether it is or it is not, COVID is not good enough, you need to do PCR. This is why I'm saying the first one to go away is going to be antigen. First, all antigen testing is going to disappear in my opinion in when the vaccination is going to be widely available. And again, I'm remarking widely available because you need to reduce the pool of negative patients to the virus. And then PCR eventually is going to go away, meaning that the PCR will be used still for differential diagnosis with symptoms when people show up, especially during the peak season. So what you will see eventually is that you're going to have a surge in volumes during the flu season and that is going to revert more to less volume during the summer, which that is the signal that will tell you that COVID is going away because it does becoming another diagnostic test for differential diagnosis and making sure that the symptomatic patient that shows up is a flu patient and not a COVID patient. And also that one is going to disappear when then the virus is going to be eradicated, okay? But think about it, even today, I think 20 years, 30 years after the measles vaccine has been made available and 90 95% is vaccinated against measles, you still have the measles outbreaks. Last year for us was a record year 2019 was a record year on measles because there were outbreaks throughout the United States. So you really need to be careful about projecting. In my humble opinion today, it is very difficult to make a projection until you really understand what the vaccine is all about. Okay. I appreciate it. Thank you. The next question is from Maja Pataki of Kepler Cheuvreux. Please go ahead. Great. Thanks for taking my question. And Ticardo, I'm sorry, but I'm going to ask you again to look into your crystal ball, which you might or might not have. But it is a very clear statement from your side on what you believe might happen that antigen testing will be first to go away? Well, if you look at the PCR market as a total, there is a substantial part of a substantial volume of more manual related PCR tests today that are helping to address the demand. Do you think the more manual PCR tests will go away after the antigen tests? And then a second question is, at some point in time, there's probably going to be overcapacity in the market on the PCR manufacturing side. Do you believe there's going to be a harsh pricing competition in the COVID space? And do you think it could actually extend PCR testing areas? Maja, I think you made a very astute comment, and thanks for bringing this up. Yes, indeed. To me, what's outstanding today, come out and then look at how is it possible that still in the U. S, they can do 30,000,000 TCR a month And also Italy, in Italy today, they are doing 1,000,000 they're doing 200,000 a day, which means 6,000,000 per month. And when you go and talk to customers, you find that it's a very interesting story. It's a combination of IDD products. And so us, Abbott, Rosh, the usual suspect, the usual companies that have C Mark products as well as or EUA products versus a plethora of entities, which have been developed by hospitals that don't have don't get enough PCR reagent from industries, buying fundamentally reagents left and right and setting up their own assays on a typically Thermo Fisher open platforms or Bio Rad open platform. At the end of the story, if you think about it, you need the CDC protocol, you need an extraction system and you need just a PCR instrument to do a PCR test, right? I think and you're very right that the first one to go would be this all plethora of entity assets because the carrier liability, they are very time consuming, by the way, because there is no level of automation whatsoever. And it's very interesting. If you look at one of the most recent publication that has been issued by the FDA. And what they did was they pretty much tracked down all the assets that received EUA approval and they were 160. And believe me, I don't remember that there are 1,000,000,000 molecular diagnostic companies in the world, right? So there are a lot of these products, a lot of these assets and methodologies that have been fundamentally developed like entities and filed as e way, which is no problem because when you want to get your e way, the burden of getting e way is relatively small, right? And this is why they have an e way because it's a short track to registration. Now we are completing our 510 because we see that now the world is going to move from EUA to 510. And just to give you an understanding, the cost of finding an EUA, which is combination of clinical, the clinical study is now required for a 510k and the filing itself is $1,500,000 Okay. So now I want to see whether 160 companies that now they came from nowhere, a lot of them, are they going to invest $150,000 to get a 510, that itself is going to clean up the list of suppliers. So in fact, you're right. I think antigen goes down, then I think that the NBT is going to disappear. And then last, the IVD companies, then when the volume then IVD volume certainly is going to go down. From a price point of view, look, it's inevitable that eventually everything resorts to price also because today there are subsidies which are very specific for the reimbursement I'm talking about in the U. S, very specific for COVID. And I believe that when things are going to go to normal again and there's not going to be so much pressure on volume, I think that also the reimbursement by definition is going to which is very generous today on purpose to push all companies to invest in research and development and bring forward all these assays. Also the reimbursement is going to go down. But this is I mean, this is part of life, right? It's nothing unheard of. What I don't think is going to happen is that all this scenario is a 2021 scenario. So we feel overall pretty comfortable visavis the what is the opportunity in 2021. I think that when you talk to 2022, there is going to be lots of uncertainty. But again, it all depends what kind of vaccine are we going to have in front of us. And as of today, we don't know enough. And when the vaccine is going to be launched, we still are going to have lots of questions because nobody will be able to tell for how long the protection will last. Okay? Understood. Thank you very much, Carla. Two follow ups. One is, do you think that the pricing pressure, because there is going to be such a big overcapacity from the big guys, could be extended to other PCR tests as well? And then just quickly, can you give us an update on the saliva test? We haven't really you haven't really spoken about that, so just wondering if there's any update that you can share. Maja, I don't think so. Because again, everything else the regular cost of business of molecular is properly priced and the pricing will come from competition and properly reimbursed. Actually, I see something completely different. I see that thousands of systems have been now acquired by hospitals. And it's very interesting, and you see it also in our results as well, because of the fact that lots of emergency funds have been unleashed, every company is reporting that if in 2019, we are actually 70 percent of our placements were going through reagent rental and 30% were actually sold. In 2020, what you're seeing is that it's completely reversed. So 70% of equipment is purchased by hospitals and 30% is leased. And they are doing so because they lost the money, they are called emergency funds. Now you're going to have all these tons of equipment that is going to be owned by hospitals. What I think is going to be the effect is that hospitals will be encouraged at that point to decrease the send out and increase the assays that they're going to do in house and especially in the U. S. And so I think that there's going to be lots of incentives for these hospitals not to engage anymore with the big private labs, but do more testing themselves. And by the way, this is what we see ourselves because one of the net result of the adoption of serology in the U. S. And not necessarily by testing volume, but by the fact that every hospital is still doing serology. We are talking about on average 1,000, 2,000 tests a month. This has pushed the installation of a lot of Liaison XL as well in the proper segment, which is the hospital segment. Remember, we are the hospital strategy. And what we are seeing is that now these hospitals that have the XL are saying, okay, let's let's faster adoption of TB. TB is the designated victim. Rather than sending it out to QuestLab Corp Sonic, we're going to do it ourselves because now we have the XL. GI, same story. It was in a relatively small mid volume, not worth taking it itself. But now that we have the box and we have TV, now let's do also the Calprotecting, the H. Pylori and all the rest. And I think this is true for all the diagnostic companies. So what you will see is going to be that there is going to be a lot of in sourcing of testing and less of send out. And this, I think, should be a concern of some of the big laboratory chains in the U. S. And if I'm not mistaken, some of the CEOs already did comment on the fact that the next challenge in the U. S. Market for them is going to be the fact that hospital will tend to in source. Fantastic. And the saliva, please? So I hope that you need to stay tuned because we launched it with we launched the answer with NPS and NS and we're now doing the clinical studies for to validate saliva. As you know, we were able to validate saliva on our molecular test. We have it C Mark, the only company with a C Mark saliva claim on molecular, very proud of it. And now we are doing the clinical for the antigen. The real problem, to be honest with you, is that when you since the FDA is asking for symptomatic and asymptomatic patients, one of the problem with symptomatic patients is that they have no saliva, unfortunately. And this is because of the respiratory condition, but also the fact that everybody is under oxygen. And one of the effects of this oxygen is that it dries up completely your mucosa. So the clinical study is longer than expected more on the symptomatic, but we are working on it and we're going to keep you updated within the next 4 to 6 weeks. Fantastic. Thank you so much. The next question is from Scott Bardo of Berenberg. Please go ahead. Yes. Thanks very much for taking the questions and congratulations again on great results today. I guess with the new flow on what appears to be quite an effective vaccine, investors increasingly focusing on the new normal for DiaSorlin and where you land post this crisis. So I wonder if you could please share some thoughts, Esther. Has the recent experience that you've seen with COVID-nineteen installed base, tremendous growth in margins and so forth changed in any way your longer term perspectives for the business pre COVID, which was for mid- to high single digit growth and slightly over 38% or so margin. So I wonder if you could talk a little bit to that and when potentially we could see a more normalized type growth profile for the company. So that's the first question, please. Second question, pleasing to see you have a laboratory antigen test, which I think looks to be a good one. Semen tusineers recently pouring a lot of cold water on the notion of laboratory based antigen tests, suggesting there's not really an opportunity there because of the logistical considerations. Can you highlight why you would disagree? And also, again, your comments on androgen going away relatively quickly after full vaccination. Is it unfair to suggest that you move into the more numerous and bigger lateral flow opportunity at a time when the market is already starting to peter away? Thank you. Okay. Let me just make a joke. You always say that the test is not needed when you don't have it. So I think that I didn't hear Siemens in making this statement, to be honest with you. I heard that Roche saying that they are coming in December. That I heard loud and clear. And I think that Roche made pretty much the same comment we made is very important, 2 different the utilization of the assay is completely different. The point of care does carry out a benefit if you want to go deep down in the community, if you want to provide to the family doctor with a tool to rapidly identify whether an asymptomatic patient that shows up is COVID or non COVID. And then essentially send the patient to avoid that all these patients rush to the emergency room and they get congested fundamentally the emergency room, which is something we're experiencing these days. However, there is a trade off. And the trade off that we see is performance. You saw Quidel yesterday had actually an FDA warning letter, a public warning letter on the performance of the product. Because the lateral flow technology is a good technology, but does carry certain limitations in terms of sensitivity and specificity, we all know. But it's a good trade off because it's storable. So you can actually decentralize that in lateral flow. I believe that when you take that assay and you put it into a LIAISON format, Kevin luminescence, call it LIAISON, call it Roche, call it Siemens if they are able to do it, it would be fundamental. You go back to the typical performance of analytical performance of cheminuminescent assay that from our experience, you gain minimum log in sensitivity. And this actually allows you, I believe, to get closer to the sensitivity of PCR. And on this one, Scott, you are technical enough to understand my comment. You know that today there are lots of debate about the fact that PCR is too sensitive. And now there are indications, again, indications and not guidelines to the fact that if you run a PCR assay and you have you are over 33 CTs. So you're positive, but over 33 CTs, well, you have detectable virus, but you're not necessarily infectious. And so everybody is indicating that the clinical relevance for infectivity is up to 33 CPs. And if you see some of the antigen test have been actually tested, the FDA ask you to look through the spectrum, but fundamentally, the clinical claim is up to 33 cities. We, with our assay and the sensitivity that is provided by the chemiluminescence technology and chemiluminescence technology, so I'm sure Rosh is going to get that as well. You are getting to the level where up to 33 cities, you pretty much match the result of the PCR, give or take with chemiluminescence. This is why I'm saying that I see a need of an antigen test done and managed by the central lab. And I've seen how customers that have adopted rapidly this assay are using it. And an example is one of the in the Italian region, I cannot name the hospital of the region, They use it to rule out all the asymptomatic, right? And because they have a gazillion asymptomatic patients that are coming over because they are relatives to people that have been diagnosed and then you need to understand about the quarantine, all that jazz and story. And the hospital today is using it to immediate very fast rollout, they are symptomatic and free them up versus then get themselves into the quarantine. And today, lots of volume actually is going in that direction. This is why I'm saying there is a need for this antigen test. It is going to go away because for a gold standard. And gold standard, undeniably, is the PCR, I'd say. Now let's talk about the post COVID world, okay? Let me just state, I don't know when the post COVID world is going to start, okay. I think I hope it's going to start in 2022. Post COVID for us, if you listen well, I know that you listen and unfortunately some of other investors did not. They were too much focused on COVID. But we started to talk about the post COVID work 3 months ago. And to me, the best move was NIMED. And we talked about NIMED and nobody listened because everybody was enthusiastic about COVID. But NIMED for us was the beginning of a new post COVID world where certainly we have an installed base in hospitals because of COVID. And NIMID is a fantastic opportunity because it's innovative, it's very much welcome clinically by physicians. NIM, the company itself spent a very amount of dollars into the clinical validation of the concept and we expect that very rapidly they're going to have also the FDA approval so that we can use there I say as a clinical device. So MIMI to me is the post COVID word that we live today assort in 3 things in my opinion. Brand recognition because we have been faithful and loyally serving our customer base without a single day of back order, and this has been recognized by everybody, uninstall base that we were able to establish on molecular and immuno. And last but not least, COVID will translate to everybody into lots of cash, right? And now the next question, I'm going to reply before you ask the question. The question is you need to take that cash and then rightfully invest it in order to strengthen the company. And certainly, M and A plays a role. And we do have a plan, as you know. We've been always careful buyers. We believe that the post COVID time is going to be a good momentum to look into M and A opportunities, and we are certainly focused on that. Thanks very much. And maybe just quick follow-up, if I can. So you're right, I was going to ask a question on M and A. But just to understand, it may be too difficult to answer, but the profile for the business pre COVID as compared to post COVID, is it still relevant mid- to high single digit, sort of high-30s margin? And maybe to answer the M and A I'll see M and A question slightly differently. With DiaSorin set to exceed approach the €1,000,000,000 sales mark, do you feel confident that, that is a level and watermark level that you can sustain along with M and A going forward? Listen, again, I pull out my crystal ball. I look into it and I say yes, because nothing changed, okay? So the Bayside has always been a profitable company because of the nature of the business we run, which is extremely specialized. And again, sorry, if I go back to it, look at NIMET. We didn't get ourselves into another TSH, we got ourselves into far from technology, clinical technology, NIMET, which is high value products and hopefully high profit product. Certainly, we will need to invest in marketing and promotion, but it's a good bet because it's a phenomenal clinical tool that everybody is welcoming. So if I look at the crystal ball post COVID, I think that we will continue our trajectory. Hopefully, we're reinforced strategically by the proper acquisition that will give us sustainable critical mass over EUR 1,000,000,000. Thanks so much, Dave. Mr. Rosa, there are no more questions registered at this time. Thank you, operator. Bye bye. Ladies and gentlemen, thank you for joining. The conference is now over. You may disconnect your telephones. Thank you.