Good afternoon, ladies and gentlemen, and welcome to the Opco Health Second Quarter 2021 Financial Results Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Ms.
Yvonne Briggs of LHA. Ma'am, please go ahead.
Thank you, operator, and good afternoon. This is Yvonne Briggs with LHA. Thank you all for joining today's call to discuss Opco Health's financial results the Q2 of 2021. I'd like to remind you that any statements made during this call by management other than statements of historical fact will be considered forward looking and as such will be subject to risks and uncertainties that could materially affect the company's expected results. Those forward looking statements include, without limitation, the various risks described in the company's SEC filings, including the annual report on Form 10 ks for the year ended December 31, 2020, and in subsequently filed SEC reports.
Importantly, this conference call contains time sensitive information that is accurate only as of the date of the live broadcast today, July 29, 2021. Except as required by law, Opco to revise or update any forward looking statements to reflect events or circumstances after the date of this call. Before we begin, let me review the format for today's call. Doctor. Philip Frost, Chairman and Chief Executive Officer, will open the call Steve Rubin, OpCo's Executive Vice President, will provide a business update and pipeline review and then Doctor.
John Cohen will discuss BioReference Laboratories. After that, Adam Logel, Opco's CFO, will review the company's Q2 financial results, and then we'll open up the call to questions. Now I'd like to turn the call over to Doctor. Frost.
Good afternoon, and thank you for joining our call today. We're here to discuss our 2nd quarter results, Which were right on plan with the financial guidance Adam provided during our last quarterly call. I'll start with BioReference Laboratories. During Q2, BRL generated solid results even as overall demand for COVID-nineteen testing declined. BRL continues to meet the testing needs of many significant customers who are now focused on large scale screening In support of the transition from diagnosis to surveillance, due to BRL's ability to provide accurate test results Efficiently, it remains the test provider of choice for large public school systems as well as all the major sports leagues We're continuing to test this year and possibly into 2022.
Furthermore, Testing in the travel industry is likely to continue into next year, and we are pleased to announce our agreement with Royal Caribbean Group. This, so far as we know, is the first COVID-nineteen testing program for the cruise industry. Due to increased awareness of the high quality of insufficient service, BRL's core business, along with Specialty testing in oncology, urology, women's health and genetics all continued to rebound toward pre pandemic levels. It's gratifying to see BRL convert many new COVID-nineteen relationships into ongoing customers for its core diagnostics offering. I'll let John speak to the great strides we're making with Scarlet Health, an on demand diagnostic service to expand digital health access to the patient's doorstep.
We're enthusiastic about this initiative as we continue to position diagnostic services as a key component in the continuum of care to improve patient outcomes. As for our Pharmaceutical business, we look forward to symmetricon's upcoming PDUFA date in October, followed by determinations from the European and Japanese regulatory authorities next year. As I mentioned recently during our annual meeting, we've undertaken several initiatives to restore growth to our RAYALDEE Franchise, including rebalancing our sales regions, more focused physician training And targeting and updating our message to highlight the benefits of initiating treatment earlier in the disease cycle. We were pleased to have recently announced our agreement with Nikoya Therapeutics to develop and commercialize RAYALDEE in Mainland China, Hong Kong, Macau and Taiwan. Infection rates for COVID-nineteen have recently increased throughout the country And enrollment levels for our RAYALDEE trial in COVID-nineteen outpatients have picked up.
The primary efficacy endpoints The trial include raising and maintaining serum total 25 hydroxyvitamin D levels within the targeted range 50 to 100 nanograms per ml and time to resolution of key COVID-nineteen symptoms. Numerous independent studies have reported an inverse correlation between vitamin D status and COVID-nineteen risk and severity. RAYALDEE can represent a great option for patients to quickly and safely raise 25D to part of our strategy to outlicense certain early stage pharmaceutical assets, we executed an agreement with Camp 4 For the development and commercialization of our Ontagonat technology, we continue to pursue other license opportunities like this one in order to monetize and leverage our early stage assets. I'll now turn the call over to Steve Rubin, who will provide further commentary on our Pharmaceutical business. Steve?
Thank you, Phil, and
good afternoon, everyone, and thank you all for joining us today. As Phil mentioned, we are quite pleased with our Q2 financial results. BioReference Laboratories' core business is trending back to pre pandemic volumes while Still leveraging its COVID-nineteen testing capabilities with certain large customers. Somatrogon is our once weekly long acting And as you know, Pfizer, our global commercial partner for Somatrogon submitted the initial biologics license application to the FDA, which was accepted and assigned a PDUFA action date in October 2021. In addition, Pfizer expects decisions from both the European Commission and Japanese regulators next year.
Under our agreement with Pfizer, OpCo is eligible to receive up to $275,000,000 on the achievement of certain regulatory and pricing milestones. These milestones range from $20,000,000 to $90,000,000 each and are catalyzed by regulatory approval in the U. S. And Regulatory and Pricing Determinations in other major markets. In addition, upon launch, we are entitled to regional tiered gross profit sharing On sales of both Somatrogon and Pfizer's daily GHD drug, Genotropin.
With respect to RAYALDEE, The numbers for the quarter break down as follows. Total prescriptions for RAYALDEE in Q2 2021 as reported by IQVIA We're approximately 11,700 representing a decrease of approximately 36% compared with Q2 of 2020 And a decrease of approximately 5% compared with Q1 of 2021. RAYALDEE sales continue to be Impacted by challenges in onboarding new patients, although this trend is starting to reverse. New patient starts decreased by 5.2% in Q2 versus Since the product was launched, nearly 26,700 patients have had RAYALDEE prescribed by approximately 3,800 physicians. More than 150 physicians or nearly 4% of the total number of prescribers were new RAYALDEE Prescribers in Q2.
As Phil mentioned, we continue to implement strategies to restore growth for RAYALDEE, Including training our sales force in virtual selling techniques, enhancing our digital marketing efforts channeled through social media platforms And redeploying sales personnel to geographies with lower COVID-nineteen infection rates. To expand RAYALDEE's market opportunity, last month we announced an The agreement covers RAYALDEE in Mainland China, Hong Kong, Macau and Taiwan for the treatment of secondary hyperparathyroidism in patients with Stage 3 or 4 CKD. We are excited to partner with Nicoya given their expertise and network in this significant market where more than 19 1,000,000 people have Stage 3 or 4 CKD. Nicoya will be responsible for all regulatory approvals and commercial activities. In addition to upfront and milestone payments of $10,000,000 in the 1st 12 months, OpCo is eligible to receive up to $115,000,000 upon the achievement of certain development, regulatory and sales based milestones.
NOCOIA will also pay OpCo tiered double digit royalties on product sales. Our ongoing Phase 2 trial with RAYALDEE as a treatment for COVID-nineteen outpatients is now 86% enrolled. Only 23 more patients need to be enrolled in order The target of approximately 160. Enrollment has been slow during the past few months due to a lull in the pandemic And the increase in vaccinations, but is showing recent signs of picking up as the delta variant spreads in areas where we have active study sites. The primary efficacy endpoints include raising and maintaining serum total 25 hydroxyvitamin D within the range A 50 to 100 nanograms per ml and time to resolution of COVID-nineteen symptoms as self reported each day by Subjects using a questionnaire designed and validated to evaluate in clinical trials the presence, severity and duration of symptoms associated with viral infections.
Top line data from this randomized double blind placebo controlled trial are still expected later this year. Moving to our other programs. About 2 weeks ago, we were pleased to announce our partnership with KAM4 for the development, manufacturing and commercialization of therapeutics Utilizing our intagunat technology, which is an oglionucleotide platform developed under OpCo Kurna. KAM4 is prioritizing OpCo's lead intaglenec compound to progress into clinical trials for the treatment of Dravet syndrome. Under the terms of the agreement, OpCo received an upfront payment along with a 5% equity interest in Camp IV.
We are also eligible to receive up to $93,500,000 in additional shares upon the achievement of certain development and sales milestone. KAM4 will pay OpCo double digit royalties on product sales. As part of our strategic initiatives, we will continue to seek other license opportunities to monetize Our early stage assets. We are constantly evaluating our assets in order to maximize our return on investment. Last month, we announced the sale of OpCo's sterile fill and finish manufacturing facility in Ireland to Horizon Therapeutics for $65,000,000 in cash.
This facility was no longer a core asset of our ongoing operations and the sale provided an opportunity to strengthen our balance sheet as well as improve efficiencies. Now let me turn the call over to John Cohen to discuss our BRL business. John?
Thanks, Steve, and good afternoon, everyone. BioReference's core clinical business continues to make progress to return toward normalized pre pandemic levels As more patients are visiting their physicians in person and salespeople are allowed back into the offices. In fact, Many of our clinical accounts have already returned to pre pandemic levels. BioReference's core testing volume at the end of the second quarter Was up 55% versus the prior year period. Specifically, our women's health specialty testing business has been coming back nicely in the last couple of months With the Clinical Women's Health business, with an increased volume by 25% and revenue 35% when comparing Q2 2021 versus Q2 2020.
Our oncology business also continues to make great progress with significant growth compared to 2019. Solid tumor is 140% over 2019. Hematological malignancies liquid tumors is 105% over 2019. Cancer Genomics is 107% over 2019 and myeloid is 2 0 9% since 2019. We continue to make investments in all these areas, particularly in the myeloid offerings with some new testing options.
Our partnership initiative, including large medical groups, FQHCs, ACOs and health systems continue to experience month over month increases in patient visits. We have added several new ACOs and signed lab service agreements with several new hospitals this quarter. In addition, Our business development efforts in partnering with large physician groups managing their physician office labs is paying off with increased volumes. Our payer relations teams has increased our access across the country. And during the Q2, we received our renewal for the UnitedHealthcare Preferred Lab Network for an additional 3 years.
In addition, BioReference and GeneDx are now provide us The Highmark of Delaware of 236,000 lives, formerly exclusive to LabCorp. At the beginning of the year, we formally launched Scarlet Health, The on demand diagnostic service to expand digital health access. Starlet brings our diagnostic services to patients' preferred locations, which may be their home or their office for an on demand, safe and convenient diagnostic experience. Currently, we are in 73 markets with Scarlett. We are continuing to invest significantly in Scarlett by adding new markets with the goal to reach 60% of the U.
S. Population in the next several months And 80% by early next year. We are seeing significant demand for the Scarlett service across a multitude of commercial verticals. Now let me turn my attention to COVID testing. Although COVID-nineteen cases have come off their highs with the administration of the vaccine nationwide, We continue to see significant interest in surveillance testing in our sports programs, school programs and travel industry partners.
We believe that many of these entities will continue their COVID-nineteen screening programs through the end of this year and in certain cases into 2022. In addition, we have seen an increase in volumes over the last 2 weeks as a result of the Delta variant spreading across the country.
I will speak more of
the variant, Delta variant in a couple of minutes. To date, we have performed over 17,000,000 COVID-nineteen molecular tests. In the Q2, we performed 2,900,000 COVID tests. We are averaging about 20,000 tests a day in July and are closely monitoring developments and demand shifts. In late March, we kicked off a company wide Lab operations, specimen acquisition, logistics, procurement, customer service, cost reduction initiatives to right size our cost structure to match the especially in the overall labor and reagent inventory management originally associated with COVID expansion.
This quarter, we renewed our contractual relationships with the National Football League and Major League Soccer for next season and Major League Baseball testing for this season. We also announced the 1st national program for COVID testing for the cruise industry, Testing crew and guests for the Royal Caribbean Cruise Lines. As I have mentioned on previous calls, our point of care capabilities have played an increasingly significant role in COVID offerings as we are experiencing a shift towards demand for screening capabilities on-site. We now have over 240 point of care sites in operation around the country and have resulted over 240,000 point of care tests in Q2. In terms of our COVID-nineteen school testing program to support a return to in person classroom instruction, We are currently working with multiple school districts, including 2 of the 3 of the largest school systems in the country, including New York City and Chicago.
These agreements cover testing services for more than 1500 schools to perform tests on public school students, principals and teachers. To date, we have tested over 650,000 students. We continue to see strong interest in school based testing programs. I'd like to briefly discuss the SARS CoV-two delta variant rapidly spreading across the country. The term variant refers to genetic variations in the SARS CoV-two, which has been emerging and circulating around the world throughout the COVID-nineteen pandemic.
Viruses will constantly change through a mutation New variants of the virus are expected to occur. Over time, new variants will emerge and others will disappear. These variants may have acted differently and require different treatments, Most notably are the B117 alpha, B1351 beta, B6172 delta And the P1 gamma variants, which seem to spread more easily and quickly than other variants and are leading to more cases of COVID-nineteen In unvaccinated individuals, an increase in the number of cases will put strain on the healthcare resources, as we're now seeing across the country and potentially more deaths. These variants are considered variants of concern by the CDC, Variants for which there is evidence of an increase in transmissibility and potentially more severe disease. The Delta variant is estimated Rise up to 80% of new COVID testing as of July 19.
While Viareferences COVID-nineteen testing platforms Do not specifically report the detection of any specific variant. Our platforms are not affected by the variant spike protein variants, including Delta. For example, if an individual is infected with the Delta variant, the individual will receive a positive COVID-nineteen result. The results will not specify any type of variant. Our genetic testing volume at GeneDx grew over 84% in the 2nd quarter Versus the prior period prior year period, driven by our industry leading exome test offerings.
There is substantial interest in our genome service Our existing client base driven by our Rapid Genome offering. In late June of this year, BioReference announced the appointment of Catherine Stuhlen As President and Chief Executive Officer of GeneDx, our Global Genomics subsidiary, Catherine joined GeneDx from the Invitae Corporation, where she served most recently as the Chief Commercial Officer. We are delighted to have her lead the GeneDx organization. And now, let me turn it over to our CFO, Adam.
Thank you, John. For the 5th straight quarter, we've reported consolidated income from operations. Across both of our segments, our operating companies continue to execute on their plans. Our Diagnostics segment reported revenue from services of $397,000,000 compared to $250,000,000 for the 2020 period. This increase reflects The continued demand for COVID testing as well as the recovery of our routine clinical and genetic testing volumes.
As John mentioned, our clinical test volumes are continue to be below historical levels, but are significantly higher than 2020, Well, our genetic testing volumes are higher than 2020 2019 levels. The Diagnostics segment reported Operating income of $30,000,000 compared to operating income of $41,000,000 during 2020. Recall that the 2020 period benefited from 2 significant items. The first was nearly $11,000,000 From the successful Medicare appeal for the 4 ks score and second was the $6,000,000 we received under the CARES Total costs and expenses were $367,200,000 compared to 2020, which had $216,200,000 Cost and expense. The increase primarily reflects the increased testing volumes.
In addition, we have continued to invest in our commercial activities, as John outlined, related to our base business, Including our efforts within Scarlett, resulting in increased selling, general and administrative expenses. Moving to our Pharmaceutical segment, we reported revenues of $45,200,000 for the Q2 of 2021 compared to $44,000,000 for the 2020 period. Product revenue increased $6,300,000 to $35,700,000 driven by a strong performance by our Latin American operations. International revenue increases were partially offset by a decrease in sales of RAYALDEE. RAYALDEE has continued to be negatively impacted by physician offices restricting product sales representatives from making sales calls as well as a decrease in Medicare patients utilizing RAYALDEE.
In Q2 2021, revenue from the transfer of intellectual property was $9,500,000 compared to $14,700,000 for the 2020 period. The 2021 period includes $5,000,000 of revenue from our recently announced partnership With Nicoya for RAYALDEE in the Chinese market. The overall decrease is the result of the completion of our somatrogon Phase 3 clinical trial and the associated amortization of the upfront payment we received from Pfizer. Loss from operations from our Pharmaceutical segment was $13,700,000 for the Q2 of 2021 compared to $6,000,000 for the 2020 period. Overall, research and development expense for the Q1 of 2021 was $18,800,000 compared to $14,100,000 in 2020.
On a consolidated basis, the Q2 of 2021 had operating profit of $5,600,000 compared to $27,200,000 for the 2020 period. During the Q2 of 2021, we of $11,000,000 As a reminder, the 2020 period benefited from the 4 ksscore Medicare appeal of $11,000,000 and $6,000,000 in CARES Act funding as well as the mark to market activity of several of our strategic investments, which had shares appreciate during the quarter, resulting in $18,200,000 of other income. Considering these items, we reported a net loss in the Q2 of 2021 of $1633,700,000 or $0.05 per share for the 2020 period. Our cash balance as of June 30, 2021 was $65,800,000 The combination of our cash on hand, our unutilized line of credit with JPMorgan and the proceeds from our sale 1 of our IrGen facilities provide us with a strong balance sheet and adequate capital resources. As we look into the second half of twenty twenty one, Our focus has shifted to growing our base business and maximizing the margins we earn on our COVID testing, While controlling our operating costs.
Given the uncertainty of the testing demands for COVID, including the most recent growth In demand as a result of the Delta variant, we are limiting our forward looking guidance to the Q3 and have built the following assumptions into our forecast. We anticipate performing between $1,000,000 and $1,500,000 COVID PCR point of care and antibody tests during the quarter. As John mentioned, we have capacity well in excess of these levels should demand for testing increase. Our range of guidance reflects testing demand from our physician office clients, testing for schools, sports, entertainment and employer channels. Should testing from the general public through our partnerships with state and local governments and pharmacy chains increase, we could exceed our volume expectations.
We assume our base business for routine clinical testing will remain at current levels, which is overall behind 2019 levels. We anticipate RAYALDEE sales to remain behind 2020 until our sales force is fully able to return to their promotional And we grow our non Medicare patient utilization. Including those assumptions, we expect revenue for the Q3 of to $270,000,000 revenue from product sales of $30,000,000 to $35,000,000 and other revenue of $3,000,000 to 5,000,000 We expect costs and expenses of $300,000,000 to $335,000,000 resulting in an overall operating loss between $5,000,000 And operating income
of $5,000,000
at various points between the revenue and expense assumptions. Forecasted operating income includes a gain of Approximately $30,000,000 resulting from the disposition of our IrGen facility. Operating profit also includes approximately $20,000,000 of non cash depreciation and amortization expense as well as an expected investment in research and development of $18,000,000 to $22,000,000 With that, I'll open up the call for questions. Operator?
Your first question comes from the line of Maury Raycroft from Jefferies. Your line is open.
Hi, everyone. Thanks for taking my questions. First question is on just the commentary on the base business. You've provided a little bit more granularity in the past on where you're at compared to pre COVID levels. And so I'm just wondering if you can do that at this point and talk a little bit more about the trajectory going Forward for the base business and also if you can comment more on that genetic testing too, which it sounds like that's Doing well.
And so what are your growth expectations for the genetic testing?
John, you want to take it or you want me to?
You can start and then I'll jump back in.
Sure. So, Maury, we were down on the base business against 2019 somewhere around In the low teens, I think it was 13% or 14% overall. I think our expectation is the base business is going to Slowly return as we look at it for the overall bio reference base. GDX, to your point, Had a pretty strong quarter, up significantly against last year, but also up significantly against 2019 levels. And that remains our expectations.
That will continue to grow and accelerate as we go throughout the year.
Yes. I would reiterate that our strategic position in 2019, right before COVID, Was to make specific investments in women's health and oncology, continue 4 ks score with urology And the genetic business. And all of those investments are now paying off. The other part was, we call strategic ventures, was the investment And a vertical to bring on health systems, reference business, hospital business, ACOs, FQCs, and that's also bearing fruit. As the physician practices move towards a differentiated DECIDR, what we call it, meaning the CEO and COO of large medical groups, etcetera, making decisions, but we will continue to see that switch, It's just the way we've strategically placed ourselves.
Got it. Okay, that's helpful. And also wanted to ask a question on somatrogon as well. When you get approval later this year for that one in the United States, will you disclose more details on the gross profit share and potentially provide guidance on what to expect For GENI tropon and Sirmatrogon after that?
Yes. So we'll definitely provide some better clarity. I think it Obviously, it has to do with the timing of the approvals and the launches. So until we have those, we're not going to add anything on top of it right now, Maury. But Once we have an approval, we'll provide some better clarity on expectations.
Got it. Okay. Thank you. And I'll hop back in the queue.
Sure.
Your next question comes from the line of Muzammil Salim from H. C. Wainwright. Your line is open.
Hi, this is Muz from H. C. Wainwright. Thanks for taking my questions. The first kind of centers around The Delta variant, I was wondering to your knowledge if there are any COVID tests on the market that can differentiate the variant, If your customers are asking for it and whether you think it's meaningful at this point to provide this differentiation.
So we do get asked occasionally by customers. We cooperate Obviously, with every state Department of Health, we send them positive COVID-nineteen PCR samples if they ask for Genomic sequencing, frequently that's for epidemiological purposes, which is what we obviously participate with them to do. Right now, I'm sure you know the vaccine has had a significant positive effect on the Delta variants and all the others. As I mentioned, the testing has not changed. So, although there is a request, it's mostly as a result of Really the State Departments of Health wanting to know the spread of the virus.
As I said, right now, over 80% of the tests that are positive are the Delta variant. But it doesn't impact on therapy. So it doesn't impact on what patients will do as a result of it.
Okay, understood. And then with regards to the multiplex test for COVID-nineteen and flu, Are you planning to commodify the surveillance data that you capture?
Well, I guess the question you're asking is, is there will and is available COVIDflu Testing. That may also be available at some point on the point of care rapid testing. We have to date seen almost no, just essentially no ordering of it. No one has asked for it yet. I think that could change in the fall.
What will happen is people will probably show up who like symptoms. The question will be is they'll get either they'll get both or they'll get a flu test, which will either be positive or negative and then reflects the COVID. It's just It's totally right now unpredictable in terms of what the flu season is going to look like, but it is available.
Okay. Makes sense. And just finally regarding the KAP4 deal, regarding Dravet syndrome, is it your intention to Away from neurology indications or developing compounds with the Entaglenut platform, are you planning to reprise these Streams once again, once you gain kind of proof of principle.
So, Kympor has The role of the Integonav platform right now is there are provisions in Our license agreement, we can either suggest additional compounds or take them ourselves with another partner. But to begin with, The way it's structured is KAM4 has the platform, the lead compound of Trevy's, and then followed by others and we have requirements So on both development and commercialization of other drugs within the platform in that agreement.
Your next question comes from the line of Jeffrey Cohen from Ladenburg Thalmann. Your line is open.
Hi, folks. How are you? Thanks for taking the questions. Firstly, could you talk about the Product revenue from Q2 seems a little stronger than we estimated. Was there anything in particular to call out there?
So our Latin American business is just they won a few tenders during the quarter that We'll allow them to increase their overall businesses. We do expect it to be a strong business for us and growth business for us going But that was the main driver there, Jeff.
Okay. And you mentioned the cash Q2 of $5,800,000 And then you spoke about next quarter reflecting the gain of $30,000,000 Is it so The cash was reflected in the Q2 or will be reflected in the Q3?
It will be in the Q3, so we don't have that cash yet.
Okay, perfect. I got it. And one more if I may. Any insight into the composition of PCR Antibody, Doctor. Cohen, and maybe talk a little bit about that and how you expect the composition to be reflected going forward?
Yes. There is some demand for antibody testing, as I think By all indications, not what anybody would have predicted early on. I think that we're fairly conservative in our estimates of what that would look like. If you follow the CDCadministration reports relative to their views of They have been fairly negative about antibody testing as a reflection of immunological status. So There is very little data to indicate, unfortunately, whether or not high or low levels of antibodies really Convert over to whether or not someone is truly immune or not.
So what I mean by that, if someone has a low antibody level, That does not mean that they don't have a high T cell memory. That really is much more important. So the result of all that is there's not a lot of it being ordered Currently. Now, that could change with what's going on with the Delta variant, where people may say, well, I really would like to know What my antibody status is or if there's a recommendation for another dose of the vaccine, there will be some people who will say, well, do I need The next dose or not, will antibodies give me enough will antibody levels give me enough indication about whether or not I should take the next dose? Those are all the that's what everybody is talking about, but the answer is nobody knows what the antibody testing will look like in the next couple of months.
Got it. That's super helpful. And then lastly for me, Adam, anything specific to call out on the Below the line item on investment loss and income tax provision of note for the quarter?
For income taxes, it's again taxes Principally that we're paying and incurring in our international businesses and as those continue to do well and be taxpayers. On the other income and expenses, it really relates 100 percent to our convertible note exchange. So it's just the fair value of the underlying shares Taking out the $55,000,000 in debt.
Okay. And the investment loss of 11.3% for the quarter?
That's the other income expense line. That's the $11,000,000
Your next question comes from the line of Edward Tenthoff from Piper Sandler. Your line is open.
Great. Thank you very much guys and thanks for taking the question. A couple of housekeeping ones, if I may. Did you have $55,000,000 in debt, Was that converted into number of shares? And where do you expect to recognize the year gen Gain in the P and L.
So the debt was exchanged for common shares and that's the loss that was recorded. The gain from Iergen will be an operating income line item. It will be a
yes, it
will be an offset to operating expense.
Okay, great. And how many shares was it? Ted, I don't have
it at my fingertips. It's in the queue that we just put out. No worries,
Your next And your last question comes from the line of Hao Chen from Laidlaw and Company. Your line is open.
Thanks for taking the questions. I've got 2 here. The first one is in terms of the pharmaceutical business, and you guys have done a lot of out licensing Type of activities, are you guys also contemplating any in licensing going forward?
So yes, we're always certainly open I mean, I guess we're not looking for any early stage projects at this point, but certainly if there's something that's synergistic, for example, something that would Supplement the renal side or something that we already have a sales force that would be a business to us, but this currently we are not looking for any additional development Projects. We have a fair amount of early stage already, as you know.
Yes. Understood. And maybe one more question on the bioreferencing side, actually income top line. I noticed that last year, you got about RMB 250,000,000 and this one this year is about This quarter is about RMB397,000,000 and last year, it had 2 this quarter had 2,200,000 COVID test in this quarter had roughly 2.9. Should we extrapolate some differences Besides those probably 700,000 tests, that will be some sort of basic business growth Last year versus this year?
Yes. So remember the Q2 of last year Yale had a significant decline in the base business. So a significant portion or proportion of our revenue last year was tied to COVID, where this year it's a bit more balanced. Also, there was in most of our volume came last year from our state and local partnerships, we were priced Significantly lower than where the majority of our volume comes from today. So there is a bit of a price mix component And the revenue differences as well.
Okay, great. That's very helpful.
This concludes our question and answer session. I would now like to turn the conference back to Doctor. Philip Frost for the closing remarks.
I want to thank everybody for participating and we look forward to spending time with you again after our next quarter.