Matt Etoch

Matt Etoch asked about the anticipated tapering of R&D expenses following the FDA submissions for Colli-Pee and the CT/NG test, and whether funds would be redeployed. He also inquired about the normalization of the international HIV ordering cadence after disruptions in 2024 and 2025.

Answer

Kenneth McGrath (CFO) confirmed expectations for lower R&D expense for the full year 2026, with some continuation in Q1 for clinical trials. Carrie Eglinton Manner (President and CEO) noted improved visibility for funding and program implementation in Africa, with countries increasing local investment and signing MOUs. Kenneth McGrath (CFO) highlighted the exciting opportunity of nearshoring for local manufacturing and assembly in Africa, which Carrie Eglinton Manner (President and CEO) clarified as an addition to existing sales.

Matt Etoch of Stephens inquired about the anticipated tapering of R&D expenses following the FDA submissions for Colli-Pee and the CT/NG test, and whether these funds would be redeployed. He also asked for clarification on the normalization of international HIV ordering cadence after 2025 disruptions.

Answer

Chief Financial Officer Kenneth McGrath confirmed expectations for lower R&D expenses for the full year 2026, noting some continuation of clinical trials in Q1 but a decrease thereafter. President and CEO Carrie Eglinton Manner explained that international HIV ordering is showing improved visibility and recovery in Q1 and Q2 2026, with countries in Africa adapting to new funding structures and increased local investment, including nearshoring opportunities.

Matt Etoch asked about the performance drivers for delivery devices, which were relatively flat year-over-year excluding incentive fees, and the variables impacting top-line and margins ahead of 2026 automation.

Answer

CEO Eric Green highlighted progress in Crystal Zenith and administration systems within the drug delivery portfolio. He emphasized two urgent levers for SmartDose: driving down costs and improving efficiencies (on track for automation in early 2026) and evaluating alternative options to maximize value. CFO Bob McMahon added that sequential performance was as expected, with improving economics each quarter.

Matt Etoch with Stephens Inc. asked about the performance drivers for the delivery devices business, which was relatively flat year-over-year excluding the incentive fee, and the variables impacting its top line and margins, especially with improving economics ahead of 2026 automation.

Answer

CEO Eric Green expressed satisfaction with the progress of Crystal Zenith and admin systems within the drug delivery device portfolio. He highlighted two urgent levers for SmartDose: driving down costs and improving efficiencies, which are on track with expectations and showing improved profitability quarter-over-quarter, with further gains expected from 2026 automation. He also mentioned evaluating alternative options to maximize SmartDose's value. CFO Bob McMahon added that sequential quarterly performance was as expected, and the focus is on long-term value for shareholders.