Q2 2023 LumiraDx Ltd Earnings Call

Participants

Dorian LeBlanc; CFO & VP of Global Operations; LumiraDx Limited

Melissa Garcia

Ron Zwanziger; Co-Founder, Chairman & CEO; LumiraDx Limited

Andrew Harris Cooper; Research Analyst; Raymond James & Associates, Inc., Research Division

Jeffrey Scott Cohen; MD of Equity Research; Ladenburg Thalmann & Co. Inc., Research Division

Mark Anthony Massaro; MD & Life Science & Diagnostic Tools Analyst; BTIG, LLC, Research Division

Matthew Carlisle Sykes; Research Analyst; Goldman Sachs Group, Inc., Research Division

Presentation

Operator

Good day and thank you for standing by. Welcome to LumiraDx's second Quarter 2023 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.
I would now like to hand the conference over to your speaker today, Melissa Garcia, Vice President Corporate Counsel. Please begin.

Melissa Garcia

Hello everyone, and welcome to today's call to discuss LumiraDx's second quarter 2023 financial results issued earlier today. Joining us are LumiraDx's Chairman and CEO Ron Zwanziger; and Chief Financial Officer Dorian LeBlanc. The press release announcing our financial results is posted on the Investor Relations section of the company's website at lumiradx.com.
Before we begin, I would like to caution listeners that any statements we make today other than historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please be aware that all such forward-looking statements involve risks and uncertainties such as those detailed in our annual report on Form 20-F for the year ended December 31, 2022, which was filed with the SEC on May 1, 2023, and in other filings that we make with the SEC. Any forward-looking statements that we make must be considered in light of these factors. Actual results may vary materially.
Also, during today's call, we may refer to certain non-IFRS financial measures. Non-IFRS financial measures should not be considered in isolation from or as a substitute for financial information presented in compliance with IFRS. There is a schedule showing the reconciliation of these non-IFRS financial measures in our press release issued earlier today, which can be found on our website at lumiradx.com.
I will now turn the call over to Ron Zwanziger for opening remarks and a general business update. We will then provide a financial update before answering questions. Ron?

Ron Zwanziger

Thanks, Melissa. Good morning, everyone, and thank you for joining our second quarter results call. In the United States, during Q2 we strategically positioned our North American business to take advantage of the upcoming respiratory season in the short-term, while also focusing on expanding our testing menu for both short-term and long-term growth. We have 3 key updates.
First, we extended our testing program with CVS to encompass numerous pharmacies across the U.S., complementing our existing partnership with the CVS MinuteClinics, which has been in place since 2020. The expansion leverages our current installed instrument base, allowing for strong operating margin on testing volumes within these new pharmacy sites during the upcoming respiratory season.
Second, our COVID flu combo tests have been submitted to the FDA emergency U.S. authorization as part of the NIH's Independent Test Assessment program ITAP having already launched successfully in over 25 countries globally. Obtaining the EUA for our tests should be valuable -- should be a valuable addition to our U.S. testing portfolio. We're actively engaged in discussions regarding their current status of our application.
Third, as reported in a recent press release, we're excited to report our submission of our 510(k) application to the FDA for the clearance of our 5-minute COVID ultra product. The innovative ultra-test strip design enables higher sample volumes, enhancing detection levels and reaction times for more precise results. This marks a significant milestone for LumiraDx as we work to expand the markets for our SARS-COVID-2 Ultra Test. The receipt of 510(k) approval from the FDA could also pave the way for expanding our testing menu in the U.S. on the unified -- on our unified platform.
In Europe, our focus remains on the acceptance and expansions of our non-COVID portfolio. Non-COVID platform test volumes excluding seasonal respiratory products increased 50% sequentially. 26% of our customer purchased more than 3 assays during the second quarter in '23 versus 17% in the first quarter of '23, highlighting the positive impact of our menu expansion.
A specific example of our unique NT-proBNP test. Following the January '23 launch of our NT-proBNP (inaudible) was dedicated to showcasing its lab-comparable performance and user-friendliness to clinicians and key opinion leaders by offering the only Fingerstick NT-proBNP test at the point of care. We were able to gain access to key accounts for evaluation.
Our efforts have been supported by peer-reviewed studies, including those from the University of Uppsala and the European Journal of Heart Failure, emphasizing the clinical and economic benefits of widespread NT-proBNP testing in primary care settings. The studies confirmed the excellent performance of our test. The benefits of room temperature storage, the utility of the same test strip and method for samples of whole venous blood, capillary blood and plasma and the short turnaround time of the test, 12 minutes. These published studies are a welcome addition to the body of evidence showcasing our laboratory comparable performance of our tests at the point of care setting.
We remain committed to transforming health care by enabling early heart failure diagnosis in the community and plan to expand our approach globally. Further, with regard to NT-proBNP, our collaborative work with Medtronic continues to develop positively. A follow-up event was run in Manchester in July, which continues to show excellent results and a direct impact for individuals being immediately referred for further testing due to elevated results.
As a result of our second successful events, we planned to support further events with Medtronic in 2023 and have spun this concept out into other mobile settings, one of which is a workplace benefit program being run in Ireland in the fall of '23 with expanded scope. It will not only be heart health check -- checks with our NT-proBNP test but would also support diabetes screening with our HbA1c test, which highlights our multi-menu approach. We plan to further expand on this model globally in an overall effort to broaden general access to such needed health checks in an overall effort to transform how health care is delivered within the community.
Our CRP test has made significant strides, particularly in community-based settings like virtual wards in the U.K. Partnerships like NHS Frimley Health have demonstrated the test value in real-time decision-making for antibiotic treatment, resulting in improved patient safety, experiences and cost savings.
The aim was to support real-time decision-making on the need for antibiotic treatment in frail, acutely unwell patients in an effort to avoid hospital admission if achievable and desirable rather than waiting several hours for lab results. This customer described our platform as small portable battery-operated, robust and simple to use with room temperature reagent storage, ideal for community and mobile testing. The clinical and operational benefits were studied across various patients and the results were very positive in 50% of patients tested the LumiraDx CRP test improved the safety of care and helped to avoid the need for escalation to hospital care at a cost-saving of up to GBP 3,914 per patient.
If adopted more broadly, these benefits could lead to substantial savings for health care systems. We continue to deliver on our multiple assay menu platform offering. As an example, we recently started working with a leading operator of care homes in Austria. They were looking for a more efficient way to test their patients at the bedside instead of sending them to hospitals -- hospital immediately, saving money and reducing patient stress. We're initially starting to work with them in the Vienna region with 16 instruments.
They're currently focused on CRP, D-Dimer and our broader respiratory portfolio and have indicated that in the future expand -- they may expand to our entire assay portfolio and may also expand geographically into additional regions throughout Austria where they have other customer locations. This is an excellent example of how easy it can be to transform community-based health care with the LumiraDx platform when one single port of instrument can have a major positive clinical impact in nearly any setting.
Coming into this [CE] respiratory season, believe we're well-placed strategically to continue to grow the CRP business as a broader part of our respiratory portfolio as the only platform available today at the peer point of care setting with CRP as well as flu and COVID tests. We provide a turnkey solution for important clinical pathways that are aimed at curbing antimicrobial resistance by differentiating between viral and bacterial infections.
For example, the U.K. Primary Care Respiratory Society recommends algorithms they have developed to rule out COVID-19 and flu, taking other symptoms into account and using the point of care CRP test if the prescriber feels antibiotics are necessary. LumiraDx has the only platform at the point of care setting that can fulfill the entire algorithm with just our one instrument, making both the patient and clinician experience more efficient and desirable to the alternatives which would require the multiple POC instruments or having to wait hours for laboratory results.
On the commercial side, we have expanded our reach into increased sales impact by entering into distribution agreement with Axon Labs, a major player in the industry for Germany and Switzerland. This distributor has already placed an initial order of instruments and [ad vitam] tests and aims to start to roll out in these countries shortly. We also plan to appoint an additional distributor -- additional distributors in other regions to increase sales reach and local customer support.
The benefits of our broader menu are also felt in Africa. In Africa, we've been working with key stakeholders to drive uptake of non-COVID testing non -- on our 5,000-plus instruments installed with the Gates Foundation during the pandemic. We've now started shipping our HbA1c test to various African countries as well as D-Dimer test to Zimbabwe. D-Dimer has historically been underutilized as a marker of blood clotting in Africa, but the new features of the LumiraDx platform enable access to this important test.
These tests also show utility in high-risk TB and HIV population. This reflects the overall benefit of the platform for tests being deployed in African countries where they have traditionally not been tested in the community. We note that globally, traditional health care models are being impacted in hospital setting due to funding and staffing restrictions and as a result, innovations like our portable point-of-care instruments are needed to allow testing in the community.
As we continue to innovate and expand our portfolio, LumiraDx remains dedicated to transforming health care delivery worldwide and contributing to such impactful change.
Now Dorian will further discuss our financial performance in the first quarter. Dorian?

Dorian LeBlanc

Thanks, Ron. Quarterly revenues for Q2 were $21 million, $9.2 million, or 44% of total revenues were from non-COVID specific solutions marking our highest quarter for our non-COVID revenues. These revenues included $4.4 million from our LumiraDx Technologies and $4.8 million from our distribution business.
Total adjusted gross margins for the quarter were a loss of $6.6 million. Adjusted gross margins exclude net depreciation, amortization, stock-based compensation and restructuring charges. The decline in gross margin from Q1 was largely due to the new placement of more than 1,500 instruments in the U.S., primarily with our retail partner, to build testing capacity for the upcoming respiratory season.
The full cost of these instrument placements were taken as a charge within Q2. Similar to Q1, the fixed cost base of our prior manufacturing investments pressured our overall margins at our current revenues. We do anticipate our significant capacity and low variable costs will enable seasonal revenues from the upcoming respiratory season to have a strong contribution margin to our gross margin and to our operating cash flows.
As we approach the upcoming respiratory season, we have seen customer preference shift to our multiplex solutions for flu and COVID over COVID-only testing. We have seen the majority of our Fast Lab's revenues migrate to our flu COVID offering. As a result, we did take further inventory reserves on raw materials related to COVID-specific tests in the period. Total inventory reserves for test strips, instrument returns, instrument components and Fast Lab's raw materials in the quarter were $3.8 million with Fast Lab's COVID inventory reserves contributing $2.4 million. Excluding instrument placements in these inventory reserves, adjusted gross margins would have been approximately 10%.
Our restructuring programs have reduced our operating expenses sequentially over the last 5 consecutive quarters since we exited the Omicron wave and transitioned to endemic COVID. Since Q3 2022, when we initiated our cost reduction programs, we have decreased our annualized cost base by more than $100 million in line with our prior guidance.
Our second quarter adjusted R&D expenses were $14.3 million compared to $14.8 million in Q1 of this year and compared to $42.8 million in Q2 2022. Our second quarter adjusted SG&A expenses were $17.6 million compared to $19 million in Q1 and $30.2 million in Q2 of 2022. The adjusted operating expense reductions from Q1 '23 to Q2 '23 are primarily related to decreased wages and other employee expenses. Adjusted operating expenses exclude depreciation, amortization, stock-based compensation and restructuring charges.
We incurred $2.9 million of restructuring costs in the quarter as we finalized most of our latest cost-reduction program in June and anticipate additional cost savings in Q3 with the full benefit of these changes. At June 30, 2023, our cash balance was $25.3 million. On a cash basis, our quarterly cash interest paid reflected the payment of both the Q1 and Q2 cash interest on our senior debt within the second quarter.
On July 20th, 2023, we executed a ninth Amendment to the loan agreement with our senior lender, which included an agreement to increase the loan facility with 2 new tranches of senior debt. On July 21st, we drew down the tranche B funding from the amendment for $15 million. We anticipate drawing down tranche C funding of $16 million before the end of August as we continue to manage our liquidity position.
We will now pause for the operator to gather any questions. Operator?

Question and Answer Session

Operator

(Operator Instructions) First question comes from the line of Matt Sykes with Goldman Sachs.

Matthew Carlisle Sykes

Maybe the first one. The ITAP submission for the flu COVID combo in the U.S. market. Could you just give us a sense for timing? Do you think that would be ready for the respiratory season in the U.S.? And you mentioned some conversations you're having with them. Just how are those going and any kind of color on timing would be helpful?

Ron Zwanziger

Well, that's always a tricky question. That's certainly the intent of the folks we're dealing with at the ITAP. And so that is the expectation, but of course, there can never be assurance of that, but that is the expectation that we will have it in time for the quarter and certainly we've got customers lined up on that basis.

Matthew Carlisle Sykes

Got it. And then maybe just 2 quick follow-ups. One, you had mentioned the press release the divestiture of the INRstar business and was there any kind of cash realized from that you guys have disclosed?

Ron Zwanziger

Dorian?

Dorian LeBlanc

No, no cash that we've disclosed that we realized from that transition. That's a business that is monitoring patients on warfarin and the software helps to provide the algorithm for the dosing. But we've seen with the warfarin patient population declining, that business was in decline and it did require some significant investment to maintain the software. So it was more of an avoidance of future investment than to realize proceeds.

Matthew Carlisle Sykes

Got it. And just my last question, the relationship with CVS, which sounds like it's going well with some of the additional placements, could you just maybe talk about sort of your expectations, timing of rollout? I assume a lot of that is to capture the respiratory season in Q4, but maybe just talk about the expansion of that relationship and what it could mean from a non-COVID standpoint as we kind of go into the end of this year and into early '24?

Ron Zwanziger

Well, probably it's best to remind you that we had a relationship with CVS that preceded the pandemic where we had a plan with them and many of the product selection of the order in which we're launching the non-COVID test was agreed with them well before the pandemic. Then, of course, there was this long hiatus and now we're coming back to it. So we're really sort of simply evolving back to what was originally intended pre-pandemic and of course, in the short term, that means the respiratory -- the first question you asked flu A and B and then, of course, there's other tests that will be coming through, both respiratory and non-respiratory. So there's a whole program of tests that we expect to go into that relationship.
Now I don't know if you've sort of picked it up, but the significance of what's been going on in the second quarter and the expansion of the relationship is that we've taken it beyond the MinuteClinic where traditionally the tests are not done in the regular pharmacies, which do not have a MinuteClinic and so we've had a large number of instruments now go into the regular pharmacy.
So it's quite a change in behavior and we think that that bodes really well for the future. There's quite a lot of tests which can be -- are needed in the community where you don't want to force people to go to just the MinuteClinics, which are crudely speaking, every 10th CVS where you want them to be able to have more reach and to go into more stores. So it's quite -- it's potentially quite significant change that we've had, positive change.

Operator

Our next question comes from the line of Jeffrey Cohen with Ladenburg.

Jeffrey Scott Cohen

A couple of questions from our end. I guess, firstly, Ron, could you expand upon your commentary on Medtronic and talk about health checks with us a little deeper as far as what specific tests and what channels as far as coagulation and diabetes, cardiovascular?

Ron Zwanziger

Sure. Well, the issue with Medtronic is that they have a program into the community to try and screen out people with heart failure and of course, there is no community-based Fingerstick NT-proBNP tests. So when they have these programs, which they have them in various forms, but the one we're involved with is a mobile bus that literally goes into the community and they channel people through.
So as soon as they heard about our test, they used it and straight away the impact was to identify people into 3 groups and this has repeated itself in the second test. So you referred to diabetes, but this particular program had started off at the moment it's [anti-pro-based], but it could expand. So even in these early results, they immediately showed that there's people walking out there that are so severe that they're going to decompensate and we've had an initial person send directly from the testing to the emergency room and then there were a bunch of other people which were sent to their primary care physician because it was elevated, but not yet in the critical state.
And then, of course, fortunately, there's everyone else. So it showed the enormous benefit of actually being able to triage patients much earlier in the community and obviously therefore reduce the hospitalization or in the case of the person that went in, get the person in before they really deteriorate. So the point about the -- this program that they're running is it shows how you can deal with congestive heart failure far more effectively than you are now.
And I should say that other countries that we're working with are going down the same path in quite a number of countries and there's a lot of key opinion leaders everywhere. That's why we dwelt upon it on the prepared remarks where in a host of different countries they can see how having a Fingerstick test in the community can do just what we've already identified so early on in this program with Medtronic. So it really shows the power of our platform.

Jeffrey Scott Cohen

And Ron, is Medtronic driving this process? And are they distributor ordering goods from you? They're just sending...

Ron Zwanziger

There's no distribution. There's no distribution here with Medtronic. Just to be clear there's no distribution. It's because they have their own products in congestive heart failure. So they have tremendous advantage of catching people early based on their own -- on their own products, not test. We just happen to be a mechanism which allows for early -- earlier identification of people and catching people, congestive heart failure for much earlier treatment and therefore to avoid both deterioration those folks health and also saving money for the system.

Jeffrey Scott Cohen

Okay. Got it. And are they piloting this or they're doing this across the U.S. now?

Ron Zwanziger

No, this is all in Europe because where we have the registration we will bring -- we will obviously bring this product into the U.S. we highlighted our prepared remarks that we've got our first 510(k) submission and then which covers the instrument and the strips and then the future submissions cover only the strips and we're obviously going to do flu A and flu B, but NT-pro is very early in the cycle of tests that we're going to bring into the U.S.

Jeffrey Scott Cohen

Okay. Perfect. Okay. And then secondly for us, if you could just touch upon the 9.29 COVID with the composition of 4.4 technologies and 4.8 distribution, as far as the technologies go, could you -- and the distribution goes, could you give us a flavor and perhaps call out the 2 or 3 or 4 tests that are driving that thus far and then what we would expect for the back half as well as any back half commentary on COVID revenue?

Ron Zwanziger

Well, even though it was a -- almost a non-flu season quarter, Q2, we had a lot of flu A and flu B testing in the quarter. But Dorian, maybe you can answer the question.

Dorian LeBlanc

Yes, we did. So just about half of that is still the respiratory testing within the 4.4 of the LumiraDx technologies, including a large portion for the Fast Labs business, as we mentioned, that transitioning to the majority of that business being flu COVID testing and on the distribution revenues, as you may recall, that's revenues for products that we don't manufacture sold primarily outside of the U.S. in Latin America and Europe for distribution agreements that we have in our sales organizations.

Operator

This question comes from the line of Andrew Cooper with Raymond James.

Andrew Harris Cooper

Maybe first just a little bit more detail, if you could give some of the progress that's been made through the quarter in terms of strep (inaudible) and I think you had commented you expected to be in trials with strep later this year. And then, Ron, I think you said potentially kind of on the market, at least in trial phase with troponin in the U.K. later this year. So just what is -- what has happened since the last update and anything else you could offer there would be great?

Ron Zwanziger

Well, actually both. So in terms of new products, whether it's troponin or molecular strep, molecular strep, we expect to probably get out in the market in the fourth quarter in the U.K. And we're also looking at the various clinical trials needed for IVDR and 510(k) and troponin continues to move quite well and I think our previous comment was that we expect we might be able to get it towards the very end of the year and that's still the case.
In terms of the (inaudible), specifically talk about in terms of self-registration in the U.K.

Andrew Harris Cooper

Okay, helpful. And then maybe for Dorian, just the commentary about some of the run rate on expenses. Can you give us a flavor for sort of what's still to be recognized here in 3Q that wasn't fully baked in 2Q and kind of from the trajectory, what we should expect there? And then should we think that 3Q gross margins look more similar to that 10% type level that you called out as sort of the normalized increment ex-inventory reserve piece or more like what we saw in 2Q just now?

Dorian LeBlanc

Yes. So I'll take the gross margin piece first. It does depend heavily on what happens with the start of the respiratory season and around the timing of a potential approval for the flu COVID test through ITAP in the United States. So obviously, that high-value, high-margin respiratory product coming through in the end of the quarter, kind of a material impact on where we stand absent a strong contribution from that, then, yes, your comment around the 10% level at these revenue levels is on the mark. On the cost savings...

Andrew Harris Cooper

Most of the -- I was just going to say, so we should expect more normalized levels from the kind of instrument drag perspective and then you feel like the inventory piece is pretty well reflected after the last write-offs?

Dorian LeBlanc

We would expect that, yes.

Andrew Harris Cooper

Okay. Thank you. And then sorry. On the...

Dorian LeBlanc

On the expenses. Yes. So we did incur the close to $3 million of restructuring charges in the quarter and that's the -- largely around severance or reduction in the workforce. Most of those employees left in May, June and so there's the expense savings further on in employee costs in the third quarter. But as we had mentioned previously, some of that will be offset by an increase in U.S. clinical and regulatory expenses. So we will get some additional marginal savings in Q3. But as we start the work on the U.S. clinicals, on the respiratory products and on the community-based products to bring the European portfolio into the U.S., we will be using some of that cost savings for the clinical trial costs.

Operator

(Operator Instructions) Our next question comes from the line of Mark Massaro with BTIG.

Mark Anthony Massaro

Ron, the first question is for you. I'm curious as to your degree of confidence around the duration of the NIH ITAP program. Obviously, you submitted your COVID alter test to the -- as a 510(k), but your COVID flu is the EUA through the ITAP. I'm just curious if you have visibility how long the EUA pathway through ITAP will be available as opposed to submitting regular way 510(k)s and any thoughts on timing expectations for the COVID flu test?

Ron Zwanziger

Well, on your first question, there has been tremendous engagement and the continues to be. Probably -- we don't know this for sure, but probably because ours is the only multiplex high-performance test available and so we suspect that's the reason. And of course there's a lot of anxiety around because of the flu season. So yes, so the ITAP program continued to interact with us even though that in general there's obviously a sharp reduction in the U.S., but for this particular application it still seems to be there and so hence our comments before that we're hoping, well, there's no assurance, but we're hoping to be able to get it in time for the flu season and we're working with our customers. We're being patient, know the situation for that to happen.
Your other comment, your other question about our first 510(k), I think that will follow the regular path and it's always very hard to estimate 510(k), particularly the first one on a new platform where you're submitting and the review process includes a great deal of focus both on the instruments as well as the particular strip in question. So it's a much greater amount of work than the second test you submit. But we submitted a very detailed and complete package and so I think that there'll be a back and forth with the FDA and I think the optimistic view might be before the end of the year. Otherwise into next year. But I think it's not far away. It's not too far away.

Mark Anthony Massaro

Okay, great. And then maybe one for you, Dorian. You're now tracking low $20 millions in the first 2 quarters of the year. Q3 is typically seasonally lighter. I don't think I heard you guide for Q3, but can you give us a sense for ballpark, do you think it will be down a little bit sequentially primarily due to seasonality? Or are there other offsets that could keep you flattish?

Dorian LeBlanc

Well, it's a tricky question to answer, Mark, because the -- such a material impact around the timing of the flu COVID approval potentially in the U.S. and customers waiting on purchases, on the timing of that, on whether they'll utilize the 12-minute COVID antigen test in the U.S. or the flu COVID test. So tricky to guide to exactly where Q3 will land just because of such a material impact from the timing. Outside of that, we continue to see the non-COVID portfolio grow and as we talk to the number of customers that are taking multiple tests and continue to go quarter-on-quarter, we see that trend will carry us through the rest of the year as the menu expansion really plays well in Europe and that will drive the non-respiratory growth, but because respiratory is such a big contributor, hard to guide with the uncertainty around timing.

Mark Anthony Massaro

Okay. And then on the balance sheet, Dorian, I think you expect to draw $16 million by the end of next week. I think that'll take you to $41 million of cash. Is that cash sufficient, in your view, to get through the end of September? And just maybe, how should we think about cash runway?

Dorian LeBlanc

Yes, absolutely. The one other piece maybe to think about on cash runway is we do have a number of receivables on the books, not trade receivables, but particularly the tax receivables. So we have $25.2 million at the end of Q2 in tax receivables, largely from U.K. R&D tax credits. We do anticipate that coming through before the end of the year and contributing significantly to liquidity and then we'll work on where we are with Pharmakon and future amendments and working through the overall liquidity for the fourth quarter. But the draw of $16 million will certainly take us through September.

Mark Anthony Massaro

Okay. Last question for me. Can you maybe explain what the measurement of the covenants in the Ninth Amendment, what that pertains to just -- I'm trying to get a sense for some of the details around the statement about the measurement there?

Dorian LeBlanc

So right now during the term of the Ninth Amendment, the only covenant that applies is the minimum liquidity covenant of $5 million. We have no other covenants that are in effect when the Ninth Amendment ends. Then we would return to the original revenue covenants that had us -- that were set during the pandemic and therefore outdated would need to be negotiated with our lender.

Ron Zwanziger

Mark, I'll just add to the first question about respiratory and revenues. So you made the comment that Q3 tends to be the weak -- in respiratory tends to be the weaker one, but actually Q2 tends to often be the weaker one than Q3 because Q3 sometimes gets the initial stocking orders for the fourth quarter flu season, but obviously because of the ITAP program, we don't know where we stand with the U.S., so that complicates matters. But then there's also the general complication of the flu season in Europe and Japan as well, making any comments particularly tricky.

Operator

I am currently showing no further questions at this time. I'd like to turn the conference back to Mr. Ron Zwanziger for closing remarks.

Ron Zwanziger

Okay. Thanks. So our transition to a non-COVID product portfolio continues to progress, especially with the commercial launches of the [A1c] test and the NT-proBNP test on our platform. Customer responses continue to be positive, supported by external clinical validations. So again, bringing together multiple assays on a single easy-to-use instrument with laboratory-equivalent performance and a low cost of ownership is enabling a transformation in community-based care.
Now in parallel to the focus on our business and test expansion, we continue to work with various strategic advisors on the previously disclosed strategic review of our business with the support of our senior lender, which we're engaged in discussions with them about the terms of the loan agreement as amended to date, including the covenants in the Ninth Amendment, which are scheduled to be measured on September the 1st. While there have be no guarantees about the outcome of the strategic review process or our ability to renegotiate terms of the loan agreement with our senior lender, we remain committed to preserving and protecting the value of our business while we continue to aim to deliver on product expansion into the U.S. and commercial growth of our approved tests internationally. Thank you for your time and for your support of LumiraDx. Bye.

Operator

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful day.