LumiraDx Limited

Q2 revenue was $21 million. Non-COVID-specific solutions were $9.2 million, or 44% of total revenue, including $4.4 million from LumiraDx technologies and $4.8 million from the distribution business. Total adjusted gross margin for the quarter was a loss of $6.6 million. Adjusted R&D expense was $14.3 million, adjusted SG&A was $17.6 million, and restructuring costs were $2.9 million. Inventory reserves in the quarter were $3.8 million, including $2.4 million for Fast Labs COVID raw materials. Cash was $25.3 million at June 30, 2023. Management said excluding instrument placements and inventory reserves, adjusted gross margin would have been approximately 10%. For liquidity, the company drew $15 million under its ninth-amendment financing on July 21 and expects to draw $16 million more before the end of August. It also said it has $25.2 million of tax receivables, largely from UK R&D tax credits, expected to come through before year-end. No formal revenue or EPS guidance was given, but management said Q3 is hard to guide because results depend heavily on the timing of U.S. flu/COVID approval and respiratory-season buying.

Ron Zwanziger emphasized the company’s shift toward a broader non-COVID platform and said customer response has been positive, especially for HbA1c and NT-proBNP. He highlighted external validation studies and said the single-instrument, multi-assay model is enabling more community-based care. His tone was constructive but cautious, repeatedly noting that U.S. regulatory timing for respiratory products remains uncertain.

Dorian LeBlanc focused on the financial drag from instrument placements and COVID-related inventory reserves, explaining that the quarter’s gross margin was pressured by more than 1,500 U.S. instrument placements and $3.8 million of reserves. He said adjusted R&D was $14.3 million versus $14.8 million in Q1, adjusted SG&A was $17.6 million versus $19 million in Q1, and annualized costs have been reduced by more than $100 million since Q3 2022. He also said the company ended Q2 with $25.3 million in cash, drew $15 million in July, expects another $16 million draw by the end of August, and has $25.2 million of tax receivables expected before year-end.

Analysts pressed on the timing of the ITAP submission for the flu/COVID combo test, and management said the goal is to have it ready for respiratory season, but there can be no assurance. Questions also focused on CVS rollout, where Ron said the relationship is expanding beyond MinuteClinic into regular pharmacy stores, which he called a meaningful change in behavior. On liquidity, management said the ninth amendment currently has only a $5 million minimum liquidity covenant and that the $16 million draw should take the company through September; they also said a strategic review and lender discussions are ongoing.