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Quotient Limited (QTNT)
Q4Â 2020 Earnings Call
Jun 10, 2020, 8:00 p.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings. Welcome to the Quotient Limited Fourth Quarter and Full Fiscal Year 2020 Financial Results Conference Call. [Operator Instructions] A question-and-answer session will follow the formal presentation. [Operator Instructions]
At this time, I'll turn the conference over to Peter Buhler, Chief Financial Officer. Peter, you may begin.
Peter Buhler -- Chief Financial Officer
Thank you, Rob. Good morning, everyone, and welcome to Quotient's earnings conference call for our fourth quarter and fiscal year ended March 31st, 2020. Joining me today is Franz Walt, Chief Executive Officer of Quotient. Today's conference call is being broadcast live through an audio webcast and a replay of the conference call will be available later today at www.quotientbd.com.
During this call, Quotient will be making forward-looking statements, including guidance and projections as to future operating results and expected development and commercialization timelines. Because such statements deal with future events, actual results may differ materially from those projected in the forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements can be found in Quotient's filings with the US Securities and Exchange Commission, as well as in this morning's press release. The forward-looking statements, including guidance, projections provided during this call are valid only as of today's date, and Quotient assumes no obligation to publicly update these forward-looking statements.
With that, I'd like to turn the call over to Quotient's Chief Executive Officer, Franz Walt.
Franz Walt -- Chief Executive Officer
Thanks, Peter, and good morning, everyone. I'm now in my third year as the CEO of Quotient. In the last few months, we're very different from anything I ever expected.
The beginning of the calendar year was marked by the outbreak of COVID-19, first in China, but soon across the globe. Our company was, of course, affected by the safety measures taken by government health authorities. Our ongoing field trials came to a halt as a consequence of COVID-19 related restrictions. Because, however turned this crisis into an opportunity by developing a very high performing COVID-19 antibody tests in record time.
On one hand to contribute to the fight against this pandemic, and on the other hand to showcase the power and flexibility of MosaiQ. With a throughput of up to 3,000 tests in 24 hours, MosaiQ is perfectly positioned to perform with some strategic placements, large scale centralized testing. I'm very proud of our teams in Scotland and Switzerland, who jointly developed the COVID-19 Antibody Test in just about six weeks, a record time for such a high quality test and at very limited costs.
We have been able to develop these tests so quickly, because we could build on and benefit from insights gained during the MosaiQ system development over the last eight years, and the technical expertise we acquired and lessons learned during that time. Also, the quality of the test is exceptional with a sensitivity of 100% and a specificity of 99.8%. This means that no past infection goes unnoticed, while only two out of 1,000 positive results could be a false positive result. Independent external studies in major laboratories in Europe have since confirmed the high accuracy of our tests. In addition, since our test detects both IgM and IgG antibodies, it can identify antibodies as early as seven day plus a positive PCR test, so very early in the seroconversion process.
The test was CE marked on May 1st, 2020 and we submitted the request for FDA Emergency Use Authorization on May 6th, 2020. Shortly after the CE marking of our COVID-19 test, we signed a contract with hVIVO in the UK, the first ever MosaiQ customer contract. This is a very important step as it demonstrates that the MosaiQ platform is our valuable output for commercial laboratories. In the meantime, we signed several other customer contracts in Europe and the United States. We made these hVIVO-related public announcements, because of the significance of having realized our first MosaiQ sale, and because the customer agreed to do a joint press release.
Many new antibody tests into the market and what was considered the Blue Ocean quickly became a highly competitive market with pressure on pricing. As a principle, we do not disclose pricing nor any other terms of our contract. The high quality of the test, combined with our service and have the ability [Phonetic] of supply has the high value for laboratories and patients and we are convinced this justifies a premium price.
Pricing can, of course, differ by market, but in all cases the contracts are profitable. All contracts are representing real win-win situation for both the customers and for us. Although, we do not report instrument inventory in placements, we did announce earlier that we had 13 MosaiQ instruments available to place with customers for COVID-19 antibody testing. As per today, we only have three left. Many more instruments are in production, of course, not just for COVID-19 testing, but also in view of the upcoming launch of our first commercial donor menu during the first half of '21.
With the introduction of the COVID-19 antibody test, we could launch the MosaiQ system almost a year earlier than in our original plan foreseen with our transfusion donor menu road-map. We always said, this technology will have its place in the transfusion diagnostic market and beyond. Now due to these unprecedented circumstances, the beyond became reality even before transfusion diagnostics.
Of course, our year is not just consists of the development of our COVID-19 test, but we also achieved a series of important milestones during the financial year 2020. Let me share the highlights with you now. In April 2019, we received the CE mark for our initial immunohematology microarray. This was a major milestone for the company as it represented the first CE mark for our MosaiQ platform. We successfully completed the US field trials for the initial Serological Disease Screening microarray followed by a 510(K) submission for the initial SDS microarray and our MosaiQ instrument.
In December 2019, we announced the concordance data of important tests of our MDS microarray against the Roche Cobas system, with approximately 900 samples we achieved an overall concordance of 98% versus Cobas and demonstrated 100% specificity and 95.1% sensitivity. Bear in mind that the MDS microarray was in a very early stage of development. The purpose of the study was to demonstrate feasibility of the product and the result versus a highly developed and approved product is very encouraging.In February 2020, we announced the result of a benchmarking study of selected tests on our SDS microarray against Roche Cobas system. The purpose of the test was again to confirm the feasibility of our system and the test results on HIV, HBV and HCV was very encouraging with a sensitivity of 100% and a specificity of 100% for HIV and HCV, and 99.4% on HBV for both sensitivity and specificity.
We started the EU field trials for the expanded IH microarray at three external sites, but had to stop high [Phonetic] pass-through, due to the COVID-19 crisis. As for most companies, our development project were impacted by the coronavirus pandemic and in March, we announced the delay of up to 90 days for all our development projects.
Looking at the situation today, we still consider these new timelines appropriate at least in Europe. In the United States, it's a bit too early to tell, in particular, due to travel restrictions. During this whole period, we managed to continue our internal development work with little to no interruption. I'm particularly glad that at end of May, two of the three expanded IH field trial sides could resume testing. With this, we will have sufficient data to submit our regulatory dossier, but we also continue to discuss the potential restart of the third site. In any event, we are confident that testing should be completed within the next two months.
Our modular regulatory submission continues in parallel and we expect to complete submission by Q4 of the current calendar year and obtain CE mark approval in Q1 of calendar year '21. We changed our notified body during the first quarter of calendar year 2020, due to anticipate Brexit, since our previous notified body was based in the UK. The collaboration with [Indecipherable] our new notified body based in Germany is excellent and we are confident that the process to obtain the CE mark for our expanded IH microarray will run smoothly.
With this, we will be in a position to offer our first compelling menu composed of expanded IH and initial SDS to donor labs in the first quarter of 2021. This first menu will consist of 22 immunohematology tests and two serological disease tests. As a reminder, our Multimodality Multiplexing MosaiQ Platform will be able to run all tests on the same instrument respective with technology and process up to 3,000 microarrays in 24 hours. One microarray can be processed just 24 seconds after initial setup, and every 24 seconds the next result and the next result.
Adoption in the lab will depend on available tender. From what we can see, tenders were put on hold during the coronavirus pandemic and we are confident that we did not miss any new tender participation. Furthermore, at the beginning of the calendar year, we announced a streamlining of our organization. We implemented a new global organization between our three sites in Switzerland, Scotland and the US. At the same time, we flattened at the [Indecipherable] and reduced complexity in our structure and processes. The primary goal of this reorganization was not to reduce costs, but to have a more nimble and agile organization. This new organizational design made it's proof in the efficient development of our COVID-19 antibody test.
Our Alba by Quotient reagent business continues to be very successful despite the COVID-19 crisis and we delivered another year of double-digit growth in revenue. We are happy to report the demand for Alba by Quotient reagent was not impacted by the COVID-19 crisis. We also obtained FDA approval for seven additional Alba by Quotient blood bank reagents. Thanks to the progress and the continuous delivery on milestones we managed to further strengthen our balance sheet and raised a total of $150 million additional financing through a combination of equity and additional debt [Phonetic].
In summary, we continued to consistently deliver on milestones within our control. On top of that, we delivered a high performance COVID-19 antibody test that has not been on our list three months ago. When I joined Quotient, I said that there are three important questions to be answered when introducing a new technology. The first one is the performance of the system, which I think we answered in several successful internal and external studies. The second one is whether or not the system will get the necessary regulatory approvals and will that gain market access?
And by now, we have already five CE marks for MosaiQ. We also expect FDA approval for our initial SDS microarray in the MosaiQ instrument, as well as FDA Emergency Use Authorization for our COVID-19 antibody test soon. The last one would be whether customers were willing to buy the new technology. By now, we have several customer contracts signed. Therefore, I think we have massively de-risk this technology over the last two years.
And with that, I would like to hand back to Peter for the financial update.
Peter Buhler -- Chief Financial Officer
Thank you, Franz. Fiscal fourth quarter product revenues were $8.7 million, an increase of 11% from last year's fourth quarter. The increase in product sales is attributable to strong growth in both product sales revenues from OEM customers and incremental direct and distributor sales.
In the quarter, OEM sales of $5.9 million, grew 6% year-over-year and represent 67% of all product sales. The increase continues to be driven by better pricing as increased sales to existing customers. Direct and distributor sales of $2.8 million, increased 24% year-over-year, and represented 33% of product sales.
Direct sales in the United States increased 16% year-over-year. No other revenues were recorded in Q4 FY'20, while $450,000 were earned in the fourth quarter of prior year from the achievement of development milestones related to new OEM product.
In the fourth quarter, gross margin on product sales was 45.6%, compared to 43.5% last year. The improved margin is due to better product mix with higher direct sales and efficiency gains through our new manufacturing site in Scotland. In the fourth quarter, we recorded an operating loss of $21.5 million, compared with $20.3 million last year.
In the quarter, operating expense were $25.4 million, an increase of $1.3 million over the prior year. Research and development expense were $14.8 million, a $1.5 million increase year-over-year, mainly driven by the expanded IH field trials and the development of expanded SDS.
General and administrative expenses were $7.9 million, down $700,000, compared with the prior year. This included stock compensation expense, which decreased from $1.4 million to $1.1 million, a decrease of $300,000. The remaining decrease related to higher throughout of compensation accruals in the prior year.
Sales and marketing expense of $2.7 million, increased $450,000 from the prior year's fourth quarter, reflecting the continued scaling up of the commercial group in view of the launch of our first commercial donor menu for donor labs.
In the fourth quarter, depreciation and amortization was $3.3 million versus $3.5 million in the prior year.
Net other expense was $2.6 million, compared with $6.3 million in the fourth quarter last year. Net other expense consisted of interest expense of $3.5 million and $800,000 foreign exchange gain, compared to interest expense of $5.4 million and $800,000 foreign exchange loss in fiscal '19.
Interest expense decreased year-over-year, due to ongoing reassessment of the accumulated royalty liability. Overall, our net loss for the quarter was $24.7 million or $0.31 per ordinary share, compared with $26.6 million or $0.41 per ordinary share in the prior year's fourth quarter.
For the fiscal year, product revenues were $31.6 million, an increase of 10.2% over the prior year. Total revenue for the year also includes other revenues of $1.55 million, earned [Phonetic] by the achievement of certain product development milestones in our Alba by Quotient liquid reagent business. In the prior fiscal year, other revenues reached $469,000.
For the year, gross margin on product sales was 43.7%, compared with 39.9% in the previous fiscal year. The gross margin improvement is mainly related to the relocation cost of the new manufacturing site in Scotland that adversely impacted the financial year 2019.
For the full-year, operating expense increased $4.7 million to $95.5 million. This increase is primarily due to higher research and development costs, related to the development of MosaiQ, in particular to spend on expanded IH field trials, but also increased material costs and third-party development fees for the progress of the serological disease and the molecular disease microarrays.
Overall, our R&D costs increased year-over-year by $3 million. Development costs of our COVID-19 antibody tests are not significant as the development projects started very late in the financial year and given the overall costs to develop these tests were relatively small.
Sales and marketing costs for the year increased by $1.2 million, this increase is to a large extent driven by additional staff to ensure commercial readiness as we prepare our MosaiQ launch. Sales and marketing also include our technical service team that support instrument installed in labs, and this organization will strengthen in FY'20 in anticipation of the upcoming product launch.
General and administrative expenses increased by $400,000 versus per year, which is mainly driven by higher one-off restructuring and transition costs of $1.4 million and increased professional fees, including legal expenses associated with the water supply and distribution agreement and related disputes.
On the other side, in the prior year, we incurred approximately $1.6 million of costs associated with the relocation of Alba by Quotient reagent manufacturing operates to our new art facility. This was completed in fiscal 2019. Further driven more, stock compensation expense decreased year-on-year from $5 million to $4.5 million, a decrease of $0.5 million.
Our fiscal 2020 operating loss of $80.7 million included $17.8 million of non-cash expense, which compares to $80 million operating loss, which included $80 million of non-cash expense in fiscal '19. In the fiscal year, net other expense was $21.4, compared with net other expense of $26.4 million last year.
Net other expense consisted of interest expense of $23.8 million offset by $2.4 million gain on foreign exchange. This compared to interest expense of $20 million and a $6.4 million loss on foreign exchange in fiscal 2019. Overall, our net loss for the year was $102.8 million or $1.44 per ordinary share, compared with $105.4 million or $1.92 per share in fiscal 2019.
Net cash used in operating activities totaled $15.8 million in the fourth quarter of fiscal 2020, compared with $14.1 million in the prior year's fourth quarter. The full-year net cash used in operating activities reached $80.6 million, compared to $75.7 million. The increase in use of cash is mainly due to higher R&D spend and an increase in inventory as we increased our stock of raw material for MosaiQ and purchased additional instruments.
Capital expenditures in the fourth quarter of fiscal 2020 were $700,000, compared with $1.7 million in the prior year. For the full-year, capital expenditures totaled $4.6 million, compared with $4.8 million in fiscal 2019.
Moving to the balance sheet. Available cash and cash equivalents and short-term investments at March 31st, 2020, were $120.8 million, compared to $94.8 million one year ago. The November 2019 capital rate provided $90.5 million of additional equity net of expenses. As in May 2019, the company issued a further $25 million of 12%, brings the total borrowings under this facility to $145 million.
Under the terms of these loans -- notes, we have $9 million in an offsetting long-term restricted cash reserves account. On March 31st, accounts receivable totaled $5.3 million and inventory totaled $20.5 million. Our balance sheet now includes operating lease assets of $21.5 million and corresponding liabilities of $22.9 million. These new items in our balance sheet simply related to change in accounting principles and primarily reflect our facilities in Scotland and Switzerland.
We have not accrued any loss in relation to the arbitration against Ortho, and we consider an unfavorable outcome is not tropical. Liabilities include the 7% cumulative redeemable preferred shares acquired by Ortho 2015 for a total amount of $20.4 million at March 31st, 2020.
Moving to guidance. For fiscal year 2021, we are forecasting full-year revenue from product sales for our Alba by Quotient reagents in the range of $32 million to $34 million, and no milestone related to other revenues are expected. For other COVID-19 antibody test, we are not in -- for our COVID-19 antibody test, we are not in position to provide any sales guidance due to the inherent uncertainties of this new market.
For fiscal 2021, we forecast the capital expenditure in the range of $5 million to $10 million and the cash used in operations of approximately $5 million to $6 million per month. No guidance has provided on operating loss given we are currently unable to forecast MosaiQ revenues related to the COVID-19 antibody test, but we expect a positive upside.
With the cash position of $120.8 million at the end of March, we will be unable to finance our operations well into 2021. At this stage, we cannot forecast how much additional cash will be generated from the COVID-19 antibody tests.
With that, let me now turn the call back to Franz.
Franz Walt -- Chief Executive Officer
Thank you very much, Peter. So fiscal 2021 is shaping up to be another exciting year for all of us here at Quotient. We started the year with the launch of our COVID-19 antibody test and signed our first commercial contract for MosaiQ. This is a major milestone in the history of our young company and brought the commercial proof point of MosaiQ forward by almost one year.
I was always convinced that our MosaiQ technology has a tremendous value beyond transfusion diagnostic, which is why our mission is transfusion diagnostics and beyond. It is almost ironic that the coronavirus pandemic pulled that beyond forward. With the creation of our high performance COVID-19 antibody test, we started commercialization beyond the donor labs before the first attractive transfusion Dx combination became available and this creates a significant potential for our small company.
So what's the star going forward? We are expecting US Emergency Use Authorization for our COVID-19 antibody test soon. Also we expect US FDA 510(K) approval for the initial SDS microarray and the MosaiQ instrument in the near-term. We have restarted our expanded IH European field trials and are planning to have completed submission for CE mark approval by Q4 calendar year 2020 and to have the first powerful commercial transfusion diagnostics menu in the market for sale Q1 calendar year 2021.
US field trials for the expanded IH menu are expected to be completed by first half of '21. We are also making good progress with the expanded SDS microarray. We expect to complete internal V&V in the second half of calendar year 2020 and are starting our EU and US field trials subsequently. At the same time, we plan to develop content for the beyond pipeline and are conducting feasibility assessment of a specific microarray menu for the commercial plasma industry, as well as immunoassay and molecular diagnostics microarray may use for the Central Lab. We will report more about it in the near future.
I'm more excited than ever to continue our journey and as Europe is getting back to normal, following the lockdown related to coronavirus. I'm confident that we will continue to deliver consistently on our milestones. Finally, I would like to thank the team at Quotient for their commitment during this exceptional time and our shareholders for their continued support.
With this, I would like to hand over back to Rob to open the Q&A session.
Questions and Answers:
Operator
Thank you. We'll now be conducting a question-and-answer session. [Operator Instructions] Thank you. And our first question is coming from the line of Josh Jennings with Cowen and Company. Please proceed with your question. One moment please, while we get Mr. Jennings on line. Mr. Jennings, you may proceed.
Josh Jennings -- Cowen & Company -- Analyst
Can you hear me now?
Peter Buhler -- Chief Financial Officer
Yes, yes, Josh. I can hear you. How are you?
Josh Jennings -- Cowen & Company -- Analyst
Great, great. Good, thanks for the transmission difficulties. I just wanted to start off by asking, I know EUA approval is expected very soon. Any incremental details you can provide, I know it's only been a month since you submitted it, but that's one of the most frequent questions we get in the incremental color. And do you need to have the MosaiQ system 510(k) approval in hand in order to get that the EUA approval for the COVID antibody test?
Franz Walt -- Chief Executive Officer
No, we don't need that, but we are just waiting for -- I think a little bit overwhelmed before the submissions. Maybe it was a little bit easier and faster in the beginning, and now there is a pile of dossiers, which have been submitted. I think we have everything in place it takes to successfully go through this process, and it's difficult for me, of course, to forecast when exactly we're going to get the approval, but I think it's imminent. And we do not know -- don't need a 510(k) approval for the instrument. So this is going on in parallel, and the 510(k) approval instrument and the initial SDS is also expected in the near-term.
Josh Jennings -- Cowen & Company -- Analyst
Understood. You did mention that you had some contracts in the United States for the -- I believe, for the COVID antibody test. Is that for research use only in front of the EUA or maybe you can just help us understand how you're able to get those contracts in place in the United States, and not it's plural or one, but prior to EUA?
Franz Walt -- Chief Executive Officer
No, it's -- no, they can use it commercially, and they are, of course. For whatever reason would not get Emergency Use Authorization, they would have the right to terminate the contract, but we don't expect that. The customers had a look at all the details and the submission dossier and are very confident as well, that's why they signed.
Josh Jennings -- Cowen & Company -- Analyst
Understood. And then, I think you mentioned you had three systems left out of the 13 in inventory. I think, I believe you relay that you've ordered more systems from your manufacturing partner STRATEC. When do you expect to receive more MosaiQ systems for commercial use or for placements? And then how many have you ordered if you can disclose that?
Franz Walt -- Chief Executive Officer
Yes, I think, in an earlier discussion Ed Farrell was referring to 20 more, but in the meantime, we have ordered more than 20. We had a lot of internal discussions whether we should disclose the numbers, but I think it would only lead to false calculation. So we don't start inventory reporting, we ordered more than 20 instruments. They are due in the next couple of months, four months, five months, we should get plenty of additional instruments. And it's not only for COVID-19, but it's also for the imminent launch of the donor menu in transfusion diagnostics.
Josh Jennings -- Cowen & Company -- Analyst
Excellent. And then my last question, sorry to focus solely on the COVID antibody test. But wanted to just hear about manufacturing capacity of the microarray for COVID-19 antibody test and maybe where you stand today and when you think you can potentially, I believe your current manufacturers solely can get to 30 million tests for microarrays manufactured annually. How do you see that ramp progressing from here? Thanks for taking all the questions.
Franz Walt -- Chief Executive Officer
Both, I think, very good and the 30 million capacity -- annual capacity will be reached very soon in the next two, three months we will be there. And we can also expand this capacity in a matter of 18 months, maximum 18 months and double it. We have a couple of KPIs in place, thresholds to be reached when we start and pull forward the investment for the second line. So the decision for the second line has not been taken yet, but there are a couple of KPIs, like number of contracts minimum consumption commitment from customers and things like that and then we do the investment. If this happens, we will inform the public.
Josh Jennings -- Cowen & Company -- Analyst
Great. Thank you.
Operator
Our next question is from the line of Sung Ji Nam with BTIG. Please proceed with your question.
Sung Ji Nam -- BTIG -- Analyst
Hi, thanks for taking the question. Franz and Peter, could you talk about what the demand looks like currently for COVID antibody testing in comparison to maybe the -- when initially there was the outbreak. I'm just kind of curious given that the different countries and regions are starting to reopen again and starting to see, kind of, stabilization or decline in the number of cases. I'm just curious, if there is still -- if the demand remains strong for antibody testing currently?
Franz Walt -- Chief Executive Officer
Yes, the demand to be able to offer antibody testing is very great. The customers don't know exactly what the actual consumption is going to be because that's a new experience for everybody. There are also discussions ongoing whether antibodies represent immunity or not. I personally believe rather, yes, than no. I also have recently seen a study in -- from South Korea concluding that there was no second infection with anybody, who had an antibody and previous belief; second infections were rather diagnostic errors like false positive results.
So everything I've seen is indicating more toward immunity, but nobody knows how long this will last, how intense it's going to be, but for all this, you need antibody testing and then also for the development of a vaccine, how else can you test whether the vaccine is working. And there are several vaccines in development and a company which is heavily engaged in vaccine development is our first customer hVIVO in England, for instance. So for that purpose, it will be important.
On top of that, if there is limited immunity with the vaccination and you need a revaccination then, of course, you need antibody testing again. Also for several epic immunological questions, on top of that, we had discussions with pharmaceutical company, who are thinking about, kind of, taking a lot of people, who had infected and have developed antibodies and provide a kind of a plasma coated area -- as a [Indecipherable]. But there are multiple of applications and interest, but it's so early in the whole process. It will take us two months, three months more to have more transparency on the actual consumption.
Many of our customers are also conducting, right now, marketing campaigns to attract such testing to their companies, like testing whole companies, and there are discussions on a kind of a passport for immunity and all this is going on really wisely in all directions, and in different directions sometimes from country to country. But the interest is great, the transparency how this will play out and how long this will be around remains to be seen. But for us it was a unique opportunity to make a contribution, but also to showcase the power of MosaiQ.
And with our experience we have acquired over the last eight years how quickly we can bring absolute top-notch performing based on the market, if we focus the resources. So I think it's only an upside. None of the COVID sales are included in our current planning, and we have so many contracts already in our hands, so I expect quite an attractive upside.
Sung Ji Nam -- BTIG -- Analyst
Got you. Great, and then could you talk about the almost 30 systems that are out there and the several contracts you have in place already? Are they reagent rental models, I'm just kind of curious where there customers that bought some of the systems outright? And then, as you are discussing or contracting with different customaries, what are their kinds of interests beyond COVID testing? Or is there interest beyond COVID testing in terms of other applications that might come onboard with the MosaiQ platform?
Franz Walt -- Chief Executive Officer
Yes, I think there are customers now, which are not in the classical donor segment, but in the Central Lab. And with that we have MosaiQ in the Central Lab, that's why I also mentioned before, we are working now with high-priority on the second portfolio for the Central Lab. Once we have the instruments in and ready do COVID testing, why not adding other impacts of disease testing.
And we have the infectious disease pipeline already up and running for the donor menu, be it immunoassays, like the serological disease screening microarray or be it molecular disease screening, which is called molecular diagnostics in the Central Lab, PCR testing. So there is an upside now to bring the beyond quicker and faster, and I think for the modifications, which are necessary to get those microarrays tail up for the Central Lab, will take may be an additional three to six months, compared to the donor menu, the additional clinical trials necessarily different patient groups to be covered.
So there is an upside definitely, so customers are interested in the performance and are taken by the performance of the test, because when they do their validation, it really proves the point that this is an extremely high accurate test, gives them confidence in this new technology. I mean MosaiQ is like, if you compare it with some of the alternatives in the market, they are like 20 years, 25 years old technology than what we have. And how well this technology works? I think we have proven.
And then, of course, they ask, can you provide more tests? So I see upside there, and otherwise for COVID, as I mentioned before, they do marketing campaigns to attract as much testing as possible. But how successful this is going to be and how -- what the throughput per instrument is going to be, it's little bit too early to tell. Yes, we just signed a contract, instruments are either installed up and running and others are in the installation process, so it will take a couple of more weeks to get more transparency on that. Other thing, I was impressed that the system works so well. It's so easy to install, so easy to train and get everything up and running, just a few days.
Sung Ji Nam -- BTIG -- Analyst
Got you. And then just lastly from me, to the extent you can comment on it. Are there plans to develop other COVID testing like or antigen and molecular testing? I'm not sure if antigen testing in a Central Lab makes sense, but kind of curious if you have additional plans there? Thank you.
Franz Walt -- Chief Executive Officer
We are discussing with clinicians variations to the test. I think first and foremost, the actual performance of the test is important. We have seen with many alternatives that they do not perform as promised than in realized, yes. And sometimes they need like two weeks to show the antibodies, probably because they are stronger on IgG and weaker on IgM, I don't know even I covered IgM. Some of them took even up to four weeks to get up to performance. So ours is only seven days after positive PCR test, and you have a high performing test.
So the performance should not softer with modifications. So modifications, we are currently looking at working on. And discussing with clinicians is a semi-quantitative microarray. We are also looking into -- they had a value of having IgG and IgM separated what is the clinical value in terms of personalized treatment afterwards or how they proceed with this case. So all this is up and running in parallel. So it could very well be that we have a second COVID-19 test very soon or a replacement with further attribute. But we only make this investment and development if the market is valuing this additional information, which we are classifying right now.
Sung Ji Nam -- BTIG -- Analyst
Great. Thank you so much.
Operator
Thank you. Our next question is from the line of Brandon Couillard with Jefferies. Please proceed with your questions.
Matt -- Jefferies -- Analyst
Thanks. This is Matt [Phonetic] on for Brandon this morning. Appreciate you guys taking the questions. Franz, first one for you, just curious if you could talk a little bit more about the hVIVO contract. Why that was the best or most logical first customer for your antibody test and then any ballpark utilization or microarray volume expected from this initial customer?
Franz Walt -- Chief Executive Officer
We can, of course, Brandon, not disclose any contractual terms and to make a forecast. It's also a little bit premature, I can only refer to the press release hVIVO did themselves, I think, they said, it's the best-in-class, they have a look at the options. They also made a comment in another press release potentially considering a second MosaiQ instrument. So it looks like they have big plans for COVID-19 antibody testing.
And hVIVO is an innovative, it's a very modern and central type of laboratory, they do CRO, as you know also in orphan drugs development, then in vaccine testing, for vaccine development, and for -- in COVID-19 testing, and trying to get all the companies -- whole companies to get tested in their lab. So I think it's the interest of the customer in having a first-class test that they able and to invest in this type of testing right now. So they were front runners, and we were front runners, one of the first, and we found each other, yes.
Matt -- Jefferies -- Analyst
Thank you.
Franz Walt -- Chief Executive Officer
We are very proud to have hVivo as a customer. We are really proud that I have to make that up. And I mean we are a small company, we look mall bolt, we are a boutique diagnostic company. We feel like the few customers -- and take really very good care of them. They get high quality products, they get top-notch service and support, the production facilities up and running, and we can guarantee the supply. I think these are all very important aspects in this new field of testing for our customers. And I think this may also reasons they have told us why they want to team up with us.
Matt -- Jefferies -- Analyst
Thanks, that's helpful. And then of the MosaiQ instruments that have been earmarked for COVID testing between hVIVO, and then the several other contracted customers you mentioned. Are these contracts have minimums attached to them? And then also of your current hyper care sites, how many, if any, might theoretically be suitable for Antibody testing to become customers as well? Thanks.
Franz Walt -- Chief Executive Officer
Suitable for all of them, yes. And, but I cannot disclose where we are with the discussions and negotiations. It's not only that we have signed several contracts, there are couple of more contracts in the finalization stage, right now, as we speak. So I can't talk to that. What facility -- but it was the hyper care, what was the second part of the question?
Peter Buhler -- Chief Financial Officer
The minimum.
Franz Walt -- Chief Executive Officer
The minimum. The minimum in the contract, but they are not really giving a lot of insights, because customers normally want the lowest level of minimum requirement, because they don't want to see done tests they can't use. And those minimum requirements already attractive for us, but the potential is much higher than we see companies. They are doing this throughput, they're getting after initial setup is higher, indicates to higher use than the minimum, much higher use than the minimum.
Matt -- Jefferies -- Analyst
Awesome. Thanks. Appreciate it guys.
Franz Walt -- Chief Executive Officer
Thank you very much.
Operator
Thank you, gentlemen...
Franz Walt -- Chief Executive Officer
All right.
Operator
Gentlemen, please proceed.
Franz Walt -- Chief Executive Officer
If there -- are there more questions? Otherwise...
Operator
There are no additional questions. I turn it back to you for closing remarks.
Franz Walt -- Chief Executive Officer
Okay, thank you very much, Rob. So thank you everybody for joining us on this call today and we look to updating you on the progress we expect to have made by the time of our first quarter fiscal 2021 conference call. Thank you very much and all the best. Take care. Bye-bye.
Operator
[Operator Closing Remarks]
Duration: 48 minutes
Call participants:
Peter Buhler -- Chief Financial Officer
Franz Walt -- Chief Executive Officer
Josh Jennings -- Cowen & Company -- Analyst
Sung Ji Nam -- BTIG -- Analyst
Matt -- Jefferies -- Analyst
