Accelerate Diagnostics, Inc. (NASDAQ:AXDX) Q3 2018 Earnings Conference Call Transcript
Nov 06, 2018 • 04:15 pm ET
Good day, and welcome to the Accelerate Diagnostics, Inc. 2018 Third Quarter Results Conference Call. (Operator Instructions). After today's presentation there will be a Question & Answer session. Please note, today's event is being recorded.
I would now like to turn the conference over to Laura Pierson of Accelerate Diagnostics. Please go ahead.
(Forward-Looking Cautionary Statements).
These are discussed in greater detail in our annual report on Form 10-K of the year ended December 31, 2017, and other reports we filed with the SEC.
I will now turn the conference call over to Mr. Lawrence Mehren, President and CEO of Accelerate Diagnostics. Larry?
Thank you, Laura. It is great to have you all with us this afternoon. For our typical cadence, I will start with a report on our commercial progress. I will then hand it over to Steve Reichling, our CFO, to review our financial results, and I will wrap it up with updates on product development.
So to commercial progress. As you know, we started this year with a straightforward commercial plan, bring the right team, data and marketing together and then execute. And execute, we have. In Q2, we completed the reorganization of the sales team while continuing to build what we believe will be an unprecedented body of evidence supporting the terrific results of the system. Further, we translated this evidence into effective marketing, which our sales team have used to increase awareness and build the funnel.
This work has had a positive impact as evidenced by the hundreds of customers interested in acquiring a system. And this demand continues to grow as the customers who are using the system clinically speak to their colleagues and other hospitals about these terrific results.
Meanwhile, those publications and posters showing the lifesaving and cost-reducing benefits of the Pheno system are also helping drive demand. And so the top of the funnel looks great. Our challenge, as you all know, has been moving these folks through to acquisition. In diagnosing a situation, we identified a few hurdles. One, budget cycle timing and, because of this, limited capital availability. Two, an extended sales cycle and time to clinical adoption. And three, GPO access. I am glad to say that in Q3, we saw material progress in all three.
I will begin in reverse order discussing these with GPO access first. The great news here is that this quarter, we signed an agreement with HealthTrust, the largest compliant GPO in the US. This contract combined with previously announced agreements with Ascension, GSA and Vizient gives us the market access we need to fully realize the commercial potential of Pheno.
To put this in perspective, when we started the year, only 600 of our 2,500 potential accounts in North America were covered by GPOs we had agreements with. This lengthened the sales cycle and, in many cases prevented access altogether. For example, prior to signing with HealthTrust, most of our member hospitals could not purchase from Accelerate.
Even more challenging, in many of