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Chembio Diagnostics Q1 Revenues Climb 26 Percent on Government Grant Income

NEW YORK – Chembio Diagnostics reported after the close of the market on Thursday that its first quarter revenues rose 26 percent year over year, driven in part by government grant income.

For the three months ended March 31, the Hauppauge, New York-based point-of-care diagnostics company reported revenues of $8.7 million, compared to $6.9 million a year ago, beating the analysts' average estimate of $8.2 million.

Q1 product revenues fell 30 percent year over year to $4.0 million from $5.7 million, while R&D revenues increased 21 percent year over year to $1.1 million from $907,687. License and royalty revenues rose slightly year over year to $243,058 from $235,304. Chembio reported Q1 government grant income of $3.4 million but no such income in Q1 2020.

"In recent months, we have advanced several strategic initiatives focused on leveraging the capabilities of our network of distributors and fully scaled US salesforce across our diversified product portfolio," said Richard Eberly, Chembio's president and CEO, in a statement. “Commercially, we are seeing good momentum with our Sure Check HIV Self-Test via our international channels and our DPP HIV-Syphilis system in the United States."

In the recently completed quarter, the company initiated US distribution of the COVID-19/Flu A&B test. Eberly said that Chembio is seeing encouraging signs from its customers regarding the test, including customer commitments and planned product evaluations in anticipation of the return of the flu season in the late summer and early fall.

Chembio said in April that it had inked a licensing agreement for the test with an undisclosed manufacturer that had received a US Food and Drug Administration Emergency Use Authorization.

With the US Department of Health and Human Services' Biomedical Advanced Research and Development Authority, Chembio remains "actively engaged in pursuit of an EUA for [its] rapid, point-of-care DPP SARS-CoV-2 Antigen System and DPP Respiratory Panel" and is proceeding with work to seek FDA 510(k) clearance for its DPP SARS-CoV-2 Antigen System, Eberly said.

Chembio said that in the recently completed quarter it launched marketing programs with national distribution partners in the US to promote and supply its rapid DPP HIV-Syphilis test system to decentralized healthcare settings. It further completed registrations in multiple countries in Africa and Southeast Asia for its Sure Check HIV Self-Test and received initial purchase orders for shipments in those countries.

Chembio further said it has received regulatory approval for its DPP SARS-CoV-2 Antigen test system from Agência Nacional de Vigilância Sanitária, Brazil’s health regulatory agency, in collaboration with Bio-Manguinhos, which is a subsidiary of the Oswaldo Cruz Foundation, an organization responsible for the development and production of vaccines, diagnostics, and biopharmaceuticals primarily to meet demand from Brazil’s national public health system

The firm's Q1 net loss narrowed to $4.5 million, or $.22 per share, from $5.0 million, or $.29 per share, in Q1 2020, beating analysts' average estimate for a loss of $.32 per share.

Chembio's Q1 R&D expenses rose 45 percent year over year to $2.9 million from $2.0 million, while its SG&A costs also rose 45 percent year over year to $6.1 million from $4.2 million.

The company ended the quarter with $14.4 million in cash and cash equivalents.

In Friday morning trading on the Nasdaq, Chembio shares were up more than 2 percent to $3.57.