Trinity Biotech plc (NASDAQ:TRIB) Q3 2022 Earnings Conference Call December 15, 2022 11:00 AM ET
Company Participants
Joe Diaz – Lytham Partners, IR
Aris Kekedjian – Chief Executive Officer
John Gillard – Chief Financial Officer
Conference Call Participants
Jim Sidoti – Sidoti & Company
Paul Nouri – Noble Equity Fund
Operator
Good day. And welcome to the Trinity Biotech Third Quarter Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions]
Please note this event is being recorded. I would now like to turn the conference over to Joe Diaz with Lytham Partners. Please go ahead.
Joe Diaz
Thank you, Kate. And thanks to all of you for joining us today to review the financial results of Trinity Biotech for the third quarter of 2022, which ended on September 30, 2022. Joining us on today’s call are Aris Kekedjian, Chief Executive Officer; and John Gillard, Chief Financial Officer. At the conclusion of today’s prepared remarks, we will open the call for a question-and-answer session.
Before we begin, let me inform you that statements made in this conference call may be deemed forward-looking statements within the meaning of federal securities laws. These statements are known — these statements, excuse me, these statements are subject to known and unknown risks and uncertainties that may cause actual results to differ from those expressed or implied in such statements.
These risks include, but are not limited to, those set forth in the risk factor statements in the company’s annual report on Form 20-F filed with the Securities and Exchange Commission. Trinity Biotech undertakes no obligation to publicly update or revise these forward-looking statements to reflect events or circumstances after today or the occurrence of unanticipated events.
With that said, I will now turn the call over to John Gillard, Chief Financial Officer, for a review of the financial results. He will be followed by Mr. Aris Kekedjian, Chief Executive Officer, who will provide additional background on revenue for the quarter and the overall business. After which, we will open the call for your questions. John, the floor is yours.
John Gillard
Thank you, Joe. Good morning, everyone. Now I will take you through the results for Q3 2022. Starting with revenues, total revenues for the quarter were $19.5 million, compared to $22 million in Q3 2021.
Aris will discuss revenues in further detail later on the call. As such, I will move on to discuss other aspects of the income statement. You will have seen from our income statement that we have recorded significant excess and obsolescence charges related to inventory of $4.7 million this quarter.
As this amount is material to the results this quarter, I will now bring you through the components of this charge. Firstly, there is a Viral Transport Media inventory write-down of $3.5 million. As we have talked about on recent earnings calls, the situation relating to COVID-19 products has been fluid and hard to predict.
Last year, when demand for PCR VTM products diminished, we took back our production. We decided to retain the capability to flex manufacturing volumes should market conditions warrant. As part of this strategy, we maintained an inventory of critical raw materials to allow a ramping up of VTM production to meet peak demand and it was important that we were able to fulfill high volume orders at shortened orders in order to retain existing customers and capture new customers at attractive price points.
So far we have not seen any evidence of current or future significant peaks in demand for PCR or VTM products this season. So we revised our strategy of maintaining significant levels of raw material inventory to meet demand peaks.
We now intend to sell the vast majority of this inventory, which given current market conditions, is expected to be at lower prices. Consequently, the value of inventory has been written down for an estimate of its net realizable value.
Secondly, we have written down the value of certain excess raw materials and work-in-progress following a review and update to our relevant quality assurance policy. This amounted to a charge of $900,000.
The third and final charge relates to write-down of Tri-stat inventory and amounted to 300,000 barrels. We undertook a strategic review of our Tri-stat instrument as part of a broader review of our haemoglobins product portfolio. With annual sales of approximately $200,000, Tri-stat is the least significant product in the portfolio.
To simplify the haemoglobins product portfolio and to allow us to focus our resources on the higher growth products, we have decided to limit sales of Tri-stat to certain targeted partnerships. Consequently, we have written down the value of this inventory to affect the consequently revised outlook.
All of what I have mentioned so far contributed to a gross margin of 10.3% this quarter. Excluding these significant inventory write-down, the gross margin for the quarter would have been 34.4%, compared to 40.4% achieved in Q3 2021.
As was the case in the first two quarters this year, the reduction in gross margin this quarter is mainly due to the very strong sales and margins recorded in the comparative period within our COVID-19-related portfolio of products. Since then demand for COVID PCR tests have or has fallen significantly in North America.
Additionally, our gross margin this quarter has been negatively impacted by rising prices for raw materials and an under recovery of labor and overhead costs at three of our manufacturing facilities due to reduced production activity.
We addressed the latter problem by reducing headcount of two of the affected production facilities. In relation to the other site in Jamestown, New York, we have started the process of transferring in autoimmune product manufacturing, which up to now has been done at our Buffalo, New York site.
In terms of dealing with margin erosion, which has come from rising input prices, we have already put through some sales price increases where market conditions allowed and we continue to monitor the opportunities to implement additional price adjustments in the short-term, but subject to consistency with our broader strategic objectives.
Moving on to our R&D expenditure, which was $1 million in the quarter, down by $40,000 compared to Q3 2021. Meanwhile, SG&A expenses in the quarter were $5.8 million, down approximately $320,000 compared to Q3 2021.
We continue to focus on operating efficiency and cost control, have continued to reduce head count as we pursue greater automation and simplification of processes. We are also benefiting from a stronger U.S. dollar against the euro, which is reducing our substantial euro/denominated SG&A expenses.
Offsetting this are additional travel and trade show related expenditures, reflecting an increase in sales and marketing, and senior operational staff travel post the lifting of many COVID-related travel bans. We believe it’s important for our sales and marketing staff to resume face-to-face interaction with our customers and partners as a key component of rejuvenating our sales revenues.
In addition, we also believe it is important the key operation leaders, many of which we have recently recruited have the opportunity to visit our various sites, so we can aggressively execute on our operational efficiency objectives.
We have recorded impairment charges of $2.3 million this quarter compared to 0 in Q3 2021. The development project for the autoimmune smart reader was paused earlier in 2022, as we review other options, including the potential to proceed with a third-party reader instead of our own internally developed reader.
Following this review, we determined that there were likely greater opportunities to capture more market share in a more capital efficient manner through partnering with a third-party reader manufacturer were pursuing an independent strategy.
At this point in time, there is significant uncertainty if we will complete the project to develop our own in-house autoimmune smart reader and that’s why we may revisit this decision in the future, in the interest of prudence, we have fully impaired the project’s carrying value of $1.3 million.
The remainder of the impairment charge relates to Tri-stat. As I mentioned earlier, we undertook a strategic review of our Tri-stat instrument as part of a broader review of our haemoglobins product portfolio.
In order to rationalize the haemoglobin’s product portfolio and to allow us to focus our resources on the higher growth products within that portfolio, management decided that Tri-stat treat sales will be restricted to only certain targeted partnerships and this has led to an impairment to the carrying value of the Tri-stat tangible assets.
This resulted in an operating loss for Q3 2022 of $7.1 million, compared to an operating profit of $2.8 million reported in Q3 2021. I will point out that, this quarter we have zero Paycheck Protection Program income and in the quarter — comparative quarter, just over $1 million of PPP income was recognized.
The other drivers of that reduction in operating profit are the lower revenue and margin contribution from our COVID-related portfolio of products, the significant inventory write-downs and the impairment charges, as well as the aforementioned impact of inflation and under recovery of overheads.
Moving on to net financial expenses of $1.9 million in Q3 2022, which compared to $1.2 million in Q3 2021. The increase is mainly due to higher interest rates applying to our borrowers post the refinancing.
We replaced exchangeable notes with a coupon rate of 4% with a senior secured term loan with an interest rate of approximately 13.5%, albeit the net amount now borrowed is substantially lower.
In dollar terms, the interest expense is $600,000 higher this quarter when comparing the interest expense for term loan versus the exchangeable loans that replaced. Additionally, in 2022, we issued a seven-year convertible note and the total cash and non-cash interest expense for this debt is approximately $260,000 in Q3 2022.
Lastly, we recorded a fair value adjustment on derivative balances related to the term loan with this quarter with income of approximately $300,000. In the comparative period, we had fair value adjustments on derivative balances related to the exchangeable notes, which is a financial income of just under $200,000, thus after tax was $8.9 million in Q3 2022, compared to a profit of $1.3 million in Q3 2021.
As in prior quarters and as set out in the press release, we quote earnings per ADS effectively or equivalent of EPS. In Q3 2022, the loss per ADS was $0.235 [ph], compared to a profit per ADS of $0.063 in Q3 2021.
I will now move on to address some of the main balance sheet movements we have seen since quarter two 2022. Intangible assets decreased by $1.6 million. This is made up of additions of $1 million, which mainly comprises capitalized R&D expenditure, partially offset by amortization of $300,000 and the impairment charges for the two development projects of $2.3 million.
The amount of capital R&D expenditure reduced this quarter compared to recent quarters and this is because several of the main projects we have been working on have reached the final phase of development, and in the final phase, fewer resources are typically required.
Inventories decreased by $5.6 million, mainly due to the significant excess and obsolescence charges I talked about earlier. Excluding these significant inventory provisions, our level of inventory has reduced by 3% since the end of Q2 2022.
This is an area we are targeting, and we have an ongoing project aimed at optimizing our inventory levels going forward as part of our focusing on improving the overall effectiveness and efficiency of our supply chain. Accounts receivable balances, on the other hand, have increased by 8% and this is mainly a function of the increased sales this quarter.
Finally, I will discuss our cash flow for the quarter. Our cash balance decreased by $3.2 million to $7.3 million in Q3 2022. Cash generated from operations for the quarter was $700,000, an increase of about $100,000 compared to Q3 2021. In the first quarter of this year, we reported positive cash flow from operations and this is a result of trimming our cost base and better working capital management.
Capital expenditure cash outflows comprising PPE and R&D spend are $1.3 million, a reduction of $700,000 compared to the comparative period. Interest payments in the quarter were $1.7 million.
I will now hand it back to Aris who will bring you to the revenue. Thank you.
Aris Kekedjian
Thank you, John. I’d like to take a few minutes before we answer any questions to go through the highlights for the quarter. Total revenues for Q3 2022 were $19.5 million. Excluding our COVID-focused PCR products, Q3 2022 revenues of $19.2 million were marginally higher by 2% compared to Q3 2021 and were up 6% Q2 — compared to Q2 2022. So we have sequential — some sequential growth of around 6%.
A strong year-over-year increase of 30% revenues [ph] attributable to both our haemoglobins and Fitzgerald businesses, offset the timing impact of atypical concentrated sales associated with Uni-Gold HIV in Q3 2021. In addition, we put through pricing changes and optimized capacity in our autoimmune products business and that’s led to a 30% increase compared to the same period last year.
Quarter-over-quarter revenue momentum was once again driven by Fitzgerald at about 25% and this reflects actions that we have taken to optimize demand generation throughout the year. We also had some strong demand for the Uni-Gold HIV product on a quarter-over-quarter basis up 35%, and as I previously mentioned, the actions we took in autoimmune resulted in a 20% quarter-over-quarter growth in the autoimmune products.
We are experiencing particularly strong demand for our haemoglobin products in Asia-Pac and Latin America, with a well over 50% year-over-year revenue growth in Asia-Pac and over 40% in Latin America. We continue to scale our commercial coverage in these markets where the increase in diabetes and propensity for haemoglobin variants is at some of the highest rates and our boronate affinity technology has a particular competitive advantage in this area, given that it mitigates and limits interference associated with variables — variants, excuse me.
The other thing that I am particularly focused on with respect to our global growth is in relation to distributor coverage. So we have also undertaken a significant review of our gaps in distribution and I expect to meet the bulk of our distributors in February in the New Year.
Preliminary estimates for Q4 indicate significant continued growth momentum in haemoglobin instrument placements and steadily improving global HIV test demand, including new Uni-Gold orders from Ethiopia and preliminary trend screen orders from Kenya. These increases are expected to offset lower Q4 revenues to share, reflecting the demand generation in previous quarters. But we expect the year to end at around $75 million run rate for — on an annual basis.
In late August, the company submitted its 510(k) submission to the FDA seeking U.S. regulatory approval for Premier Resolution, our Haemoglobin Variants instrument. We are expecting to launch this product in Q2 of next year and we remain on track, hopefully, in line with what your expectations are.
In November 2022, the company initiated the development of its next-gen flagship diabetes HbA1c instrument, the Premier 9210. We are expecting to launch in Q3 this revised instrument of next year. It is planned to feature an improved backward compatible reagent column system that will feature up to 3 times the injection capacity and stability. It requires limited calibration and improves user interface and lapse system integration.
In addition, this system should underpin the lower cost mid-throughput A1c instrument currently in development. We think this product launch and the associated redesigns associated in conjunction will give us substantial gross margin improvement in our haemoglobins business over the next couple of years.
Since the World Health Organization approval in February 2022 of our TrinScreen product, the Kenyan Ministry of Health task force recommended it as the first line screening test for Kenya’s new HIV testing algorithm. We expect to conclude the current pilot program that’s underway. We expect that to end probably sometime close to year-end and we believe that we are going to be delivering Ministry of Health orders in Q1 and ramp up to approximately 6 million tests a year.
The company is in partnership negotiations with a number of rapid best innovators. Our intention here is to leverage our lateral flow biological development and manufacturing capabilities and also provide access to our global distribution channels.
In addition to capital efficient growth, this strategy provides early access to intellectual property associated with evolving user interface concepts. We have been implementing improved design for manufacturing, supply chain and other in-sourcing enhancements in order to significantly optimize margins across the portfolio.
In Q3, we focused on streamlining the portfolio with the elimination of loss-making legacy products and inventory, much of what John explained to you earlier. We continue to consolidate multiproduct flexible production in our Jamestown facility with the transfer of our immunofluorescence and urine tube manufacturing activities from Buffalo, New York and Burlington, Canada, respectively.
The company continues to focus on attracting and developing world-class leadership. We recently appointed a new Chief Technology Officer, a Global Head of Quality and Regulatory Affairs and Global Supply Chain leaders, all critical in driving our growth strategy that I reviewed last week at the Piper Sandler Conference, where I outlined the company’s strategy and our focus around key initiatives. You are welcome to take a look at a copy of the presentation. It’s on our website.
And with that, I think, we will open it up to questions.
Question-and-Answer Session
Operator
[Operator Instructions] The first question is from Jim Sidoti of Sidoti & Company. Please go head.
Jim Sidoti
Hi. Good afternoon. Thanks for taking the questions. It seems like you have made some pretty significant investments in the haemoglobin product line to accelerate growth there. If you look out to 2024, how many different Premier Instruments do you expect to have on the market and what markets do you think you will be in?
Aris Kekedjian
Well, look, let me — I will let John give you some context around the numbers associated with the plan. But I will give you some context. Our technology is somewhat unique. It keeps variant interference out of the A1c testing process.
That might not be as big a deal in the U.S., but outside the U.S. where you have the highest growth rates of diabetes, whether it’s in Southeast Asia or Latin America or the Middle East for that matter, our technology is actually perfectly suited with the high-growth markets that we are talking about and that’s where we are seeing significant growth. So we feel pretty confident that we could be placing quite a number of instruments on a consistent basis in those markets.
Now at the same time, behind that, we are using a fair bit of the same technology to rollout our T20 lower cost instrument for lower throughput use, same column technology, similar supply chain.
And I think, again, that gives us significant opportunity to gain share in these critical markets. And as you know, the business model, it’s a bit of a razor/razor blade model. If we get a number of placements in around the world, especially where the high growth rates are, it’s just math. John, I don’t know if you want to give some context on some…
John Gillard
Yeah. In terms of numbers, like, we have historically placed 200 — about 200 instruments a year. That has been reduced down through COVID and we certainly have seen an uplift throughout this year.
I’d expect once this redesign goes through and we are also focused very much in terms of our supply chain efficiency to reduce down the cost of the instrument, our intent there would be to give a lower entry price point, right, in terms of the market.
So I think both of those, the redesign and the supply chain efficiency, reducing down the price point, Jim, we would expect that we would increase those number of placements from that historical run rate.
In terms of the T20 instrument, the mid-level analyzer that is a lower cost instrument and we certainly, again, would be expecting to be in the 100 range in terms of placements of that once we have got that established in the market. Geographically…
Aris Kekedjian
As far as the new 9210, I would expect, we would be running well ahead of where we were prior to COVID, once we were up and running and properly marketing the product. It wouldn’t surprise me if we are starting to put 250, even higher 300 units in the market on annual basis. That’s what I would expect from my sales team, okay?
The T20 is coming later. We still have to get approvals and commercialized. But we — to John’s point, we should have a similar number of run rate unit placements with the T20 as we are with the 9210. So, like, if you think about doubling over time, we should be doubling our placement levels with both products compared to where we were a couple of years ago.
John Gillard
Geographically…
Jim Sidoti
So…
John Gillard
… we expect the T20, Jim, is probably suited more to countries where there’s more dispersed testing regime, so a lower concentration of big, big labs and that can generally be kind of the lower to middle income countries, okay? For the 9210, we will probably continue to be strongest in higher income countries are those with a significant level of variants. So…
Aris Kekedjian
Yeah.
John Gillard
… it depends on the economic factors and it also depends on the type of lab infrastructure in country. We have got a good global spread of our instrumentation and we think the T20 gives us a chance to have even better global spread and a greater diversified placement base.
Aris Kekedjian
And the other thing with the T20 is, we are doing some work on it now, but we think there is an interesting market opportunity in the U.S. around CLIA Labs and whether or not they are the appropriate throughput levels and the right entry point. So we think there is a revitalization potentially of our U.S. placements potentially with the T20.
And part of the redesign effort, we have got the team together in January, but part of the redesign effort is to make sure that the features that we are incorporating really stops into where we think the sweet spot might be.
Jim Sidoti
But it sounds like, by 2024, you are going to have — you will have at least three versions of the Premier systems on the market, is that right?
Aris Kekedjian
That’s…
John Gillard
Yeah.
Aris Kekedjian
Yeah. Including…
John Gillard
Yeah.
Aris Kekedjian
Including the Primary Resolution, yeah. That’s a plan.
Jim Sidoti
Okay. All right. And in terms of…
Aris Kekedjian
The haemoglobins business for us right now is really all about focused product development, commercialization and rollout. It’s just execution right now, very focused.
Jim Sidoti
In terms of facility consolidations, is there enough capacity in Jamestown to continue to consolidate?
John Gillard
Yeah. So, just to be clear, we are not closing our Buffalo site. We are expanding our autoimmune manufacturing capability. So our Jamestown site has historically dealt with our legacy infectious disease business.
I think we flagged a number of times we do expect that business to continue to kind of keep — was reduced down over time, right? And for that reason, we are seeking to get greater utility out of the Jamestown site. That site has been a very loyal, highly productive site for Trinity…
Aris Kekedjian
It’s a very flexible product site as well. You can ramp up and ramp down in a number of different product lines. We are looking at it as one of these — as a swing facility and a flexible site in many ways.
John Gillard
Yeah. And that flexibility increases our overall utilization, okay, so that’s critical. So we want that portfolio effect at as many sites as we can, so that we are not left with trapped costs in particular sites depending upon inter-quarter demand for product.
Aris Kekedjian
And look, our intention with the Buffalo side is, to be honest, expansion around our lab. That’s where our focus is. So using Jamestown for capacity around autoimmune products so that we can expand the lab in Buffalo actually aligns a lot better with workforce dynamics and so we think it’s the right way to go.
Jim Sidoti
Okay. Any update on refinancing the remaining portion of the debt?
John Gillard
We continue to examine a number of options. I think as we flagged previously, we seek to do that as part of some kind of strategic transaction and that would be our preference. So looking at a number of different options, we don’t have a critical need at this point to overly focus on that and we will make a thoughtful decision in the context of broader strategic objectives.
Aris Kekedjian
A number of our…
Jim Sidoti
Okay.
Aris Kekedjian
Yeah. We were having a number of dialogues with various parties about different strategic ideas. That — most of those should be kind of coming to fruition one way or the other in the first quarter, early first quarter and that’s probably the right time for us to then go seek a proper refinancing on the back of a move around strategy we have been outlining.
Jim Sidoti
Okay. And then I just want to be clear that I heard you correctly, in terms of guidance for the fourth quarter, it sounds like maybe a little bit weaker on Fitzgerald, a little bit stronger in some of the other product lines, but overall, it seems like guidance you gave at the end of last quarter of $19 million or so, it sounds like that’s similar to the guidance you have given for the fourth quarter?
Aris Kekedjian
I think we will be a little lower in the fourth quarter. I — what I said last quarter was, we are kind of flattening baselining around $18 million, $18.5 million ballpark. That’s why came and roughly — I have done the math, roughly, we are a $75 million run rate company closing out the year, okay? It’s about $18.5 million run rate.
I think that’s kind of — it’s a little lumpy like here quarter-to-quarter, but that’s kind of where we are averaging out. The initiatives we have been putting in place, I have been here 60 days, the initiatives we have been putting in place should start kicking in, in the New Year. So we expect to start seeing tick ups in revenue profile in 2023 — early 2023.
Jim Sidoti
Got it. All right. Thanks.
Aris Kekedjian
Fitzgerald is really — yeah, Fitzgerald is the most, it’s the biggest swing from quarter-to-quarter. It’s just — we wanted to make sure the demand profile was more evenly distributed over the course of the year. We have got a number of inbounds and Asia seems to be rebounding a little bit faster. So we were able to book some of that stuff, but we are not banking on that with Fitzgerald in the fourth quarter and that’s the major gap.
John Gillard
And Jim, as you know from the past, some of our orders can be large value and there’s uncertainty around that until we reach out into the quarter.
Jim Sidoti
Understood. Thank you.
Aris Kekedjian
You bet.
Operator
The next question is from Paul Nouri of Noble Equity Fund. Please go head.
Paul Nouri
Hey. Good afternoon. I am wondering if you could give us any guidance on what gross margin will be compared to the third quarter going forward?
John Gillard
Not really at this stage, Paul, a lot of moving pieces, and to be honest, between the headcount reductions that we are doing and there’s a lot of PPV variants at the moment with input price increases. So, at this point, I’d be reluctant to give guidance on this.
Aris Kekedjian
I think we gave a perspective last at Piper. It’s in the presentation. I think we are targeting over the next two years, three years about 40%, 45% gross margin level. That’s kind of where our base plan lands.
Paul Nouri
Okay. And the run rate of the screening test that you mentioned in the press release. Is that just a number that you can do based on manufacturing or that you think you will have based on won tenders next year?
John Gillard
The — is this the TrinScreen?
Paul Nouri
Yes.
John Gillard
Yeah. That would be from one algorithm. So that will just literally be from Kenya. So — and we are hopeful that we will be included as the screening test in the algorithm. That’s what all indications suggest and that’s what the task force recommended. And…
Aris Kekedjian
The pilot is going well. So all indications are we are good to go with Kenya. And Kenya, as you know, sets the tone, and we have got commercial teams on the ground. We have got a whole team on the ground working all the other algorithms. But we really do believe that when we get Kenya landed, that it’s going to set the stage for the rest.
John Gillard
And that’s what has been indicated most of their annual demand, right, under their current plans. So, yeah, it’s not driven from our manufacturing capability. It’s driven from our expected demand. I mean on the basis we get the screening position.
Paul Nouri
And the legacy business that’s been declining for a number of years and was hit by the lockdowns in China, how large does that business remain now?
John Gillard
And it’s probably — it’s less than $2 million a quarter, right? What we are seeing with that, Paul, is just a continued tapering off, right? And I think, we — there’s some evidence of a little bit of a bounce back in that, yeah, around basically a higher level of pregnancy in China and a lot of our infectious disease test there is used for screening pregnant mothers.
So, look, there will be variability within that number, but over time, that’s not an area that we are expecting to grow and that’s why we are moving to that portfolio effect in terms of our productive manufacturing capability.
Aris Kekedjian
Look, the key for us with respect to infectious disease is, as we are examining next-generation instrumentation around autoimmune, especially around a chemiluminescence type technology platform, we believe that has significant synergy and alignment and potentially rejuvenates our infectious disease business.
So we are looking at that as in tandem. We think that’s — we are going to do anything significant in terms of investment in infectious disease. It will be on the back of being smart about what we do with autoimmune on a next-generation basis.
Paul Nouri
And the syphilis test that you guys had FDA approved and didn’t really sell much of whatever the factors were in the U.S. Is it completely pulled from the market and what are your plans for syphilis point-of-care moving forward?
John Gillard
We distributed the syphilis tests on behalf of a third-party and demand for that product is high. We continue to have ongoing discussions with that supplier in terms of our strategic plans. Look, we are inherently an infectious disease lateral flow developer and manufacturer, right?
So there’s clearly an element of skill set. But we have to weigh that all versus the regulatory costs and development costs and challenges have gone after that market. So constantly under review, but at the moment, we are happy with the performance of the — from a revenue perspective of the third party product that we are distributing.
Paul Nouri
Okay. And I guess, probably, last question. How did the lab in Buffalo perform this quarter, and in particular, the Sjogren’s test?
John Gillard
Yeah. We have continued to see growth in Sjogren’s test. That’s typically growing quarter-on-quarter and…
Aris Kekedjian
Yeah. I mean, Sjogren’s we are probably doing $3.5 or so million of revenue. We think — and that’s up — I mean if you look at it just from a couple of years, it was $2 million back in what 2000, was it 2020?
John Gillard
Yeah. I mean, yeah, a bit lower. Yeah.
Aris Kekedjian
So…
John Gillard
Significant growth in that.
Aris Kekedjian
Significant and we haven’t really marketed it, to be honest with you, one of the opportunities that I have been focused on is where our — where do we have IP and what’s an interesting model going forward for our reference lab. And the beauty of the Sjogren’s product is that, we haven’t marketed it and it’s been growing significantly.
If we put some work behind it, I think we can significantly scale that business and it’s all based on the fact that we had a partnership with the University of Buffalo, where we licensed key markers into a test.
I think that’s a model for us going forward, where we can license promising biomarkers around the autoimmune space and develop those into tests that only we can provide. So between that and partnerships with pharmaceutical companies in the autoimmune space, that’s kind of where we are leaning with a broader strategy
John Gillard
And the lab, generally, Paul, I think, we have set out at the Piper conference, Aris spoke about it and we are very, very focused on increasing the capabilities of that lab. We have a huge amount of infrastructure there. We have a great asset, having a New York Certified lab. We think that really plays well in terms of the at-home testing market that’s kind of opened up post-COVID.
So a big strategic focus for us is finding the right partner that can help us scale that business in a way that delivers real value to Trinity in a way that’s sticky and recurring rather than a kind of merely transactional relationship that we can lose value over time. So that’s our strategy around that.
Aris Kekedjian
I mean, if you look our plan has real growth in the lab over the next several years, because we have visibility to both improving the specialized nature of what it does today around the kind of things that are growing like autoimmune disease.
And at the same time, we believe we have the capability of capacity to build it out to meet the needs of the B2B2C market. And it’s something I discussed last week at Piper and I really believe we are sitting on a valuable asset there.
Paul Nouri
Right. Well, thanks for answering my questions.
Aris Kekedjian
Thanks, Raul.
Operator
[Operator Instructions] The next question is from Andrew May of Wells Fargo. Please go ahead. Andrew is your line muted?
Aris Kekedjian
Kate, why don’t you move on.
Operator
Hello, Andrew. Is your line muted? Okay. There are no additional questions at this time. This concludes our question-and-answer session. I would like to turn the conference back over to Aris Kekedjian for closing remarks.
Aris Kekedjian
Thank you. I appreciate it. Look, I just wanted to give out a comment or two around the recent 13D filing by the MiCo Group. I wasn’t surprised by it given my knowledge of all the facts. I don’t think it’s worth seriously addressing the individual points. It chose to raise.
But first and foremost, to be clear, I was recruited by MiCo initially as a Board member and subsequently put forward by them as CEO. My assessment of the situation is this is all about control and not about shareholder economics.
There’s a clear stable mentality at work here. A 29% stake does not entitle you to control. The tender rules are clear and are there for a reason. They are there to protect all the shareholders. MiCo like anyone else has the option to make a proper bid for the company.
Just remember, their market cap is about $230 million. I imagine we take significant resources to acquire Trinity at a price of the Board and shareholders would find compelling in light of the ambitious and attractive value creation opportunities available to the company.
It was obvious to me when MiCo asked me to join the Board and then put me forth as CEO that Trinity had several compelling market opportunities that also clearly had been in a turnaround situation for several years.
My focus, the focus of the Board, the management team is a complete turnaround to instill operating rigor, build partnerships and ambitiously rejuvenate the growth potential that lies ahead of us.
That’s all I have to say about the matter, and with that, I’d like to thank all of you for joining us today. Enjoy the holidays. We look forward to an ambitious and exciting 2023. Thank you.
John Gillard
Thanks, everybody.
Operator
The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.
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