Centogene N.V.

Thank you. Hello and welcome.

Thank you for joining us to discuss our Q3 2020 results, which were issued earlier today. You can view this presentation and the related press release on Centogene's website.

For those unable to view the webcast, you can find the relevant slides on www.investors.Centogene.com. Our speakers today are Centogene's Chief Executive Officer, Andrin Oswald; and Richard Stoffelen, Centogene's Chief Financial Officer.

Before we begin, please refer to Slide 2 of our presentation, which provides information about certain statements to be made today that may be considered forward-looking statements within the meaning of the U.S. securities laws, including those regarding our strategic plans, development programs, and future financial results.

Statements made during this call that are not historical statements may be forward-looking statements, and as such, maybe subject to risks and uncertainties, which if they materialize could materially affect our actual results. The forward-looking statements in this presentation speak only as of today and we undertake no obligation to update or revise any of these statements to reflect future events or development, except as required by the law.

Additional information regarding these statements appears in our SEC filings. Following our presentation, we will also open up the call to Q&A.

We kindly ask that you ask only a maximum of three questions. I will now hand the presentation over to Richard.

Please turn to Slide 3.

Thank you, Sun. Before we get into our financial results, let me briefly introduce our new CEO, Andrin Oswald.

He joined our company in early December, and has brought with him a tremendous amount of energy and passion to the company. A few points on Andrin.

First, he brings extensive expertise and recognition from the life science industry. He spent 10 years of his professional career at Novartis, where he was the Head of the Vaccines and Diagnostics division, until the business was divested to GlaxoSmithKline.

While Andrin was head of that division, he helped it grow to a $2 billion a year business and managed it through the M&A transaction. As a medical doctor, Andrin is also passionate about helping patients and improving the health of our communities, in general.

After his roles at Novartis and GSK, Andrin spent time in the non-profit sector, where he worked at the Bill & Melinda Gates Foundation for almost four years. When the COVID-19 pandemic broke out early this year, he began working with the Swiss government leveraging his expertise in vaccines to help combat the spread of the coronavirus.

We are extremely pleased to bring on board someone with such extensive knowledge of the industry, and we'll benefit from his widespread managerial experience in both the for-profit and non-profit sector when establishing and maintaining relationships with stakeholders across the industry. Andrin also brings tremendous passion to everything he does, whether it is his drive to help patients or mountain climbing or traveling around the world, capturing different cultures via photography in his personal life.

With that, let me hand the call over to our new CEO, Andrin Oswald.

Thank you, Richard, for the kind introduction, and hello, everyone. Its a pleasure to meet you today and also to represent Centogene for the first time.

Let me start off by recognizing and thanking Professor Arndt Rolfs, and everyone here at Centogene for the work they have done to build such a wonderful company. Since I started, I have met a group of diverse and capable people, who all strive to meet the highest level of professionalism.

They are also dedicated to improve the lives of the many patients around the world who suffer from rare diseases, rare but often devastating. This sincere passion for helping people, the belief in the power of innovation, and an unwavering strive for excellence is why I joined Centogene.

Now, let us walk you through our earning results. Please turn to Slide 4.

Today, I will first walk you through our operational performance during Q3 of the year. In addition to the progress of our core business, meaning the Pharma segment and Diagnostics segment, I will provide an update on our COVID-19 testing activities in recent months.

Richard will then take you through the financials and provide an update on how we see the rest of the year. Afterwards, we will be open for Q&A.

Let's please turn to Slide 5. Let me first highlight the key messages for today.

We had a very strong quarter from a revenue perspective. Q3 2020 revenue grew by more than 200% compared to the same period in 2019.

Revenue for the first nine months grew by over 70% versus last year. This is truly impressive and a record for the company.

Our strong top-line growth was driven by COVID-19 testing. This has been a critical additional source of revenue for the company as our core business has not yet fully recovered to pre-pandemic levels.

We have made progress since the bottom-out in Q2 by re-centering our focus on the core segments. Particularly, the number of Pharma partnership discussions is encouraging, which has been quite active since the summer.

In the upcoming slides, I will also walk you through some key operating metrics that demonstrate the progress we have made in the last quarter in recovering our core business. We would also like to update you on both the strong foundation and prospects for our business.

First, we are happy to inform you that we anticipate our full year revenue to be over EUR100 million. Furthermore, the positive financial contributions from COVID-19 testing will enable us to make strategic investments to further solidify our position in the rare disease space.

We continue to build for the future, and these important investments will allow us to return to growth momentum in our core business as we were experiencing before the global pandemic and help us achieve Centogene's long-term potential. Let's now discuss these points in more detail.

Please return to Slide 6. In Q3 2020, our revenues increased 213% compared to Q3 2019 to approximately EUR36.3 million.

This increase was driven by COVID-19 testing, which accounted for EUR27.4 million. That enabled us to counter our core business revenues decrease of 21% with the Pharma segment, and 25% within the Diagnostics segment resulting from the COVID-19 pandemic impact.

While the worst of the pandemic appears to be behind us, our core business is still recovering. COVID-19 testing revenue has enabled us to more than make up for this difference and has driven impressive growth for the quarter.

This speaks to the resilience of the organization and our ability to be nimble. I know this did not come without the dedication and sacrifice of the employees here at Centogene, and I want to take the opportunity to acknowledge everyone for their tremendous efforts during these last several months.

Please turn to Slide 7. Let me first focus on our Pharma segment.

The first metric is the number of Pharma collaborations which remained flat compared to 12 months ago. We signed several partnerships over the course of last year, including 7 in Q3 2020 alone.

I'm saying that -- in saying that, we also had the same number of partnerships that concluded during this period. While we have generally seen the number of partnerships grow, slow progress in new discussions during the first half of the year has resulted in the total number of partnerships remaining flat.

The disease areas where we have active partnerships increased by 4 to 45. While the growth is smaller than prior year periods, this metric is important for us to reflect on as we expand into new disease areas.

We help our Pharma partners by transforming data into medical insights, and we want to make sure that we continue to grow the number of disease areas we're working on with them. We believe, in turn, this will open up broader pool of potential partners.

Biomarker partnerships also remained flat, representing the outcome from the slow first half of the year. This is certainly a metric we will be focusing on and seek to improve moving into next year.

Please turn to Slide 8 [ph], where I will speak about progress made in our Diagnostics segment. The Diagnostics segment is a critical part of our business, as it enables us to access data that we then translate into extremely valuable medical insights.

As you can see from the chart on the left, we have added 130,000 patients to our database in the last 12 months. This is a reflection of our continued growth and despite the COVID-19 pandemic, we have been able to stay close to the growth rate of our repository that we were able to demonstrate in previous quarters.

This underlines our steadfast commitment to helping patients around the world. On the right hand side, we report the number of sample order intakes during the nine-month period of 2019 and 2020.

We observed a 16% reduction in order volume during this year's period compared to 2019. While volume decline is not what we would like to see, the ability to divert the capacity of the COVID-19 testing is a representation of the company's agility and ability to respond.

Let's now look at our COVID-19 testing. Please turn to Slide 9.

As we reported in September, our COVID-19 testing volume grew significantly in Q3, particularly in airport locations. Airport testing still accounts for the majority of our total testing volume, and is playing a crucial role in providing timely and accurate testing to surrounding communities and those who need to travel.

This monthly volume growth is depicted on the left hand side of the slide. We have continued to expand our testing locations, including the test center at the newly opened Berlin Brandenburg airport.

In addition to the expansion of testing sites, we have also added the rapid antigen testing to complement our service offering. The ability to now provide PCR and antigen testing provides travelers with the option to select the service that best meets their needs.

Please turn to Slide 10. As I conclude the business performance section, let me provide you with the latest business outlook.

As I mentioned before, Pharma partnership discussions have picked up since June, and our business development team has never been busier. We have signed 12 new deals in H2 of this year so far.

While this will not meaningfully affect our 2020 financials, it sets a solid foundation for the Pharma segment to return to growth and its previous trajectory in 2021 and beyond. Turning to Diagnostics segment, our testing volume has returned to approximately 75% of pre-pandemic levels.

While the volume has not yet fully recovered, we are happy to see higher and steady numbers despite the recent surge of COVID-19 cases and lockdown restrictions in Europe and other critical markets. Given the current situation, we are continuing to serve our community by meeting the current demand, but also making necessary strategic investments in our infrastructure.

Financial contribution from COVID-19 testing are allowing us to invest in both the commercial organization, as well as lab capacity and science, that we need to meet future demand. For our COVID-19 testing business, we are well-positioned to provide services to enable the world to overcome this pandemic.

While we had recently had some encouraging news on the vaccine front, we know it will take time for the vaccine to be widely available. Beyond that, it is uncertain for how long and what types of testing will be required in different settings.

Recognizing these uncertainties, our COVID-19 testing platforms and locations provide us with enough flexibility to offer necessary testing capabilities, while communities remain in need. While we are committed to providing the COVID-19 testing as we move into 2021, I want to emphasize that our focus is on the core business segments, as this is the long-term future of the company.

Let me stop here, and hand it back to Richard to walk you through the financials. Richard, over to you.

Thank you, Andrin. Now please turn to Slide 12.

As Andrin mentioned earlier in the presentation, our Q3 2020 revenues grew by an impressive 212% compared to the same period in 2019. This is largely driven by the COVID-19 testing revenues, which did not exist in the prior year.

As mentioned, the core business segments are yet to recover to pre-pandemic levels. While Diagnostics segment decreased compared to the same period last year, it did exhibit growth compared to Q2, 2020.

In the Pharma segment, while this activity did not translate into revenue for this quarter, active partnership discussions, leading to new deals, point towards a robust recovery as we go into '21. As mentioned, we believe the core segments will continue to recover and the financial resources from COVID-19 testing will allow us to grow those segments as we did before the pandemic and achieve Centogene's long-term potential.

The slowdown in revenues translated into a decrease in adjusted EBITDA for both core business segments. As mentioned, new deals in the Pharma segment will only translate into revenue in '21, leading to a decrease in adjusted EBITDA margin this quarter.

While the Diagnostics segment showed revenue growth compared to Q2, fixed cost elements meant adjusted EBITDA margins also declined compared to Q3 2019. COVID-19 testing shows a healthy adjusted EBITDA margin, and we expect it to continue to do so, while we offer our testing services and volumes remain at current levels.

Now, let's look at the first nine months of 2020 to get a more comprehensive feel for the full year performance of 2020. Please turn to Slide 13.

As you can see in the graph on the left, we recorded EUR58.1 million in revenues during the first nine months of 2020, exhibiting 73% growth compared to the same period last year. While the core business declined compared to last year, COVID-19 testing has more than offset this decline, and has driven overall growth.

Looking at the adjusted EBITDA, both core segments exhibited a lower margin compared to the same period last year. These results reflect the same trends I discussed on the previous slides.

We look forward to further recovery in the core business, and believe we are well positioned to do so in '21. Before we move on, let's look at the revenue breakdown in more detail on Slide 14.

On the Pharma side, each quarter, we provide a breakdown of the revenue that comes from new and existing contracts, as it is typically a good indicator for future growth in the Pharma segment. As you can see, all revenues in the Pharma segment came from existing contracts for Q3.

And let me explain why that is. Typically, there are few months between signing a contract with the partner and getting the collaboration up and running.

This means, it takes time for revenues from new contracts to be recognized. Therefore, we believe that this result reflects the challenging environment we saw in Q2, where our Pharma partnership discussions stalled.

As mentioned earlier, I believe we are well-positioned for a robust recovery and return to growth in the Pharma segment in '21. The revenue breakdown for the Diagnostics segment is demonstrated in the middle graph of the page.

Revenue in our core diagnostic testing, excluding NIPT, decreased compared to Q3, 2019. We believe that the decrease is reflective of the decrease in sample volumes that we discussed earlier.

On the right side of the slide, you see the revenue growth that we have been able to achieve with our COVID-19 testing. We are pleased to have used our expertise to ramp up testing so quickly, and it speaks to the organization's ability to adapt to a challenging environment.

Let us now finish discussing other key financial elements of this period. Looking at our financial statement, we have already mentioned the increase in revenue, both in the third quarter and year-to-date.

That increase in revenue drove an increase in gross profit of approximately EUR5.3 million in Q3 '20 compared to last year, and an increase of approximately EUR4.2 million for the nine-month period. As our expenses increased by approximately EUR6.9 million for the third quarter compared to Q3 2019, there was a small increase of the negative operating result to date.

Let me comment on the two biggest factors driving such increase. Firstly, our R&D expenses for the quarter were up by EUR2.8 million, which is reflective of our continued commitment to improving our biomarkers, databases and technology platforms, as well as continued efforts in executing our long-term strategy for the company.

General admin expenses increased by EUR3.5 million. As mentioned last quarter, these costs were primarily as a result of being a public company, such as D&O insurance.

In addition, we incurred costs related to our COVID-19 testing efforts, including continuing to internally test our employees to keep the company operational, as well as some upfront costs because of test site expansions. The continued revenues from COVID-19 testing in Q4 and beyond will help offset such cost increases.

Now, please turn to Slide 16. Let's have a closer look at the cash flow and balance sheet.

Cash flow used in operating activities increased compared to the same period last year. This was due to the lower revenues from our core business and purchase of inventories in response to the COVID-19 pandemic earlier in the year.

I would like to remind you that cash flows from investing activities included nearly EUR20 million in cash received from the sale of our Rostock headquarters last year, which was a one-time event. Excluding that sale, cash flow used in investing activities increased by EUR4.8 million, which was mostly driven by investments in laboratory equipment and intangible assets.

Cash flow received from financing activities increased significantly, largely driven by the net proceeds from our follow-on equity offering in July, and lower repayments of loans compared to the same period last year. As of September 30, 2020, we have EUR28.8 million of cash and cash equivalents.

Regarding our outstanding debt, I would like to remind you that this value includes more than EUR21 million of lease liability, in accordance with IFRS 16. Please turn to Slide 17.

COVID-19 testing revenues will continue to drive our top-line for the time being. We recognize that there are uncertainties around how this market environment will evolve, particularly with recent news on vaccine progress.

Having said that, I believe, we are well-positioned to meet society's demand regardless of how the situation unfolds. We have seen our core business make a steady recovery from its Q2 drop.

While we are still recovering to pre-pandemic levels, both segments are holding steady despite the recent surge in COVID-19 cases and lockdown restrictions around the world. Although, our societies have learned to operate more effectively in this pandemic environment, it is difficult to foresee the effect of this week's lockdown announcements, including the one in Germany.

Putting these factors together, we anticipate that our 2020 full year revenue will be in excess of EUR100 million. Such a result would be a good representation of Centogene, and how we have been able to adapt to this unique situation, demonstrate financial resilience and secure resources to be well-positioned to drive further growth in the core business as we move into '21.

With that, I will turn it back to Andrin.

All right. Let's now go to Slide 19, as to summarize today's conversation.

Firstly, our COVID-19 testing offering has demonstrated how we can leverage our expertise of providing precise medical diagnosis where it is needed. We will continue to do so as long as necessary.

One thing that we should not forget, however, is that the expertise that allowed us to be agile in quickly building the COVID-19 business is also the same expertise that will help us grow our core business. We shouldn't lose sight of the strong foundation that we have.

The second point is, that it's time now to bring back the focus to our core business. While we never lost sight of our long-term vision, we did have to divert some resources as the core business slowed down and we saw the opportunity to build up our COVID-19 testing business to support communities with a reliable testing option.

We recognize that it's now time to bring the focus back to our core business. While our core business has not yet fully returned to pre-pandemic levels, its underlying fundamentals are stable and encouraging.

Next year, we will see the impact of 12 new Pharma partnerships that we have already signed in H2 this year. An additional record number of partnership discussions, even when compared to pre-pandemic times are also a good indicator of that momentum.

Lastly, let us look ahead. As the new CEO recently coming on board, I'm very proud of the dedicated efforts that the entire team has made in a challenging year.

We anticipate achieving triple-digit revenue for the full year 2020, which would be the first time in our company's history. In a global pandemic year full of uncertainty and challenges, this will be a significant achievement, no doubt.

This achievement brings with it an added benefit of getting greater financial resources that we had not anticipated. Pairing the financial resources on hand with the competencies we have demonstrated in such a challenging year leaves me confident we can further accelerate the growth of our core business for the future of this company.

By investing in assets such as research capabilities and accelerating biomarker development, we can further strength Centogene's long-term prospects. I'm hopeful for what Centogene can continue to do for the rare disease community.

And if we can accelerate that, we will be able to amplify our impact on the many patients and families awaiting answers to real medical solutions. With that said, I look forward to the next period, where I will continue to learn and engage with the team at Centogene.

I also look forward to meeting you, our investors, and welcome your thoughts and feedback. I thank you for joining us today, and wish you a safe and healthy upcoming holiday period.

I will now turn the call over to the operator for the Q&A portion of our call. I would like to kindly remind you of Sun's request at the beginning, for everyone to only ask a maximum of three questions so that we have enough time to address as many of them as possible.

Thank you.

Yes, hi, thanks. First of all, welcome Andrin, really glad to have you on board.

So, first question, if I could cover with both you and Rich on the guide. Looking at over EUR100 million in guide for the full year and based on the comments you made on Pharma, is it fair to say that the COVID volumes continues to step up in the fourth quarter while ASP remains stable?

And then the Pharma growth is largely expected to be a first quarter and essentially a 2021 phenomenon given what you're seeing in the marketplace right now. I just wanted to understand and make sure I'm characterizing that well?

Yes, thanks. Thanks for the question and I'd hand that one over to Richard.

Thank you very much, Andrin. Thank you, Puneet for asking and allowing me to be a little bit more specific.

You’ve listened very carefully and adequately. Indeed, we expect the COVID revenues to expand further in the fourth quarter, and we expect the Pharma revenues to only really pick up as of '21, whereas we're very happy with the base created with the new contract signed as well as the enormous spin in the number of contracts with Pharma partners like we had alluded to already earlier when we presented Q2.

And, on the -- I just want to clarify on the Pharma partners. Is that a metric that you are still providing in terms of -- in the third quarter?

Can you remind us where the Pharma partners are? I know you provided diseases and the number of collaborations you have.

Sun, would you please respond to that, particularly.

Yes. The Pharma metric, the operating metrics that we provide is listed on Slide 7.

In terms of number of Pharma collaboration as well as diseases under partnership and biomarkers partnerships, I will state that this is as of the end of Q3 figures. And while we have signed seven new partnerships during the quarter of Q3, same number of collaborations ended and that's why the total number of Pharma collaboration stays at the same number of 63.

Okay, thanks for that. And then, Andrin, looking at how things are progressing in Germany right now and knowing your own extensive experience with vaccines and the efficacy data that we have seen so far on the vaccines, what are your expectations for COVID testing volumes in Germany and the airports?

With the significant expansion here expected to come in, could you elaborate maybe -- do you expect moderation in the COVID testing by second quarter next year or could that happen even before?

Good question. Of course, I don't have the crystal ball here, but -- and I think that we can for sure expect that in Q1, there will not be enough vaccine to make any significant impact on any government's action with regard of how it wants to contain this pandemic, and we would expect, hence also widespread testing to be part of any meaningful response.

I mean, in the second quarter, it becomes a little bit less short. And I think at that time, you would expect that vaccines volume, at least that's clearly the hope that the -- these vaccines would be at the level where broader populations could be vaccinated.

And I think, then the question is what's the response to that? You could imagine that over a certain period of time, when travel restrictions ease, but vaccination levels may not be at the level where they would completely avoid further spread, that testing volumes could actually go up dramatically.

Eventually, I think by summer, when hopefully vaccination rates are at the level where the virus starts to be contained, I think that's the biggest uncertainty then. I mean, how many governments -- will the German government keep on testing in place, for example, for old people who want to come back into Germany, what other governments are doing in Europe, would you need to be tested, if you took an airplane to go somewhere else.

You know that certain airlines are pretty explicit and strict on that, and others may say a vaccination certificate is enough. So, I think, it's just too early to know exactly which way this will go.

And more important, I think, from a business perspective, is that we are remaining flexible. So, I think, we are setting up an operation that allows us to really benefit, at least, when you look at the commercial perspective, from the situation as long as it makes sense, but also remain flexible to be able to adjust volume or potentially reduce our offering should that eventually be the outcome.

Okay, that's very helpful. And if I could squeeze in a last one on.

Andrin, wondering, what are some other disease areas that you are interested in looking at? I mean, obviously metabolic disorders have been really strong here for -- core for Centogene, but wanted to see other areas of interest where you think the business could accelerate.

Thank you.

Yes. I think you will have to bear with me there a little bit.

I mean, I've been with the company for two days -- two weeks, sorry now, that, of course, I have a long list of ideas and questions that I have. Discussions with the team have just started.

And coming in as the new CEO, I mean, that gives you a privilege to have a fresh look at things, ask questions, and I have little doubt that after the first three months, which I think is probably a reasonable timeline that we'll have some answers in that regard. I would say, above all, I am fascinated and impressed by the vast amount of data in the biobank that exists here, and compared to some other, let's say, companies with the similar things that may be limited geographically, I think we have a huge global footprint.

And I mean, that adds fantastic additional scientific and patient insights. And so, the key question clearly is in my mind, I mean, how do we maximize the value, short-term and long-term?

And how do we develop the right tools and offerings to really make sure that we can create impact with that, of course, for patients, but also financially? And I have little doubt, that after three months, I mean, I will have a few ideas on how we can accelerate that work going forward.

So, bear with me, hopefully, we can meet in the next couple of months, even if it is just virtually, and we can discuss it further, and I can also get your thoughts on that.

Okay, great. Thank you.

Hi, thanks for taking the questions, and congrats to Andrin on your new role. So, a couple of questions on COVID testing and one on Pharma.

I guess, kind of going back to Puneet's questions regarding the durability of COVID testing longer-term, and Andrin, do you have a sense of -- I recognize there will be declining volumes as the vaccines are broadly deployed, but do you think that there will continue to be a baseline of testing at these airports and other sites, even after the vaccines have been deployed -- for kind of -- for the next few years?

Yes. So on that one, I mean, I really don't know the answer.

I mean, there are, of course, scenarios by which you can think this is possible, right? You could go into the -- wondering whether that vaccine has the potential to mutate, you can wonder whether -- sorry, not the vaccine, I mean the virus.

You can wonder how geographically, around the globe, the situation is going to evolve. I think, most experts still believe that this virus is going to be here to stay, and even with widespread vaccination, will not disappear completely.

So, some testing, you can argue, will absolutely be needed for even the long-term. Now, the question is where it's going to happen?

And then, who is the best company to provide such a solution? And, yes, definitely looking at it also from a strategic point of view in the sense of which way could this go, and then what would be the best response from the company to ensure that whatever we have provides long-term value, going forward.

That said, I think as I initially mentioned, the core of the company is rare diseases. And this is clearly what we're going to focus on, going forward.

We are not ignoring or just letting COVID-19 go, not at all. But we are not going to make a compromise on the clarity and where our resources are going to go with regards of building the success of this company for the long run.

Great, that makes sense. Just one more question on COVID testing.

I recognize it's not the core part of your business. But you guys also rolled out antigen testing, so curious about the rationale of centralized testing for antigen-based testing in a centralized fashion?

And what does the economics look like for Centogene for antigen testing, I guess, in terms of margins?

Yes, just one or two points. I'm happy to hand over to Richard after me.

One is, I think we really look at PCR versus antigen testing as a service offering that just gives the travel as a choice, and we do not really care which of the two they choose, and we don't anticipate that it should have a massive impact on our bottom line, depending on which way it will go. Whether you go for PCR or an antigen, of course, two obvious differences are, PCR is somewhat more reliable, right, so governments may decide that they want to stick to PCR just because of the accuracy of the tests.

I doubt that antigen will get to that level in the foreseeable future. On the other hand, of course, antigen can be faster.

So, it's more convenient from that point of view. And for an airport location that could, of course, makes sense if you go there, get tested, and you have your results, let's say, within a certain period of time that would allow you to board an airplane afterwards.

I think, that's more challenging with PCR. But then, as you may know there are also better PCR tests somewhere on the horizon, so PCR time may be short further.

I think, we are really building up our offering such that we can be pretty relaxed with regards of what governments advice and what consumers prefer, because we can offer both at similar, call it, pricing or financial levels with regards to how this will come -- would look as a business for us. Richard, do you have anything you want to add there?

No, Andrin, I think, you captured it well. We just want to provide that testing that is required by the market.

The speed is of the essence to some, and therefore, antigen and margins are quite similar, Sung ji.

That's great. And then lastly from me, just on your Pharma partnerships.

Obviously, you guys had a pretty rich pipeline of field prospects pre-pandemic. So, just kind of curious, as you look out -- and you're starting to see very productive discussions, has the composition of that pipeline you had before the pandemic changed?

or I'm just kind of curious as to -- if this is just kind of a delay, right, in terms of partnerships materializing due to the pandemic?

Sun, do you want to take that?

Sure. Thanks for the questions, Sung Ji.

There certainly has been a delay. I think, there has been a block of our partners in Q2, in particular, trying to figure out what they're going to do, but there also was a prioritization on their part, in where they're going to dedicate their resources to, especially within the year of 2020.

As the companies sort of figured out what their sort of near-term financial plans are, and where they're going to prioritize their resources, I think our conversation has really picked up from the summer, and we have been quite active in discussions. But, there -- as Richard referred to during the presentation, much of the conversation there -- in addition to the delay that we had, much of the financial impact from these discussions won't really materially come to effect until 2021.

Just, if I, maybe, add one thought to that, which is important in my mind, that our Pharma partnerships, we look at them really as a large extent also a strategic partnerships. I think, we don't want to go into short-term solutions or deals by which we sell off our value to create revenues.

And, I think, it's a testament, again, of the company -- a testament of the company and its ability to stay focused on the long-term, that we didn't have to do that during COVID-19 just to somehow keep our revenues where they're supposed to be. So, when we look at these deals, we want to make sure, and that's definitely we're going to spend some time over the next couple of months, is that you set them up such that they generate long-term value.

And not just kind of creating revenues over a couple of quarters, because that is not what we think would be justified given the tremendous database that we have, and what we think we can do with that, and how we can build that know-how in, I think, the years to come.

Great, thank you so much for taking the questions.

Hi, everyone. Thanks for the questions, and welcome to Andrin.

I guess, maybe first, you mentioned sample volumes are back to over 75% of pre-pandemic levels. What do you think the trends will look like there over the next couple of quarters?

And do you think it takes a widely distributed vaccine to get those back to pre-COVID levels?

Yes, I think that's a good question. One, it is quite difficult to answer because it's a multitude of things that are happening here, right?

In certain areas you have lockdowns and hence patients are just not going to the hospital. In some other areas, doctors need to prioritize and are doing certain testing in certain areas.

Clinical studies or trials are slowed down just because of less travel and ability to execute, by also some of the operations. So -- and I think step-by-step we will get back to normal.

It really depends a bit on how the pandemic will play out in the first half of the year. I mean, I do believe personally, what I said previously, will translate into normalization on the testing business, which is, Q1 will be challenging, and Q2, I think, things will get rapidly better, and then we have confidence that in the second half of the year, things could be looking pretty good.

So, overall, next year is not going to be a normal year, that's clear. But I think, quarter by quarter, it should get clearly better.

And then you would expect 2022, we are definitely back to a normal healthy marketplace that we were used to.

Okay, that makes sense. And how should we think about the revenue potential from these 12 new partnerships that you signed in the back half as we head into 2021?

And anything you can comment on for Alnylam and PTC, specifically.

Sun? Sorry, Catherine, could you repeat the question about the PTC and the Alnylam partnership.

Yes, I was just asking how we should think about revenue potential for these 12 new partnerships, as we head into '21? And if there are any specific comments you can make on Alnylam and PTC?

Yes. Right.

Unfortunately, I cannot provide the financial details on our partnership or forward-looking statements. But what I will say is that both partnerships are quite interesting partnerships, particularly with the PTC partnership, being able to work with our partner to better understand the prevalence of AADC deficiencies in patients that will help their --our partners development program going forward, and helping rare disease patients.

I think, that would be great. I think, our partnership with Alnylam on the ATTR patients, in being able to prospectively monitor the patients and validate our biomarkers will have -- it will certainly help the patients, going forward.

But also, this, I think will validate the power we have with --just being able to develop and validate our biomarkers that can really provide value to our pharmaceutical partners. So, I think, both the partnerships are -- carry more long-term impact than just the financial.

I hope that answers your questions.

Okay, great. And clearly, you're having really strong levels of [indiscernible] these new partnerships in the third and fourth quarter.

And just given the level of conversations you have going on still, how should we think about the pace of signing new partners, going forward?

Sun?

Maybe, yes, I can continue on the response. I think, as we've pointed out in the second half of this year, we've signed 12 new partnerships, and normally -- and our active discussions have certainly picked up.

But generally, the cycle within the year, normally, our beginning of the year is when we really start having initial conversations, and normally our sort of new partnership signing starts to pick up from the second quarter of the year. So, I would assume that this new year would follow that cycle, as well as the -- our Pharma partners are really finalizing their budget for the year and look to planning up the year and starting the initial conversations, and and we start -- and if the pandemic subsides with the vaccines being more available throughout the globe, I would think our second quarter will be the starting point of when we actually start seeing a lot of these deals coming to fruition.

All right, great. Thank you.

Hi. And thanks for in my questions.

Let me add just a couple on COVID and then on the core business. With respect to COVID, are you looking to add antibody testing as you're offering, especially the transition to kind of a post-vaccination world in H2?

Yes, I'm happy to answer that. I think, its a question that we have been discussing.

We are looking at it, but there is no decision yet whether we would or not. We do not think it is critical for the business, the focus will remain, most likely on the test that we have, but it may be complementary thing to add on.

Got it. And then as a follow-up to that.

So, appreciating the sort of the knowledge and capability to build for -- to offer COVID testing over this year. Are there any opportunities you see to valorize that, post-COVID, in terms of perhaps selling the business or leveraging on kind of the technology and capabilities learnt?

Yes, well, I think, that's not really our focus right now, and our focus is to ensure that this business runs effectively. I mean, demand is high.

And as we said, it may increase further in the coming months. So, I think the key priority now is really make sure that we can deliver against what we have set up to do.

And I think, that's all I could say at this point in time.

All right. Then maybe one more exciting.

Are there any specific Pharma collaborations you would like to highlight as sort of key wants, to keep an eye on in 2020 -- 2021, sorry.

Sun, I guess I know what the answer is, but you may still -- you may still answer it.

Sure, sure. No, I mean, I think, the question --prior question that came up among our new partnership, certainty Alnylam and PTC, they both emphasize our strength in terms of better understanding the prevalence of the disease state, and also being able to show that demonstrates the power of our biomarker, these are, I think, good partnership.

But if you're looking at a more broader picture, as you may be well aware, our key partnership along with our Takeda, Pfizer's R&D partnerships, and Denali's co-collaboration on the clinical development of the LRRK2 mutation of Parkinson's disease. Those are the key partnership that I would keep my eyes on.

Thank you.

Thank you.

Great, thanks. Can you speak to your overall COVID testing capacity now?

And also the incremental cost from here in terms of the COVID-related initiatives? And do you still think kind of most of the capacity infrastructure kind of related to COVID will not be able to be repurposed in anywhere or is there -- is there some way that you can kind of [indiscernible]?

Richard, you want to take that?

Yes, happy, happy to take that question. It's a very good question, Aaron, that we brace ourselves on a regular basis.

We are still contemplating how best to repurpose, we might, we might not. It's too early to make that decision at this stage.

So, yes, we contemplated on a regular basis, but no decision has been made in that respect yet.

Okay. And did you break out testing volume and revenue by category [indiscernible] could you break out the other categories?

What categories are you referring to? Within COVID or within the segment?

Outside of COVID, Yes, outside of COVID, in the quarter.

Yes, there is, in the MD&A, you will find some further drops, Erin.

Okay, all right, thanks. And then lastly, on sort of the CEO transition, and welcome, Andrin, and obviously, excited to share kind of what's next?

But I'm curious if you anticipate any sort of change in strategic vision here at this juncture, and also any other changes from a management perspective or any one kind of that you would anticipate bringing on board? Thanks.

Yes, thanks for that. I mean, I would repeat what I said before.

I mean, coming in as a new CEO would -- you have a chance to have a fresh look. I'm personally excited and I joined because of the tremendous know-how and capabilities that CENTOGENE has in the rare disease space.

I mean, I'm intrigued by the fact that it is a real global knowledge database, and not just one -- driven by one or two markets. And I do believe that there is tremendous potential there, not just to give better and better diagnostic and earlier diagnostic, but also to leverage that in discovery, and I would say R&D of rare disease space now.

And how exactly and how we could somehow shape the strategy for the future to really capture that value and get into what I think will be the next growth cycle of the company and its evolution. Bare with me, I think, I'll take the usual 100 days to talk to a lot of people, including, hopefully many of you, and then come up with my thoughts.

It is also true that, and of course, an organization that went from 50 to 500 people may not be the same organization that they need to go from 500 to 1,000 or 2,000, or whatever the next growth cycle will show. So, we definitely are also having a look at the organization, and think through with the team what we need to get in place to make sure that we have the organization that will be able to deliver -- and on -- and against the strategy that we set ourselves.

So, I think, you can expect some thoughts on that in a quarter from now as well.

Okay, all right. Thank you so much.

All right. So, I think that brings us to the end of the call.

Robert, Sun, you wanted to add something or can I conclude.

Please feel free to conclude.

Please go ahead.

So, thank you, all for making the time available. Thanks for your interest in the company, and thanks for the best wishes for me personally.

We are fully dedicated here, and I speak for the team as well that I met, to ensure that CENTOGENE will deliver against the high expectations that patients, but also investors have on us in the time to come. And I'm looking forward to meet as many as soon as possible in the next couple of months, if not physically, then hopefully virtually.

And I am grateful for what you have done and are doing to support us, and I think we will, for sure, hear each other again while we present the full year results next year. So, with that said, wishing you happy holidays, and stay safe and healthy during these turbulent times, and god bless you.

Bye.

Thank you.