Accelerate Diagnostics, Inc. 2016 Q4 Results Conference Call Monday

Good day and welcome to the Accelerate Diagnostics

Incorporated 2016 Q4 Results Conference Call. All participants will be in listen-only mode. After today's presentation there will

be a question and answer session. Please note, this event is being recorded.

I would now like to turn the conference over

to Laura Pierson of Accelerate Diagnostics. Please go ahead.

Before we begin, I would like to advise you

that information presented during this conference call may contain forward-looking statements within the meaning of Section 27A

of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Forward-looking statements include statements

about our future and statements that are not historical facts, may contain expectations regarding revenues, earnings, operations,

and other results and may include statements of future performance, plans, and objectives.

Forward-looking statements include statements

pertaining to, among other things, the commercial launch and demand for the Accelerate Pheno system and Accelerate PhenoTest BC

kit for positive blood cultures, the potential benefits of our Accelerate Pheno system and Accelerate PhenoTest BC kit including

accelerated identification and susceptibility results and estimates of time reduction to results.

The potential of our technology generally,

our belief that our expanded manufacturing capability will allow us to meet demand, our expectation of our 2017 performance, and

our future development plans and gross strategy including with respect to research and development, as well as product expansion.

These statements represent only our belief

regarding future events, many of which are inherently uncertain. You are cautioned that any forward-looking statements are not

guarantees of future performance and involve risk and uncertainties and that actual result may differ materially from those projected

in the forward-looking statements as a result of various factors.

Information regarding important factors, including

specific risk factors that could cause actual results to differ, perhaps materially, from those in our forward-looking statements

is contained in reports we file with the SEC. You should read and interpret any forward-looking statement together with the reports

we file with the SEC.

I will now turn the conference call over to

Mr. Lawrence Mehren, President and CEO of Accelerate. Larry?

Thank you Laura, and good afternoon, everyone.

I appreciate you joining us for our Q4 2016 conference call. I will begin with discussing our progress to date on key 2016 results.

These include our recent FDA clearance and CE mark expansion, building of our commercial organization and ensuring operations excellence.

Accelerate Diagnostics, Inc.

Monday, February 27, 2017, 04:15 PM Eastern

I will then turn it over to Steve Reichling

who will review our preliminary fourth quarter and full year financial performance. I will conclude with a summary of our areas

of focus for 2017 and then questions.

So let's start today with the welcome news

that we have just received clearance from FDA for both the Accelerate Pheno system and the Pheno test blood culture kit. This is

a significant milestone for Accelerate, and an important validation of our technology and the performance of our system.

The achievement of this milestone required

over four years of dedicated effort from a large cross-functional team. When we began in 2012, we realized that to address the

challenges of serious infectious diseases, we needed a truly disruptive instrument.

Our vision was to create the first direct from

sample completely automated system that would identify a pathogen and perform antimicrobial susceptibility testing all in under

Not only did it need to be fast, it needed

to be highly multiplexed able to conduct any one of over 100 different assays. Initially there was a high degree of skepticism

that such an instrument could be built.

To achieve this goal we needed innovation in

many areas. For example, the system required a novel sample prep method that would clean a dirty sample, a genotypic ID system

and a live cell phenotypic analysis engine.

Needless to say the engineering chemistry and

biological challenges were significant but the Accelerate team along with a small group of truly forward-thinking external scientists

and clinicians made it happen.

We built three generations of instrument each

more capable and reliable than the last until we believed we had it right. We then ran tens of thousands of tests internally to

optimize what became 140 different assays.

Our clinical study became what we believe is

one of the largest trials and submissions ever in clinical microbiology. It included over 39,000 tests on approximately 1800 samples

The final submission was over 10,000 pages

long and included clinical study data for individual assays, multiple analytical studies and other important validations of our

Pheno systems performance.

The final product has 140 assays of which 116

are FDA cleared with 24 available to be run in a research use only mode on the software. Of these assays some include labeling

restrictions, a common practice.

In addition, we received clearance for what

we have called our definitive monomicrobial test. This test when interpreted with the Gram stain had a 99.7% positive predictive

value on fresh samples in the clinical trial confirming that additional testing is highly unlikely to identify additional bacteria

or yeast and accordingly is not required.

Accelerate Diagnostics, Inc.

Monday, February 27, 2017, 04:15 PM Eastern

This puts us in a unique position as we believe

all other rapid systems require this additional testing. Using the data from the US trial we also expanded our claims in the EU

filing a new CE Mark to include all of these tests. Accordingly we now have approval to market the Accelerate Pheno system and

Accelerate Pheno blood culture test kit in our initial target markets of North America and Europe.

Now of course to capitalize on our R&D

success, we need to achieve the same level of success with our commercial efforts. This journey has already begun. In the EU we

worked hard in 2016 to build a team that matched the challenges of selling to 15 different countries each with different clinical

and laboratory needs, healthcare systems, acquisition processes and reimbursement policies.

We believe the eight experienced professionals

we hired have done a great job of addressing these challenges in capturing significant mindshare across the region. Further, they

are translating this market awareness into real business.

We ended 2016 with numerous contracts and installed

a number of modules. Further, two of these contracts were converted into installed accounts and began producing revenue in the

final days of 2016. This progress has continued in 2017 and we expect solid performance for the remainder of this year and beyond.

2016 commercial progress in the US has also

been positive. We completed the build out of our sales team with 25 seasoned professionals covering the entirety of the US and

the major metropolitan areas of Canada. The early work of this team included market development and building a funnel of qualified

leads. We believe both of these activities were successful with positive awareness in our target market translating into a healthy

sales funnel on solid prospects.

We now have a number of signed pre-FDA approval

contracts that were designed to allow customers to do a systematic evaluation against predetermined endpoints. If these endpoints

are met, the contracts proceed to acquisitions. Now with FDA approval, we expect to begin seeing conversions of many of these contracts

into revenue-producing acquisitions.

For example, within 30 minutes of FDA clearance

we have received our first clinical capital order for four modules. This was an exciting start to our post FDA clearance sales

effort. Supplying the commercial teams and their customers with a steady supply of high quality instruments and test kits is an

important aspect of our continued success.

Accordingly in 2016 we expanded our manufacturing

capability. We now have built over 390 instruments and over 100,000 kits which we believe will allow us to meet demand. Further