Q4 2020 Renalytix AI PLC Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the fiscal two two.
Excuse me. This school 2020 year end earnings conference call. At this time, all participants are in a listen only mode. After the speakers presentation. There will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that todays conference is being recorded if you have.
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I'd now like to hand, the conference over to your speaker today carry meaningful Investor relations. Thank you. Please go ahead ma'am.
Thank you and thank you all for participating in today's call.
No need for me to let it yeah I came from Cowen <unk> co founder and Chief Executive Officer, and James Stirling, Chief Financial Officer, Tom Mclean, President and Chief Commercial Officer, Steve Coker co founder and furnace running Chief Technology Officer will also be available for <unk>.
Before we begin I'd like to remind you that management will make statements. During this call that include forward looking statements under the meaning of private Securities Litigation Reform Act of 1995.
Any statements made during this call that relate to expectations or predictions of future events results or performance are forward looking statements.
Examples of these statements include without limitation.
Statements related to kidney intelligence ability to lower health care costs improve patient quality of life. Instead of long term standard of care trends that are market and potential benefits of government policy change the impact of COVID-19 on her business.
Expectations for hiring product development strategic partnerships and collaborations reimbursement decisions clinical studies and regulation sufficient and our business strategies and future growth.
These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements for a description of the risks and uncertainties associated with our business. Please refer to the risk factor section.
Our final prospectus filed initially U.S. public offering filed with the Securities and Exchange Commission on July 17 2020.
All forward looking statements made on this call are based on management's current estimates and various assumptions, we analytics AI disclaims any intention or obligation except as required by law to update or revise any financial projection or forward looking statements, whether because of new information future events or otherwise.
This conference call contains time sensitive information.
Accurate only as of the live broadcast today October 27th 2020, and with that I'll turn the call over to James.
Thank you Carrie good morning.
Hi, everyone and thank you for joining us I'm pleased to welcome you to the renal what exactly I conference call to review our fiscal results.
Oh for 2020.
Oh 2020 was nothing short of a pivotal year for re analytics together with our colleagues at Mount Sinai SDK that stuff actually founded analytics in 2018.
With the goal of accelerating advanced diagnostic products and solutions and the clinical practice that could significantly lower health care costs.
And also improve the quality of life for the millions of patients currently living with chronic kidney disease.
The states and abroad.
Social and economic impact of chronic kidney disease, or CKD cannot be underestimated CKD as one of the larger summit medical challenges today.
More than 37 million individuals with CKD in the United States.
An additional 660000 people currently living with kidney failure.
Our lead product kidney and TLX provides critical information about the rate of CKD progression and the risk of kidney failure and easily understood format to health care providers patients and then.
Effort to support optimization of care delivery affected use of available therapies to improve patient outcomes.
And reduce the 120 billion dollar annual cost of chronic and end stage kidney disease in the United States Health care system.
Kidney until like some artificial intelligence enabled in vitro diagnostic that combines the power of blood based protein Biomarkers with features drawn from an electronic patient records all process by a powerful machine learning algorithms the.
The result is a first in class solution that can provide an accurate prognosis of a patients risk kidney function decline indoor kidney failure early on in the CKD disease cycle.
CKD stages, one two and three early stage CKD were over 80% of CKD patients reside.
Taking a blood draw and measuring biomarkers means that we can capture the current picture of the patients' biology.
Foundation, a blood based Biomarkers also means that we are not wholly dependent on what is and is not in a patient's electronic record in order to generate an accurate risk score. We believe this represents a significant competitive advantage that will be difficult to overcome.
And again, we believe it is necessary to take a blood draw and measure biomarkers in order to enable early stage prognosis that is in stages, one two and three of CKD.
Most importantly understanding risk progression in early stage CKD can all can also help provide doctors and patients with the most lead time to prepare an optimal treatment strategy and increased choices to slow or stop the march towards kidney failure for patients who do progressed to end stage kidney disease kidney Intel.
Next early prognosis can potentially help provide more lead time to assess the options for home dialysis versus in center hemo dialysis substantially reducing costs.
Potentially patient suffering.
Because kidney until exit the firm is first and foremost an in vitro diagnostic we were able to follow a well developed a roadmap to product validation for clinical use. This has enabled to critical commercial milestones first the ability to have a regulated products and second the ability to define reimbursement.
Payments in the U.S. medical system.
While developing and validating an in vitro diagnostic can be time consuming and costly. We firmly believe this is an innovative and pragmatic route towards enabling the power of artificial intelligence through a regulatory pathway, achieving defined payment and establishing long term guidelines ready standard of care.
Care.
To date arent vitro diagnostic strategy gives you the yielded an acceleration core milestones in period, including a distinct national reimbursement code effective October 2019, a national Medicare price effective January of this year in New York State Department of Health approval, which we are.
Achieved in June that has allowed us to begin commercial product sales.
Addition, post period, we submitted our final regulatory submission to FDA for consideration of kidney until X clearance. This consideration as part of a process, which began 18 months ago. As you know with the FDIC awarding breakthrough device designation to kidney until X in may of 2090.
Operating under breakthrough designation has allowed us to have an ongoing dialogue with the FDA to address some of the more innovative aspects of kidney until X.
I firmly believe running a full regulatory FDA process has helped make kidney until X of more robust products that rises to the quality necessary to set a long term standard of care.
Initially kidney until X is indicated for adult patients with type two diabetes and existing CKD.
This population accounts for roughly 20% to 30% of the estimated 37 million U.S. CKD patients.
As you know kidney until X is a scalable platform and we are pursuing development and validation of additional indicated uses which we expect to submit for regulatory consideration as early as this December.
We will share more on our platform expansion strategy in the coming quarters.
Throughout the fiscal year 2020.
We crossed several core milestone sooner than we expected which are necessary for sustained long term market adoption.
In addition to the regulatory and reimbursement objectives mentioned, we've also signed key strategic partnerships completed large scale clinical trials secured private insurance payers support.
Continued to generate clinical utility and health economics data.
And we've also expanded our operating team and of course, we successfully completed the dual listing to NASDAQ global market, which raised over $85 million in gross proceeds substantially strengthening our balance sheet and allowing us to pursue a more expansive product development and commercial implementation course hiring.
The right people to help us execute as a major focus to date, we have filled several core positions, including VP health systems partnerships VP Chief Human Resources Officer, VP Project Management Director Scientific project management senior quality director of quality assurance and have expanded our in turn.
Software development in AI capabilities other roles added to this other roles added to support our commercial scale up of kidney until X include billing manager client service director Senior SEC reliability engineer clinical laboratory scientist senior manager technical accounting clinical services specialist.
Among others, we have a mission driven culture at me analytics with an underlying commitment to transform the lives of patients with CKD and all of these people will be able to help us execute on that mission.
As we continue to invest heavily across our technology platform. We are committed to retaining these core values that are critical to our long term success.
At the end of September we crossed the key implementation milestone with the activation of kidney and TLX into Mount Sinai Health system in New York City.
The Mount Sinai implementation has been perceived proceeding in line with our expectations kidney and telex is currently being ordered with risk score reporting to more than 30 primary care physicians and more than 20 nephrology specialists, we expect the ordering group of physicians with Mount Sinai and other health care providers.
As to grow in the coming quarters.
Getting into more detail on our regulatory process post period in July 2020, we received the clinical laboratory permit from the New York State Department of health to provide commercial testing kidney until X in New York State.
Permit was granted following a review by a panel of New York State Department of Health scientists and external reviewers of the analytical and clinical validation results for kidney intellects officials from New York State successfully completed an inspection of the re analytics, New York Laboratory as part of this process with no findings reported.
For reference on New York State approval is the most stringent state run regulatory process and serves as a cornerstone for our national commercial rollout.
Achieving broad reimbursement coverage beginning as early as fiscal year 2021 remains one of our highest objectives in fiscal 2020, we established several of the fundamental components necessary both for both private payer coverage and Medicare coverage determinations Medicare.
Medicare recipients represent a substantial portion if not a majority in many your us regions of our addressable market and Medicare coverage remains one of the defining milestones for broad kidney until X commercial success.
Further to date, we have also executed Medicaid contracts in seven states, including Michigan, North Carolina, Rhode Island, South Carolina, Vermont, Wisconsin in Wyoming, We expect to continue executing Medicaid contracts through fiscal 2021 and fiscal 2022.
In the period kidney and telex has achieved a distinct common procedural terminology code or CPT code. That's a payment code, which is included in the final 2020 clinical laboratory fee schedule by the centers for Medicare and Medicaid services also known as CMS.
As a reminder, a CPT code is a unique identifier for the kids TLX test used by CMS as well as by private payers in the United States and in January.
This CMS sort of price is $950 per reportable test result.
Which became effective nationally.
In an interesting developments post period in August 2020.
CMS submitted for public comment a rule on innovation, which will provide an automatic national Medicare coverage determination. So those diagnostics devices under FDA breakthrough device designation when they are approved.
If it becomes effective this new proposed CMS rule could help shorten the time to insurance coverage for some 12 million Americans within kidney until exits initial indicated use population adult diabetic kidney disease.
Our New York City launch market Medicare recipients represent a majority of insured dk the patients.
Whether or not this rule, making ultimately plays out.
It is important to note the recent and ongoing favorable changes in the policy landscape for the diagnostics industry and specifically the chronic kidney disease diagnostic landscape.
We believe these policy changes will continue to benefit the kidney until X commercial path. For example, starting in January of 2021 patients with private insurance covered under a Medicare advantage plan, we'll be able to choose to stay with their private insurance company for kidney failure in dialysis treatment.
Rather than being automatically transition over to Medicare.
This Polish this shift will likely result in a material health economics burden to large private payers in the United States for managing kidney disease. We believe early an accurate identification of disease prognosis will become an even more important part of the private insurance equation and CKD in 2021.
During the period, we continued to achieve traction towards private insurance coverage of kidney intellects, most notably with physician led plan CDP HP in Albany, New York and two large preferred provider organizations, including the three revenue were three rivers provider network.
Our conversations with additional insurance payers and healthcare providers continue to advance and we expect to continue to grow private reimbursement coverage over the near term.
We believe achieving regulatory FDA regulatory clearance will also be an important factor to building on our national reimbursement strategy.
At the core of our commercial strategy is our focus on driving strategic collaborations strategic partnering activities are important to not only building commercial use cases for kidney until X, but also validating kidney until X is unique in the early stage CKD progression space.
To date, we have announced collaborations with two major pharmaceutical companies. Most recently with Astra Zeneca with easy we have entered into a multi phase collaboration to develop precision medicine strategies for cardiovascular renal and metabolic diseases.
Our initial work together, we are examining the uptake of and patient adherence to chronic kidney disease treatments using the ability of kidney and TLX of the kidney intellinx platform to identify patients earlier with progressive kidney function decline.
We expect to report our initial findings in collaboration with AC in the first half of 2021.
And based on study outcomes.
Multicenter randomized controlled trial will be initiated to evaluate uptake and adherence to new potassium binding agents in patients with CKD and hyperkalemia.
We are confident the kidney and telex is unique value proposition and the early but rapidly developing market for applications in CKD drug therapeutics will allow us to form long term partnerships with key industry stakeholders, including pharmaceutical companies service and health care providers.
Turning now to clinical evidence.
As our health economics, and clinical utility data continues to accumulate kidney.
Kidney until X has growing potential to be viewed as a compelling solution to promote early intervention in kidney disease, where impact on costs and care is most effective we have now completed an expanded validation study set for more than 12000 blood samples and analyzed.
12000, blood samples, which are analyzed across multiple time points in 6000 patients with.
With positive results consistent with the kidney until X interim analysis.
Excuse me interim analysis announced on ninth of July 2019.
The study results were presented at the 80 its annual American diabetes conference and are under peer review currently for internationally recognised journal publications.
These data results were part of our kidney until X.F.D.A. filing.
Submission clearance as well.
Included in these data results is a collaboration study that was completed with the University Medical center of growing again in the Netherlands to determine the ability of kidney until X to identify patients that will experience a progressive decline in kidney function or kidney failure in over 9500 blood samples analyzed across.
Multiple time points in about 3700 patients followed longitudinally.
Initial findings from this work are being prepared for presentation and publication.
In addition, we are evaluating the response to drug therapy based on baseline risk and change in risk overtime as defined by kidney Intellinx.
Concurrent with our clinical data generation, our intellectual property portfolio was continuously evolving.
In the period, the us patent and trademark office allowed claims extending the use of one of kidney until X primary blood markers STN fr one.
All patients with diabetes to determine an increased risk of developing progressive kidney disease or kidney failure. We have also completed rights to additional patent applications for use with get the intellinx.
We are activating.
We are currently activating and evaluating a number of in licensing opportunities that will also enhance our competitive product position.
As you know we are working with closely with leading clinical investigators population health departments clinical societies and patient advocacy groups to make sure we have actionable simply understandable and accurate medical communications.
Expert experience as reflected in the design of the kidney and TLX Test report and the newly launched product website, which can be seen at kidney and TLX dot com.
We believe our education and support program will be an important resource to help inform and improve care for early stage CKD patients and support future hospital system deployments of kidney until X in the United States and abroad.
We have been asked many times about the effects of COVID-19 on our business.
Without question. This is an unprecedented operating environment.
Ultimately cannot quantify the challenges, which all of us may face with the emergence of the fall and winter infectious wave.
But I am incredibly proud of the intensive effort in the innovation that our employees and our partners have demonstrated as we continue to build out the kidney until X franchise to patients in need.
And to their clinicians.
Particular highlight during this time as the level of proactive collaboration.
That were seeing to solve the complexities of technology licensing transition translation and data generation.
And while our focus remains specifically on chronic kidney disease like many others in the diagnostic community. We are contributing to help find the diagnostic solution to this global crisis.
In May 2020, we entered into a joint venture with Mount Sinai to form can Taro bio sciences for the purpose of developing and commercializing test kits for the detection and quantification of blood antibodies to Sars koby too.
Yesterday can Toro announced CE mark approval of its quantitative antibody testing kit, which can now be distributed laboratories in the UK and Europe Global manufacturing leader in immuno assay technology biotech. The corporation is consumables manufacturing and distribution partner, giving continual access to testing laboratories worldwide.
Slide.
A major advantage of the continual kit technology is that it doesn't require any specialized equipment to produce antibody test results further expanding the commercial scale up potential.
Tara was applied for FDA review.
And we are expecting to hear the results in the near term.
In addition to the Contardo joint venture in August We also announced a multi center study to evaluate the risk of long term kidney damage by kidney and TLX to patients who have experienced hospitalization from coated infection.
Investigative teams participating in the study include the Icahn School of Medicine at Mount Sinai, New York, Yale University of Michigan, Johns Hopkins in Russia Records, we expect to report initial findings from this study in the first half of calendar 2021.
And then subsequently prepare for regulatory filings.
In conclusion fiscal 2020 was a transformational year for renal products.
We believe we have truly unprecedented opportunity an unprecedented opportunity to transform patient care for CKD patients with our artificial intelligence in vitro diagnostic solution.
We have made significant progress towards our operational regulatory and reimbursement goals and are now engaged in commercial rollout of kidney until X in the United States looking.
Looking ahead, we have a number of core milestones to achieve over the next 12 months, including.
Increasing reimbursement coverage expanding strategic partnerships ft, a regulatory events.
Additional health system partnerships and growing testing volumes, we intend to keep our heads down and focused on the fundamentals of execution.
I want to thank the renal ltchs team again for their continuing hard work and we look forward to updating you all on our progress in coming quarters.
In the interim please stay safe and I'd like to turn the call over now to our Chief Financial Officer, James Sterling to provide more detail on our financial results James.
Thanks, James and good morning, everyone.
The earnings release, we issued today outlines our financial results for the fiscal year ended June 32020 and fall.
And I'll review a summary of these results now.
All figures are in us dollars, which is our reporting currency.
Our operating expenses were $11.1 million for fiscal 2020 compared to $7.1 million in fiscal 19 on an IRS basis.
The increase in operating expenses was primarily driven by the scaling up of our organization as we begin commercial rollout of kidney Intel X in the United States.
On a GAAP basis operating expenses were $10.3 million in fiscal 20.
Versus $42.3 million a year before.
Fiscal Nineteens Opex under GAAP included the Mount Sinai license fee and the fair value of the Joslyn license as well as R&D expenses.
Which were all capitalized on dry for us.
Net loss was $9.3 million or 16 cents per share for fiscal year 2020, that's.
As compared to $6.2 million or 17 cents per share for fiscal year 19.
On a GAAP basis fiscal 20, net loss was $9.8 million or 17 cents per share.
Versus $42.3 million or 99 cents per share in fiscal 2019.
Turning to our cash we ended fiscal year 2020 with $13.3 million. Shortly after fiscal year end, we completed the NASDAQ dual listing and associated financing raising net capital of 76.1 million after commissions fees and offering expenses.
Also subsequent to fiscal year end, we completed the spin out of reach GDX previously known as fractal Dx.
Which included a portfolio of advanced diagnostic and prognostic solutions used in kidney transplant.
For each Dx is now under consideration for admission to the end market.
Submarket at the London stock exchange.
We will now open it up to questions operator.
As a reminder.
If you would like to ask a question. Please press star one on your telephone to withdraw your question press the pound or the hash key please standby, while we compile the culinary roster.
Your first question comes from Dan Arias.
From Stifel.
Hey, guys. This is Daniel may stick on for Dan Arias, Congrats on the IPO and product roadmap.
Hi, Daniel how are you.
Good morning, guys. Thanks.
So I'm just wondering how Mt. Sinai early days are how many sites are you in there what kind of volume trajectory I know its pretty early said 30 primary care in 2000 specialists that are ordering.
But if you could just provide an update there.
Tech integration works. Thanks.
No. The topical question. It is early days so we've been at it for just about a month.
And the technical integration was complex.
Which we knew it would be.
The advantage is that once you are technically integrated obviously, you're able to address a large population in that large group treating physicians.
Well the fully integrated approach of course getting there the first time.
Is always an interesting journey.
But we've been very pleased.
So far.
The implementation has gone relatively smoothly.
And.
To be able to report live results into a major system like Mount Sinai.
Less than 24 months after we did our primary financing.
Having run through product validation.
We think is quite an achievement.
Directly to feedback we've been getting clinical feedback has been enthusiastic.
We do believe we are hitting right at the heart of some of the core work flow issues some of the ambiguity around understanding progression.
Which is key to giving clinicians and patients time.
To optimize treatment.
It is also key to making sure that we understand which patients are really at high risk for disease progression and or kidney failure.
And equally as important understanding which patients are not at high risk.
For progression and can remain the primary care physician level. So feedback has been very good.
And we're starting to get uptake now we're not going to report a specific number because it is too early.
We have deployed to your question in multiple sites within Mount Sinai.
And.
It should be an interesting run going forward.
Great. Thanks.
I guess from there any comments on new business development from Payors large hospitals and then you mentioned the conversations are going you expect to.
To to have some news on that front in the near term, but any anything specific there you could comment on.
Yes, I represented during the IPO Road show that we would have clear sight to three.
Implementations.
Over the next 12 months that was back in July.
On a stick to my guns on that so.
So I do believe that we are on track to have three significant implementations, which will.
Give us.
A direct addressable markets.
That should support.
Revenue growth.
We continue to have multiple discussions with payers and obviously, we're laser focused on our Medicare coverage determination process.
Those discussions are going well and investors should expect us to provide additional color on coverage determinations for kidney TLX.
It is a lasagna plates.
To achieve reimbursement coverage in the United States, It's a it's a complex network.
And the most important thing is to put the fundamentals in place. So that you can start to get increasing coverage, which ultimately is sustainable over the long term.
So.
We have a superb reimbursement team.
With a whole lot of experience.
And I believe that we are doing all the right things necessary to start achieving broader coverage.
In calendar 2021.
That starts in January.
Great I'll ask one Martin jump back in the queue.
On the regulatory clearance you guys submitted a few months ago.
They didn't see is probably pretty busy but timeline on breakthrough is supposedly 90 days is that still the right way to think about it any update on on hearing from them or are you just submitted and you're waiting to hear back.
Okay.
Yes, the answer I always give is it's a bit of a fools game to call regulatory approval or in our case clearance times.
It would not be unreasonable.
For us to expect a regulatory clearance as early as the end of this year.
Possibly beginning.
Early next year. The agency is under an enormous amount of pressure and we hear this from multiple places.
Reviewers.
We are dealing with.
Wave of cobot.
Related applications.
And we certainly have a lot of sympathy for the agency because.
It is an unprecedented time that being said we are in the cycle under breakthrough device designation, which has been very helpful.
To us continues to be helpful to us and we were able to have a lot of discussion around some of the innovative aspects of kidney until X as I mentioned before.
Before cobot setting.
And continue to have discussions during the cobot periods. So we're confident that we are on the road to a regulatory clearance.
I am always shy about talking about timing.
And now that we're looking at.
The the expansion of the first waiting for a third wave depending on how you look at it coming into the United States, None of US ultimately knows how that's going to impact regulatory time and resources, but.
The good news is our product is still moving forward.
So I'm quite hopeful that we'll be in a position going into next year, where.
Weve crossed that cross that Rubicon.
Definitely a fair assessment alright.
Anyone else I'm turn and I'll jump back in the queue. Thanks, guys.
Thank you Daniel.
Your next question comes from Tyco Peterson with JP Morgan.
Hey, Mike.
Lenny on for Tycho, Thanks for taking our question today.
Our first question is on.
On the Mack Cali covert study I was wondering if you can give us an update can we still expect to get initial result by the end of this calendar year and are you still targeting commercially launching kidney and collect from the coker population in the first half of next year.
So the answer is we are on track.
When exactly that data will come out I'm not exactly sure but we.
We do expect to be generating a fair amount of data this year.
And yes, we could very well report some of that data later this year going into the first quarter of next year.
This issue is a.
Is a fascinating issue.
The whole area of cobot long haulers.
And the complications that are emerging from post hospitalization.
From infection is a.
A fascinating area that we believe kidney until X can play a core Roland.
It's clear that.
The same receptor pathways that are involved in.
Kidney function that transport are related to cobot infectivity, so theres a lot of crossover going on and it's clear that there are a lot of patients coming out of the hospital.
With longer term kit.
Kidney damage and so assessing.
Their progression risk.
Which is what kidney until X was designed to do becomes important before establishing a long term care profile and also assessing.
The recovery times with those patients. So this is this is an area. We are focused on and again, we're not a co good company.
And we have to be very careful about the resources that we commit to cope with we are very much a chronic kidney disease company at the moment.
Expanding into other disease indications, but this particular population which is emerging.
Which unfortunately is getting larger fits right in the wheelhouse of kidney until actions very complimentary to.
The product development that we've been doing since inception.
So I think this is this is going to be a fascinating place to be and on the line with US is also dr. Steve Coca.
Who was on the front lines.
This situation has been going into Mount Sinai Hospital on a daily basis throughout the entire cobot that could epidemic. Steve could you just give us one minutes worth of color on the importance of applying kidney until X in this population and what you're seeing.
Sure James.
As many of you have likely seen.
The current of Iris Cove it is not just.
A respiratory illness, but it causes a significant amount of acute kidney injury severe acute kidney injury with many patients requiring acute need for dialysis.
What this translates into it for long term risk of chronic kidney disease is yet to be determined.
We at Mount Sinai and several other investigators, including the ones we're collaborating with.
Are currently conducting.
These long longer term ascertainment of kidney function in injury.
And.
We really need to explore and see if we can apply.
Again, the kidney intellinx platform to risk stratify these patients for the long term sequentially.
Chronic kidney disease, and the progression to and Fitch kidney disease.
Certainly this will add potentially out a whole new.
Proportion of patients to to be the clinical.
Staffing needs for Nephrologist and not everyone can be seen by nephrologist after being hospitalized with covidien, having acute kidney injury. So this is the clinical utility and the value of having.
Be restrictive for kitchen tool that kidney intellect to help treat patients and get them to the nephrology. If if they are high risk for the long term kidney disease.
Outcomes.
Thank you Steve.
That's extremely helpful.
We were wondering if there had been held.
In your conversations with health systems, and you mentioned it.
Targeting three significant implementations and sort of the medium term. So how does it help the application of intellect to the Cobra population.
Okay.
That's been a secondary discussion.
We find actually that the health economics equation.
Around kidney disease.
Is something that is well known.
The challenges one of the advantages of operating in the kidney disease space is we don't have to do a lot of education.
With health systems population health managers are payers about the critical cost.
And the care pathway with kidney disease.
So most of our focus is really to say here.
Here, we have a progression tool.
Caribbean TLX, which is supported by care navigation.
And a comprehensive suite of data analytics that we can do on health economics.
And that's been the primary focus.
While cold it is an important issue obviously.
Most of our discussion is really how to deal with the longer term implications for the growing CKD population and especially looking at progression in early stage CKD stratification of those patients into low medium and high risk.
That.
That's been the primary focus.
That's great very helpful. And then one last one I was wondering on the Astrazeneca collaboration can you talk about the near term goals.
What we should expect in early 2021, and maybe touch on if possible the medium term economics.
Yes.
We're very focused.
In the short term on a couple of things one of which is reimbursement reimbursement reimbursement.
So we set up a paradigm here, where we can get paid we know what the rate is.
Because Medicare has already established national pricing at $950 per reportable results on a distinct code.
So are our primary objective is let's generate coverage determination and we can do that for a number of different channels, one of which we started to announce this are the preferred provider organizations.
And obviously working with individual insurance companies that are concentrated in our launch and subsequent rollout markets. So for example, there are.
A whole sequence of insurance payers that covered the New York City region.
As well as the New York State region, and we've been putting a significant amount of effort into achieving that coverage.
And then of course on the government side.
We're very focused on achieving Medicare coverage determination because that accounts for the majority of our indicated use population.
And there are a number of different pathways that we're pursuing I won't detail those on the call here.
But again as as we've said from the very beginning of renal led Ics, we know how to build the diagnostic product we know how to run a regulatory process, we know how to engage clinicians and patients.
The biggest risk.
To the business is achieving reimbursement coverage.
We've made a number of accelerated moves in that direction, we're continuing to put a significant amount of effort to do that so you should expect additional color in the short and intermediate term on building out that reimbursement picture not only regionally, but also nationally.
Other things that you should expect our additional strategic partnering.
And there are more than one way to skinned the cat.
In order to get adoption.
With kidney and TLX and open up.
Specific business channels and one of those is through strategic partnering.
We believe we're in a very unique position, where kidney and telex is really the only product at the moment.
That can look at progression disease progression in early stage CKD. The reason, we can do that is because we take a blood draw and we have a core biomarker strategy. We do not believe that you can look at early stage CKD progression strictly through data analytics alone.
Or looking through a large data warehouse you have to take a blood draw to capture the current biology and you have to have a core biomarker strategy that starts you down.
Accurate and early understanding of disease progression, so from a strategic partnering standpoint, and there are many stakeholders in the chronic kidney disease business.
From a strategic partnering standpoint, we offer a unique value value proposition.
And that starts from very early stage one.
CKD. So you should expect us to be announcing additional strategic partnerships as the business rolls along over the course of the year.
The third thing you should be looking for is obviously the FDA clearance.
Which again I won't put a timing on that but.
We have put a significant amount of effort into that and we think that that is a marquee.
A milestone for us introducing an artificial intelligence enabled in vitro diagnostic.
Which we believe is a distinct product class and the regulatory process has made a smarter.
And also provides IRET very robust framework for a product that can establish a standard of care over the long term long term that will also help us with reimbursement.
So there are a number of.
Key events.
That's you can expect over the short and.
Intermediate term.
And then of course, we're building the company.
Core ways I mentioned, a number of the key positions that we filled.
The most important resources that we have.
The ones that show up for the weekly all employees zoom call, which is the way to do it these days.
And we're going to continue to add to our employee base in a number of core areas. So that we have the ability to execute.
Not only with Mount Sinai book with other large health care systems as well.
And Im sorry, then you asked a question about intermediate term economics, what was the second part of your question.
Yes, so with relation to the extra Seneca collaboration and how to think about.
Yes in short.
We're delighted with easy.
It is a very sharp team.
And we're very engaged with Astrazeneca theres, a lot of questions that need to be answered.
Around.
The clinical workflow.
Around different types of therapeutic approaches.
And we believe that kidney Intel X and our relationship with investigators and other institutions again put us in a position.
To really maximize data generation with a group like Casey.
Not only in the short term, but over a multiyear period.
As we begin to expand out the characterization.
The work flow.
Any disease, so easy is very much the right partner.
And.
Yes, you should expect us to start publishing on results.
With a C and hopefully expanding the program where they see.
In calendar 2021.
Perfect very helpful. Thank you.
Thank you.
Your next question comes from Jan Linquist with Investec.
Hi, there good morning, Hi, good morning.
Just wondering if you could tell us a little bit more about the collaboration with University of Michigan The state probe.
Database, and what you're hoping to get out of that.
Secondly.
Just on on Medicare reimbursement again.
Covered that topical but just specific on the mold the sub.
Submission.
The carefully that now on hold pending the outcome of the new proposed rules, providing the nationwide made mitigate coverage for FDA breakthrough devices with its still get underway and if so what is the timeframe for that and then finally, perhaps.
If there's anything you can say about.
The in licensing activity that you mentioned earlier.
Would that be specific it to strengthen the kidney and select franchise.
And if that if you take that into into the digital areas or are you looking at tangential.
But you had to put the Kt would I be thank you.
So thank you guys all three good questions I'd like to bring Ferguson Tom into this discussion briefly.
And.
Why don't we start with the University of Michigan, Fergus could you give us a one minute summary, and obviously this is a very exciting interactive collaboration with a with a top group.
In the field.
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Hi.
Thats doing yens.
Part of it is here so just to keep it very briefly in relation to University of Michigan into CE Pro cohorts.
Primary short term objective here is to examine the power of.
Combining urinary biomarkers that positive based biomarkers.
And specifically, which also Steve to your toward question looking at.
Yes, our past.
As a as a particular the biomarkers that has been shown to be very prognostic.
In terms of chronic kidney disease across a broad range of chronic kidney disease conditions. So so to see ethics really one is looking at us that specific biomarker and how we kind of had to keep the intellects platform look.
Looking at the combination of urinary and plasma biomarkers and to see pro cohorts and how that two of our form to launch pad for for future product developments.
And then obviously then expanding essentially takes time to keep the internet's indication out two indications beyond the existing type as it could you just see population so its a.
It had some short term objectives, but longer term as we looking us expansion of the kidney and flex platform in important terms of biomarkers be.
The types and indeed, indeed indicates that use populations. So we've just started the program intensely in terms of moving some of those two.
To and fro two between the two groups and analysis will be getting under way and in a matter of weeks.
That's great and Tom moving onto Medicare revenue, just going to say.
Yes. Please go ahead.
Doesn't it.
It is.
It's actually some very recent data published on the unity is yes biomarker tests.
Sure.
Now to our websites.
So that people can hear test.
Okay. Thanks.
Thank you focused obviously, adding yoram.
As a bio fluid into kidney until X for me as quite exciting having come out of the liquid biopsy space. So we're able to access to different compartments.
Tom can you please take us.
Quickly through the Medicare.
Strategy, and obviously were full out on that regardless of seabed.
Absolutely James Hello again.
So the break through national coverage determination rule proposal that CMS issued is actually still in comment on that comment period ends next week on that is an important and exciting development. If that rule is finalized to give Medicare.
Beneficiaries immediate access to innovative technologies as determined by the FDA, but that is we are not counting on that being.
The pathway for reimbursement that would be a great upside so with regard to a local coverage determination on we have.
Yes, the advantage with two laboratory locations to be pursuing local coverage determinations, both with national government services, and really again and because meridian participates in a mall. The X program also through multi acts and all three.
Three of those coverage pathways are moving forward on with.
Getting the data and everything in line for that and as James indicated earlier in the call on that local coverage determination process, which in effect would be a national coverage determination for samples run through those labs.
All of those initiatives are moving forward in line with that end of 2021 goal for Medicare coverage.
Okay, great. Thank you. Thank you you're welcome.
Okay.
And then in terms of in licensing opportunities that really flows also from groups like University of Michigan.
And.
We have a very good network.
Leading investigators.
We're working with.
Academic medical centers of note.
Researchers and we find ourselves in a fascinating position because there really has not been much development at all in early stage CKD progression.
And again, that's where 80% of diabetic kidney disease patients reside is in the early stage and we.
We're answering a core question, which is who as kidney disease that matters and who doesn't who is going to progress.
And who is not going to progress and how does that risks change over time. This is a fundamental question to understanding how you allocate resources.
And ultimately how you develop care pathways and treatment paradigms.
So being in that position is attracting a lot of interest because there hasn't been a platform like give you until X before it is expandable.
As we discussed so we can add additional biomarkers different features we can expand the indicated used for kidney until X horizontally into other disease States and we can also get very deep in terms of kidney disease subtyping.
Specific types of kidney disease. This is what happened in oncology. So it's the cancer model.
Because we have that platform available.
And there really hasn't been one like this before we've attracted a lot of conversations we've accessed a lot of stored sample sets and its been a very robust discussions so.
I am not going to say specifically, what we're working on in licensing, but university of Michigan as a superb example, where we can collaborate very openly with the leading group of investigators around a new fluid around the new biomarker, we expect to be doing that a number of.
Times over the coming months and years.
And it's a very robust development program that's available for us.
Okay, and Kerry I think we have time for one more.
A question at this point, yes.
Your next question.
Sorry. Your next question comes from Edward Thomason within one singer.
Hi, everyone and thank you for the update and excellent questions if any.
Many have the shorts.
So two questions if I may.
No we're running out of time, but can you just provide a bit of an update on the actual rollout on Mount Sinai and particularly how it is going on in the Mount Hassane area and the when do you anticipate.
Speed of sense of adoption and rolling out into EBITDA.
Districts in the New York State.
And then the second question just on the.
Who's Medicare breakthrough designation rule change and and you will view on the.
To the election outcome, which we will find out in the next couple of weeks or.
As I suspect probably the.
These changes are Pan party, there because to get your view on that.
Thank you Edward the view on the election whole boy I'm going to stay away from that one.
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It's it's an interesting time in the United States I.
From a medical device policy standpoint.
We've obviously been very pleased with whats taken place in the kidney disease space recently.
Starting with the presidential executive order in July.
2019, which really realigned a lot of the incentives and economics around kidney disease.
Which very much.
Played into the into.
Into the development space of kidney and tell us looking at disease progression early.
I think those trends will continue.
And these are really a continuation of some of the laws, which were put in place under the Obama administration. So we are really living in just in summary in a value based healthcare environment.
Sure I think is only going to strengthen.
Some policies may change some avenues may open others may close but.
The reality is value based healthcare has set in and it should because chronic kidney disease cost simply unsustainable.
And we have to develop precision medicine strategies, we need new tools.
Look at disease earlier, the same way you don't want to show up.
In the emergency room with stage four cancer, you want to catch it early the same is true with kidney disease. If you are experiencing kidney function decline are at risk for kidney failure, you want to know as early as possible to set up the maximal treatment options and Thats. What can you tell us. It's all about so I think regardless of who's inaugurated in January.
The the momentum from a policy perspective will continue.
In terms of characterizing the Sinai rollout. We've we've commented on that I don't want to go too much further because it is early days.
And.
The most important thing for us is to make sure. We have all the fundamentals in place marketing and communications is absolutely critical to messages need to be clear and simple the physicians need to be able to use this information and act on it according to guidelines.
That's what's going to start to change outcomes and.
And cost the feedback Weve direct feedback we're getting from the physicians is invaluable.
It's helping inform the process.
It's it's a great set of feedback to be able to work with a system like Mount Sinai health system directly.
We're very pleased about how things are taking shape and again, we are reporting live results into.
Into the system, which is a which is a major milestone you should hear more about that in the December quarter.
Report and in the March quarter report as well and we hope to have other systems coming online as well and Edward you had one other question on C met I believe.
Tom do.
Do you have anything else to add on.
The Medicare equation.
The only thing to add.
Third on that is that see net which is Medicare for innovative technologies is a bipartisan matter.
Matter on it has bipartisan interest so the idea of.
Medicare beneficiaries again, having access to innovative technologies is something that we perceive crosses party lines.
We are actively engaged in supporting this and also because of our membership industry associations and our own outreach on.
I think that consensus is is that this this rule change on the benefits of that are apparent to both both parties in the United States at this point.
And that's very clear thanks very much.
Thank you Edward and I think unfortunately, we are out of time.
But these have been very good questions and.
Expect we'll have a lot more to talk about as the year progresses, and certainly moving into next year.
Ladies and gentlemen this.
This concludes today's today's conference call. Thank you very much for participating you may now disconnect.
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