Q4 2020 Exagen Inc Earnings Call
Greetings, ladies and gentlemen, and welcome to the ex Adjourn, Inc. Fourth quarter, 2000, and 'twenty earnings Conference call.
At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance. During this conference. Please press star zero on your telephone keypad. Please note that this conference is being recorded.
I will now turn the conference over to our host Mike Cavanaugh Investor Relations for Epogen and Thank you you may begin.
Good afternoon, and thank you for joining us today earlier today accident, Inc, released financial results for the quarter and fiscal year ended December 31 2020.
The release is currently available on the Companys website at Www Dot estrogen dot com.
Ron Rocca, President and Chief Executive Officer come all of Dowie, Chief Financial Officer, and Mark Hazeltine, Chief operating Officer will host this afternoon's call.
Before we get started I would like to remind everyone that management will be making statements. During this call that include forward looking statements within the meaning of federal Securities laws, which are made pursuant to the safe Harbor provision of the private Securities Litigation Reform Act of 1995.
Any statements contained in this call that are not statements of historical facts should be deemed to be forward looking statements.
All forward looking statements, including without limitation statements regarding our business strategy and future financial and operating performance, including 2021 guidance the impact of the COVID-19 pandemic on our business, our current and future product offerings and reimbursement and coverage are based upon.
Non current estimates and various assumptions.
These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward looking statements. Accordingly, you should not place undue reliance on these statements.
For a list and description of the risks and uncertainties associated with our business. Please see our filings with the Securities and Exchange Commission, including our form 10-K and subsequent filings.
The information provided in this conference call speaks only to the live broadcast today.
March 16 2021.
<unk> disclaims any intention or obligation, except as required by law to update or revise any information financial projections or other forward looking statements, whether because of new information future events or otherwise.
I will now turn the call over to Ron Rocca, President and CEO of <unk>.
Thanks, Mike and thank you to everyone joining the call today as always we appreciate your continued support of ex gin we.
We are very pleased with the exceptional performance and the fourth quarter. Our testing franchise continues to grow despite well known challenges that patients have visiting health care providers.
During the fourth quarter, we delivered a record 28000 and 601 of our flagship advise CTD test, which includes our advised lupus test and and back to back years of over 100000 tests for the full year. We believe this is a testament to the value patients and healthcare providers receive with <unk>.
Our advice suite of testing solutions.
Due to the pandemic patients must make additional efforts to visit their doctors and get their symptoms correctly diagnosed making our test volume even more impressive.
This gives us confidence and the continued growth of our testing franchise, especially as COVID-19 related restrictions ease and patients can again freely visit their health care providers.
Along a similar vein, we saw 1006 hundred 90 order and healthcare providers and the quarter, including a record 635 adopters. Moreover, we had a high retention rate of 99% among adopting health care providers again, we are very proud of these numbers given the circumstances.
Yes.
And this further demonstrates the unique utility of advice franchise to Rheumatologists, who are challenged with clinically difficult to diagnose diseases.
Additional value provided by our advise CTD test during this pandemic is the convenience and accuracy to cover multiple connected tissue disorders vs serial testing, which could take many doctor visits over numerous years.
As we have said before life threatening diseases like lupus and chronic disorders like rheumatoid arthritis, and do not stop during a pandemic and tested cannot either with the pandemic, making it more challenging for patients to see their doctors for treatment and the necessity of tests that can speed up the diagnosis and prognosis of autoimmune diseases.
As a parent.
We believe our advice brands can address that need better than anything currently on the market.
The Symphony co promotion agreement, which was amended and December delivered revenues of $1 7 million and in the fourth quarter, which was near the contractually quarterly ceiling for the second consecutive quarter.
That said I do want to take this opportunity to provide some perspective around the future expectations when.
When we consider the opportunity provided by the new amended agreement coupled with COVID-19 pandemic going forward, we expect symphony revenue to come in at the quarterly contractual minimum of $300000 as always we evaluate our product portfolio and allocate our important resources to the opportunities to generate them.
Motion and value for our organization and patients.
I'd like to now turn to our sales force, which is a key driver of our performance.
The team covered 56 territories as of December 31, 2020.
And the first quarter 2021, we added seven new territories for a total of 63 territories as well as the creation of and inside sales force to further our reach with Rheumatologists in the white space complementing our decentralized sales force and covering vacant territories are specialized team has adapted well to the pandemic.
Continues to expand estrogen and reached a rheumatologist and is highly energized entering into 2021.
I would also like to comment on the progress we have made on the reimbursement front over the course of 2020.
This is a high priority effort for X gene and yielded over $14 billion in net work lives over the course of the year, bringing us nearly to $60 million in network lives as of the year and.
We have maintained this momentum thus far in 2020, one having recently completed new covered and in network agreement with Tricare West and Highmark. The fourth largest overall Blue Cross Blue Shield affiliate organization as well as adding contracts in network services to two medical systems, the top medical center and St.
Charles Health systems.
Turning now to our R&D efforts. This remains a key strategic focus as we seek to solidify <unk> position as a premier autoimmune company, providing and extensive range of testing solutions to help rheumatologist diagnose treat and monitor autoimmune diseases, which isn't tourist really difficult to do.
We are focused on driving multiple sources of innovation and strengthening our intellectual property portfolio. For example, and November we announced a new study in collaboration with Brigham and Women's Hospital, Boston to evaluate the effects of COVID-19 virus and its possible connections to subsequent autoimmune diseases.
We will also continue to advance the development of further tests to add to our advisory franchise, including our test for fibromyalgia, a disease, which has a large addressable market.
While not an autoimmune disease is often confused with connective tissue diseases and is therefore frequently diagnosed by rheumatologists.
Adding and effective rule and rule out test for fibromyalgia promises to be invaluable to health care providers. We believe that our device test are the most effective complete and differentiated series of tests for autoimmune diseases, and we remain focused on strategically enhancing that advantage and closing we are very pleased with our results and the <unk>.
And fourth quarter and the full year 2020, our core testing franchise is strong and has proven to be resilient and the face of significant challenges. However, there are additional challenges which are out of our control such as the inclement weather in February 2021 experienced in Texas and other parts of the country.
We made a lot of progress on the reimbursement front during the year and we will continue to give that a high priority.
We will continue to invest and our R&D to find additional differentiated test to add to our advisory franchise and finally, we will have a sales force in place to drive Rheumatologists to our platform. We believe that X gene is well positioned for the future.
I'd now like to turn over the call to <unk> to discuss our financial results.
Thank you Ron and good afternoon, everyone total revenues in Q4, 2020 were $12 7 million and increase of 24% over Q4 2019.
Total revenues for the full year of 2020 were $42 million, which was a 4% year over year increase from 2019, despite the impact from the ongoing COVID-19 pandemic.
Total revenues were driven primarily by <unk> CTD testing volume, including a record 28601, and the fourth quarter and 100450 for the full year.
As Ron mentioned, the number of ordering health care providers was 1690 for Q4 2020, compared with 1665 for Q3, 2020 and 1707 for Q4 2019.
<unk> CTD test revenue was $8 6 million and the quarter and other testing revenue was $2 4 million.
<unk> revenue for the full year was $29 2 million and other testing revenue was $7 7 million.
Revenue for simply was $1 7 million for Q4, 2020, and $5 1 million for the full year 2020 with 100% gross margin.
Once again, we are very pleased with the performance of our core testing franchise and the face of headwinds from the ongoing COVID-19 pandemic.
Cost of revenue were $4 $3 million and Q4 of 2020, resulting in a gross margin of 66% compared to 55% in Q4 2019 for.
For the full year 2020 cost of revenue were $16 6 million with a gross margin of 61% compared to $18 8 million and gross margin of 53% for the full year 2019.
The improvement in gross margin was driven by an increase and high margin Symphony revenues a day.
Decrease and royalty costs associated with the expiration of a royalty on our <unk> technology, and a decrease and direct costs, including materials and supplies.
Operating expenses in Q4, 2020 were $15 4 million compared with $13 1 million and Q4 of 2019.
Operating expenses for the full year 2020 were $57 2 million compared with $49 $7 million and 2019 the.
The increase was primarily due to employee related expenses, including stock based compensation associated with the overall increase and head count and an increase in R&D expenses.
The net loss in Q4, 2020 was $3 5 million compared with $3 $4 million and Q4 2019.
For the full year 2020, the net loss was $16 7 million compared to $12 million and 2019.
Looking at our balance sheet cash and cash equivalents as of December 31, 2020 were approximately $57 4 million.
For full year 2021, we expect total revenue to be approximately $47 million to $49 million. This includes testing revenue of 46 million to $48 million representing growth of approximately 27% over 2020 at the midpoint of the range we are prioritizing resources.
And by testing franchise, and expect $1 2 million and revenue per symphony for the full year 2021.
We will now open the call for questions.
Thank you.
Ladies and gentlemen at this time, we will be conducting the question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is and the question queue.
You May press Star followed by the number two if you would like to remove your question from the queue.
And for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys.
Our first question comes from Chris Lin with Cowen and company. Please state your question.
Hi, good afternoon, and thanks for taking my questions.
First could you just help us unpack that 2021 revenue guidance and a bit more detail I'm curious was factored in for testing ESP volumes and the impact of COVID-19.
Why don't I, just stop there and start with that.
Yes. Thanks for the question, Chris at the midpoint of that range, that's a 27% increase and testing revenue as you heard on the call. We did get in network and contracted with Highmark and Tricare West. So we're continuing to make progress on that front. We anticipate that we will continue to make progress with contracting and networking and that's <unk>.
To be accretive to our overall asps.
Yeah, and as far as could Covid impact obviously, we don't know if it's over yet Chris but we're obviously monitoring that the the one thing I've repeatedly said is it COVID-19 does not cure these autoimmune disorders and those patients are still out there. So.
We will continue to monitor it we're real happy with the way the year ended last year and this year and it seems like things have opened up quite a bit and we hope it continues to do so.
Okay, well just based on your comments.
Just to be clear I guess for 2021, you're expecting testing ESP to be up sequentially relative to 2020 is that right.
Well, we don't give guidance around or asps.
But what we do anticipate it and continue to get in network and contracted with the payers.
Okay, and then how would you describe the relationship between the increase and testing revenue relative to testing volume should we expect a similar level of increase or any commentary you want to give their understanding you want don't want to quantitate it.
Quantify it yet.
Chris.
Do anticipate our volume to increase we did mention that we are going to expand the number of territories from 56% to <unk> 63, and add a virtual sales rep team based on the success of our current decentralized sales force has had having zoom calls with the physicians.
Yeah.
Okay.
And maybe for just one more question here and Iran. Small we both we talked about the potential of there being pent up demand provides testing and Australia I think you alluded to that in your prepared remarks, just on the <unk> panel testing versus serial testing can you talk about what if that was a tailwind at all and Q4 and secondly, yes, whether it's.
<unk> 2021 guidance as it relates to that dynamic.
Splits it late factoring that in or would that represent upside to your.
Guidance this year.
I think what we saw there with the trend was that Covid has forced doctors to be much more efficient and how they treat patients, especially specialty like rheumatology, where these patients are coming in as a PCP referrals and they're all waiting to see their specialists. So when we talked about serial testing, which is the way of <unk>.
Lot of them were were.
And we're trained.
And that really doesn't work now not with all of these patients coming in and so our test because its so convenient has 11 of the generic markers that most over often overlap with each other and plus the best Lupus test offers convenience with the accuracy I don't think thats going to go away at least from the conversations I've had from physicians some of them said they dabbled with.
It before but now they have to use something to be more efficient to see these patients. So.
As far as whether it's in the guidance or not I think that <unk> looks at everything when he puts these things together, but I don't think that's going to go away Krish and I think doctors have found that they are much much more efficient with advise CTD than the traditional serial testing, which as survey showed could take up to six years to get correctly diagnosed.
Okay. That's very helpful. Thanks for taking my questions.
Thanks, Chris.
Our next question comes from Brian Weinstein with William Blair. Please state your question.
Hey, guys. Thanks for taking the questions good afternoon.
Hey.
And understanding that you're going to be spending less time.
On the co promotion.
Promotion here and Simponi. So just curious how much time, where your reps actually kind of spending and an average.
Sales call talking about one versus the other and what I'm trying to get at here is what does that incremental time that theyre going to be a lot and really do for you guys in terms of being able to drive.
Clinicians to begin to write for advisor order the tests, but then also to get deeper into the accounts just because that gives you a little bit more flexibility I mean, what do you do with that extra time I guess you have great question, Brian So the capacity that went into the.
And the promotion of Symphony was good capacity at the time, but it does free up a little bit more time for us now to engage them in other discussions with our other brands now I will say this that with symphony. It did open doors to doctors and traditionally just treat rheumatoid arthritis patient. So we will continue to use it to be able to leverage the relationship.
And with our other brands, but the capacity will now go over to our other brands that has a lot of that.
It has a lot to do with the way we look at the markets, we put in something and principal one principal to principal three and right now its principle. One is definitely advise CTD for all calls so that extra capacity will go to quantified it depends on territories, some territories, where heavier with lupus rheumatology treating lupus and others were heavier with.
With the RA doctors, but in general I'm looking to free up quite a bit of capacity and went there and move it over to our testing brands.
Great. Thank you for that and obviously it doesn't sound like you're expecting anything else to be brought into the bag.
Inorganically the share, but can you talk about at least is there a funnel of things that you're considering or that you are looking at and how.
And what inning what quarter or what.
Half of soccer Macerich. However, you wanted to kind of talk about where those things kind of share in the funnel to the extent that there are anything and any of those things that are out there that might be able to replace that lost revenue and allow you to kind of continue to grow the bag.
Yes, another great question because.
While I can't share with you everything thats in our funnel, we have a big funnel, we look at everything that could possibly make sense for us from a ROI standpoint from a reputation standpoint with the rheumatologists and since we know.
Yeah.
How low ball, but dominate this channel at this point with all the products, we have and how much commitment we have with Rheumatologists, we do get contacted quite a bit.
And we strained those the restaurant and BD and to make sure that it makes sense and.
And if and when it does make sense and increase value increase our reputation and leverage their infrastructure, we'll take that on so quick answer is we have a big funnel, we look at it and when appropriate we will put that into our sales bag.
Okay, and then last one for me.
And is you mentioned the rois, you're thinking about adding things to the bag, but how do you think about the ROI on the sales force here Youre up to 63 and I wasn't sure. If that was I think that the current number I wasn't sure. If you were looking to go beyond that this year I understand you have the inside sales reps there, but how do you look at the ROI from above and external but also I'd be really curious about what you see.
ROI is on on the inside sales force here and some of the things that that Theyre doing how do you measure that thanks, guys alright.
Yeah, Thanks, Brian and I am just going to clarify one point. We ended 2020 with 53 sales reps. We had 56 territories were now increasing to 63 territories and hiring those additional.
Sales reps to get to 63, I'm going to let Ron speak to the answer yes.
Roy.
Brian what we're finding is when we put a rapid and new territory, what we call white space here, there quickly getting up to speed with their doctors, it's not like when we launched this product yet explained would sell bound complement activation product is or who we are by the time. The rep goes into these new territories. The doctors are waiting.
Get the information and logistics on the package and so forth. So we think the ROI for every additional rep. We add in the United States is going to yield a good return even faster the virtual what we call virtual or centralized sales force will augment debt.
In a couple of ways. One is we will use that for white space Places, we don't have reps, yet and we still don't cover places like Alaska, Hawaii, Puerto Rico for example.
And so we'll look to increase our presence there the other thing to virtual reps do is when somebody goes download and medical leave whether its pregnancy hurt ankle whatever we won't lose any momentum so using the two together.
Which is a lot less expensive has centralized reps, we think we're going to be able to cover everybody in the right capacity to get the reach and frequency necessary to grow these brands.
Great. Thank you guys so much.
Thank you. Our next question comes from Carl Mixon with Cantor Fitzgerald. Please.
Please go ahead with your question.
Hey, guys. Thanks for taking the questions.
Congrats on the quarter and call and thanks for the color on the guidance it was helpful.
To start on the SMT and agreement first so Ron we've always talked about how the Prometheus model would be kind of preferred over the type of agreement that you've had.
And with Janssen to this point, but I mean with all these little bit therapeutics on the market and coming to market. Obviously have you thought about pursuing like a traditional companion diagnostic strategy and obviously that would take time.
And you would need approval is probably but would you kind of rule out doing one of those collaboration and somewhere down the road or maybe I'm just thinking about it, especially since you have the relationships already with a lot of those manufacturers on the data side already and I guess, where I'm kind of getting at is.
And the future of the Dx Rx strategy because of whats going on with.
Janssen and what Youre kind of expecting for 'twenty one thank.
Thank you I appreciate your perspective.
Sure Carl Thank you, we believe and precision medicine, and we believe it's here to stay let's just say that and if flat out as you see more and more quality testing products coming and you see more and more $60000 a year of biologics coming you're going to see more and more of a push for precision medicine, I love that because I think we're and pulp.
Positioned to be able to help the rheumatologist and the payers and that area. We had wild success with this strategy at <unk> with a steroid and I will say this about symphony and it has been successful for what it was the problem is we negotiated this agreement pre Covid and then shortly after the agreement was inked COVID-19 showed up and that.
Derailed it but I like the fact, it's a biologic see only at home self injected biologic, but the reality of the situation is when we look at future deals for us and our model will look for things, we have a little bit more control and the marketing aspect of pricing aspect and as well as the sales aspect. When we just have the sales aspect, we really don't.
Kids and control the messaging as much. So that's what we'll look for and the future we have not given up on precision medicine, we're still wide open to that we think marrying up a diagnostic with a pharmaceutical and.
Quite frankly in many cases, the ethical thing to do so thanks, Carl for that question I appreciate it.
Okay. Yeah that was that was helpful. Ron Thank you and.
Pretty impressive actually with the with the added lives and the over the course of the year and I was kind of quiet for a certain period of time, but it kind of picks up at the end there and congrats and all of these like client bill agreements and the and that we're kind of I guess partnerships, but should we expect to see more of those and the near term like with.
Some of the hospitals, and Boston, and so forth or maybe when we see the payers and kind of yes.
And we added on like and that over the course of 'twenty one.
Should we see more of them just given what's kind of going on with Covid and and vaccines and all of you and all of this.
Uncertainty.
We know what payers want and we did it and that's the dossier and I think we did a wonderful job as you saw with now both Tri care East and West and you know they operate separately.
With the fourth largest blue high Mark and with some of the meetings. We've got planned go and this year. So I don't expect it to stop because I think it really addresses and issue you got to keep in mind that a and a which is considered a lupus test was developed in the late forties like 1947, and we haven't had a really really good test for these doctors and a long time.
The other thing that Covid has really brought to the forefront is the disparity and treatment with African American women and Hispanic women will nine out of 10 lupus patients are female and of that the majority are Spanish and African American and so we think that awareness along with the fact that we have the we believe the best drug and the best diagnostic on the Mark.
For these patients will help us get the payers to do the right thing and take care of these patients. So I have no doubt that we'll continue to progress forward.
My my intent is to get as many of these wrapped up as soon as possible not only for us not only for the people and the phone but for the patients they really need quality testing for autoimmune and we're here to provide that.
Okay that was great Ron thanks, the non Caucasian.
And data is great, but it works with the payers it seems sort of thoughts on and I guess just the last question for me come all on the gross margin for 'twenty, one and obviously, they're not going to be you're not expecting to start shifting revenue.
Which is 100% Marsh, obviously and so the largest stepped down quite a bit is there anything that you could help us kind of current model that out and know the royalty is coming off quite a bit like it's really rolling off quite a bit in and.
And 2021.
So there's that dynamic I think about just help us sort of sort through those moving pieces. Please mark thanks.
Sure. So on testing gross margins, we've seen some significant quarter over quarter increases going back to Q2 2020, we're at 52% gross margin for the testing business, we increased it to 54% and Q3 and then this past quarter and Q4, and we did 60%. So we're continuing to make increasing.
And you touched on some of those points on the testing that royalties. It takes about 12 months to see that royalty completely go away and its sunset. It on January seven 2020, so it should be completely out for the majority of 2021, and then we continue to make efficiencies and the lab we commented on.
And on lower material costs, and lower supply costs, and we're looking to automate as much as we can to drive down our labor expenses.
Okay perfect. Thank you well thanks, guys for taking the questions.
Our next question comes from Mark Massaro with BTG. Please state your question.
Hey, guys. This is Dan.
Mike and thanks for taking the question.
And so I think.
And the heightened interest in Europe, and mobile phlebotomy sites as a result of the pandemic and I know you.
You've talked about the efficiency and your virtual sales force and.
And is the intention there to kind of maintain both of those as Covid even walk.
And can you repeat the back end of that question I got the mobile park with the SEC.
And part.
Yeah, and so decision.
<unk> and Rachel and sales force and.
Okay, and the intention there too.
And peanuts, and current eases up and looking for into 2020 one.
Okay, Great. Great question. Thank you the mobile phlebotomy is something we do when there is a reputable mobile phlebotomy area.
Event in the area and is not owned by a physician nor does it have links to a hospital because there are some some regulations there it has to be truly independent. So we sign those deals up when we find them or they find us and we do like the mobile phlebotomy. We've also introduced two capillary tests, the methotrexate and the hydrops chlorine touch both come into cash.
<unk> fashion, so you don't need a <unk> and just to say we've got one revenue in particular that reminds a physician that they did go to Med school and medical school and learn how to pull blood, So believe and the product draw the blood yourself and put it and the tube and I'm always fascinated when they say Oh, yes, I guess I can do it myself.
It's not a really tough procedure, even though you do have to be trained so the mobile phlebotomy share to stay we think and the short term and definitely and we will continue to sign more of those agreements to make sure that every patient and every doctor has access to the asset now as far as the effectiveness of virtual sales reps.
Theyre very effective, especially when you compound the fact of how many calls it can make and they don't have to fly northern have windshield time I think it's here to stay one of the things I think COVID-19 does.
To society is we've evolved I bet 510 years faster than we would have and being able to do things like zoom calls zoom conferences reps on a zoom call and I think everybody's gotten used to it to the point and quite frankly, I don't think its going to go away. We will it be the lead part to initiating a new therapy.
Or new tests, probably not but to augment what is already out there I think it's a very efficient cost effective way to deliver core message to the right audience. Thank you for the question.
Thank you.
And so just a quick follow up any and.
And your colleague collaboration with free than to evaluate the emergence of immune disease and post.
And 19 infection.
Would you anticipate the outcome of this study too many and it all.
Al.
And has any kind of linked day notice at this point and when we should expect the final data and be out there.
Sure. So the thought process is if you have COVID-19 you will develop autoimmune diseases faster than if you were and the control group that did not have COVID-19.
And there's a lot of scientific papers being written on it currently some are already on the web and you can look them up and the theory is actually looks pretty solid that that might be the case and now we've got to prove it out and that's that's what we're going to do we're really happy to be working with a marquee organization like Brigham and women out of Boston and we're really happy that they are using our advisor test to do.
This I mean, that's really important.
Will it drive additional revenue, we believe so because familiarity with us and the asset will naturally draw doctors more towards us we know they like esoteric labs like us with White glove service anybody of Brigham or any of these institutions, where there's tough St. Charles that we signed up the policies that we signed up.
Similar request out of Arizona. They know they have access to our phds and Mds $2004 seven have access to them to ask any questions. I think that's the type of quality that these marquee institutions want they don't want and nebulous lab, they want a partner and labs and that in and of itself will make us more important to them and drive business as well as very good.
<unk> for the public.
Okay got it thank you and just.
Our final question for me and you.
Could provide an update and other areas and you're thinking of it spending thank you.
And as additional offerings to lupus patients. So I believe in the past you've mentioned Arlington and plan and.
Kidney damage et cetera.
Uptake the kidney damage and may be more relevant quickly the fiber and long term. So let me do the lupus nephritis first.
Lucas to price a very serious issue been listed the biologic from GSK got their approval I think late in the fourth quarter last year and <unk>.
Just got their velocity for and approved I think early in January so you've got two new pharmaceutical companies coming out pushing for lupus nephritis, and we're really take a look at the assets that are out there to measure that theres not really high quality assets. So we do have a monitoring product that has some lupus nephritis markers and as we have told the the physicians and so forth we'll look to.
Enhance that even further since both these products are will be drawing a lot of awareness and attention to lupus nephritis will have the test to measure that and our advisor monitoring test.
As far as the long term and looking at what other AD and the bag for Rheumatology Fibromyalgia is really important big Tam 15 million patients roughly in the United States and no such thing as a rule in test and we've had a lot of conversations with payers and they say these fiber patients eat up a lot of resources they come.
And to the offices they think they have lupus and they just do doctor shopping so having the first rule and fiber test I think will be very important because the rheumatologist now with David and tell that patient with pretty much definitive with adding it to their clinical diagnosis that they have it or do not have phibro and then the patient can rest assured of what they.
Right now they get a non answer for fibromyalgia and because they end up and a rheumatologist office, because they look smell and and act like lupus patients.
I do eat up a lot of resources. There so really looking forward to seeing the development of that product as well as the lupus nephritis asset as well.
Our total awesome, thanks for taking the questions guys.
Thank you.
Our next question comes from Paul Knight with Keybanc. Please state your question.
Hey, Ron Congrats on the.
And reallocation away from Simponi and I know.
Yes.
Your success of your tests are fabulous.
On the <unk> could you.
Kind of give us a little bit of a timeline on when you would expect data.
And the progress on that over the years and.
For starters and then could you quantify your virtual sales force is it 10 people and go into 2015.
And what metrics on that.
Sure.
So as far as fiber timelines as CEO of course, my I'm very anxious to get this quality product and the market as soon as possible. So I always got to be careful not to rush by scientists too much because its the good science that will lead to good product development.
So there the stages here for fibro, obviously, we're and we're working with Ohio State on this is to develop the analytical validation and enrollment has picked up recently, which is really nice I think that has to do with COVID-19 dissipating a little bit and some of these areas and then we have to do the clinical utility and clinical validation. These studies for a big product with a big Tam needs of <unk>.
Higher and number and we're going to do everything we can to get this product out to the public as soon as possible I would rather not give stamp of date I mean, I talk to my science people all the time and they know that the urgency is there to get to some of the market, but I want the study is done correctly and what the dossier fully baked.
And logic correctly into the marketplace. So we're moving as fast as we can on that Mark.
As far as the virtual sales reps.
We are looking to have seven right now and we're doing pretty good job of recruiting the right type of people, it's a little different type of skill set that you need.
And for this type of person.
But I'm excited about it I would not have believed this pre COVID-19 that they'd be as effective as they are but I think the one thing Mark that Covid has done has made doctors ready for zoom calls with the virtual Rev and <unk>.
Cinema, Grubhub lunch and to sit there and have a good conversation with them. So Paul I think.
And I think Thats just a its a good different change that a lot of share doing.
And is adding virtual sales calls to your decentralized sales representatives.
Okay, Great and then.
Could you quantify the number of covered lives under high Mark.
We did Mark do you have that in front of me absolutely covered lives for a high Mark is about $5 6 million.
And that was seen in Q1 here correct.
Yes, we have the coverage decision from high Mark and Q4, and the and network was a Q1 event Tricare West, which we also disclosed as a Q1 event as well.
And then.
Usually you quote the 99% sequential ordering retention rate.
How do you feel like that compares to a year ago do you ever really have dropped balance it seems pretty sticky.
It's very sticky very few dropouts and I think that's a testimony to the quality of product as well as the fact, they really didn't have much before we entered the marketplace.
Like I said <unk> anti DSD and Andy Smith did a very old products and they all have issues of either being.
Too many false positives or too many false negatives. So once a doctor looks and uses our product and its peers of 11 to be a magic number 11, and more times and a quarter they stick at 99%.
And I'm fascinated because I did have the number one crohn's product and one time I could never get that thing to stick more than 75%. So this is really a testimony to the value that it adds to the physicians and the patients and it has been that way youre absolutely right, Paul it's been sticking at 99%.
And that's just a terrific testimony to the asset.
Thank you.
Thank you there are no further questions at this time I'll turn it back to management for closing remarks.
Yes, I want to thank everybody for participating the call. We're very excited about what we've done with estrogen and so far and we're really impressed with what we've got in place for the future as we continue to build this company you have to know that our goal is to make sure that we take care of every patient that is out there.
We believe that helping one autoimmune patient may not change the world, but it will change the world for that one patient and that's the way we're looking at it. So thank you again for your time on the call really appreciate it and I look forward to a terrific 2021.
Thank you. This concludes today's conference all parties may disconnect have a good evening.