Q3 2021 Sera Prognostics Inc. Earnings Conference Call
Speaker 1: The Sarah Pognosk call will start in a few moments. Thank you so much for waiting.
[laughter] sorry about that.
They're probably not the call will start in a few moments. Thank you so much for waiting.
Speaker 2: The the the.
[music].
Speaker 1: Good afternoon and welcome to the Sarah Fongnostiks conference call to review 3rd quarter results for fiscal year 2021. At this time, all participants are in a listen only mode. We will be facilitating a question and answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Peter DiNardo of Capcom Partners for a few introductory comments.
Good afternoon, and welcome to this tariff on and off the conference call to review third quarter results for fiscal year 2021. At this time all participants are in a listen only mode. We will be facilitating a question and answer session towards the end of today's call. As a reminder, this call is being run.
Courted for replay purposes, I went down I'd like to turn the call over to Peter Denardo, a cap clinical partners for a few introductory comments.
Speaker 3: Thank you, Danielle. Good afternoon, everyone. Welcome to Sarah Prognostic's third quarter 21 earnings conference call. At the close of the market space, Sarah Prognostic's released its financial results for the quarter ended September 30, 2021.
Thank you Danielle good afternoon, everyone welcome to sewer Prognostics third quarter 'twenty, One earnings conference call.
Most of the market States. They were prognostics released its financial results for the quarter ended September 32021.
Speaker 3: Presenting for the company today will be Greg Critchfield, Chairman, President and CEO , and Jay Moyes, our CFO . During the call, we will review the financial results we released today, after which we will host a question and answer session. If you've not had a chance to review our quarterly earnings release, it can be found on our website at sarahprognostics.com. This call can be heard live via webcast at sarahprognostics.com, and a recording will be archived in the investors section of our website.
Presenting for the company today will be Greg Critchfield, Chairman, President and CEO and Jay Moyes, our CFO during the call. We will review the financial results were released today after which we will host a question and answer session. If you've not had a chance to review our quarterly earnings release. It can be found on our website at zero Prognostics Dot com.
This call can be heard live via webcast at cira prognosis Dot com and a recording will be archived in the investors section of our website.
Speaker 3: Please note that some of the information presented today they contain projections or other for the statements about events and circumstances that have not yet occurred, including plans of projections for a business, future financial results, and market trends and opportunities.
Please note that some of the information presented today may contain projections or other forward looking statements about events and circumstances that have not yet occurred including plans or projections for our business future financial results and market trends and opportunities.
Speaker 3: These statements are based on management's current expectations and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We're referring to the documents the company files from time to time with the security machines commission, specifically the company's annual report on Form 10-K . It's quarterly reports on Form 10-Q and its current reports on form 8.
These statements are based on management's current expectations and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the Securities and Exchange Commission specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q.
And its current reports on form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward looking statements I will now turn the call over to Greg Sarah Prognostics, Chairman, President and CEO Greg.
Speaker 3: These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward looking state.
Speaker 3: I will now turn the call over to Greg Farah Pognathic, Chairman, President, and CEO . Greg?
Thank you Peter and good afternoon, everyone.
Speaker 4: Thank you, Peter, and good afternoon, everyone. Today, I will provide an overview of key business highlights during the quarter and our expected developments over the near term.
Today, I will provide an overview of key business highlights during the quarter and our expected developments over the near term.
Speaker 4: Here is a company that is moving at this point in time from a clinical development stage into a commercial stage enterprise. We are very pleased with our progress during the third quarter and excited by the opportunity ahead of us to grow the company and to achieve our vision of improved healthcare for mothers and babies.
Sure. It is a company that is moving at this point in time from a clinical development stage into a commercial stage enterprise.
We are very pleased with our progress during the third quarter and excited by the opportunity ahead of us to grow the company and to achieve our vision of improve health care for mothers and babies to achieve this we are deploying our capital judiciously to build the capabilities to engage in full commercialization that we believe will generate.
Speaker 4: To achieve this, we are deploying our capital judiciously to build the capabilities to engage in full commercialization that we believe will generate significant revenue growth in the future. We are engaged in ongoing publication of serious science and technology to extend our leadership in pregnancy. We are building an effective commercial organization and we are collaborating with key individuals and organizations as we move forward to achieve our goals.
Significant revenue growth in the future. We are engaged engaged in ongoing publication of pseudo science and technology to extend our leadership in pregnancy. We are building an effective commercial organization.
And we are collaborating with key individuals and organizations as we move forward to achieve our goals.
Speaker 4: Let me start by discussing further validation of our preterm testing technology and the significant positive impacts that serious testing can have on health care costs, while bettering maternal and neonatal care. I'll then discuss a new key collaboration and the build out of our company with additional staff and advisors.
Let me start by discussing further validation of our preach from testing technology and a significant positive impacts that serious tempting can have on health.
Health care costs, while bettering maternal and neonatal care.
I'll, then discuss a new key collaboration and the build out of our company with additional staff and advisors.
Speaker 4: During Q3, we announced the publication of the detailed health economic analysis in the peer-reviewed journal, Clinical Economics and Outcomes Research. This publication illustrates the clinical benefit of combining our preterm testing with evidence-based interventions to improve neonatal health and reduce total health care costs.
During Q3, we announced the publication of the detailed health economic analysis in the peer reviewed journal clinical economics and outcomes research.
This publication illustrated the clinical benefit of combining our preterm testing with evidence based interventions to improve neonatal helped and reduced total health care costs.
Speaker 4: This work adds to the growing body of evidence supporting the effectiveness of CIRA's test and treat strategy in identifying women at risk for spontaneous preterm birth and providing more proactive care in those pregnant.
Work adds to the growing body of evidence supporting the effectiveness of serious test and treat strategy and identifying women at risk for spontaneous preterm birth, and providing more proactive care in those pregnancies.
Speaker 4: for active care in more pregnancies that are truly at higher risk of premature birth, has the ability to reduce complications of preterm birth, decrease hospital length of stay, and save healthcare expenses.
Record care in more pregnancies that are truly at higher risk of premature birth.
Ability to reduce complications of preterm birth.
Decreased hospital length of stay and say health care expenses.
Speaker 4: The recent published health economic analysis was conducted by Sarah working in partnership with Anthem's analytics subsidiary, Health Corps, using actual claims data of more than 40,000 pregnant women and infants.
A recent published health economic analysis was conducted by Sarah working in partnership with anthem analytics subsidiary Healthcorp using actual claims data of more than 40000 pregnant women and infants.
Speaker 4: The analysis evaluated the application of the preterm test and treat strategy by modeling testing to be conducted during weeks 19 or 20 of pregnancy and assessed the benefits across the population by providing proactive interventions in the higher preterm test risk cases. Note that the effective compliance model in the study was very conservative with only 60% of eligible candidates assumed to receive proactive interventions.
The analysis evaluated the application of the preterm test and treat strategy by modeling testing to be conducted during weeks 19, or 20 of pregnancy and assess the benefits across the population by providing proactive interventions in the higher preterm tests risk cases note that.
The effective compliance model and the study was very conservative with only 60% of eligible candidates assume to receive proactive interventions.
Speaker 4: Key findings of this comprehensive and conservative analysis include 20% reduction in preterm birth less than 37 weeks of pregnancy.
Key findings of this comprehensive and conservative analysis include 20% reduction in preterm birth less than 37 weeks of pregnancy, 33% reduction in very early premature birth.
Speaker 4: 33% reduction in very early premature births less than 32 weeks of pregnancy. 10% reduction in neonatal intensive care admission.
32 weeks of pregnancy Chen.
10% reduction in neonatal intensive care admissions.
Speaker 4: 7% reduction in overall hospital length of stay, $863 net savings.
7% reduction in overall hospital length of stay eight.
$863 net savings.
Speaker 4: one that's $1,608 dollars growth savings per pregnancy that was evidenced by the $54 million reduction in total costs in the population that was studying.
One that's 1608.
Dollars gross savings per pregnancy that was evidenced by the $54 million reduction in total cost in the population that was studied.
Speaker 4: Based on the $863 net savings, the authors of this conservative analysis estimate that more than $850 million could be saved annually in U.S. individual and employer sponsored health plans.
Based on the 863.
Dollar net savings the authors of this conservative analysis estimate that more than $850 million could be saved annually in U S individual and employer sponsored.
Health plans.
Speaker 4: We believe this work provides a compelling economic rationale that is appealing to payers and should help foster widespread adoption of our preterm test entry strategy by health insurance payers.
We believe this work provides a compelling economic rationale that is appealing to payers and that should help foster widespread adoption of our preterm test and treat strategy by a health insurance payers.
Speaker 4: On the scientific front, last week, we announced a rigorous, peer-reviewed, preterm test validation of a risk threshold that stratifies pregnancies into higher or lower risk categories for preterm birth. This work was published in the journal...
On the scientific front.
Last week, we announced a rigorous peer reviewed preterm test validation of a risk threshold.
Ratifies pregnancies into higher or lower risk categories for preterm birth.
This work was published in the journal of clinical Medicine.
Speaker 4: This threshold enabled more proactive interventions to help address higher risk of premature delivery in women whose preterm risk results are at or above twice the average population risk for spontaneous preterm birth.
This threshold enabled more proactive interventions to help address higher risk of premature delivery in women, whose preterm risk results are at or above twice the average population risk.
<unk> pre term birth.
Speaker 4: In a pregnancy where the risk is at or above that 15% threshold, the doctor and patient can decide to more proactively address that risk with interventions designed to help the mother and baby.
The pregnancy or the risk is at or above that 50% threshold, the doctor and patient can decide to more proactively address that risk with intervention designed to help the mother and baby.
Speaker 4: This preterm test risk threshold underpins the published data demonstrating the performance of value of CIRA's preterm test and treat strategy in published validation study of prematurity prediction, in published health economic models demonstrating its impact in populations and in intervention studies where clinical benefits of the strategy are assessed.
This preacher preterm chest risk threshold underpins the published data demonstrating the performance and value of series preacher I'm tempted to REIT strategy.
Published validation study prematurely prediction and published health economic models, demonstrating its impact in populations and intervention studies, where clinical benefits of this strategy are assessed.
Speaker 4: Note that the 15% risk threshold is also employed to interpret an individual mother's risk results as higher or lower when she receives serious preterm testing commercially.
Note that the 15% risk threshold is also employed to interpret and individual motors.
Result is higher or lower which she received serious preterm chest and commercially.
Speaker 4: In the recent threshold analysis publication, it was demonstrated that patients at or above 15% or twice the intended use population risk had significantly higher risk of spontaneous preterm birth and that they had a higher frequency of adverse clinical outcome.
In the recent threshold analysis publication, it was demonstrated that patients at or above 15% or twice.
The intended use population risk has significantly higher risk of spontaneous preterm birth and that they had a higher frequency of adverse clinical outcomes.
Speaker 4: Publication of this work adds to the growing body of evidence supporting the clinical validity and utility of our preterm tests in identifying women at risk. This additional validated data for physicians, employers, and payers further demonstrates CIRA's ongoing efforts to improve pregnancy outcomes and reduce healthcare costs through studies and collaborations with respected independent parties and individuals.
Publication of this work adds to the growing body of evidence supporting the clinical validity and utility of our preterm test in identifying women at risk. This additional validated data for physicians employers and payers further demonstrates there is ongoing efforts to improve pregnancy outcomes and reduce healthcare.
Costs through studies and collaborations with respected independent parties of individuals'. These efforts highlight series vision to provide actionable insights to benefit mothers and newborns and to save on health care costs, while improving patient outcomes.
Speaker 4: These efforts highlight serious vision to provide actionable insights to benefit mothers and newborns and to save on health care costs by improving patient out.
Speaker 4: CIRA has always been interested in addressing prematurity, both in the U.S. and abroad. In the early days of the company, we worked on building predictors that could benefit underserved populations that are disproportionately affected by prematurity, particularly in Asia, in Africa, and in the U.S.
There has always been interested in addressing pre maturity both in the U S and abroad in.
In the early days of the company. We worked on building predictors that could benefit underserved population that are disproportionately affected by pre maturity, particularly in Asia and Africa and in the U S.
Speaker 4: Our earliest studies overrepresented underserved populations as we discovered and further validated our preterm tests to make sure that our tests would work well for them.
Our earliest studies over represented underserved population as we've discovered and further validated our preterm test it make sure that our test would work well for them.
Speaker 4: This 2015 serious conductive work in cooperation with the Gates Foundation efforts and we anticipate upcoming publication of work in non-US geographies that further demonstrate the power of our technology to assess prematurity risk in low and middle income population.
2015, Seer is conducted work in cooperation with the Gates Foundation efforts and we anticipate upcoming publication of work in non U S geographies.
Further demonstrates the power of our technology to assess pre maturity risk is low and middle income populations.
Speaker 4: Finally, our preterm prospective inter, excuse me, our prime prospective intervention study being conducted across the U.S. includes underserved populations where prematurity risks are very high. We have maintained a constant focus to ensure that our predictors work well where they are needed the most.
Finally, our preterm perspective.
Excuse me, our prime prospective interventional study being conducted across the U S includes underserved populations, where pre maturity risks are very high.
We have maintained our constant focus to ensure that our predictors worked well where they are needed the most.
Speaker 4: We've just announced an important key collaboration to further help underserved U.S. communities address health care disparities by partnering with Preemie World, Global Preemies, and the Alliance for Black NICU Families.
We have just announced an important key collaborations to further help underserved U S communities address healthcare disparities.
Partnering with premium World Global premiums and the alliance for Black NICU family.
Speaker 4: leading organizations all geared to empowering and supporting families impacted by preterm birth.
Leading organizations, all geared to empowering and supporting families impacted by pre term birth.
Speaker 4: The long-term goal of this collaboration is to help educate and stimulate conversations between patients, their families, and their physicians to improve individualized assessment for preterm birth risk.
Long term goal of this collaboration is to help educate and stimulate conversation between patients their families and their physicians to improve individualized assessment for preterm birth risks.
Speaker 4: According to a study published in 2020, African-American women in the US are 50% more likely to deliver prematurely when compared to Caucasian women. And we believe that education and access to information is essential to changing this unacceptable statistic. We are proud to join with these leading organizations in a united effort to effect change and improve healthcare outcomes in this underserved segment of the patient population.
According to a study published in 2020 African American women in the U S are 50% more likely to deliver prematurely when compared to Caucasian women and we believe that education and access to information is essential to changing this unacceptable statistic, we are proud to join.
And with these leading organizations in the United effort to effect change and improve health care outcomes. In this underserved segment of the patient population.
A word about people.
Speaker 4: Sierra works internally and externally with very talented and dedicated people that are essential in building our company for success.
<unk> works internally and externally with very talented and dedicated people that are essential in building our company for success.
Speaker 4: We were pleased to announce last week the engagement of Dr. Woodrow Myers as an advisor to the company on public and political affairs.
We were pleased to announce last week the engagement of Dr. Dr. Woodrow Myers as an adviser to the company public and political affairs Dr.
Speaker 4: Dr. Myers is a nationally recognized leader in developing medical quality initiatives, and he has extensive experience and leadership in addressing health equity and disparities. We are honored to have him join our team and lead on a multidisciplinary effort to execute a national and state-specific political and public affairs strategy to help address healthcare disparities that disproportionately affect underserved communities.
Dr. Myers is a nationally recognized leader in developing medical quality initiatives and he has extensive experience and leadership in addressing health equity into severities, we are.
Honored to have them join our team and lead on a multi disciplinary effort to execute a national and state specific political and public affair strategy to help address healthcare disparities that disproportionately affect underserved communities.
Speaker 4: Data and analytical capabilities are a cornerstone of our business.
Data and analytical capabilities are a cornerstone of our business when it comes to extensively analyzing information to validate what we're doing to provide health care insights to patients physicians and payors and to lead to new and improved products at quarter end, we were very pleased to announce to you.
Speaker 4: when it comes to extensively analyzing information to validate what we're doing, to provide healthcare insights to patients, physicians, and payers, and to lead to new and improved products. At quarter end, we were very pleased to announce the appointment of Dr. Paul Kiranich as Chief Data Officer of the National Center for Disease Control and Prevention.
Appointment of Dr. Paul Cooney Chief.
Chief data officer with extensive data science bioinformatics and proteomics experience helps us to foster further innovation for Sarah.
Speaker 4: to the extent that data science, bioinformatics, and proteomics experience helped us to foster further innovation for SARA.
Speaker 4: I'm also very pleased to report that we have begun our build out of the commercial team to robustly scale. Ours has continued during spring term testing.
I'm also very pleased to report that we have begun our buildout of the commercial team to robustly skill preterm testing.
We have now hired a talented sales force comprised of 26 representatives concentrated in regions, where we begin selling our test with a good initial basis of third party payment.
Speaker 4: of 26 representatives concentrated in regions where we begin selling our tests with a good initial basis of third party payment.
Speaker 4: We have sales representatives hired on both coasts, western, midwest, southern, mid-Atlantic, and northeastern territory.
We have sales representatives hired on both coasts western Midwest.
Southern and mid Atlantic and northeastern territories.
Speaker 4: By the end of this quarter, we anticipate having 30 active cells territories covering approximately 12% of all U.S. pregnancy.
By the end of this quarter, we anticipate having 30 active sales territories covering approximately 12% of all U S pregnancies.
Speaker 4: These sales representatives call on physician offices, educating them about preterm testing and how to incorporate testing into their clinical practice.
These sales representatives call on physician offices, educating them about preterm testing and housing appropriate testing into their clinical practices.
Speaker 4: We also have an experienced team of market access personnel who are in discussions with payers as we emphasize the health and economic benefits of our test and treat strategy and work to secure reimbursement contracts.
We also have an experienced team of market access personnel, who are in discussions with payers as we emphasize the health and economic benefits of our test and treat strategy and work to secure reimbursement contracts.
Speaker 4: From this base of deployment, we expect to extend our testing ultimately throughout the U.S. Note that we are receiving payment from major payers in the United States as we are initially rolling out our preterm testing.
In this space and deployment, we expect to extend our testing ultimately throughout the U S.
Note that we are receiving payment from major payers in the United States as we are additionally, rolling out our pre term testing, we are building and deploying digital marketing programs to engage women, who are the ultimate important customer for whom our testing has been created we believe that the coordinated efforts.
Speaker 4: We are building and deploying digital marketing programs to engage women who are the ultimate important customer for whom our testing has been created. We believe that the coordinated efforts to address the three key customers we have, doctors, patients, and payers, will help us to grow revenues as our commercial team executes on our vision.
To address the three key customers, we have doctors patients and Payors will help us to grow revenues as our commercial team execute on our vision.
Speaker 4: And finally, to expand our talented pool of advisors, we are pleased to have just appointed Genia Lindgaard to Seroprognostics Board of Directors.
And finally to expand our talented pool of advisors. We are pleased to have disappointed genuine linde guards to cero Prognostics board of directors.
Speaker 4: Zhenya possesses significant expertise and deep understanding of both healthcare and consumer technologies that are important enablers of our strategy and can help drive adoption among patients, physicians, and payers through her profound knowledge of consumer-centric approaches.
<unk> possesses significant expertise and deep understanding of both health care and consumer technologies that are important enablers of our strategy and can help drive adoption among patients physicians and payers through her profound knowledge of consumer centric approaches. She currently serves as CEO of the common project Foundation are global.
Speaker 4: She currently serves as CEO of the Common Projects Foundation, a global nonprofit focused on enabling trust ecosystems for individuals' data and prior to that, served as vice president of platform and customer engagement on the executive team at Uber. She's also served with the Boston Consulting Group and has served on the board of directors of City Harvest, a New York City hunger charity.
Nonprofit focus on enabling trust ecosystems for individuals' data and prior to that served as vice president of platform and customer engagement on the executive team at Uber. She has also served with the Boston Consulting group and has served on the board of directors of City Harvest, a New York City Hunger charity.
She shares our passion and vision to create better lives for women in newborns globally and we welcome her aboard.
Speaker 4: She shares our passion and vision to create better lives for women and newborns globally. And we welcome her aboard.
Speaker 4: Looking forward, we see a robust opportunity to potentially ramp adoption of our preterm test and treat strategy to address prematurity.
Looking forward, we see a robust opportunity to potentially rapid ramp adoption of our preterm test and treat strategy to address prematurely.
Speaker 4: While the COVID pandemic has somewhat impaired our initial scale-up in Q3 and going into Q4, we believe that this problem is something we can successfully move through and look ahead to the time it will receive in the rearview mirror. Looking forward, we expect to announce upcoming contracts with payer, employer, and physician network groups to adopt our testing. A growing revenue graph is expected to follow the signing and implementation of testing within these groups.
While the Covid pandemic has somewhat impaired our initial scale up in Q3 and going into Q4. We believe that this problem is something we can successfully moved through and look ahead to the time it will recede in the rearview mirror looking forward, we expect to announce upcoming contracts with payer employer and physician network.
For them to adopt our testing.
Our growing revenue ramp as expected.
It's a followed the signing and implementation of testing within these groups.
Speaker 4: we foresee additional clinical and economic data readouts and publications occurring in the future as well. We are very encouraged by our execution thus far in 2021, giving us confidence as we move into year end and into an exciting 2022.
We foresee additional clinical and economic data Readouts and publications occur in the future as well.
We are very encouraged by our execution, thus far installs in 'twenty, one, giving us confidence as we move into year end and into an exciting 2022.
Speaker 4: I'll now turn the call over to Jay for a brief review of our third quarter financial results and some color on our expectations through year end.
I'll now turn the call over to Jay for a brief review of our third quarter financial results and some color on our <unk>.
Patients through year end okay.
Thanks, Greg and good afternoon, everyone.
Speaker 4: We are pleased with our execution to date and our positioning from a commercial perspective as we approach year-end and a new year in which we expect to see additional commercial developments occur.
We're pleased with our execution to date and our positioning from a commercial perspective as we approach year end in the new year, and which we expect to see additional commercial developments occur.
Speaker 4: Today, I'll briefly review our financial results for the third quarter and then provide some color on our outlook for the near term.
Today I'll briefly review our financial results for the third quarter, and then provide some color on our outlook for the near term.
Speaker 4: For the third quarter of 2021, we reported revenue of $23,000 compared to $5,000 for the same period of 2020.
For the third quarter of 2021, we've reported revenue of 23.
Dollars compared to $5000 for the same period of 2020.
Speaker 4: Total operating expenses of $9.5 million were up significantly from $4.6 million for the third quarter of 2020. The increase was primarily due to the scale up of operations to address the significant opportunities we see ahead for our pre-term test.
Total operating expenses of $9 $5 million were up significantly from $4 6 million for the third quarter of 2020.
The increase was primarily due to the scale up of operations to address the significant opportunities. We see ahead for our pre term test.
Speaker 4: Research and development expenses for the third quarter of 2021 were $2.7 million, compared to $1.9 million for the prior year period due primarily to increased laboratory operations and clinical study costs.
Research and development expenses for the third quarter of 2021 were $2 7 million.
Compared to $1 9 million for the prior year period, due primarily to increased laboratory operations and clinical study costs.
Okay.
Speaker 4: Selling, general and administrative expenses for the third quarter of 2021 were $6.7 million, up from $2.8 million in the prior year.
Selling general and administrative expenses for the third quarter of 2021 were $6 7 million up from $2 $8 million in the prior year.
Speaker 4: This was due primarily to increased headcount as the company scaled commercial operations and general corporate infrastructure, as well as increased costs related to operating as a public company following our initial public offering this past July .
This was due primarily to increased head count as the company scaled commercial operation and general corporate infrastructure as.
As well as increased costs related to operating as a public company. Following our initial public offering this past July.
Speaker 4: Net loss for the third quarter of 2021 was $9.9 million compared to $5.1 million for the same quarter a year ago.
Net loss for the third quarter of 2021 was $9 9 million compared to five $1 million for the same quarter a year ago.
As of September 30.
Speaker 4: 2021, the company had cash and cash equivalents of approximately $82.5 million and an additional $67.5 million of available for sale security.
2021, the company had cash and cash equivalents of approximately $82 $5 million and an additional 67 $5 million of available for sale securities.
Speaker 4: We believe a significant cash position is sufficient to enable us to successfully scale testing for revenue on our anticipated timeline and meet our profitability objectives.
We believe the significant cash position is sufficient to enable us to successfully scale testing for revenue on our anticipated timeline and meet our profitability profitability objectives.
Speaker 4: Turning out our expectations for the remainder of the year, as Greg mentioned.
Turning now to our expectations for the remainder of the year as Greg mentioned.
Speaker 4: And as numerous companies have noted recently, we experienced some challenges during the quarter from COVID-19 that impacted our testing revenue for the third quarter. We anticipate these challenges will impact testing revenue through the fourth quarter as well. And with that, we'll open the line for questions.
And as numerous companies have noted recently, we experienced some challenges during the quarter from COVID-19 that impacted our testing revenue for the third quarter. We anticipate these challenges will impact testing revenue through the fourth quarter as well and.
And with that we'll open the line for questions.
Operator.
Speaker 1: We will now begin the question and answer session. To ask a question, you may press star then one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star then two.
We will now begin the question and answer session to ask a question you May Press Star then one on your telephone keypad.
Isn't it speakerphone, please pick up your handset before pressing the key.
Withdraw your question. Please press Star then two.
Speaker 1: The first question comes from Patrick Donnelly of Sydney. Please go ahead.
The first question comes from Patrick Donnelly with Citi. Please go ahead.
Speaker 5: Hey guys, thanks for taking the questions. Maybe one of the sales reps, you know, encouraging here you guys had 26 out there already, going to 30. How should we think about that ramp continuing over the next, you know, 12, 24 months, particularly as you get more payers on board, you know, how many do you envision, you know, a critical mass a few years out and what's that look like over the next year or so? Yeah, great question.
Hey, guys. Thanks for taking the questions.
Maybe one on the sales reps, it's encouraging to hear you guys had 26 out there already go into 30.
How should we think about that ramp continuing over the next 12 to 24 months, particularly as you get more payers on board. How many do you envision a critical mass a few years out and what's what's that look like over the next year or so.
Yeah, Great question Patrick.
Speaker 3: We believe that we currently have a very good size footprint to begin testing. And as I said before, we're focusing on areas where there is payment by insurance companies. And what you do is you expand out over time as more data become available, as more contracts are secured. That allows you to grow the company in a much more profitable manner.
Okay.
Believe that we currently have a very good sized footprint to begin testing and as I said before we're focusing on areas, where there is payments by insurance companies and what you do is you expand out overtime.
As more data become available as more contracts are secured non allows you to grow the company in a much more profitable manner.
Speaker 3: We believe that to cover the entire U.S., a Salesforce of about 250 sales representatives is required to address the OB-GYN channel. This is the same size that Jay and I built the Salesforce to be at Myriad. That was the second of the specialty Salesforces that we built there.
We believe that two to cover the entire U S salesforce.
Sales force of about 250.
<unk> Representatives is required to address the obgyn channel. This is the same size that Jay and I built the sales force to be at Marriott.
And that was the second of the specialty sales forces that we built there. So that's what we see happening we believe it can be done at.
Speaker 3: So that's what we see happening. We believe it can be done in a planful way, in a way that does not waste effort and money. And we are clearly looking at growing over time as the Salesforce moves forward.
The plan full way in a way that does not waste effort and money and we're clearly looking at growing over time.
Is it sales force moves forward.
Speaker 5: No, that's helpful. And then if you just on the payer ramp, what's the right way to think about some of these other large national payers coming on board in terms of the timeline? I mean, is it waiting on some of the bigger data reveals, is it kind of seeing a little more health economics? What are those conversations like? And again, what should we think about in terms of timing for some of those catalysts?
No. That's helpful. And then maybe just on the payer ramp.
What's the right way to think about some of these other large national payers coming onboard in terms of a timeline I mean is it waiting on some of the bigger data reveals is it kind of seeing a little more health economics, what are those conversations like and again, what should we think about in terms of timing for some of those catalysts.
Speaker 3: What I can tell you Patrick is that right now we are in conversation with regional payers, with self-insured employees.
Okay.
What I can tell you Patrick is that right now we are in conversation with with regional payers.
With self insured employer groups and national Payors, most conversations or are ongoing we share data, we discuss where things are going and what will happen over time, we believe that the smaller payers will come first and then larger ones later and that's what we see happening.
Speaker 3: and national payers. Those conversations are ongoing. We share data, we discuss where things are going, and what will happen over time? We believe that the smaller payers will come first.
Speaker 3: and then larger ones later. And that's what we see happening. We anticipate the ability before year-end of being able to announce one or more of these collaborations with payer groups and look forward, you should look forward to that. And in the future, of course, there will be many more announcements as we grow our footprint and our payer coverage map.
We anticipate the ability before the before year end, but be able to announce one or more of these of these collaborations with payer groups.
And look forward.
You should look forward to that.
And in the future of course, there'll be many more announcements as we as we grow our footprint and our payer coverage map.
Speaker 5: Okay, great. And that may be last one if I can, just in terms of practice accessibility, again, as you kind of build out the Salesforce, what are you seeing in terms of, whatever metrics you guys have in terms of what practices are, your sales are actually get into, kind of the...
Okay, Great and then maybe last one if I can just in terms of practice accessibility again as you kind of build out the sales force what are you seeing in terms of.
Metrics you guys have in terms of what practices are your sales reps can actually get into kind of be.
Speaker 5: efficiency of some of their calls in person if they're able to get in person with with the COVID impact is wondering You know how you're seeing that ramp and again how you're expecting that to trend over the next few quarters is hopefully we turn the corner on
Efficiency of some of their calls in person if they're able to get in person with the Covid impact just wondering how you're seeing that ramp and again, how you're expecting that to trend over the next few quarters and as hopefully we turned the corner on this.
Speaker 3: That's great. So they, as I said before, some of our discussions are with physician group.
Yeah, that's great. So.
As I said before some of our discussions are with physician groups.
Speaker 3: That's an efficient way of doing things. Some are with integrated health networks.
That's that's an efficient way of doing things summer with integrated health networks.
Speaker 3: Some are with large practices that are in just different geographies.
Some are some are with large large practices that are.
Just different geographies, our salespeople are looking.
Speaker 3: Our salespeople are looking based on data. They have a target list of high potential candidates, and those are the ones that we go to first. We believe that doing that in a way where the OBGYN and the MFM to whom they refer to difficult cases, working together to establish protocols, is a way to systematize the testing that's done in any geography. And that's part of the discussion that takes place.
Just on data.
Target they they'd have a target list of high potential candidates and those are the ones that we go to a first.
We believe that doing that in a way where the.
The obgyn and the MSM to whom they refer difficult cases, working together to establish protocols is a way to systematize the testing thats done in any geography, and that's part of the discussion that takes place.
Alright, Thanks, a lot Greg.
You bet.
Speaker 1: The next question comes from Brian Weinstein, a William Blair. Please go-
The next question comes from Brian Weinstein of William Blair.
Yes, Hi, this is Justin on for Brian.
Speaker 6: Yes, hi, this is Dustin on for Brian . We know it's kind of early on, but we're just wondering how we should think about the trajectory of volume expansion here and whether you guys can give us some idea of how you're thinking about that over the next few months.
It's kind of early on but I'm just wondering how we should think about the trajectory of volume expansion here and whether you guys can give us some idea of how you're thinking about that over the next few months.
Speaker 3: I lost one word in your question. Could you repeat the, what expansion are you talking about? That's volume expansion.
Yeah.
And last one word in your question could you repeat the what expansion that you're talking about.
That's volume expansion.
Yes.
Yeah.
Yes.
Jay do you want do you want to start now and I'll I'll finish that up.
Speaker 4: Well, I think the
Well.
<unk>.
I think the.
Speaker 4: You know, the volume is expanding, it's early days and the sales force has been in place since really the beginning of July , this past year, and it takes a certain amount of time for the sales force to get up to full efficiency.
Yeah.
The volume is expanding.
It's early days and the sales force has been in place since.
Really the beginning of July this past year.
And it takes a certain amount of time for the sales force to get up to full efficiency.
Speaker 4: And I don't know, maybe Greg, you can add some additional color to that. You bet. Yeah. So we were effectively not doing material commercialization before July . This July , we hired the sales team that I mentioned, where now we have 26 active reps that are there. And it's really a combination of things that you want to pay attention to.
I don't know maybe Greg you can add some additional color to that you bet yeah.
So we were not.
Not doing material commercialization before July this July we've hired the sales the sales team that I've mentioned, we're now we have 2026 active reps that are there.
And it's really a combination of things that you want to pay attention to if you want to you want to reduce the burden on patients obtained for the testing themselves you do that by going to places where they are where you have.
Speaker 3: You want to reduce the burden on patients of pain for the testing themselves.
Speaker 3: You do that by going to places where you have a good basis of insurance coverage.
Good basis of insurance coverage first you also you work with payers.
Speaker 3: You also work with payers that are not in the initial group of payers paying for testing, and you work to secure contracts with them. Those things are happening in real time. At the end of the day, it's the doctor that orders the test.
Do not have.
It appears that they are not in the initial group.
Appears paying for testing.
You work to secure contracts with them. So those things are happening in real time, you need to at the end of the day, it's the Doctor orders the test.
Speaker 3: And so one of the key things is making sure that we arm the doctor with information, tools, and practical ways of identifying patients in their practice that are candidates for testing and actually initiate the testing within their practice.
So one of the key things is making sure that we arm. The doctor was information tools and practical ways of identifying patients in their practice that are candidates for testing and gift and actually initiate the testing within their practice.
Speaker 3: Those activities take time. If you look at traditional numbers, it takes six to nine months for a sales rep to come up to speed to begin paying for him or herself. That's an industry standard among oncology. And we think of it similarly in our space now.
Activities take time.
If you look at traditional numbers it takes six to nine months for a for a sales rep.
To come up to speed to begin paying.
Or herself.
That's what the industry standard among oncology.
And that's it.
Similarly in our space now.
And I might add to your exit we haven't been seeing encouraging order volume.
Speaker 4: And I might add two directs. We have been seeing encouraging order volume towards the end of Q3. I think that's...
Towards the end of Q3, I think that's important to note.
Yes.
Speaker 3: Yes, and the orders they're getting are patients. They're both, they're both anthem and non-antipatients that are where the borders are being generated.
Yes, and the orders there as we're getting our patients.
They're both.
They are both anthem and non <unk> patients that are there.
Orders are being generated.
Yeah.
Speaker 6: Great, thank you. And then specifically wondering what's happening with Anthem. What are you guys hearing from them? How are they promoting doctors to use the products? And overall just how are they assisting?
Great. Thank you and I'm, specifically wondering what's happening with anthem.
What are you guys hearing from them how are they promoting doctors, who use our products and overall just how are they assisting.
Speaker 6: on the commercialization efforts and what kind of feedback are you getting on the field on how effective that is.
On the commercialization efforts and what kind of feedback are you getting on the field concerns how effective that is so.
Speaker 3: We're having many discussions about specialized programs to go after. The question of how do you roll out testing within the large insurance network? Those things are happening. We ourselves reps are in the field educating.
We're having we're having many discussions about about specialized programs to go after.
The question of how do you how do you rollout testing within it that large insurance network.
Those things are happening.
Our sales reps.
Or in the field educating doctors.
Speaker 3: And the strategy is a very simple one. The sales rep talks to a doctor, educates them about the need for better identification, for pre-term birth, the testing. And...
Our strategy is a very simple one.
The sales rep talks to a doctor educate them about the need for better identification for preterm birth the testing.
Speaker 3: once they have understood that, then the idea is...
And once the once you have understood that.
And then the idea is to encourage them to offer the testing.
Speaker 3: have encouraged them to offer the testing to all patients in their practice. And then for those patients that are covered by insurance companies that are not yet paying for things, we begin discussions with them. And I can tell you that we're already seeing revenues from those kinds of payers now.
All patients in their practice.
And then for those patients that are covered by insurers insurance companies that don't they're not yet paying for things we begin discussions with them and I can tell you that we're already seeing revenues from from from from those kinds of payers now.
Great.
As a reminder, if you have a question please press star one.
Speaker 1: The next question comes from Dan Brennan of Cowan. Please go ahead. Thanks.
The next question comes from Dan Brennan of Cowen. Please go ahead.
Speaker 7: Hey guys, thanks for thanks for being in the questions. Maybe first one, just going back to volumes, obviously we're at the first pitch to first inning here, but I'm wondering, do you guys plan to provide any guidance as we get to the fourth quarter about 2022 volumes, or just kind of, what can we expect in terms of visibility?
Hey, guys. Thanks for thanks for taking the questions.
Maybe first one just going back to volumes, obviously were at the first pitch the first inning here, but I'm wondering.
Do you guys plan to provide any guidance as we get to the fourth quarter about 2022 volumes or just kind of what can we expect in terms of visibility.
Speaker 3: Yeah, at this early stage, we're not prepared to give guidance at this point in time. We're very early in the game. We are just beginning our commercialization efforts to yield orders. And over time, we are going to have a much better understanding of things. So, we did not at this time plan on giving guidance now. So, that's where we are currently.
It is this.
Early stage, we're not we're not prepared to give guidance at this point in time.
We're very early in the game.
We are we are just beginning our commercialization efforts.
The yield yield.
Yield orders.
Overtime, we are going to have a much better understanding of their.
We do not at this time plan on giving guidance.
Now so that's where we are currently.
Speaker 7: In terms of upcoming data that we should be aware of, obviously, there's a bunch of studies still ongoing. Can you just kind of remind us what's coming up in 2022 from a data standpoint and related to that, the key publications, any key publications, either that are in the works right now, or you think a forthcoming 2022 that could be important.
Okay.
In terms of.
Upcoming data that we should be aware of obviously, there's a bunch of stuff.
He is still ongoing.
Just kind of remind us what's coming up in 2022 from a data standpoint.
To that in terms of key publications any key publication to either that are in the works right now.
Or do you think are forthcoming in 2022, there could be important.
Speaker 3: Yeah, from this point and into next year, we see publications, additional publications of validations of our prediction in non-US populations, as I mentioned.
Yeah.
This point and into next year.
We see publications are additional publications of validation of our prediction.
Non U S populations as I mentioned, we see.
Speaker 3: We see additional economic modeling that will talk about the benefit, the economics of the test and treat strategy using our validated threshold.
Additional.
Economic modeling.
But we'll talk about the benefit the economics of the test and treat strategy using our using our validated thresholds and then we also anticipate upcoming.
Speaker 3: And then we also anticipate upcoming clinical readouts by the year end or into the beginning of next year. We anticipate having enough deliveries having occurred in the prime study. This is a large multi-center study within Anthem where the interim look will be read out. And that occurs after 2,800 deliveries have occurred.
Clinical readouts.
By the way.
Year end or into the beginning of next year, we anticipate having enough enough deliveries having occurred in the Prime study. This is a large multicenter study within anthem.
The interim look will be read out and that that occurs after 2800 deliveries have incurred.
Speaker 7: Got it and leaving them to help economics. Can you just give us a sense of the Anthem study? There was a savings level I think in the most recent cost benefit peer review.
Got it.
Maybe in terms of health economics.
Can you just give us a sense of how the anthem study.
Savings are savings level I think in our most recent maybe.
Cost benefit to review I think you know there's also a savings maybe it wasn't as great as management.
How do we think about health economics.
Speaker 7: What are the right numbers that are justifying or persuading payers to adopt your test?
What you know what are the right numbers that are justifying or persuading payers to adopt.
Sure.
Speaker 3: Yeah, what I can tell you is that when we share a spreadsheet model
Yeah, what I can tell you is that we when we share.
A spreadsheet model.
Yes.
With with Payors.
Speaker 3: and have them put their own numbers into the model. And one of the things in the publication that was quite evident is no matter what numbers you put in, there is a way to.
Have them put their own numbers into the model and one of the things in the publication that was quite evident as no matter what numbers you put in.
There is a way to save money and because of that that's termed a dominant strategy and that's some of the way. The authors characterized the strategy when we show this to payers, but the savings are already enormous if anything.
Speaker 3: And because of that, that's termed a dominant strategy. And that's the way the authors characterize the strategy. But we show this to payers.
Speaker 3: and savings are enormous. If anything, the publication was conservative in its use.
The publication was conservative in its use and we hear some payers talking I guess, we believe these savings are even higher.
Speaker 3: And we hear some payers telling us we believe these savings are even higher. They're quite impressed with the amount of savings that they're taking.
They are quite impressed with the amount with the savings.
Speaker 3: Remember, the great majority of preterm delivery.
Remember.
The great majority of preterm deliveries.
Speaker 3: cannot be detected by today's current clinical practice.
Not be detected by today's current clinical practice.
About one in six.
Speaker 3: Those are pregnancies of women carrying a single fetus with a pregnancy that risks and who will deliver prematurely. Only about one in six are identified by current methods.
Or are those are those are pregnancies of women carrying a single a single thetis pregnancies that risk who will deliver prematurely.
Only about one in six of our identified by current methods using our test with current methods.
Speaker 3: Using our tests with current methods increases the detection by fourfold.
Greece's detection by fourfold.
Speaker 3: that's a significant increase. And being able to intervene early, as the ANTHEM data show, and as our prospective intervention trials that prevent PDB trials show, there is benefit in finding those pregnancies and being more proactive in the individualized care you can give to those pregnancies that are at risk.
That's a significant increase in being able to intervene early hence the anthem data show and as our perspective.
<unk> trials that prevent PTB trial showed there is benefit and finding those pregnancies and being more proactive in the individualized care you can give to those pregnancy, who truly are at risk.
Great. Okay. Thanks, guys.
You bet.
Speaker 1: Again, if you have a question, please press star, then 1.
And then if you have a question. Please press Star then one.
Speaker 1: Thanks, cereal, for the questions. I would like to turn the conference that goes with Mr. Critchfield for closing remarks.
And Sir no further questions I would like to turn the conference back over to Mr. <unk> for closing remark.
Okay.
Hum.
Speaker 3: We'd like to thank everyone for attending our call today. We are very excited to see the progress as we achieve our vision of improving the health of mothers and newborns and thereby saving health care costs. We're pleased with the efforts of our internal team in the work performed with a number of external collaborators as we seek to improve pregnancy outcomes. Although these are...
But we'd like to thank everyone for attending our call today.
We are very excited to see the progress as we achieve our vision of improving the health of mothers than newborns and thereby saving health care cost. We're pleased with the efforts of our internal team and the work performed with a number of external collaborators as we seek to improve pregnancy outcomes.
Although these are early days.
We believe the straw.
Speaker 3: strong alignment of science, economics, and commercial execution will enable CIRR to more rapidly generate revenues over time.
Longer alignment of science economics, and commercial execution will enable <unk> to more rapidly generate revenues over time.
Speaker 3: And finally, we look forward to sharing our progress with you as we complete 2021 and move into next year. Thanks again for your attention and interest. As a reminder, the webcast of this call will be available on the Investor's section of our website.
Finally, we look forward to sharing our progress with you as we complete 2021 and move into next year. Thanks again for your attention and interest as a reminder, a webcast of this call will be available on the investors section of our website.
Speaker 3: This concludes the call and we look forward to providing the next update on our progress following the close of 2021. Thank you and good afternoon, everyone.
This concludes the call and we look forward to providing the next update on our progress following the close of 2021, Thank you and good afternoon everyone.
Speaker 1: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.