Q2 2022 OncoCyte Corp Earnings Call
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Good day and welcome to the OncoSite conference call to discuss the second quarter 2022 financial results.
today's call is being recorded. At this time I would like to turn the call over to Caroline Corner, Restwick investor relations. Please go ahead.
Thank you, operator, and thank you everyone for joining us on today's conference call to discuss Oncocyte's second quarter 2022 financial results. If you have not seen today's financial results press releases, please visit the company's website on the investor page.
Joining me on today's call are Roni Andrews, President and Chief Executive Officer, and Anish Jha, Chief Financial Officer. I would like to remind you that during this conference call, the company will make projections and forward-looking statements regarding future events. Any statements that are not historical fact are forward-looking statements. We encourage you to review the company's SEC filings, including, without limitation, the company's Form 10-K and 10-Qs, which identify the specific risk factors that may cause actual results or events.
to different materially from those described in these forward-looking statements. These factors may include, without limitation, risks inherent in the development and or the commercialization of potential diagnostic tests, uncertainty in the results of clinical trials or regulatory approvals, the capacity of Oncocyte's third-party supply blood sample analytic system to provide consistent and precise analytic results on a commercial scale, the need to obtain third party reimbursements for patients use of any diagnostic tests the company commercializes.
our need and ability to obtain future capital, the maintenance of IP rights, risks inherent in the strategic transactions such as failure to realize anticipated benefits, legal, regulatory or political changes in the applicable jurisdictions, accounting and quality controls, greater than estimated allocations of resources to develop and commercialize technologies, or failure to maintain any laboratory accreditation or certification, and uncertainties associated with the COVID-19 pandemic and its possible effects on our operations.
Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements. Oncocyte expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise may be required under applicable law. With that, I'll turn the call over to Roni.
Thanks, Caroline, and welcome everyone. Today I'll begin by reviewing recent decisions and actions we're taking to reduce our operating expenses and cash burn, enabling us to weather the current market conditions while still delivering on the important product launches that will deliver significant shareholder value. Beginning in Q1, our leadership team began working on a reprioritization of our product investments to identify ways to reduce our cash burn.
while preserving the important short-term value-creating programs. That reprioritization was completed in Q2 and allowed us to right-size the resources required to deliver on the new priorities as we enter the second half of 2022.
The resulting savings are expected to reduce our headcount carrying costs by more than $4.5 million when annualized.
When combined with the operating savings from the reprioritization process, reduced hand count, and the imminent modernization of some of our assets through licensing and strategic activities, we anticipate being able to reduce our annual operating costs by over $12 million over the next year and have improved line of sight to how our cash will last into 2024, but still allowing us to deliver on Vitagraph, Determina I.O., and Determina CNI product launches.
In order to allow us to divide and conquer with a lean organization, I'm happy to announce that Guy Sapolsky has been promoted to President and COO and Denise John has been promoted to the role of CFO from his previous role as interim.
These moves will allow me to focus on corporate business development and investor relations while they operate the company day to day. Both promotions are well deserved and I look forward to working with this core team to deliver Oncocyte through the current market storm and emerge as a leaner, focused company delivering products that fulfill our mission.
I'd like to start today's progress update discussing our compelling revenue opportunity in transplant rejection monitoring.
For those who have been following the story since our acquisition of Chronic Biomedical, you also notice that we rebranded the test from Therashure to Vitagraph, branding we believe is more reflective of the intended use in transplant.
As you likely recall, last fall we set out to complete the technical transfer of the test from our German R&D team into our CLIA lab in Nashville and then validate our laboratory test for liver patients with an ambitious goal for the end of the first half of 2022.
I'm very proud of the focused effort by our ClioLap team and the transplant R&D team in Germany for the combined effort to deliver on this important milestone ahead of schedule in early April . This expedited effort also allowed us to complete the clinical validation required to submit our dossier to CMS for a liver reimbursement which we accomplished in late April .
We then followed that submission with our kidney dossier in late June .
With our liver test now clinically validated, we have entered our early adopter program phase of launch and have already signed on one of the largest liver transplant centers in the US who will begin sending our first samples later this month.
The responses from key opinion leaders have been resoundingly positive. Since today there's no routine molecular monitoring test in use to monitor for rejection of a transplanted liver, we're encouraged by the KOL interest and believe our tests will become very important to the liver transplant community.
Our vast experience in polymerase chain reaction or PCR has allowed us to develop a streamlined workflow delivering an incredibly efficient digital PCR application that allows us to consistently process and report patient monitoring results within one to two days when we launch the product.
We've now confirmed with numerous KOLs and liver that our turnaround time is indeed expected to deliver the fastest donor-derived cell-free DNA monitoring results in the industry.
This, of course, is something we set as a goal on our test workflow redesign and a product attribute that we believe will differentiate Oncocyte from the competition.
We've also made progress on the IVD process for creating a kit to democratize the transplant market and will soon begin development of a kitted version of the monitoring test across liver, kidney, and ultimately heart.
We're fortunate to have several instrument systems that work with our assay and are working with the best platforms through feasibility to ensure we have the best results and cost position for our democratization efforts.
For strategic reasons, we will not be speaking specifically about our potential instrument partners platform performance until we're ready to publish and announce the data. In fact, we are on track for completion of feasibility and trial initiation by early 2023.
There are several milestones to watch for our liver program coming in the next few months as we commercialize our Vitagraph products. First, we'll continue to onboard KLLs from the liver transplant community as part of our early adopter program. Second, we expect reimbursement decisions from CMS this fall. Third, we expect to initiate a full market launch of Vitagraph liver and kidney in Q4 once reimbursed. And finally, fourth one is to
We plan to complete platform feasibility for the IVD kit product by end of year and site enrollment for the clinical trial so that we can commence that trial in early 2023.
Now, let's turn next to our flagship oncology program, Determina IO. To remind you, this is our gene expression test to help physicians assess tumor microenvironments to determine which patients are suitable candidates for immune oncology therapies.
Our early adopter program continues to underscore to us the need for this test across a slate of cancers.
Previously, we shared the valuable insights as to the importance of Determina I.O. tests in early stage triple negative breast cancer and late stage non-small cell lung cancer.
We now have solid data from various meetings, including results from the NEO-TRIP randomized trial in TMVC that was presented at ESMO last fall.
Then in second quarter at the AACR meeting, we presented data supporting its use in metastatic bladder cancer, our third tumor type, and now have had our peer-reviewed paper accepted for publication. We see this as a major milestone and feel well positioned as we prepare to term IO for CMS submission for reimbursement this fall.
Adding to our growing data sets in June at the American Society of Clinical Oncology, or ASCO meeting, we released results from the GONO Clinical Trials Group where the Terma I.O. was tested as a biomarker on the Atizo tribe study. As a reminder, Atizo tribe is a randomized clinical trial on metastatic colorectal cancer where patients receive placebo or the standard of care plus the roast drug Atizo.
If you hadn't had a chance to review the data and the subsequent comments to the Atizotribe principal investigator, I encourage you to do so. The key takeaway is that Determine.io found a new patient population in metastatic colorectal cancer that no other biomarker found. And today, these patients are not eligible for immune therapy.
Determina I.O. is expected to expand the market for ICI use in metastatic colorectal cancer and may allow for enrollment of a whole new population of patients into a life-saving treatment protocol.
Also at ASCO, we released data on dutrimo-IO and metastatic triple negative breast cancer, RT-MVC, using the Merck drug, Keytruda. The data presented at ASCO confirmed all the previous data set findings. The dutrimo-IO has demonstrated superior accuracy to predict response to immune checkpoint inhibitor therapy and is agnostic to which branded immune checkpoint inhibitor a physician uses.
Finally, at ASCO, we released new data in gastric cancer, the third leading cause of cancer death outside of the US.
We feel that this indication is important now that we have solidified our platform and channel partner for rest of world markets and are already working on the kitted version of Determina.io.
Determina IO has now been validated in over 1,100 patients in six tumor types and across all four major immune therapies.
Our early adopter program continues to provide valuable use cases for CMS submission and market launch, and our volumes have continued to double each quarter during our limited launch.
EAP clinicians are reordering the test for multiple use cases across multiple tumor types, and we remain incredibly enthusiastic about the future of daterma I.O.
In Q2, we also began refining the priorities for our kit strategy with our platform partners. We made a decision to focus these relationships on short-term ROI projects that require less investment but still have significant market impact.
The two product efforts we settled on are a kitted version of Determina IO for submission for regulatory approval in the EU and ultimately here in the US and our Vitagraph digital PCR monitoring test for liver and kidney for US FDA submission.
We've already initiated the work to move both projects forward to keep us on track to meet the aggressive timelines we've set for IBD development team.
We look forward to updating you on our progress in this incredibly important strategic effort as we join you in future calls.
Despite the ongoing macro environment challenges in the second quarter, we continue to make solid commercial progress with the TermaRx, our lung cancer stratification test.
Since its launch in mid-2020, the TermalRx has now touched well over 1,100 patients' lives. These patients had stage 1 tumors and without our test information, may have gone untreated and statistically, half of them may not be with us now.
Recently, we were introduced to one of the first patients to utilize the test when it was first developed and in use prior to our acquisition.
Jamie was only 34 years old when diagnosed with early stage non-small cell lung cancer.
Jamie told us her greatest fear at the time was not being able to be there for her kids, not being able to be there for their milestones and seeing them grow up, and not being able to grow old with her husband and see her grandkids someday.
Her surgeon ran to Tom R. X to see if she was high risk for recurring tumor. When a came back positive, she said she didn't hesitate to opt for the single round of chemo. Today, Jeremy Wings can't so free after 10 plus years enjoying life with her family, celebrating anniversaries and graduations, as a fantastic advocate for the Tom R. X.
She believes every early stage lung cancer patient deserves to know their high risk for recurring metastatic disease. It's stories like hers that inspires our team to continue on our mission. I encourage you to watch Jamie's story on our website.
DeterminerRx is now the standard of care in large lung cancer surgical programs like Florida Oncology and others and continues to gain momentum in its usage.
I'm pleased to report that in second quarter the Termar-X sample volumes were 66% above prior year, driving us towards our stated goal of doubling 2021 volumes and revenues here in 2022.
We're also able to expand our pool of onboarded physicians, which now stands at 549 practitioners, which is up 16% year over year.
In sum, we're really pleased with the traction our small but extremely effective sales team has secured and of course we're thrilled that Oncocyte is positively impacting treatment plans and outcomes for lung cancer patients.
In closing, I want to re-emphasize, when you combine the cost reduction activities I mentioned earlier with the anticipated attractive gross margins of VITAGRAP and Determa I.O. revenue streams in 2023, you can start to understand our confidence and our ability to bring Oncocyte to the challenging market environment leaner and stronger.
Some key revenue-based milestones to keep an eye on for the next six months include the anticipated receipt of reimbursement for Vitagraph and the subsequent full market launch of our test.
Expected submission to determine IO and TX for reimbursement, and planned monetization of assets through strategic licensing of our tissue-based assays.
I'm grateful for your support as we advance our products through the various development cycles to deliver on our mission. At this point, I'd like to turn the call over to Anish Jhaan to review our financials. Anish. Thank you.
Thanks, Ronnie, and hello, everyone.
Our consolidated revenues for the second quarter of 2022 were approximately 2.1 million, up 0.7 million quarter of a quarter and a slight increase as compared to the same period a year ago.
Second quarter revenues associated with the Terma RX were $0.8 million, down $0.2 million sequentially and up $0.2 million year over year.
We received $1 million in licensing-related revenues in the second quarter from the final Burning Rock milestone payment.
Our pharma services business generated 0.2 million in the second quarter, a decrease of 0.1 million quarter over quarter, and an increase of 0.1 million year over year.
As we have discussed previously, revenues in pharma services depend on our partners' ability to enroll patients for trials which continue to face headwinds and will likely continue to fluctuate from quarter to quarter.
We do have a pipeline of work from our diagnostic development partners, QIAGEN and Thermo Fisher, which we believe will grow and be more predictable in future quarters.
Cost of revenues for the second quarter were approximately $2.4 million, including $1.4 million from the cost of diagnostic tests and testing services we performed for our Determina Rx and Pharma Services customers, providing revenue deliverables under our license agreements, and $1 million in non-cash amortization expenses of Determina Rx and Pharma Services related intangibles.
Research and development expense for the second quarter of 2022 was $5.6 million, an increase of approximately $3 million from the same period a year ago.
The increase in R&D expense was related to site startup costs for our PODMA trial for Determina RX and headcount as we prepared to begin the IVD development in order to kit Determina I.O. and Vitagraph liver and kidney to fulfill our platform partnerships.
We also continued R&D activity to support ongoing clinical trials to gain statistical power to our current Daterma I-O data sets to ensure success as we submit to CMS for reimbursement. Additionally, we completed the clear validation for our new Vitagraph product offering in preparation for the Q3 launch of our new transplant business.
Sales and marketing expense for the first quarter of 2022 was $3.5 million, an increase of $0.9 million year-over-year, primarily attributable to an increase in headcount and continued ramp in sales and marketing activities to prepare for commercialization of our transplant business as well as support the commercialization efforts of Determina I.O. and Determina RX.
General and administrative expense for the second quarter of 2022 was $5.5 million, a decrease of $2.4 million for the same period in 2021, primarily due to one-time acquisition-related costs of chronic biomedical injuries.
the same period of the prior year.
Excluding this one-time prior year cost, general and administrative expenses were maintained year-over-year, inclusive of increases in stock base and cash compensation for our new hires, and a standard cost of living increase for many employees.
non-GAAP operating loss as adjusted for the second quarter of 2022 was 11.2 million, an increase of 3.4 million as compared to the same period a year ago.
Gap operating loss as reported for the second quarter of 2022 was 8.6 million, a decrease of 1.3 million quarter over quarter, and a decrease of 5 million as compared to the same period a year ago.
We've provided a reconciliation between these GAAP and non-GAAP operating losses in the financial tables included with our earnings release.
For second quarter of 2022, we reported a gap net loss of $8.3 million or $0.07 per share as compared to $10.3 million or $0.11 per share, a decrease of $2 million a quarter of a quarter and $10.5 million, an increase of $2.2 million as compared to the same period a year ago. A
Turning now to the balance sheet, as of June 30th, we had cash, cash equivalents, restricted cash and marketable securities of $47.1 million. Early in the second quarter, we raised $32.8 million in net proceeds from an underwritten offering of common stock priced at market.
We received the first of two $5 million tranches of preferred stock offering proceeds in the second quarter with the final tranche expected in the fourth quarter of this year.
Additionally, we are currently reviewing several options for non-diluted forms of capital including capital lease lines and licensing tests in ex-US markets as well as commercial partnerships and the monetization of certain assets.
We feel confident that our current balance sheet combined with these non-dilutive opportunities provide us with sufficient cash to take the company into 2024.
Over the first half of 2022, we have proactively prepared for continued market headwinds and re-prioritized our investments in our product portfolio by focusing on shorter term revenue opportunities and instituting a more sequential approach to product development and test launches.
Specifically, we plan to reduce the number of clinical trials we invest in over the next 18 to 24 months and rely on the data collected to date to support the submission for reimbursement and any subsequent product launches.
We also plan to re-evaluate timing of several capital intensive investments, including the planned Salesforce expansion to launch Daterma TX and Daterma IO.
The expense reductions combined with the anticipated revenue growth once our tests receive reimbursement is expected to have an immediate impact on reducing our cash burn.
Since the end of the first quarter, we have right-sized our organization to match the more focused priorities and have taken a definitive step to reduce our headcount carrying costs by over $4.5 million on an annualized basis.
In Q3, we expect to incur a severance charge of approximately 2 million as a result of these actions. We expect to incur a severance charge of approximately 2 million as a result of these actions.
Net cash used in operations for the quarter was $11.3 million. Net cash used in operations decreased sequentially due to focused efforts to control hiring and optimize our use of cash primarily by reducing clinical trial spend and marketing investment beyond the $1 million milestone payment from the Burning Rock licensing agreement.
In summary, management has taken numerous actions in the first half of 2022 to focus investments and reduce our cash burn without impacting the long-term potential enterprise value of ArcaSite.
In future quarters, we expect to benefit from the anticipated wind down of several studies and trials, the right sizing of the organization to better match the new prioritization and revenue growth from our high margin major project launches planned for the coming quarters.
We remain confident that the combination of these activities will allow us to enter the first half of 2023 with a quarterly cash burn rate below 10 million and we expect the burn to decline.
below 8 million by the second half of 2023.
We are committed to weathering the current market headwinds with a well-constructed plan that we believe will position us to deliver on critical product launches over the next six to eight quarters.
That concludes my remarks concerning our financial highlights. Operator, please open the call for questions.
Thank you. At this time, we will be conducting a question and answer session.
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One moment please, I'll call for questions.
This question is from David Westenberg of PAPI Sandler. Please go ahead.
Hi, thank you for taking the questions here. I really like all the color here on the transplant, the incremental submit, this, this, this, all the way to commercialization. Can you just give me some color on what, or maybe rank order, what's under your control versus what's out of your control? I'm just trying to think about what could go wrong in terms of the things that are outside your control.
you know, sticking with that liver and kidney thing, you know, you submit it at two different timeframes. Do you expect to receive reimbursement at the same time or is that going to be latter the way you, you know, you reimburse? So.
Great questions and thanks for those. Let me start with the last one first. I think it'll be easier. We knew that liver today does not have any tests covered to date. Even though the LCD was written as somewhat of a blanket LCD for kidney and heart, and those are established pricing at about $2,700 to $2,800, we knew that liver had not been through that process. We wanted to bring liver through early.
so that we could submit liver and go ahead and get the first round of questions, which we have already received and have already begun response to. So we received those questions last week. We were answering those questions this week and we expect to have the return of those questions back to CMS next week. We expect Kidney, we always get some questions, so we expect Kidney as well. We'll have some follow-up questions, but we don't expect them to be as intense.
is intensely centered around clinical utility, which is where the liver questions were mostly centered. And so it's important that we have our KOLs, who've been very kind and gracious and very excited about what we're doing in liver. They'll be part of our response on the utility, but we don't expect kidney to have as many of those types of questions. And so we submitted them liver first in the kidney, hoping that we end up somewhere in the September , October timeframe, getting responses for both. But.
But you ask what's in and out of our control. And what's in our control right now is we've redone the workflow. It is, you know, I've been doing PCR for a long time since we incubated it in water baths. And I'm really excited about our team and what they put together. This is a really, really solid workflow. Our CLIA lab workflow in the lab is well less than a day. And so it's the logistical parts around that that push it over a day. So we're excited. We can control that. Our team control is the outreach we have to the current.
Typically, there is a timeframe of 60 to 90 days when you get the review and you get your questions and you get an answer. But given how backed up Palmetto is and just given the current environment, we did see those questions for liver come in within the timeframe they committed. So we're hoping that we're on those timeframes, but we can't obviously, we can't predict those timeframes. So hopefully that's a good thorough answer there but that's what we're focused on is execution and we just hope that.
I'm Paul Meadow.
Yeah, you get 60 days, they typically answer you for the first round in 60 days, then you have a chance to respond, and then they have another 60 days from that point. And so, you know, we got their answers, we're very happy that they got them to us at the timing they did for liver. We're answering our questions this week, they'll get them back next week, and so somewhere 60 days from next week, we hope to hear back from them, if not sooner. Got it. Okay, I appreciate it.
Absolutely, Dave. I don't want anyone to get the impression I'm not going to be very active. I am very active. But we're at a point where we have an incredible operating professional, Gisa Paulson. She came with all the experience she had from Heros, Genentech, and JAX Sciences years. And it just really is a... She's been here since the fall. And we're at a point where from project management, program management, internal operation, lab oversight, and all that.
She can take on a lot of what I was doing that frees me to do more corporate development work, more time with investors, and certainly more time with strategy and some things that are important. It gives me more time to be in the field. I'm personally gonna oversee the transplant launch and program since I have so much product launch experience. And I'm old and I've been doing this a long time. I've launched a lot of products in the PCR world. So I'm gonna be very active with that. And so having Geeseo step in, this is where I manage the, you know, the CR.
He has incredible background in operating finance, which is what we need as a company right now.
Got it. All right. I appreciate it. You know, just because I'm given that I'm first, I don't want to take any of the questions. I think my next one is going to be really, really short because it's probably me just mishearing something. Did I hear on Daterma, it's a little bit delayed because you need more patience? I don't know if I heard that correctly in the prepared remarks or not. Maybe I misheard that. Can you just clarify that? Yeah, yeah. Let me clarify. Iowa is on track to submit this fall. We have it powered.
lung and for triple negative get accepted as well. And once those are all three bladder, TMBC and lung accepted, we'll go. So we don't need any more statistical power necessarily. We'll always want more statistical power. But we are ready for that. But we are not going to, I think the message that we sent last quarter, and David just so you guys as you think about modeling, we're gonna go to market with those three indications. We did have a really superior output in colon at ASCO. We're balling up with lots of different opportunities there.
be kind of a CLIA test that you're doing in your own lab? And, you know, and you'll eventually have a kitted version. So, you know, do you think there's going to be a kind of a difference in terms of, you know, how the sales or the rate at which they ramp for the CLIA offering versus the kitted offering? And, you know, is it going to be kind of limited in the early days when you're doing it yourself or and then really take off with the kit? Or do you think you could take off pretty strongly just with, you know, the initial launch?
very high profile centers. And so our goal in the early, you know, right now the early adopter phase, Mike, is to get as many of those sites onboarded as we can to really play through our logistics, our turnaround time, our lab, and we'd also like to get it to within a day or within 24 hours. And that's gonna require overnight shifts and logistics that today are, you know, we're putting in place, but we haven't tested yet. And so ultimately-
We think that once we're ready to go full market, hopefully by October , November , when we get reimbursement, the idea would be that we would open it up to all centers and liver. And assuming we get kidney, obviously, you know, that's a very competitive market. We'll do our best to go after the kidney market. I think the real opportunity for us though, honestly, we'll create a nice business as a lab developed test product but the participation in economics.
that are afforded by democratization to the transplant centers themselves and to pathology labs serving transplant centers are significant. And the turnaround time plus those new economics that they don't receive today, because as a central lab we get those economics, sharing those economics, we do expect that and all our market research says that will be the sort of catalytic event for market growth for our kids. And so we'll see how that goes, but we are planning on.
but I didn't get the timing on all that and the reasoning that it's gonna decline. Is that because you're gonna start to have more revenue or, I apologize, you went through a little quicker. No, it's fine. It's a combination. I'll let Anish give the call commentary. It's actually a combination of reductions in headcount that we made recently, repolarization of projects, and we defunded some things that we were funding. We're winding down some clinical studies now, so I think you guys know this and I've had a conversation.
and studies, those will bleed off over time as you head into next year. So the combination of that with the reduction in headcount, with some, you know, party's decisions we've made, we'll reduce it to about a $12 million operating expense reduction. And then from there, you add revenue on top of that. And that revenue, even nominal revenue that we've modeled takes us under 8 million in burn as you enter the second half of 2023. Thanks.
Any comments on that? Yeah, and just to confirm the timing also, the under $10 million burn rate per quarter is really in the first half of 2023, just so that's clear to you.
Yeah, got it. Okay.
We're really trying to give you guys incredible transparency and visibility now. I think it's important given the market environment. We went from 13.3 to 11.3 in operating burn, Q1 to Q2, so that was a nice reduction for us based on a lot of stuff we've done internally. We can't do 15% every quarter getting to 10 because we do have a severance charge from the reduction in head count this quarter as well as we need to bleed off some of these gains.
But we're committed to this. We do believe that we've got a line of sight and modest revenue gets us really significant impact on burn next year and we want to infrastructure costs as we establish toward the new levels.
Okay, and then just one on pharma services. I mean, is that, you know, it's running, I guess, it was like 300,000 or something. I guess that.
Is that a focus for the company? I mean is that something that can grow into something more material or is it just more you have some drug companies approaching you wanting to use your tests and you're kind of playing along with that but you're not really out there actively trying to build that business.
As part of our reduction in expenses, we did sort of pull back on the commercial, those are expensive headcount on the commercial effort there. However, we have long term relationships, most of us, with certain areas within pharma and we do have two arrangements, one with QIAGEN and one with Thermo that are long term contracts to do validation verification, what we call D&D, as well as some development work for them.
Those projects will continue and the good news for us is we don't really have a dedicated pharma services lab team. This is the lab team that is in R&D in Nashville and R&D here doing things around either DIO or doing things around CNI and transplant in Nashville. And so what we do though is when we get a project, those folks can flex and perform the pharma project when they need to and when they have time from their activities that they're working on every day.
That's the big challenge we're having right now.
Okay, got it. Thank you.
The next question is from Thomas Lutton of Lake Street Capital Markets. Please go ahead.
Our next question is actually from Mason Kariko of Stevens. Please go ahead.
Hey guys, just wanted to ask a couple on Determina RX here. Great to see the volume growth year over year, but it seems like ASP may have declined sequentially. I was just hoping to get some color there in terms of what drove the decline and then what your expectations are from an ASP standpoint going forward throughout 2022 and then maybe as we start to get closer to 2023. Yeah, thanks for asking that because when you...
somewhere around a $3,000 AUP and about 10% of our samples were commercial samples, meaning they were not Medicare, which means when you blend that AUP in at a much lower AUP, which is somewhere in the $1,800 range, you end up with about a $2,972 per case revenue, collectible revenue.
from RX. That is a very solid number for us. We have been tracking that number over time. It's come up from the high 1800ish into the low 2s and now over 2.5 and now to 2.9. So we do see that we're getting at our challenges. We have a billing backlog as you might imagine because it takes us a little while to get some of the commercial payers to pay us. And that billing backlog has increased as we've increased our sample volumes.
And so that doesn't show up, and our AU doesn't show up because the revenue doesn't match the same period as the samples come in. So hopefully that gives you some clarity about the AUP. Our Medicare Advantage samples are consistently coming in around $3,000. And so that is the majority of our revenue push. And so as you think about modeling, obviously you need to model the commercial payers as well, which is much less, but it's not a high percentage. So the product mix or the payer mix right now is really advantageous for us.
given we're getting such high AUPs for Medicare and Medicare Advantage.
high AUPs for Medicare and Medicare Advantage. Got it. Okay and then
Maybe just on the large transplant center that you talked about signing on. Sorry if I missed some of this commentary, but any incremental detail you can give around that maybe the level of volumes they're doing in terms of liver transplants and if there's any stipulation about the number of patients that you're going to be able to capture, any qualitative or quantitative code you can give there would be helpful.
Yeah, this account probably does somewhere between three and five hundred livers a year. I'm not trying to be coy. It's a hyper competitive environment and we'd like to keep these KOLs under wraps for a while just because they've been so gracious to help us out so much. We have a number of these that are interested in joining the Early Adopter Program and being part of the program. We'll see you next time.
So if you think about liver, the utility is going to be different in liver than kidney. You can say about, you know, if you say they have 300 a year, let's say they need 300 a year, they do probably 500 total transplants. So 300 of those are, I'm sorry, 500.
liver cases, about 300 are total transplants, 300 of those a year, if you get two samples or two tests for every liver patient, that's about 600 tests a year. You can start thinking about $2,000 per reimbursed test, that's what kidney and heart are, 27, 28. You can start to build a case for, there's about 70 of these types of centers in the United States. And so you start to think about liver at, I think around 8,500 liver cases.
Just a final reminder, if anyone else would like to ask a question, you're welcome to press star then 1.
We will pause a moment to see if we have any further questions.
Ladies and gentlemen, we have reached the end of the question and answer session and I would like to turn the call back to Ron Andrews for closing remarks. Please go ahead, sir.
Thanks everyone and we appreciate your time today. We certainly appreciate the questions and we're eager to obviously to see many of these milestones unfold over the fall and we look forward to speaking at numerous conferences through the fall and updating you guys on our progress. Thanks for your time today.
This concludes today's conference. Thank you for joining us. You may now disconnect your lines.
Thank you, operator.
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