Q3 2022 Lucid Diagnostics Inc Earnings Call
Greetings and welcome to lucid diagnostics third quarterly update conference call and webcast.
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It is now my pleasure to introduce your host Mr. Adrian Miller, Vice President of Investor Relations.
Thank you you may begin.
Thank you operator, good afternoon, everyone.
Miller, Vice President Investor Relations at Lucid diagnostics. Thank you for participating in today's business update call. Joining me today on the call are Dr. Alicia backlog, Chairman and Chief Executive Officer of Lucid diagnostics, along with Dennis Mcgrath, Chief Financial Officer of Lucid diagnostics. The press release announcing our business update and financial results will be.
Available shortly on lucid website. Please take a moment to read the disclaimers about forward looking statements in the press release.
The business update press release and the conference call. Both include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made factors that could cause actual results to differ are described in the disclaimer and in our filings with the six.
And Exchange Commission.
And a description of these and other important risks and uncertainties that may affect future operations see.
<unk> part one item <unk> entitled Risk factors in most of its most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in quarterly reports forms 10-Q, and subsequent forms 8-K, except as required by law loosen disclaims any intention or obligation to publicly.
Date or revise any forward looking statements.
Changes in expectations or in the events conditions or circumstances on which these expectations may be based or.
Or that may affect the likelihood of actual results will differ from those contained in the forward looking statements with that said I would like to turn the call over to Lee.
Alicia Eclogue DUC backlog.
Thank you Graham.
So thanks, everyone and welcome to our quarterly call.
First start by thanking our long term shareholders for their ongoing support and commitment as we discussed on our last call last quarterly call. We had some recent transformational milestones that we've put behind us and the team is now for this past quarter and moving forward and just intensely focused on executing on our long term strategy that were very satisfied with the quality.
They've delivered over this past quarter and are really particularly proud that they did so well under budget for the quarter and the year as we continue to keep a close eye on.
Cash preservation.
I will note that for the first time we've.
The format here moving from purely an audio conference call too.
Two of our webcast.
We did so in response to feedback including.
One of our long term patent investors suggested that this would be more useful interval for Don Don feedback to make sure that we are providing the type of transparent communications that we have always.
Aspire too.
Let me start with some quarterly filings.
Ethernet testing volume has increased.
8% sequentially quarter to quarter and 436% annualized.
88 <unk>.
In the quarter and we're happy that we are gratified that we've cleared that up.
Our quarter milestone.
Now have 13 with the 10 centers that are operating in 11 states.
More are due to open during this coming quarter.
This quarter.
The satellite LTC activity, a kind of a concept that we introduced on our last call and I'll describe.
More in detail later has been increasing rapidly and now includes about 22% of the patients.
Undergone cigar test them.
Laboratory, Lucid Dx lab operating independently with enhanced quality and efficiency metrics.
We're starting to receive payments in recognizing revenue on each of our claim that were submitted under lucid Dx labs starting in August .
Clinical utility studies to support private and public payer reimbursement that are underway.
We completed the transfer of different check to a high volume manufacturer and as I mentioned, we are executing on our growth strategy, while continuing to focus on preserving cash and are running well ahead of our budget.
The full year endpoint in this past quarter.
Recent introduction for those of you who are.
Just wondering about our company with the diagnostics as a commercial stage cancer prevention Medical Diagnostics company focused on early pre cancer detection in the tens of millions of patients with gastric esophageal reflux disease, or chronic heartburn or at risk of developing highly lethal esophageal cancer.
Our mission is to prevent these.
Some of these cancers and at risk patients with chronic heartburn.
So hopefully he'll cancer, it's highly lethal and is becoming more prevalent how about 16000 patients die every year you can see on the far right there.
At 500% increases over the last.
Over the last few decades and it remains the second most people can with an 80% overall prior year Mark Allen the key statistics on this slide however is that.
The stage one mortality rate at five years is 40%. Unlike most other nearly all other.
Common cancer colon cancer, and breast cancer, where stage one diagnosis.
It's actually a victory.
Because of this early pre cancer detection is really necessary to prevent.
And unfortunately less than 5% of those who have been recommended for screening for over a decade at historically undergo endoscopy.
Lucas products include.
Two products with regard or esophageal DNA test and our eastern checkpoint collection device.
<unk>.
Are the first and only commercially available test capable of serving as a widespread screening tool to prevent these debt through the early detection of esophageal precast so in a sense.
Okay.
To establishing a viable cancer prevention program for this particular type of cancer.
We're really excited in the.
Previously announced that the.
Alrighty guidelines from the major Gastroenterology Society now recommend visa check.
Function with regard at an acceptable alternative to endoscopy and the further updates also no longer consider having symptomatic heartburn as a mandatory prerequisite which has significantly expanded the population of patients who are candidates for visa card testing.
The commercial opportunity here is very very large as I mentioned the target population because of the updated guidelines are now 30 million patients each represent patients who are at risk who have.
Chronic heartburn.
And our recommended for screening.
Should note that this increase does not include the elimination of the need for GERD symptoms and the American Gastroenterology Association guidelines, but does reflect an expansion to include an unequivocal recommendation of women.
Medicare payment has been established at 90 $838, resulting in a very large multibillion dollar market opportunity and then over 90%.
Estimated growth.
Gross margin at volume.
Our sales strategy.
Includes targeting primary care physicians and specialty an institution. The specialists include gastro neurologist forgot surgeons.
Those doctors as well as institutions large practices hospitals and so forth. These two channels are somewhat different when we talk to small PCP practices. Our goal is to get them to order or do you sort of our tests however, with.
With our specialty been institution, we're looking to have them build an Isa card program and by making the case that by bringing more patients with.
Protecting more patients with the selection of a pre cancer that will create downstream revenue opportunities from more endoscopy deflation.
Ph monitoring another test.
They also have somewhat different locale.
TCP.
Referred patients are sent to one of our lucid test sensors work one of our lucid nurse practitioners performance Easter textile collection procedure with the practices and institutions. There are two options, we have some practices in indications where their own nurse the nurse practitioner physician assistant performed the test for <unk>.
Train them, but as I mentioned at the beginning we're also increasingly utilizing our own nurse practitioners, who are able to perform the cell collection procedure at the particular practice typically allocating a day or so where patients are teed up for that date, we've had situations where up to 1000 patients have been set up for R&R expectation.
Or two too.
<unk> performed et cetera, we're looking forward to continuing to expand that we have.
We have established Bridget.
Robust compliance program around this and there are a couple of states, where we have some limitations, California, and Florida being too, but we're figuring out ways to work around.
The compliance and the regulation challenges in those states or satellite test centers.
Elisa test centers are.
We've established.
Not just physical locations or nurse practitioners could perform testing, but they also tend to be sort of centers around which a lot of educational programs targeting ah patients as well as acquisitions.
Our centers.
The economics of our test centers are very attractive as I've mentioned, many times before we won't go through all of the numbers.
But bottom line is that we can cover the fixed costs that would be personnel or quality location by performing.
To reimburse procedures per week.
As I noted at the beginning we can we continue to show steady growth.
With regard testing volume.
88, <unk> tests performed.
Third quarter, which represents 28% increase from the second quarter and a 435% increase.
The third quarter of 2021.
I've described this as a <unk> strategy, where we are.
Yes.
We are deploying sufficient resources to get good steady growth, but not going full throttle until we have more predictable reimbursement.
<unk>, which we hope to see in the coming in the coming quarters.
This growth has been driven by a variety of factors, we have increased our personnel all of our shareholders.
So in the next slide.
Also dramatically improved our sales training and really data driven sales processes and work now steadily as we are growing our team at developing increased experience. Although I will note that the median rapids only been in the field for a month or two and we look forward to continuing to extract.
Improved performance from our existing team through increased experience in the field.
We are starting to track.
Testing volume by referral source of by operator, so optimizing the tracking and reporting of of both of these have either generally rough numbers, but you can see that approximately half of the patients.
Just under half the patients right now are being referred by small individual pieces individually small PCP practices and the remainder are coming from specialists are institutions.
And as I noted earlier.
Performance of the test is being done.
Add in a variety of settings, including our own.
The nurse practitioners and the LTV or the satellite LTC as well as the physician practices.
Horton thing to note an important trend from the last quarter and this slide is that 22% of the tests performed in the fourth quarter were in that satellite in LTC model, where our.
<unk> practitioners are called.
Co locating with added physician practice to perform tests on patient segment from that practice.
And we expect this to continue quarterly making an impact now and expect it to be a growth driver moving forward.
This slide shows the expansion of our sales team I said this in previous slide you can see we're making good steady progression month to month at expanding our team we have 37.
37 sales professionals across the whole spectrum of sales reps on the way to senior leadership.
Leadership our target.
We intend to plateau for the near term that 58.
Good luck to complete that by the end of this year, but likely will reach that target by the early part of the of the first quarter of 2023. Our plan as we've described before is to continue to at that point.
Both the expansion of our sales.
<unk> team as well as the expansion of our test centers.
And continue through 2023, what we're establishing more.
Victim of reimbursement by allowing the team to continue to grow volume through the measures and the effects that I described earlier.
I previously mentioned, we now have.
We could test centers located in <unk>.
13 centers located in 11 states and complete them here.
Couple of notes that we had we did have a center in Seattle, which we called it hasn't had the regulatory hurdles with regard to managing nurse practitioners, there became a bit cumbersome. It will go back at.
At a different point, but we thought we would be better allocation of our resources elsewhere.
Our last announcement, we've added a center in Chicago, that's our most recent openings and Subaru in Illinois, and we continue.
We described previously are shooting for an additional three centers by the end of this year.
A good path to do so.
Sure.
Let me talk a little bit about our laboratory operations, we're really quite proud of the progress that we've made as you may recall at least lucid diagnostics lab with the Dx labs.
We went live in February February of this year.
And we've been gradually working our way and now I can proudly say that we've transitioned to being fully independent with our own personnel.
Performing all aspects of the test doesn't work in the laboratory.
You can see here that we've extracted substantial efficiencies.
I won't go through all the details here, but I just thought I'd highlight a few of our ability to extract DNA from the sample at the horizon has improved in multiple parameters. There you can see by substantial amount and we are actually are garnering.
More DNA per sample, which is which has an impact on the performance of the test and even.
Somewhat obscure aspect of the cost of bisulfite conversion phase, which is a critical step that had been incredibly time consuming costly you can see that the team in just a couple of months has dramatically.
Decrease the time and resources that go into that and that bodes well for our decreasing the overall cost and then opportunities to continue to.
Extract efficiencies in cost savings through a variety of means including automation team is also really important patient and physician facing point of view has been able to get the turnaround times to out and you can see when we took over the lab times increase that there were some growing pains in the early couple of months, but now we've had decreased to turn around.
Time to six days, which is which was a record.
For us.
I'll talk a little bit about our.
Okay reimbursement strategy, and where we are with that I don't know if you look at the upper left you can see that our payer mix.
Thousands of tests that are performed to date.
Skewed heavily towards private payers with Medicare and Medicaid only representing about 11%.
That is really important as we look at the near term.
Opportunities for securing reimbursement from private payers versus Medicare and as it relates to the local coverage determination for Medicare.
Quick update on that.
We don't have a lot of neat.
The <unk> group, which is reviewing the local coverage determination comments that occurred in the second quarter of the year that included us in about a dozen other entities are commented on a draft foundational LCD. They are still working on that honestly, we haven't heard any answer that although we did have a part with them we werent allowed.
To talk about the local coverage determination, but we did have a call with the team to discuss our plans for collecting the type of clinical utility data.
Required that will be required to translate a final foundational LCD into an actual coverage determination for <unk> at the appropriate time windows those conversations were quite fruitful and productive.
On the private payer side, you see that.
Steadily working our way through the from the lower hanging fruit, which are the secondary ppl's.
<unk>.
Preferred payer organizations.
<unk>.
Increasingly.
Increasing lives covered all the way to national National plans.
Key factor and we continue to have ongoing discussions with private payers with medical directors and so forth remain.
On the Medicare side with collecting clinical utility data and I'll talk a little bit more about that later, but our plan to do so we've been getting that through.
Through both retired in an existing medical directors with multiple clients.
We haven't we're in a position to start collecting that data in a way that we should start being able to start securing do more.
The plan further down on this chart here.
And security networks for that.
Claims processes, so as we discussed last quarter.
<unk>.
Just completed.
August .
The transition to our.
New revenue cycle management partner, which is the entity that.
Submit claims on our behalf and then go through the entire claims.
Process, including a growing a variety of adjudication and so forth.
Ultimately leading to payment or denial of that process was launched in August of this year beginning part of August and we have several thousand claims that we had been holding these are claims that started all the way back to February when we took over at the laboratory CLIA certificate and we're able for the first time to <unk>.
Theoretically build on our own behalf and we did start to Boeing once the revenue cycle management partner with in place in August .
So.
This is how it works just to kind of all of them are primary on that once we bill taken the payer can either pay directly.
The payment the direct payment can be.
Out of network.
Percentage of trial of charges built typically have some out of network rate.
Or if we're hitting that work on that particular payer are paid on a contracted rate.
If the payment is not there is an opportunity to appeal to secure payment. After the appeal before more final denials as this process is important obviously for securing payment, but it is also extremely important for the entire reimbursement process. I described this plenty of times that in order to actually have meaningful.
Conversations with the larger.
The larger payers you actually have to generate a claims history, where claims are being submitted denied paid tioga and so forth and we're looking forward to starting to now that we have all the elements in place starting to build up those claims history. So we can we can start having a subsequent conversation to be in that work on these various plans that are shown.
On the slide.
We have we did as I said, we started submitting these payments in the second quarter, we did start to see some payments.
They include a.
And network payments, but the majority of them are out of network payments.
The payer paid us typically at a 50%, 60% standard out of out of network benefit rate, resulting in payments of about 12% to $1300, which is gratifying because.
These payments do reflect the full list price that we charge to the patient. So we don't really have enough.
Data yet to know what percentage of the claim submitted I won't get paint we need another couple of quarters to get a better picture of that but we look forward to tracking that closely over the next couple of quarters to give you a better sense as to how it will do from out of network payments as we are waiting.
Going in network and securing in network contracts.
So as I've mentioned several times the key factor for our.
Securing reimbursement is establishing clinical utility.
So if you look at the clinical studies that are currently active we've talked about this over several quarters that we substantially shifted our own internal resources from.
The performance studies that we have launched earlier be want to be too two clinical utility study, but I won't go through these.
In detail, but these are these are coming along and we are starting to enroll patients in them. We have a retrospective study from NYU.
Hundreds of patients that should start.
I'm generating data quite soon and we're hopeful by.
Mid part of next year to have substantial.
A meaningful amount of clinical utility that too.
Engage private pay Arizona.
As I mentioned previously we took we made the strategic decision to.
Pause the screening portion of the outperformance studies with one study.
Until such time that we have better predictability and frankly, an improved asset.
Since the transfer of.
The test to our personnel, we've been making significant strides with regard to improving the asset itself and so we're going to keep that on ultra now we're continuing to enroll in the case control study and expect to do so for the next couple of quarters and once we close that out that'll be a nice.
Piece of performance data that will supplement the excellent data that we currently have from the science translational medicine paper from a couple of years ago.
As I mentioned, even for this study where we're benefiting from the fact that we have.
Delayed things a bit for cost control and cash preservation purposes, because we're continuing to improve the assay will be subjecting the samples collected to the best version of the assay.
There are a lot of other studies out there on the far right you can see that other investigators are initiating with <unk>.
Ongoing National Cancer Institute Studies, American, Florida Society, VA, and and others and we're really excited about those.
Those studies continue to enroll and generate positive data.
Finally, before handing it over to Dennis just a quick comment about our manufacturing this was a long process.
And our team for completing but I'd say very technical process of transferring the manufacturing from of our ESO check.
Our collection device to a high cost high volume manufacturer coastline bus manufacturer for device began there in <unk>.
October of this year.
Just last month.
Kind of a company that's headquartered in San Diego with plant in Tijuana, Mexico will have an immediate impact by moving to the high volume provider of decreasing our per unit manufacturing cost of diesel check by about 60%.
And also the capacity.
The initial line will grow to about 20000 units a year, but what's really important with regard to this transfer is that we have fully scalable capacity at this facility by if we can just add additional lines as demand dictates.
Upwards of $7 million 1 billion devices, a year really really unlimited for them for the near term.
So with that.
Pass it onto Dennis to talk about our financials.
Yeah.
Thanks, Lee and good evening everyone.
Our summary financial results for the third quarter were reported in our press release that was published earlier today.
And on the next three slides.
Emphasize a few key highlights from the quarter, but I encourage you to consider those.
Those remarks in the context of a full disclosures covenant in our quarterly report on Form 10-Q that was filed with the SEC earlier today.
And is also available on our website.
The balance sheet in front of us.
Cash.
Between the quarters sequentially decreased by $5 7 million.
Our vendor payables decreased by $2 2 million when considering not only accounts payable that's reflected there, but other recurring crude expenses.
But it is offset by intercompany debt to the parent company <unk> of $4 $2 million increase however, both boards have agreed that that can be settled up in stock.
Coming weeks.
We have a committed equity facility as youre aware up to $50 million.
Possibility of stock issuances, we did during the quarter.
A record $1 8 million of proceeds most of which we had already reported to you as part of our update in August .
Our shares outstanding included Unvested.
Restricted stock awards as of today.
$39 1 million shares.
And we are now S. Three eligible as previewed with you previously in similar to what we've done at pad that elusive board.
Consider that good governance to have a shelf registration with the embedded ATM on file with the SEC.
We plan to do so in due course.
Go back one slide so you see our P&L in front of US. So slide 20 here compares this year's third quarter to last year's third quarter on certain key items I'll Trust you will review the information on my comments in light of the cautionary disclosure, that's probably hard to read on this slide but it's at the bottom of the slide.
And provides supplemental information, particularly about.
non-GAAP information so the revenue for the quarter.
Reflects 39 tests.
And in average payment rate of $1945 per test.
The rate slightly.
Higher than the Medicare rate of 1938, as we received one payment closer towards ASP of $24 99.
The Medicare rate and that skew slightly higher.
The prior year reflects the fixed monthly fee received from the third party lab that we used before setting up our own lab earlier this year.
Just a comment on revenue recognition.
Consistent with our past discussions the key determinant.
In revenue recognition with the probability of collection for the vast majority of patients out of network claims submission.
This means revenue recognition occurs when the claim is actually collected versus when the patient report is invoiced and submitted for reimbursement.
As Youll see in our 10-Q this was called variable consideration in the jargon of gaps ASC 606.
For revenue recognition guidelines and presently there is insufficient predictive data to recognize revenue when invoice that will occur in time as contracts start to come on board in the probability of what we invoice gets collected we will shift to <unk>.
Recognizing revenue.
When it is invoiced or.
Our GAAP and our non-GAAP loss for the third quarter of this year, it's fairly flat sequentially.
Our non-GAAP loss per share is 28 for the third quarter.
And was also a loss of 28 per share in the previous quarter in the second quarter.
On slide 21.
As a graphic illustration of our operating expenses presented in detail in our press release, the total non-GAAP Opex was relatively flat sequentially.
The cost of revenue primarily consists of ESO check devices lab supplies and fixed lab facility costs.
It is now being presented in our 10-Q as an operating expense consistent with the practices of other diagnostic companies.
Sales and marketing was relatively flat sequentially.
And G&A decreased by 35% primarily related to the allocation of almost $1 million of lab costs in the prior quarter as you'll recall there was no revenue recognized in that quarter and therefore, the typical cost of revenue type expenses are required to be reclassified the G&A.
And then R&D consistent with <unk> comments already.
Decreased sequentially by 22%.
So with that operator, let's open it up for questions.
Okay.
Okay.
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One moment, please while we poll for questions.
Our first question is from the line of Mike Matson.
Needham and company.
Please proceed with your question.
Yes.
Hi.
So I guess.
Doing some rough math on the tech centers and then some of the numbers you guys gave.
If you had it I think that it's about 240 tests of the two.
88, we're at the test centers that spot you have 13 centers.
By my math 18 to 19 per center in the quarter.
About one five per week.
Does that sound right and maybe you can just comment on kind of what you've seen at the centers that are.
I know some of them are newer so maybe the ones that have been running longer what kind of volumes you've been seeing there on a weekly or monthly basis.
Let me make a couple of comments on that Mike.
Eric can chime in so one thing I did want to give a caveat that the.
<unk>.
The numbers on that slide at the Pie charts.
We're still kind of.
Improving our sort of tracking ability to understand.
Come through to the ultimately to the lab, who is who the referring physician was then who actually performed.
The procedure. So we're trying to capture that there are.
We haven't actually broken that down it might be a little bit careful to sort of confirm your.
It's travel extrapolation of that and I'll ask Dennis to chime in if you'd like but but you did note one thing which is that we had pet centers in Arizona that have been.
<unk> been in place for over a year that are bit better quite a bit busier than we have something better than that of <unk>.
Just been getting off the ground as we've accelerated growth for them over the last couple of months I don't think we have yet to have the kind of data, which I think the same thing which is sort of what is what is the productivity of the center, but I just again want to remind you and everyone that this is.
I'm not sort of a thing like a same store concept to the test centers are just like the bottoming there just where the tests are performed right. Ultimately I do think the more useful information, which I think will capture some of the trends that you are trying to.
Take care.
Mike as the as the breakdown between primary care physician referrals and referrals coming from institutions that are trying to build their own program and right now that number has been bouncing between about 50 50 50 between the two of them. So I don't want to be cautious not to get ahead of ourselves in terms of the kinds of extrapolation toolkit.
Hopefully quantitatively that gives you a bit of a sense Dennis do you want anything to that.
Yes, I would say that although that math is probably something that all of us want to ultimately do the choppiness of yet per center doesn't lead to the predictive value that's needed for future forecasting of what these test centers can result, some because of the newness of how long some of been operating but we're still pretty early.
Early in the game to be able to put trend lines to that so.
One of my <unk> already said.
Yes, sorry, one other comment I would just add to that Mike is that we even have some locations where we have scale.
Specialty practices, we have a gastroenterology practice that building their own test program, but it's more convenient for them. If they have a risk of tests that are in the vicinity is more convenient for them to send those patients who are at that center. So we're still kind of grappling as sort of a three dimensional matrix here about who the operators of the referral is where it's actually being performed to try to capture that data in a way that debt.
Useful to understand more of the underlying subs.
Substantive.
Issues here with Craig a referral patterns and so forth.
Okay. Thanks.
I mean, the volume number looks pretty good the 10 88.
Just wondering on the backlog, obviously, you've done a fair number I don't know what that number is off top my head, but tough to date.
Does he started doing that in a lot of them, obviously havent been paid for but.
Yes so.
Do you have any feel for.
Any of them gotten to the point where.
It is sort of a write off where it got to that when you put that little flow chart up there, where you kind of got that Didnt final denial stage or are all of them still kind of potentially getting completed.
So just to give you a sense about how early we are in this process. So youre right. If you kind of the number of.
Tests that have been performed.
Include Q3, Q2, and I believe Dennis right half of Q1, Youre talking several back over 2000 tests.
Tests have been performed in claims that need to be that had been a need to be submitted and work their way through the process. As you mentioned that process. Just started in August . So we're just starting to see an initial trickle of payments and that initial denials I don't believe we've seen any final thoughts that would be way way up.
I'm quite sure we haven't because that would be quite early.
<unk> claim that was submitted in August so we've got as I said, they've been we've been paid on a few.
In the second quarter so.
Claims that were submitted in August got paid before the end of September .
But the majority of them are.
Still working their way through the system. So we don't have.
We don't have.
Really it numerator or much less in development on the number that would lead to final denials that'll take us.
A reasonable period of time to to find out what yes. Okay.
That makes sense I guess I forgot how early it was in the process. So the ones that have been paid.
What are those all coming from a single.
Insurer or are they coming.
Have you gotten actually got and didn't want to get paid some multiple insurers at this point for multiple ensure that we don't have the numbers yet again, it wouldn't really be meaningful to give you numbers, yet, but no no. It's not a single pair we are getting them and as I mentioned the most.
Gratifying thing is that they are respecting the the list price not even the Medicare price the delivery charges that we submit and are paying that had a standard kind of 50% to 60% out of network payments with an average payment around after a $30 million. So.
So yes.
We really need to over time to see to see how that holds in terms of the price in terms of the number of payers that are paying out of network and frankly ultimately for the near term a useful metric that we're really looking forward to getting our hedges.
To get our head around which is the percentage of.
The total claims submitted that event that get paid out of network that that will be an important number for us.
Near term as we're trying to walk down on long term contracts.
Okay, great. Thank you.
Thanks, Mike.
Okay.
Yeah.
Thank you.
Next question is from the line of Ross Osborne.
With Cantor Fitzgerald.
Please proceed with your question.
Good evening guys Hi.
Congrats on the progress.
Starting off yet.
This quarter's update.
<unk> now included women can you describe how the female population performed during the quarter and how you plan to drive awareness going forward.
We don't have a breakdown by gender yet.
But yes.
I think qualitatively, we are seeing men and women in the proportions that you might see I don't have a number to report to you but.
We are getting.
A couple of things that we're noting again bigger qualitative reserve.
We are getting patients that are consistent with sort.
Sort of guidance right, we're not we're not getting the patients where someone's referring a 15 year old without delay or a 21 year old with that occurred that we see so far removed from qualifying for guidelines. It really does appear that that.
Because the patients who qualify based on risk factors for guidelines is our typical patient, which again bodes well for us in our conversations with the.
With payers as they are seeing patients, who where they believe it's a medical medically indicated based on guidelines would be would be difficult, but I don't know I don't have hard numbers for you, but that I think.
David.
Yes.
The ratio between men and women at risk.
Consistent with what we would expect from the broader population.
Okay, no that makes perfect sense.
And then I guess thinking about next year as you continue to expand geographically.
Expect any staffing headwinds that database.
Practitioners.
And you're testing centers.
So what are you doing to mitigate each risk ahead of broader commercialization.
So that I'm glad you asked that question. It is a good opportunity opportunity for me to sort of.
I reiterate what our plant actually yes. So our plan is not to continue to grow the test sensors, the nurse practitioner group or the sales team through the year our plan.
<unk> previously articulated was to get to a level by the end of this year.
<unk> 16 has centers and.
Nurse practitioners are sufficient to cover those test centers as well as 58 sales credit personnel, but 58 target will leak a bit into the first quarter of next year, but that we've maintained that sort of our plant.
And in the context of our kind of strategic assessment in cash preservation mode. We believe that we'll be able to continue to show steady kind of mid <unk> test volume growth with that team as they get more experience in the field and.
And become individually more productive so we may reassess that.
Into the year as depending on sort of how some of these numbers play out with regard to reimbursement of out of network payments and so forth. We're not ruling out the possibility that we could pivot from that stance, but given our current stance, where we're very much focused on resource utilization and cash preservation, where we're looking to keep those plateau.
Now, we still have a ways to go on both of those so that.
The answer to your question is that I think I've said this before we've been very gratified, despite the challenges with the workforce.
Labor shortages and workforce limitations at our ability to recruit both.
Nurse practitioners.
And.
And sales personnel.
There is always takes time it takes time to to interview, we're very picky.
We have a very robust process, we don't just sort of a higher people without without a very very.
<unk>.
Process, where they are interviewed literally half a dozen people or more so it takes time, but we've been able to secure candidate.
Hi, calibrate the high caliber candidates that we have.
And that's true awesome sales.
Sounds great. Thank you for taking my questions.
Thanks Ross.
Thank you. Our next question is from the line of Mike <unk>.
With Canaccord. Please proceed with your question.
Good evening.
Yeah.
Hi, This is Alex you can count on for Kyle Nextgen.
Hi, Alex.
Hi, Great quarter, guys just had a couple of questions for you. So I guess, a good place to start would be.
The new high volume manufacturer coastline I was wondering if you could dive into this a little bit more specifically, where you're feeling a bit capacity constrained before or is this more so just a preemptive measure prior to ramping up the business and potentially becoming an issue in the future. Thank you.
The lab. So we were just planning ahead, where you would take a while it took about a year honestly that there were there were a variety of delays, it's not a trivial thing to take a.
Small batch manufacturing line and move it towards a high volume manufacturer, where these lines are easily reproducible and when you can and you could rapidly escalate our capacity over time. So our team led by Catherine how are doing great job of getting out of working their way through that but it's all in it was all anticipatory. We also we haven't shut.
The small volume manufacturing because it's always a good idea to have to have dual sourcing you know because of a variety of you never know what this is going to rise.
But this is just planning ahead for future volume.
Got it and I know this is looking a little bit.
<unk> had but just thinking about 2023 can you provide us any color on you know.
And then possibly like a revenue breakdown.
By customer type or are any trends that you're seeing at the end of this year, possibly that could be going into next year that'd be helpful. Thank you.
I think the only trends and I'll, let Dennis answer the drilling times are really the ones, we talked about where we are getting some out of network payments, we're getting paid.
That $50 to 60% to 230 to $100 level.
We're working through generating claims histories.
We're getting good quarter on quarter mid throttle growth, but translating that into sort of predictable revenue projections is going to take us several more quarters.
So we can get a sense as to what our out of network. What portion of those claims submitted we will get paid out of network and how we're progressing with regard to using a clinical utility data to secure in network contracts. So im quite sure Denis Wood will.
We would concur with some with just leaving it at that I don't think we have anything more we can provide.
No that's exactly right to predictive value is.
Is what we're striving for and we just don't have that as of yet.
Got it thank you very much.
Great. Thanks, a lot.
Alex.
Thank you.
Our next question is from the line of Ed Woo.
<unk> capital. Please proceed with your question.
Yes, congratulations on auto progress have you noticed any significant either increases or decreases in others.
Nurse practitioner or medical supplies or any input costs, our office space. Thank you.
Sort of replacement rate pressures placements out there I think.
We've.
Yes, we've generally had both for our sales reps or.
The bulk of our TMR webpage.
Well paid professionals.
In terms of certainly in terms of our budgeting and are are targeted.
Expenses for personnel.
Or for even for our suppliers, we've had supply chain issues, which we have described before where we've had.
<unk> had to work around challenges with regard to.
But in terms of the <unk>.
In terms of the type of from a cost point of view they are.
Is there, but it hasnt had a significant impact on.
On a businessman.
Over the past or even moving forward then institute to do you agree with that.
Yes, I agree that the inflationary pressure for the delivery side of our test centers is not as sensitive given the margin level of the next patient coming in the door and that test so even if.
Salaries are rents did creep up as a percentage of the total revenue opportunity for us it's still a small portion.
Great well. Thank you for answering my questions and I wish you guys. Good luck. Thank you.
Very good day. Thank you.
Operator, you have any more questions.
There are no further questions at this time.
Okay with that.
I'd like to thank all of you for taking the time.
And listening to our update today hopefully you found the webcast portion of this.
Useful and informative we look forward to feedback.
Any feedback that you might have and we look forward to having you keep up with our breadth with our progress through.
Our news releases appear periodic call such a bit.
Also feel.
Feel free to reach out to us to sign up for E Mail alerts on either an investor relations website and on social media as well and you can always contact us through Adrian Miller, our VP of Investor Relations at Teekay parent.
<unk> dot com. So thank you again and have a great evening.
Yes.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
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