Exagen Inc. Q1 2023 Earnings Call
I.
Ladies and gentlemen, please remain on line. This event will begin shortly. Ladies and gentlemen, please do remain on line. This call will begin in a few minutes.
depended upon those other things.
Good day ladies and gentlemen and welcome to the Exogen Q1 2023 YarnX Core.
At this time all participants are in a listening mode.
A question and answer session will follow the formal presentation.
If anyone should require operator assistance during the conference, please space star and name zero on your telephone keypad.
As a reminder, this conference is being recorded.
I would now like to turn the conference over to your host, Ryan Douglas, of Amis Relations. Please go ahead. Good afternoon, and thank you for joining us. Earlier today, Exigen Inc. released financial results for the quarter-ended March 31, 2023. The release is currently available on the company's website at www.exigen.com.
Chana Bali, President and Chief Executive Officer and Kamala Dali, Chief Financial Officer will host this afternoon's call.
Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities laws which are made pursuant to the State Parvary Provisions of the Private Security's Litigation Reform Act of 1995.
Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including without limitation, statements regarding our business strategy and future financial and operating performance, including guidance for the quarter ended June 30, 2023.
Potential profitability, our current and future product offerings, and reimbursement and coverage are based upon current estimates and various assumptions.
These statements involve material risk and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements.
Accordingly, you should not place undue reliance on these statements.
For a list and description of the risk and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2022, and subsequent filings.
whether because of new information, future events, or otherwise. I'll now turn the call over to John Abali, President and CEO of Exxion. Thanks, Ryan, and thank you to everyone joining the call. Today I will discuss our first court of results and give updates on our strategic initiatives, past the profitability and research pipeline. I'll then hand it over to Camel, our CFO , for details on our financial results. As always, we appreciate your continued support of Exxion. When I arrived at Exxion, we put together a plan to reduce expenses across the organization and grow the business to profitability.
Now that I've been leading exigen for seven months, it's great to see that the changes we've implemented are starting to have a meaningful impact on the business and are reflected in our commercial results and reduced operating expenses.
For the first quarter, I'm happy to report that total revenue was 11.2 million, driven by a record volume of 37,300 advised CTD tests. Volume increased 10% over last quarter and 21% year-over-year. I'm excited about the momentum our commercial team has created as they have remained focused and highly motivated throughout the implementation of these changes.
My strategy has been to orientate the company on a path to profitability. And the results in this quarter give us our first opportunity to convey the impact of our initiatives.
For the first quarter, SGNA and R&D expenses decreased to 13 million, which is an improvement from an average of 15.5 million per quarter throughout 2022.
The decrease was primarily due to the reduction in force that took place in December .
The assumptions we made in planning the reduction have proven to be on target.
And we now believe that we have the right people in place and are operating at the optimal size.
C'mon will elaborate on the financial performance, but in short, I'm very pleased with how we've started the year. Increasing ASP through changes to our operations and revenue cycle management is a key component of our strategy.
Trailing 12-month ASP through Q1 was $279, which we anticipate improving in 9-12 months as our efforts begin to materialize.
Keeping in mind that first quarter ASP numbers include the effects from deductible resets and final Medicare pricing on the Clinical Laboratory Fee Schedule.
We feel ASP trended in line with expectations for the first quarter. As we've consistently detailed, we aim to improve ASP through multiple initiatives, both in the short and long term.
These initiatives include steps taken recently to improve our revenue cycle operations by increasing our required documentation at time of test order and revamping our appeals process.
Additionally, we've been aggressive with appeals, filing more than we did for the entirety of 2022. As a reminder, the appeals process can take upwards of a year, depending on what level of appeal is reached.
and we should see the results reflected in higher ASPs.
Over the long term, we believe this approach will be an effective way to educate insurance companies regarding the value of AdviseCTD and expect these efforts to improve coverage with plants.
As part of our initiative to improve revenue cycle management, we made a strategic decision to hold first quarter claims until the second quarter.
while we optimized our appeals process. This additional time enabled us to focus on process improvement without the pressure of triggering timely filing deadlines.
As anticipated, this resulted in a temporary increase in our accounts receivable balance by 3.2 million, and subsequently impacts the cash balance, the effects of which will diminish at the year progresses. This resulted in a temporary increase in our accounts receivable balance by 3.2 million, and subsequently impacts the cash balance, the effects of which will diminish at the year progresses.
We recently refinanced our term loan to better align with our strategic focus and to alleviate performance covenants that restricted our pursuit of profitability. In a tightening debt market, we had the opportunity to refinance from a position of strength to obtain terms we found advantageous.
This benefits the company in multiple ways. The new loan provides flexibility in the performance covenants. It delabberages the organization and resets the interest only period to three years, all of which allow us to focus on achieving profitability in the medium term.
Additionally, our monthly payment is lower and we were able to make a $10 million principal payment without penalty. There are a few other details, come all will cover, but in general we found this to be a very positive development which better aligns with our strategy. Moving to R&D.
After a thorough review, I've decided to end our radar program, including associated clinical trials.
While there remains a strong clinical need for a predictor of drug response in rheumatoid arthritis, and radar has many promising aspects to meet this clinical need, we believe the commercialization hurdles are significant and therefore a prohibatory given the current strategy of the organization.
We continue to develop products for monitoring of disease activity in lupus, along with a predictor of drug response for lupus nephritis.
Both efforts remain active and we plan to give updates when we have meaningful outcomes from our development. We ended the first quarter with 1.1 million in R&D spend, which was light due to the timing of pipeline projects and trials.
And for the full year, we anticipate our R&D spend to be around $6 million.
Lastly, I really value in-person connections with our customers, and I'd like to share an opportunity I had to spend a day in the field with a top rheumatologist in Los Angeles, who sees an excess of 20 patients per day. These types of opportunities are incredibly rewarding, as I was able to experience firsthand how our test is used in clinical practice and the positive impact it has on patient care.
The physician I shadowed really connected with her patients on a personal level. And this was the motivating part to be welcomed into the clinician patient interaction, and observe firsthand how our test was being positioned, and utilized, as the definitive solution to answering a patient's prior ANA positive finding. The office environment is fast paced, and clinicians trust exigen and the advise brand to deliver superior quality and service in helping them solve the differential diagnosis of their referred patients.
This was the first of several visits I hope to have in the coming year. And as I saw firsthand, in combination with the record advised CTD volume, we demonstrated this quarter, clinicians find the advised platform extremely helpful in their everyday clinical practice as the brand they can trust. Overall, I'm extremely proud of the progress made by the exigent team this past quarter.
Our strategy has been highly targeted as we've gone through every aspect of the organization, and it's exciting to see the progress reflected in the quarterly results. We still have a significant amount of work ahead of us regarding the reimbursement of advice which we're working on and will continue to provide regular updates, but so far what we have set out to accomplish is starting to take shape.
I'll now turn the call over to Kamal. Thank you, John , and good afternoon, everyone. Total revenues in the first quarter of 2023 were $11.2 million, compared with $10.4 million in the first quarter of 2022.
delivered. Other testing revenue was 1.4 million in the first quarter of 2023, compared with 1.7 million in the first quarter of 2022.
The Chirling 12-month ASP was $279 per test compared to $285 per test in Q4 of 2022.
Cost of revenue were 5.9 million in Q1, resulting in a total gross margin of 47%. Compared to 44% of the first quarter of 2022, the increase in gross margin percentage was primarily due to an increase in a buy PTD volume, which resulted in a variable impact of absorption of COGS and lower royalty expense due to holding claims. The increase in gross margin percentage was also due to a variable impact of the first quarter of 2022.
Operating expenses were 18.9 million in the first quarter of 2023, compared with 20.1 million in the first quarter of 2022. Primarily, during by decrease in employee-related expenses due to a reduction in force in early December 2022. For the first quarter of 2023, our net loss with 7.7 million
compared to a net loss of 10.3 million for the first quarter of 2022.
Looking at our balance sheet, as John mentioned, we refinanced our debt on April 28th. The refinance with through our existing lender, who we have a very relationship with, and have been working with for six years.
After the prepayment, the balance of the loan is 18 million. As disclosed in the AK, the terms of the agreement include a floating interest rate, which is the greater of 10% or prime plus 2%, refining the interest-only period to three years, the implementation of a new management plan, and improved covenants.
Caching cash of prevalence as of March 31, 2023, were approximately 52.2 million. As John mentioned, with a revenue cycle management strategy, the claims held from Q1 until Q2 contributed to the AR balance increasing by 3.2 million, which is offset by a lower cash balance. Our cash burn of 10 million includes the 3.2 million of AR that was a result of whole
Given the breadth of the changes that are in progress, we remain prudent in our approach to guidance, and for Q2, we're projecting revenue in the range of 10.7 to 11.2 million.
For your or your comparisons, please remember that in 2022, payments for Medicare were delayed from Q2 to Q3.
Finally, as the strategies materialize, our revenue growth will be a composite of both volume and ASP improvements.
Finally, as the strategies materialize, our revenue growth will be a composite of both volume and ASP improvements. We will now open the call for questions.
Thank you very much, sir.
Ladies and gentlemen, we will now be conducting a question and answer session. If you'd like to ask a question, please press star and then one on your telephone keypad.
A confirmation turn will indicate your line is in the Christian queue.
You might press start and then tune if you would like to remove the question from the queue.
For us, this spent using speaker equipment, it may be necessary to pick up your hands it before pressing the start keys. Our first question is from Mark Massara of BTIG. Please go ahead.
Hey guys, this is Vivian on Pymar. Thanks for taking the questions. I think that's on the strong screen. So I guess on the guide, it looks like the mid-court of the Q2 guide is below Q1 levels. So I guess Komolly mentioned towards the end of your remarks, but what are the assumptions on the balance?
between ASP and volumes, and I guess just any conservatism factor to this. Hi Vivian, thanks for the question. So in terms of the assumptions being made, obviously the composite of ASP and volume.
Now volume exceeded expectations in Q1. We came off the reduction in force on December 5th, where we reduced the territories from 63 to 40. So I was very pleased to see the volume command where it did for Q1.
As we stated in the prepared remarks, the AFP could take time for it to grow to the levels that we want to see a grow to. We've signaled nine to 12 months before we see AFP at the levels that we wanted to contribute to the grow. We've signaled nine to 12 months before we see AFP at the level that we wanted to contribute to the grow.
Okay, perfect. And then maybe another one to you from all in terms of topics, which came in, I guess, a little above our thinking. Can you help us think about any one timers that may have been in their workforce reduction? And maybe you could also help us think about how to quantify the savings that you might expect to.
That's why we felt comfortable in saying that if you look at the average
Outbacks for 2022 by quarter, it comes in at around $15.5 million. And then Q1 of 2023 came in at $13 million. So look at that as about a $2.5 million saving, annualized 10 million savings on the year. So that's I'm thinking about the reoccurring expenses.
Now, to the second part of your question with radar, we ain't have a lot of radar senses in 2022. That's why you can look at the Euroburg Euro savings and assume radar's in there.
But John did guide to R&D expenses. Full year 2023 will be around 6 million.
Okay, perfect. Maybe we can just squeeze in one more. You spoke about holding some Q1 planes until you choose. I guess on that front I was wondering if there were any material revenue collections from prior prior periods in Q1. And that's it for me.
Sure, so in terms of impact on revenue, there is no impact from holding claims. But where you do see an impact is an increase in our AR, which ultimately is offset with lower cash. So the way I'm looking at this as AR is about 3.2 million higher.
quarter over quarter from Q4 to Q1 and that negatively impacted cash which will be offset as we start to fill and collect on that so it's just a temporary Temporary lower cash that will be offset during the year
Okay, awesome. Thanks for taking the questions.
Thank you. The next question is from Kyle Mixham of the Canacord. Please go ahead.
Hey guys, thanks for taking questions. Congrats on the quarter. Just starting with the second quarter, it is like a little bit of a step down.
And it wasn't quite clear what you just said come all about the kind of volume and ASP dynamics. I feel like ASP, you know, we shouldn't really expect that to really bump up too much quarter to quarter, but on the volume front, I mean, you just put up the most volume in like...
two years or so, like it did, it's just great, great numbers. Would you mind us talking about that a little bit? Because if you got a back out of the payment that was shifted from 2Q to 3Q last year, you get like minus 4% decline year of year in second quarter of 23. So maybe let's just walk through some of these factors and how you're thinking about it. Come on, thanks. Sure, so obviously the driver there is gonna be AFP.
And let me walk you through the quarter over quarter AFP because it came in in Q1 exactly where internal models had it. So there is no surprise internally for Q1 AFP. And the drivers there are gonna be Medicare moving to the CLFF.
schedule or pricing. So, you know, the PLA code starting in April 1 of 2022 was around 200 higher than the CLFS pricing, which is still significantly higher than what it was for to having the PLA code in place.
And then the second aspect of the AFP from Q4 to Q1 is deductibles resetting. And then the second aspect of the AFP from Q4 to Q1.
And then keep in mind in Q4 2022, if you're looking at a quarter-to-requarter, there were some year-end adjustments that were very favorable to the Q4 2022 AFP.
Great. Thanks, come on. And the volume, I mean, it looks like a record just by the way. I think I look nine to two years. So that's so good. I guess that makes sense. Maybe John on the ASB, I'm coming up with 263 for the quarter, I could provide a bias. Maybe just walk through why that would have declined quarter to quarter.
Like you kind of mentioned some factors, but I think it will be helpful to describe why there are these moving pieces and what kind of contribute to the biggest headwind or bottleneck for average revenue protest. Certainly. And thanks for joining Kyle. Good afternoon.
From an ASP perspective, some of the headwinds, as Koemal mentioned, is in Q1 we have a deductible reset which is consistent with most of the industry, it occurs annually and then kind of smooths out throughout the rest of the year. We also had our Medicare pricing on the clinical laboratory fee schedule as we mentioned.
Headwind or tailwind throughout the year will be gains in medical policy.
From the different insurance plans and that's something we're actively focused on we've set that as a top priority with our market access team We've adjusted the compensation structure for all of them to focus on that and we do think that our appeals efforts Will really help in that in that respect? I think that will be a main driver for us in terms of progress for ASP over the course of the next
information, all of our dossiers along with the studies which we've published on, and really help us draft a concise message which articulates to the payers the value of the test. That coupled with high frequency of appeals and taking those to a higher level of geodication, external type of appeal for example, I think will be primary drivers for the ASP over time. And again, we think maybe the back half of this year into 2024.
will be the appropriate timing for starting to see some of those impacts. We do agree with you on the volume side. It was a fantastic quarter. It really moved past any of our internal models. And to be honest with you, we're still identifying some of the business patterns that are developing with some of the changes that we've implemented. And that is the primary driver behind our guidance for Q2. We're just trying to be prudent in maintaining a conservative approach there.
and seeing when exactly some of these effects which we anticipate are likely to come into play.
All right, that was great, John . Thanks for that. And just moving to some of the things that the company can actually control itself, and that's the termination of the radar program that was kind of an attractive asset at one point, but I felt like on that last, you know, earnings call that it was sort of almost the emphasized a bit to the snake sense, I guess. I'm just curious though, if that was about the ROI of that program or...
I mean, how is this, you know, discontinuing lower margin test, you know, strategy kind of affecting margins thus far if at all?
Certainly. So I'll try to unpack your first question and you just guide me in terms of if I'm hitting also on the second portion. As it relates to radar, if you evaluate this against this product, this development product, against the development criteria we put in place, it checks a lot of boxes. We've been trying to be as clear as we can as
of qualities and that's really to be honest with you why it took some time on my side to evaluate it to its full potential. I did end up hiring actually some external consultants that I've worked with in the past to come in and I just there's a lot of internal emotion tied up in this project and I wanted to evaluate it more objectively. So from my perspective there were some uncertainties there certainly around Medicare and ultimately the path to obtaining.
coverage and I can go into that in more detail if needed but I think on the surface there's a long line, significant timeline is associated with getting through the Moldex program in this product and there's remains some uncertainties with that, the ability to do that. It was also highly dependent on a procedure which is not in widespread use across the industry.
timelines were likely much more significant than we had originally planned for, and as you mentioned, that certainly impacts the ROI. The second part around Gross Margin and directly how some of the other testing.
is impacting that and discontinuation of some of that other testing. We've really tried to focus on advice CTD. I think you see that reflected in the performance this past quarter with volume and we really are excited about the results that that's generated. Our other testing revenue has come down a little bit in Q1 and I think that that's just a factor of
are focused on advice TTD. And so some of the discontinuation, as we said, would turn out to be relatively immaterial to the entire story. I think you're seeing that in general, but again, very excited about how the advice TTD.
The product has performed here over the last quarter, and if we can continue to execute on our ASP efforts, I think hopefully we'll start to see some of those effects as well.
Okay, that makes sense. Thanks, Sean, for the detail and thanks for watching. Thanks guys.
Okay, that makes sense. Thanks, Sean, for the detail and thanks, Klausio. Thanks guys.
Thank you. The next question is from Andrew Bradman, off to Leumbrea, be seated. Hey guys, this is Dustin on for Andrew. Thanks for taking our questions. First, I just want to get an update on the Medicare LCD. You guys from the last year.
confirming you guys are still being paid at that crosswalk rate. And then secondarily, just a general update on the PLA code related disruptions you're seeing with private payers and those new contracts that you might be getting is the pricing coming in at where you guys would want that to be medium to longer term.
just.
Certainly. Thanks for joining the call, Dustin. So.
briefly an update on the LCD. No material changes to report at this point in time and just to recap we have submitted a request for an LCD for AdviseLupus. That submission has been acknowledged by Neridian.
who's our local Mac that it's complete and pending. And so until we end up on a meeting agenda, there won't be much to report and the timelines there are fuzzy at best. So we remain in the queue and until there's something material that Naredian does.
We'll continue to remain pending in that queue. But everything that is in our control has been completed relating to the LCD request. Your second part of your question was relating to payments for Medicare. So we have claims with 2023 data service under the new pricing $840 for our current PLA code, which have been paid.
by Medicare and no changes to report their relative to Q4. We, as we mentioned in the prepared remarks, we have held claims here for Q1 as we revised our appeals process and so that's part of that as well. We just want to make sure that we have everything buttoned up before potentially triggering any sort of timelines that are dictated by the payers.
But we treated all claims similarly there. But as it relates to 223-day service, nothing new to report and still getting covered and paid by Medicare at the appropriate rate.
I think the next part of your question dealt with PLA code disruptions with commercial payers. We continue to see those. We haven't carved those out individually. There's no material write-downs, as you see here in the quarter. So, not a whole lot new to report in that context. But if you do take a look at the trailing 12-month ASP, we're down about $6 here in Q1. We think that's mostly a factor of deductibles along with the
contracts perform over time and are they reflected in your ASP? And so I think, you know, if I'm evaluating an organization or a business in this area, I think you would want to see material changes in the ASP and that's where we've tried to direct folks as well. So I think continuing to monitor that, which we've articulated, we expect to see changes here.
somewhere 9 to 12 months gives us a full cycle of appealing with a claim date of service of Q1, so sometimes towards the end of the year. I think you'll end up seeing some of those changes, but nothing significant to report on either front to directly answer your question.
Yeah, that was great. Thank you, John . Kind of a related question. In those Medicare medical policy decisions that are being made, are a lot expected to happen in the second half of this year? Or should that be more spread out over a 12-month basis?
Certainly. We expect to get quite a bit of feedback in the second half of the year. So the first half of the year, I think, is littered with quite a few submission dates, although there are policy determinations occurring in the first half of the year. But I would say the majority are centered in the second half of the year, Q3, Q4.
from many of these policies. So second half of the year, you're correct.
Okay, great. And then just one more on the pipeline. You briefly mentioned the two other projects you're working on. If you could go into more detail on those two, that would be great. Thank you. Certainly. So in terms of our pipeline right now.
We are actively engaged in two programs, one focused in lupus nephritis, the other focused in a disease activity score for monitoring of lupus patients. We believe both are high clinical needs within the space. And if you were to talk to rheumatologists who are treating lupus patients, I think it would be easily validated that either product fits a strong clinical need. We believe we have...
channel. So again another positive there. I hesitate to go into significant detail on our pipeline products when I don't foresee revenue in the next 12 to 24 months. I know that that's a change from how the company has handled this previously, but I don't want to commit to something and then have to back off it, if you will, at some point in time. So for that.
programs are ongoing and then we'll update from there.
Great, thanks for taking our questions.
Great, thanks for taking our questions. Certainly.
Thank you. The next question is from Dan Brennan of TD Town. Please go ahead.
Great. Thank you. Thanks for taking the questions. Maybe a couple, just starting off on withholding claims in one queue, just what kind of impact did that have and how will that flow through the queue two and the rest of 23? Certainly. Thanks for joining the call, Dan.
So, for sure. In terms of impact as we see it, so as we mentioned, we saw accounts receivable increased by 3.2 million, and we had a subsequent impact to cash as a consequence of that. This was all planned, and just to reiterate at a high level the reason why we...
are doing this so that it gave us the freedom to adjust our billing and revenue cycle processes and sure that we have basically all of our ducks in a row for our appeals process before filing claims so that in the event we do get denials. We don't start the timely filing clock for those denials, the response to those denials, ahead of where we...
a cash balance or a slower burn over the course of the year, but that's how this will rectify over the next nine months.
Great, thanks for that. And just to remind us how we think about the burn for this year and in terms of ultimately tapping the capital markets, when would you anticipate doing that?
Or the need to do that.
Okay, thanks Dan. In regards to the burn, you know, we gave that number of, around 7 million, because of the, what we just talked about with polling claims, that if you back that out, then the burn and you won't have been close to 7 million.
And the way we're looking at this is in each quarter, we should be seeing relatively small and prevent to the cash per and quarter after quarter as we continue to see our ASP increase over time and control expenses. So I think that's $7 million a number.
for a burn and this quarter is your high point for the year.
And then in terms of impact relative to capital markets, the way we're thinking about internally is we just came off a quarter where, as mentioned, volume, is the highest volume we've ever had from a quarterly perspective relative to advise CTT.
And from that, it beat our internal models. And so from that perspective, really the timing and magnitude of the ASP impact here over the next 12 months is going to be highly material to when any sort of cash needs fall into place. We continue to look at market conditions and stay abreast of that. That's why we moved with the
some of the debt decisions we did more recently, but at this current time, we believe we have the focus, the flexibility, the focus on advice, CTD, that's what we're doing. And then depending on how some of these things fall into play, whether they're ahead of schedule or maybe a little bit behind, we'll have to see, but that will dictate timing. Great, now thanks for that. And then you've talked about a couple of times, how strong the volumes were, and how many initiatives you've already put in place of kick in, faster than expected. Is there any reason why the kind of Euro-Vio buying go if you achieve the one you shouldn't continue in 2Q? To help us think through, I think you would talk about it earlier in the call. You would expect it to benefit to it.
be seen maybe in a few quotas 2-3-4, a quotas from now but you're seeing some of it now. So is there any reason why it was a one-time pop and then it's going to revert back which is kind of help us think through Q2 and divide in progression as we look at it sequentially? Certainly, I think that's a great question. So from our perspective, we reduced about a third, a little bit more than a third of ourselves, footprint in the US.
And we expected that impact to hit more in Q1. Now it didn't. In fact, we actually had very substantial growth in Q1. I think it's the way we're thinking about it internally is we still anticipate some impact from reducing a third of our sales force. We think the revised focus on by CTD is the right strategy and it's showing up in the numbers.
But until we see a couple quarters of consistent growth in that respect, I think the hypothesis is still valid. You know, historically, the company has conveyed that it takes roughly two quarters before you see some trail off when a territory gets...
Is vacant? I'm new to the story in that sense, and still analyzing this from my perspective, seeing how we can minimize that. And like I said, when you make such a dramatic cut here at the end of Q4, I anticipated some impact in Q1. So that's why we're thinking kind of Q2 that's anticipated in the guide. Again, just trying to be conservative that given the significant size of the changes that we've made, there should be some impact here in Q2. But again, we're proving wrong.
Any color, how to think of the sequential pacing, when you might see maybe some of the bigger step ups or just kind of any help how that progression occurs. Thank you. Yeah.
Yeah, again, a great follow on and the way we're thinking about it internally is the changes that we're making now, call it Q1, we anticipate seeing the effects of those changes in approximately 9 to 12 months and the rationale behind that being you initially perform a test, you file a claim,
There's, we're conveying that we think the opportunity exists in our appeals process. That appeals process is several cycles, call it two to three cycles per claim. And so for that entire process to play out, take somewhere in the nine to twelve month range, and that's just based on my experience. So we would expect to see the effects of the changes we're implementing now reflected like it in ASP.
Sometime in the fourth quarter, potentially Q1 of 2024. And that's as simple as that, really. So the way we're thinking about it is, we're likely at a stable ASP with maybe some minor fluctuations, positive or negative over the next two or three quarters. And so then we would start to see the effects of our strategy material.
CD price today. Avina Lyft.
Yes, hey Paul, great to see you. The list price for Advice CTD, and again this is the PLA code plus an additional 12 to 13 markers. There's one marker there that's on Reflex, so just to be terribly clear, is $1,650.
without re-blocks. That drops about $40. So call it 1610.
And then based on your experience at other, at other plate diagnostics firms, what do you think the company should operate at as it goes through the process of getting payers? Should it be a third of lists, a half a list? What's your opinion?
My opinion is that we should be operating above our Medicare rate and under the PAMO legislation I think the system is designed to either penalize or adjust the rate or award those who... who...
can work through the market dynamic in terms of pricing for their tests. And so that's our goal, that's our objective. And just to give you that number as well, the entire Medicare Reimbursed rate is 1067. So I think we should be operating closer to that level. It's not above. And that's what we're working to do.
Do you think more data is needed by commercial appares? What do you go to your opinion when they might be looking for on publications? I think that we are likely to hear from multiple commercial pairs that they will need more data. I think it's up to us.
to explain why we disagree and we do disagree with that premise, but that's an easy, easy first objection to throw out there is that the studies that you have are insufficient, are poorly designed, et cetera, et cetera. We have 17 studies covering advice, CTT across and advise Lupus.
covering the full spectrum, clinical validity, analytical validity, utility, budget impact, in every area. We have a rural evidence that supports the use of the test, and we even have prospective studies showing the patient impact and utility even at societal level. So I think we have a strong data package. I don't think it will move every payer. I think we have a strong data package.
Okay, thank you very much. Thank you, ladies and gentlemen. We have reached the end of the Christian and Ante session and I would like to call to the call back to John and Bolly for closing remarks. Great.
We've started 2023 off strong as a team and are seeing initial results from a plan we've put in motion. We've successfully reduced meaningful costs in the organization, driven record demand for advice C2D, and have reshaped our operations in a way which I believe will continue to improve the business going forward. We hope you find the clear articulation of our goals useful in measuring our progress and look forward to updating everyone on future calls.
Thank you for your support of Exigen. I sincerely thank the Exigen team for their efforts this past quarter. Thanks for joining the call today. Thank you very much, Lynn.
Let it be determined that it includes the day's conference. Give it a good night, your last time, and thank you for your participation.