Q1 2024 Aspira Women's Health Inc Earnings Call
Speaker Change: [music].
Good morning, ladies and gentlemen, and welcome to the spiral women Health incorporated first quarter 2024 earnings conference call. At this time all participants are in a listen only mode. Following management's prepared remarks, we will open the call for your questions.
Operator: Good morning, ladies and gentlemen, and welcome to the Aspira Women's Health Incorporated First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode.
Operator: Following management's prepared remarks, we will open the call to your questions. As a reminder, this call is being recorded for today. Before we begin, I would like to remind everyone that forward-looking statements as defined under the Private Security Litigation Reform Act of 1995 will be made during this call, including statements related to Aspira's expected future performance, future business prospects, and future events or plans. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainty that could cause results to differ materially from those anticipated due to the impact of many factors beyond Aspira Women's Health Control.
A reminder, this call is being recorded today.
Before we begin I would like to remind everyone that forward looking statements as defined.
The Securities Litigation Reform Act of 1995 will be made during this call, including statements related to our Cyrus expected future performance future business prospects and future events or plans, although the company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions actual outcomes and results are subject to risk.
And uncertainty that could cause results to differ materially from those anticipated due to the impact of many factors beyond the Spiro women's health control.
The company assumes no obligation to update or supplement any forward looking statements, whether as a result of new information future events or otherwise except as required by law participants are directed to the cautionary notes set forth in today's press release as well as the risk factors set forth inspire its most recent annual Form 10-K and quarterly.
Orderly report on Form 10-Q filed with the SEC for a description of factors that could cause actual results to differ materially from those anticipated in the forward looking statements.
Operator: The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Participants are directed to the cautionary notes set forth in today's press release, as well as the risk factors set forth in Aspira's most recent annual Form 10-K and quarterly report on Form 10-Q filed with the SEC, for a description of factors that could cause actual results to differ materially from those anticipated in a forward-looking statement. At this time, I'd like to turn the call over to Nicole Sandford, Chief Executive Officer. Please go ahead.
At this time I'd like to turn the call over to Nicole Sanford Chief Executive Officer. Please go ahead.
Nicole Sandford: Thank you and welcome everyone to our first quarter 2024 earnings Conference call with me today are a doctor Sandy Milligan, our new president and twice and hold back our Chief Financial Officer.
Nicole Sandford: Thank you and welcome everyone to our first quarter 2024 Earnings Conference Call. With me today are Dr. Sandy Milligan, our new president, and Torsten Hombeck, our chief financial officer. I will begin with an overview of our strategy, execution, and operations, followed by Sandy with an update on our development plans, and Torsten with a review of our financials. We will then open the call for questions.
Nicole Sandford: I'll begin with an overview of our strategy execution and operation followed by Sandy with an update on our development plans and Torsten with a review of our financials. We will then open the call for questions.
Nicole Sandford: Let me begin with our strategy and commercial execution this quarter. We were excited to see Overwatch grow by 114 percent to 1,052 in the first quarter of 2024 compared to the same period last year, representing approximately 18 percent of total test volume, which declined slightly to 5,829. This is important as we believe the largest opportunity for future growth rests with Overwatch now that we are offering it as a tool for the longitudinal monitoring of mass.
Nicole Sandford: Let me begin with our strategy and commercial execution. This quarter, we were excited to see overwatch grow by 114% to 1052 in the first quarter of 2024 over the same period last year, representing approximately 18% as total patch volume, which declined slightly to 5829.
Nicole Sandford: This is important as we believe the largest opportunity for future growth rests with Overwatch now that we are offering it as a tool for the longitudinal monitoring the masses.
Nicole Sandford: Creating an opportunity for repeat testing for the more than 1.2 million patients a year that develop an indexil mask and potentially multiplying the total addressable market by more than 2-3 times that of a single use test.
Nicole Sandford: Waiting in opportunity for repeat testing for the more than 1.2 million patients a year that developing in Mexico, math and potentially multiplying the total addressable market by more than two to three times that of a single use test.
Nicole Sandford: Overwatch is designed to help physicians determine the risk of cancer for women with potentially benign or indeterminate masses, something for which there is no other non-invasive tool available. We believe the broad adoption of Overwatch will help women avoid unnecessary surgery for the benefit of patients, physicians, and payers. In fact, data published just last week in the peer-reviewed journal Frontiers of Medicine showed that physician accuracy in predicting malignancy would have improved by more than 400% had Overwatch been used for those patients.
Nicole Sandford: Overwatch is designed to help physicians determine the risk of cancer, but window with potentially benign or indeterminate passes something for which there is no. Other noninvasive tool available. We believe the broad adoption of Overwatch will help women avoid unnecessary surgery the benefit of patients physicians and payers in fact data published just last week and the peer review.
Nicole Sandford: Journal Frontiers in medicine showed that position accuracy in predicting malignancy would've improved by more than 400% had overwatch can use for those patients.
Nicole Sandford: You'll hear more about the data shortly, but let's stop there for a minute and talk about the power of this paper. It clearly demonstrates Overwatch's utility for physicians to improve the accuracy of their assessment of malignancy risk and offers an incredible benefit to premenopausal women who may have resorted to surgery in the past. These women face the onset of surgical menopause if their ovaries are removed, causing a host of near and long-term health risks due to the abrupt drop in circulating hormones compared to women that experience menopause naturally and gradually. Surgical menopause has been found to increase women's long-term risk of cardiovascular disease, osteoporosis, Parkinson's disease, and dementia, to name a few.
Nicole Sandford: You'll hear more about the data shortly but let's stop there for a minute and talk about the power of this paper. It clearly demonstrates the overwatch is utility for physicians to improve the accuracy of their assessment of malignancy risk and offers an incredible benefit to premenopausal women may have resorted to surgery.
These women face to onset of surgical menopause at their ovaries removed, causing a host of near and long term health risks due to the abrupt drop in circulating hormone compared to women that experienced menopause naturally and gradually surged.
Nicole Sandford: Surgical menopause has been found to increase women's long term risk of cardiovascular disease, osteoporosis, Parkinson's disease and dementia to name a few.
Speaker Change: We believe this data will play a central role in driving adoption of the Overwatch by both physicians and payers and are currently executing an aggressive campaign to share the paper and its findings with our various stakeholders. We also saw the publication of data supporting periodic testing published in the peer reviewed journal gynecologic oncology earlier this.
Nicole Sandford: We believe this data will play a central role in driving adoption of Overwatch by both physicians and payers, and we are currently executing an aggressive campaign to share the paper and findings with our various stakeholders. We also saw data supporting periodic testing published in the peer-reviewed journal Gynecologic Oncology earlier this month. The validation of Overwatch as a reliable test in the monitoring of ovarian cancer risk in women with indeterminate or low-risk anexal masses, especially in a prestigious journal for gynecologic oncology, is a major milestone.
Speaker Change: Got it.
Speaker Change: The validation of Overwatch is a reliable test and the monitoring of ovarian cancer in women with indeterminate are low risk and Knoxville Memphis.
Speaker Change: Especially in a prestigious journal for Gynecologic oncology is a major milestone data in this analysis of over 500 women supports the use of Overwatch for monitoring masses overtime offering women and physicians peace of mind, if they choose to avoid surgery with malignancy record low.
Nicole Sandford: Data in this analysis of over 500 women supports the use of overwatch for monitoring masses over time, offering women and physicians peace of mind if they choose to avoid surgery when the malignancy risk is low. Turning now to our commercial activities, our team is more prepared than ever to take advantage of the expanded features of Overlock. Our sales efficiency numbers continue to improve, with volume for full-time representatives increasing 22% to 364 in the first quarter of this year when compared to the first quarter of last year.
Speaker Change: Turning now to our commercial activities. Our team is more prepared than ever to take advantage of the expanded features of Overwatch. Our sales efficiency numbers continue to improve with volume for full time representative increasing 22% to 364 in the first quarter. This year when compared to the first quarter of last year.
Nicole Sandford: In addition, March was the strongest month of the first quarter, and the momentum has carried into April, which was the second-largest volume month in company history, despite two remaining open territories. Another key factor to growth is Average Unit Pricing, or AUP, which was at $369 for the quarter, consistent with the first full quarter of last year. Importantly, the volatility we anticipated with the launch of Overwatch never materialized, and our gross margin remained strong at 56%.
Speaker Change: In addition March was the strongest month of the first quarter and the momentum has carried into April which was the second largest volume month in company history. Despite two remaining open territory.
Speaker Change: Another key factor to growth as average unit pricing or a P.
Was it $369 for the quarter consistent with the first full quarter of last year.
Speaker Change: Importantly, the volatility we anticipated with the launch of Overwatch never materialized and our gross margin remained strong at 56%.
Speaker Change: Moving to an update on the innovation, we are aggressively seeking alternative sources of funding for our product development, including the pursuit of research grants under the leadership of our new President Sandy Milligan.
Nicole Sandford: Moving to an update on innovation, we are aggressively seeking alternative sources of funding for our product development, including the pursuit of research grants under the leadership of our new president, Sandy Milligan. We submitted ARPA-H grants for OVA-MDX and endo-MDX last month to take advantage of the opportunity to obtain funds made available by the Biden administration to support women's health research. The ARPA-H grant process is expected to be condensed, with funding decisions to be made as early as the fourth quarter.
Speaker Change: We submitted ARPA each grants for Ova, Mdx and Endo Mdx last month to take advantage of the opportunity to obtain funds made available by the Biden administration to support Women's Health research.
Speaker Change: The ARPA E. Grant process is expected to be conducted with funding decisions to be made as early as the fourth quarter.
Nicole Sandford: Other grant applications have been submitted for our portfolio, some of which have been submitted in partnership with collaborators. For example, in addition to an NIH grant submitted by Dana-Farber Cancer Institute, our endocheck test was included in a third ARPA-H grant proposal submitted by a scientific researcher that owns a patent that may be used in a promising drug therapy for the treatment of endometrioma. EndoCheck is the only non-invasive test that has been shown to accurately identify endometrioma, making it the perfect pairing for a combined solution and collaboration on clinical research.
Speaker Change: Other grant applications have been submitted for our portfolio some of which have been submitted in partnership with collaborators.
Speaker Change: In addition to an NIH grant submitted by Dana Farber Cancer Institute, our Endo check test was included in a third ARPA age Grant proposal submitted by a scientific research or they don't have the patent that may be used in a promising drug therapy for the treatment of endometriosis.
Speaker Change: Endo check is the only noninvasive test that had been shown to accurately identify endometrial Ma making it the perfect pairing for a combined solution and collaboration on clinical research.
Nicole Sandford: Positioning EndoCheck as a research test in this manner may generate income while simultaneously validating the outcome. I continue to believe in the promise of EndoCheck as an inexpensive, non-invasive tool for women with suspected endometrioma, especially for women with comorbidities that create higher surgical risk, adolescents, and underinsured patients. However, we need to be smart about how we build the market to meet the needs of clinicians as well as patients. We are extraordinarily conscious of our spending, and while we would like to fully fund all of our programs, we must be thoughtful in deciding where our research dollars go. While we are pursuing alternative sources of funding for EndoCheck, we are focusing our attention on the MDX portfolio.
Positioning endo check as a research tests in this manner may generate income while simultaneously validating the algorithm.
Speaker Change: I continue to believe in the promise of Endo check as an inexpensive noninvasive tool for women with suspected endometrial Omar, especially for when they would comorbidities that create higher surgical risk adolescence and under insured patients. However, we need to be smart about how we build the market to meet the needs of clinicians as well as patients.
Speaker Change: They are extraordinarily conscious of our spending and while we would like to fully fund all of our programs, we must be thoughtful and deciding where research dollars though.
Speaker Change: We are pursuing alternative sources of funding for Endo check we are focusing our attention on the mdx portfolio.
Nicole Sandford: Now it is my pleasure to turn the call over to Dr. Sandy Milligan, who joined us just a month ago. Her impact is already being felt throughout the organization, providing incredible insight, expertise, leadership, and relationships. Danny brings refreshing discipline from her years in the military, a depth of medical knowledge from training as a physician, and strategic clarity from her prior senior roles with a variety of market-leading life sciences companies. She has been a tremendous addition to the team. And we'll now turn the call over to her. Thank you, Nicole. And
Speaker Change: Now it is my pleasure to turn the call over to Dr. Sandy Nelligan, who joined US just a month ago.
Speaker Change: Impact is already being felt throughout the organization, providing incredible insight expertise leadership and relationships.
Speaker Change: And he brings a refreshing discipline from her years in the military adapted medical knowledge from training as a physician and strategic clarity from her prior senior role with a variety of market leading life Sciences companies.
Speaker Change: She has been a tremendous addition to the team I will now turn the call over to her.
Sally Ann Yanchus: Thank you, Nicole, and it is truly my pleasure to be part of the Aspira team. It has been an exhilarating ride so far, and I see tremendous potential in our science and technical expertise to forward our vision of transforming gynecological health. Since joining, my focus has been on understanding our programs and strategies to accelerate product development by confirming our priorities, timelines, and capabilities to accelerate our progress without sacrificing scientific or technical rigor.
Nicole: Nicole and it is truly my pleasure to be part of the spirit team. It has been an exhilarating ride so far and I see tremendous potential in our science and technical expertise to forward our vision of transforming gynecological health.
Nicole: Since joining my focus has been on understanding our programs and strategies to accelerate product development by confirming our priority timeline and capabilities to accelerate our progress without sacrificing scientific or technical rigor.
Sally Ann Yanchus: Building on what Nicole has already shared about EndoCheck, we have continued to make strides with the scientific and clinical support for the test. From our previous work with ovarian cancer, we saw a potential correlation between some protein biomarkers and endometriosis. We utilized AI to develop an algorithm and trained it on our internal data set composed of women with adnexal masses, where this algorithm had high performance. We then applied the algorithm to an external data set that included both patients with and without adnexal masses.
Speaker Change: Building on what Nicole has already shared about Endo check we have continued to make strides with the scientific and clinical support for the test.
Speaker Change: From our previous work with ovarian cancer, we saw potential correlation between some protein biomarkers in endometriosis.
Speaker Change: We utilized AI to develop an algorithm and trained it on our internal dataset composed of women with ductal masses, where this algorithm had high performance.
Speaker Change: We then applied the algorithm to an external dataset that included both patients with and without adding extra masses.
Sally Ann Yanchus: In this cohort, we found that the signature had superior performance in the presence of endometriomas and superficial ovarian endometriosis, representing subtypes that are present in up to 40% of women diagnosed with endometriosis. We presented data related to the performance of EndoCheck for the identification of endometrioma at the Society of Reproductive Investigation annual scientific meeting in February, where there was a great deal of excitement about EndoCheck from clinical, academic, and other attendees for its potential contribution to a test with a broader application and the insights it offers to improve the understanding of this devastating and complex disease.
Speaker Change: In this cohort we found that the signature had superior performance in the presence of endometrial Mas and superficial ovarian endometriosis, representing subtypes that are present in up to 40% of women diagnosed with endometriosis.
Speaker Change: We presented data related to the performance that endo check for the identification of endometrial MA at the society of reproductive investigation annual scientific meeting in February.
Speaker Change: Where there was a great deal of excitement about endo check from clinical academic and other attendees for its potential contribution to a test with a broader application and the insights it offers to improve the understanding of this devastating and complex disease.
Speaker Change: Also as Nicole mentioned, we announced the publication of two Overwatch focused menu scripts earlier this month collectively.
Sally Ann Yanchus: Also, as Nicole mentioned, we announced the publication of two Overwatch-focused manuscripts earlier this month. Collectively, the studies support the use of Overwatch as a repeat ovarian cancer risk assessment tool and demonstrate the potential for significantly improved triaging of malignancies for surgery and clinical impression alone. Our published data demonstrates that Overwatch could substantially reduce surgeries for low-risk patients performed out of concern for malignancy risk, especially for asymptomatic and premenopausal women. Indeed, Overwatch may have reduced the number of surgeries in women with low risk of malignancy by 62% in all patients and 77% in premenopausal women.
Speaker Change: Collectively the study support the use of Overwatch as a repeat ovarian cancer risk assessment tool and demonstrated the potential for significantly improved triaging of malignancies for surgery and clinical impression alone arm.
Speaker Change: Our published data demonstrates that overwatch could substantially reduce surgeries for low risk patients performed out of concern for malignancy risk, especially for asymptomatic and premenopausal women.
Speaker Change: Indeed, overwatch and they have reduced the number of surgeries in women with low risk of malignancy by 62% in all patients and 77% in pre menopausal women.
Sally Ann Yanchus: With the added feature of serial monitoring, Overwatch can be drawn at provider-specified intervals for active surveillance of an adnexal mass determined by initial clinical assessment as indeterminate or low risk. This is the strongest clinical support for Overwatch and its value proposition for physicians and patients to date.
Speaker Change: With the added feature of serial monitoring Overwatch can be drawn at provider prescribed intervals for active surveillance of an adnexa math determined by initial clinical assessment as indeterminate or low risk. This is the strongest clinical support for overwatch and its value proposition for physicians and patients to date.
Speaker Change: Moving onto Ova, MTX, which is being developed in collaboration with the Dana Farber Cancer Institute, we have completed assay analytical feasibility on an F. D. A approved P. C. Our system and are nearing completion of our initial test design.
Sally Ann Yanchus: Moving on to OVA-MDX, which is being developed in collaboration with the Dana-Farber Cancer Institute, we have completed assay analytical feasibility on an FDA-approved PCR system and are nearing completion of our initial test design. This is a major innovation and a critical step in the development of our next-generation test for ovarian cancer risk. We believe that the performance of the miRNAs we have licensed from Dana-Farber will lead to the development of a commercial application.
Speaker Change: This is a major innovation and a critical step in the development of our next generation test for ovarian cancer risk. We believe that the performance of the M. I Rnas, we have licensed from Dana Farber will lead to the development of a commercial application as.
Sally Ann Yanchus: As we have shared previously, we believe this test will have the power to improve sensitivity for early-stage ovarian cancer, as well as specificity for histiological subtypes, solidifying our position as the leader in non-invasive ovarian cancer testing for women with adnexal abnormalities. Primarily leveraging samples from our existing biobank, we expect to complete the design and assay verification by the end of 2024. Endo We will begin establishing analytical feasibility and down selecting miRNA and protein candidates as part of the ongoing test design.
As we have shared previously we believe this test will have the power to improve sensitivity for early stage ovarian cancer as well as specificity for his theological subtypes.
Speaker Change: Finally, our position as the leader in non invasive ovarian cancer testing for women with an excellent method.
Speaker Change: Primarily leveraging samples from our existing biobank, we expect to complete the design and assay verification by the end of 2024.
And do MTX, it's also being developed in collaboration with Dana Farber we.
Speaker Change: He will begin establishing analytical feasibility and down selecting of M. I RNA and protein candidates as part of the ongoing tests design by the end of 'twenty 'twenty four we expect to complete the assay and algorithm design input and begin the verification and validation procedures leveraging our experience developing over MTX.
Sally Ann Yanchus: By the end of 2024, we expect to complete the assay and algorithm design inputs and begin the verification and validation procedures leveraging our experience developing OVA-MDX and confidence in the signature delivered by Dana-Farber. On the regulatory front, earlier this month, FDA finalized its rule to regulate lab-developed tests. It is worth noting that, unlike earlier proposals, it included provisions that may allow existing LBTs to be exempted from additional oversight provisions. We do not anticipate the new rule to have any impact on our ability to offer existing products, including the longitudinal testing feature of Overwatch.
And confidence and the signature delivered by Dana Farber on the regulatory front earlier this month F. D. A finalized its rule to regulate lab developed test.
Speaker Change: It is worth noting that unlike earlier proposal included provisions that may allow existing L. D cheese to be exempted from additional oversight provision.
Speaker Change: We do not anticipate the new rule to have any impact on our ability to offer existing products, including the longitudinal testing feature of Overwatch. We are still assessing the impact of the final rule on the regulatory strategy for products in our pipeline. However, we do not currently anticipate this regulation to cause significant.
Sally Ann Yanchus: We are still assessing the impact of the final rule on the regulatory strategy for products in our pipeline. However, we do not currently anticipate this regulation to cause a significant extension of our prior development or launch timeline.
Speaker Change: An extension of our prior development or launch timelines.
Torsten Hombeck: I want to thank everyone in the company for the reception I have received since joining. It is clear that everyone here is committed to the success of the company and to making a difference in women's health, and I am honored to be working alongside our talented crew. The passion for leading the way in women's health with non-invasive, AI-enabled tests to aid in the diagnosis of gynecological diseases is unwavering and truly inspiring. With that, I will turn it over to Torsten for an update on our financials.
Speaker Change: I want to thank everyone in the company for the reception I have received since joining it is clear that everyone. Here is committed to the success of the company and to making a difference in women's health and I am honored to be working alongside our talented crew the passion for leading the way in women's health with noninvasive AI enabled test to aid in the diagnosis.
Speaker Change: Gynecological diseases is unwavering and truly inspiring.
Speaker Change: With that let me turn it over to Torsten <unk> for an update on our financials.
Torsten Hombeck: Thank you Sandeep.
Torsten Hombeck: Let me begin with a review of our first quarter 2024 financial results. Oversweet revenue for the first quarter of 2024 was $2.2 million, which was a slight decline from the $2.3 million in the same period last year but an increase of approximately $100,000 from the $2.1 million in the fourth quarter of 2023.
Torsten Hombeck: We begin with a review of our first quarter 2024 financial results.
Torsten Hombeck: Well with suite revenue for the first quarter of 2024 was $2 $2 million, which was a slight decline from the $2 $3 million in the same period last year.
Torsten Hombeck: But an increase of approximately $100000.
Torsten Hombeck: The $2 $1 million from the fourth quarter of 2023.
Revenue in the quarter benefited by a strong 114% year over year growth of Overwatch, but was offset by a decrease in our Uber one plus test volume that had been contributed.
Torsten Hombeck: Revenue in the quarter benefited from strong 114% year-over-year growth of Overwatch but was offset by a decrease in our Over 1 Plus test volume that had been contributed by unprofitable territories eliminated as part of the refresh of our commercial strategy in 2023. Looking more closely at our sales trend this year, I'm very pleased to see our commercial refresh having the positive impact that we anticipated it would. We completed the refresh towards the end of last year, and importantly, we're now seeing a return to growth in test volume. As a matter of fact, our oversweet test volumes since January of 2024 have increased each month, both for Overwatch and Battle.net.
Torsten Hombeck: Unprompted.
Speaker Change: Profitable territories eliminated as part of the refresh of our commercial strategy in 2023.
Speaker Change: Looking more closely at our sales trends this year I'm very pleased to see our commercial refresh having a positive impact that we anticipated it would.
Speaker Change: We completed the refresh towards the end of last year and importantly, we're now seeing a return to growth in test volume.
Speaker Change: As a matter of fact, our oldest suite test volumes since January of 'twenty 'twenty four have increased each month.
Speaker Change: Both for over one plus.
Speaker Change: Overwatch and.
Torsten Hombeck: And we have seen that positive trend continue into April. I do not normally comment on the monthly trends, and we won't provide monthly updates in the future, but I felt it was important this quarter to demonstrate the reversal of the prior trends, which are now pointing again towards positive growth. Our overall average unit price was stable at $369 for the first quarter of 2024, compared to $370 in the first quarter of last year.
Speaker Change: And we have seen that positive trend continued into April.
Speaker Change: I do not normally comment on monthly trends and we won't provide monthly updates in the future, but I felt it was important this quarter to demonstrate the reversal of the prior trends, which are now pointing again towards positive growth.
Speaker Change: Our overall average unit price was stable at $369 for the first quarter of 2024 compared to $370 in the first quarter of last year.
Speaker Change: However, the U P number alone doesn't tell the whole story.
Torsten Hombeck: However, the AUP number alone doesn't tell the whole story. Last year's first quarter was almost all related to over one plus, compared to this quarter, where volume was closer to an 80-20 split between over 1 plus and over watch. The stable AUP means the average price of Overwatch is increasing and conforming with Overwatch Plus faster than we had originally anticipated. We have seen no dilution in the price as a result of the change in product mix, which is normally expected with the launch of a new test.
Speaker Change: Last year's first quarter was almost all related to Eagle one plus.
Speaker Change: Care to this quarter, where volume was closer to an 80 20 split between over one plus and Overwatch.
Speaker Change: It's stable.
Speaker Change: It means the average price of Overwatch is increasing and conforming with over one plus faster than we had originally anticipated.
Speaker Change: We have seen no dilution into price as a result of the change in product mix, which is normally expected with the launches of new tests.
Speaker Change: With the recent announcement of commercial reimbursement wins for overseas like and some in California, We believe <unk> will.
Torsten Hombeck: With the recent announcement of commercial reimbursement wins for Oversuite, like Anthem in California, we believe our AUP will improve steadily. Our gross margins for the first quarter of 2024 improved to 56.3% compared to 51.2% in the first quarter of 2023. Our operating expenses all showed significant improvement this quarter compared to the first quarter of 2023. Research and development expenses for the quarter decreased by 28 percent, and sales and marketing expenses decreased by 27 percent, while G&A decreased 13% as a result of our continued focus on disciplined spending throughout the organization.
Speaker Change: We'll improve steady.
Speaker Change: Our gross margins for the first quarter of 2024 improved to 56, 3% compared to 51, 2% in the first quarter of 2023.
Speaker Change: Our operating expenses all show significant improvement this quarter compared to the first quarter of 2023.
Speaker Change: Research and development expenses for the quarter decreased by 28% and sales and marketing expenses decreased by 27%.
Speaker Change: While G&A decreased 13% as a result of our continued focus on disciplined spending throughout the organization.
Speaker Change: Our cash used in operating activities in the first quarter of 2023 was $4 $4 million down 23% compared to cash used in operating.
Torsten Hombeck: Our cash use and operating activities in the first quarter of 2023 were $4.4 million, down 23% compared to cash use and operating activities of $5.7 million in the first quarter of 2023. Cash and restricted cash as of March 31st, 2024 were $3.7 million, up from $2.9 million as of December 31st, 2023. To date, we have used $2 million from our existing equity line of credit with Lincoln Park Capital, and we have approximately $2.8 million remaining available to us.
Speaker Change: <unk>, a $5 7 million in the first quarter of 2023.
Speaker Change: Cash and restricted cash as of March 31, 2024 was $3 $7 million up from $2 $9 million.
Speaker Change: December 31 2023.
Speaker Change: To date, we have used $2 million from our existing equity line of credit with Lincoln Park capital and we have approximately $2 $8 million remaining available to us.
Additionally, we are pursuing various dilutive and non dilutive sources of funding including research grants.
Torsten Hombeck: Additionally, we are pursuing various dilutive and non-dilutive sources of funding, including research grants. We reiterate our cash use in operations guidance for 2024 to be between $15 and $18 million. On a macro level, we see a clear resurgence of interest in women's health, including and maybe especially with respect to advanced diagnostic tools. I believe this, with the publication of our two papers Nicole and Sandy talked about earlier and the expansion of Overwatch and its potential to provide a source of recurring revenue, has strengthened our positioning in the market and with potential commercial partners.
Speaker Change: We reiterate our cash used in operations guidance for 2020 for it to be between 15 and $18 million.
Speaker Change: On a macro level, we see a clear resurgence of interest in women's health, including and maybe especially with respect to advanced diagnostic tools.
Speaker Change: I believe this was the publication of our two papers, we couldnt Sandy talked about earlier and the expansion of Overwatch and its potential to provide a source of recurring revenue has strengthen our positioning in the market and with potential commercial partners.
Torsten Hombeck: While conditions continue to be less than optimal for small-cap companies, I'm encouraged by the conversations we are having with various parties, including potential investors, about the company. With that, I will now turn the call back over to Nicole for our closing remarks.
Speaker Change: While conditions continued to be less than optimal for small cap companies I'm encouraged by the conversations we're having with various parties, including potential investors in both companies.
Speaker Change: With that I will now turn the call back over to Nicole for closing remarks.
Speaker Change: Nope.
Speaker Change: Yeah.
Speaker Change: Thank you Thorsten.
Nicole Sandford: Aspira remains steadfastly focused on its mission to improve health outcomes for millions of women while positioning itself for long-term success. We have the only blood test on the market for the accurate assessment of the risk of malignancy for all patients that have been diagnosed with an anexal mass, and we are leading the way in the development of non-invasive tests for endometriosis.
Speaker Change: I remain steadfastly focused on its mission to improve health outcomes for millions of women, while positioning ourselves for long term success.
Speaker Change: The only blood test on the market for the accurate assessment of the risk of malignancy for all patients that have been diagnosed within the next Omar.
Speaker Change: We are leading the way in the development of noninvasive tests for endometriosis.
Nicole Sandford: With the launch of the longitudinal monitoring feature of Overwatch Complete, and the return of volume growth at the end of the first quarter and into the start of the second quarter, I'm more bullish than ever about our ability to scale the business. Despite the ongoing challenges in the market, we have kept our promises to patients, physicians, and our shareholders to the best of our ability. Spirits in the company are high, and we remain deeply committed to realizing the opportunities in front of us. With that, I would like to open the call to questions. Operator.
Speaker Change: With the launch of the longitudinal monitoring feature of Overwatch complete the return to volume growth at the end of the first quarter and into the start of the second quarter I'm more bullish than ever about our ability to scale the business.
Speaker Change: The ongoing challenges in the market, we have kept our promise to patients physicians and our shareholders to the best of our ability.
Speaker Change: Spirits in the company are high and we remain deeply committed to realizing the opportunities in front of us.
Speaker Change: With that I'd like to open the call for questions.
Speaker Change: Operator.
Speaker Change: Thank you well now be conducting a question and answer session. If you'd like to ask a question. Please press star one on your telephone keypad. The confirmation tone will indicate your line is in the question queue.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 2.
Speaker Change: First start to if you'd like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star one.
Operator: One moment, please, while we poll for questions. Thank you. Our first question is from Ross Osborn with Cantor Fitzgerald. Please proceed with your question.
Speaker Change: One moment, please while we poll for questions.
Speaker Change: Thank you. Our first question is from Ross Osborne with Cantor Fitzgerald. Please proceed with your question.
Ross Everett Osborn: Hi, good morning, Congrats on the progress and thanks for taking my questions. So starting off would you remind us to the extent that Overwatch L. A more can't all boys the single monitoring offering.
Ross Everett Osborn: Hi, good morning. Congratulations on the progress. Thanks for taking our questions. So starting off, would you remind us to what extent Overwatch LM will cancel the single monitoring offering?
Speaker Change: Sure, So hey, Ross Thanks for joining.
Nicole Sandford: So, hey, Ross, thanks for joining us. It's really not a question of cannibalizing because this is extending the usage, so the single use test will continue to be, and again, just a reminder to all that this is an additional feature. The test itself hasn't changed, so it's the same test, okay, just to be perfectly clear. It's just a new feature that is supported by some pretty powerful clinical data that will encourage physicians to run the test multiple times for the same patient over time.
Speaker Change: It's really not a question of cannibalizing because this is extending the usage. So the single use past, we will continue to be and again just a reminder to all that this is an additional feature the pass itself hasn't changed so it's the same task, okay just to be perfectly clear.
Speaker Change: It's a new feature that is supported by some pretty powerful clinical data.
Speaker Change: We'll encourage physicians to run the test multiple times for the same patient over time. So that first test will still be the first test just like away and now the physicians will be will be encouraged or will be able to select.
Nicole Sandford: So that first test will still be the first test, just like always, and now physicians will be encouraged or will be able to select their own intervals for running additional tests. So this is a multiplier. It's not really a divider, let's say. Is that helpful?
Speaker Change: Their own intervals, we're running additional test. So this is a multiplier it's not really a divider, let's say that is that helpful.
Nicole Sandford: Volume, you mentioned March being the strongest month of the quarter, with momentum carrying into April. Would you just provide some more color on what's driving growth?
Speaker Change: Yes, understood and then moving on to our volume you mentioned March being the strongest month of the quarter would have been some carrying into April would you just provide some more color on what's driving growth.
Speaker Change: Yeah.
Speaker Change: Sure well a few things I think we've talked in the past about our commercial refresh.
Nicole Sandford: Well, a few things. I think we've talked in the past about our commercial refresh. We've completed most of that work at this time, and that included improving our messaging, providing additional tools to the team, and creating a new marketing team. We added some folks who were focused on driving pull-through with national accounts. We added some new people internally for inside sales. So there were a lot of different things that we did over the course of the last year to improve the performance of the team.
Speaker Change: <unk> completed most of that of that work at this time and that included.
Speaker Change: Improving our messaging, providing additional tools to the team and creating a new marketing team. We added some folks who are focused on driving pull through with national accounts. We added some new people internally for inside sales, though they were a lot of different things that we've done.
Speaker Change: Over the course of the last year, we will improve the performance of the team. We also added a few roles at in December. So we were close to a full team for for the majority of the first quarter. So we're really starting to see the momentum that we expected to see as a result of the changes that we made.
Nicole Sandford: We also added a few roles in December, so we were close to a full team for the majority of the first quarter. So we're really starting to see the momentum that we expected to see as a result of the changes that we made. So, you know, the downward trajectory in the second half of last year was a conscious decision to conserve cash by eliminating unprofitable territories while we refreshed the entire commercial team in preparation for the launch of the longitudinal monitoring test, which we believe is the largest opportunity for the company and the company's history, frankly, for growth.
Speaker Change: So you know that.
Speaker Change: The downward trajectory in the second half of last year was with a conscious decision to conserve cash by eliminating unprofitable territories, while we refreshed the entire commercial team.
Speaker Change: Team in preparation for the watch the longitudinal monitoring tests, which we believe is the largest opportunity for the company in the company's history frankly for us for growth.
Speaker Change: Great and then lastly for us on.
Nicole Sandford: Great, and then lastly for us, on the LDT proposal, are there any updates you'll need to do to your facilities to become compliant with VA oversight?
Speaker Change: L. D. T proposal are there any updates or needed due to your facilities to become compliant with it you have a site.
Speaker Change: It's a little early for us to be 100% clear on the provisions, but sandy anything you want to comment there.
Nicole Sandford: It's a little early for us to be 100% clear on the provisions, but Sandy, anything you want to comment on there?
Sally Ann Yanchus: Yes, certainly, I think there's some phase-in responsibilities that we will have, but I don't think it'll take any modifications to our already CLIA-certified facilities. So there are some expected responsibilities around labeling, documentation, but nothing extraordinary and nothing that we're not prepared to do already. Okay, great.
Sandy: Yes, certainly I think there's some phase in responsibilities that we will have but I don't think it will take any modifications to our already clear CLIA certified facilities. So there are some expected responsibilities around labeling documentation.
Sandy: But nothing extraordinary and nothing that we're not prepared to do already.
Speaker Change: Okay, great. Thanks for taking my questions.
Ross Everett Osborn: Okay, great. Thanks for taking our questions.
Ross: Thanks Ross.
Speaker Change: Thank you. Our next question is from Andrew Brachman with William Blair. Please proceed with your question.
Operator: Thank you. Our next question is from Andrew Brackmann with William Blair. Please proceed with your question.
Speaker Change: Hey, everyone. This is Maggie buoy on for Andrew today, maybe one just to start on Overwatch grows can you talk about how much of the growth in the quarter from Overwatch came from new accounts versus driving utilization in existing accounts and then while I can appreciate it is still early.
Andrew Frederick Brackmann: Hey everyone, this is Maggie Bowie on for Andrew today. Maybe one question just to start on Overwatch growth. Can you talk about how much of the growth in the quarter from Overwatch came from new accounts versus driving utilization in existing accounts? And then, while I can appreciate it's still early, what are you seeing in terms of new versus existing accounts with the recent longitudinal monitoring launch?
Speaker Change: Are you seeing in terms of new versus existing accounts with their recent longitudinal monitoring lunch.
Nike: Hey, Nike Thanks for joining Adele.
Nicole Sandford: Hey Maggie, thanks for joining us. I don't think we've ever talked about, or at least in recent history, we haven't talked about new versus existing physicians, so I'm not really prepared to give any additional color about that. And it is very early. In fact, it's less than a week since we launched the longitudinal monitoring application, so definitely too early to give too much color. But I want to tell you, though, this is, to me, an important development, not just for the fact of driving recurring revenue, but we think that the Overwatch Longitudinal Monitoring Test is going to help to create stickiness with our existing providers.
Speaker Change: I don't I don't think we've ever talked about or at least in recent history, we haven't talked about new versus existing physician. So I'm not really prepared to give any additional color about that and and it's it is very early in fact less than a week since we launched the longitudinal monitoring application so definitely too.
Speaker Change: Early to give too much color I wanted to tell you. Though this is this is to me is an important develop it development not just for the fact of driving recurring revenue, but we think that the overwatch longitudinal monitoring test is going to help to create stickiness with our existing providers are what.
Nicole Sandford: What's important is that we now have tests now that will be appropriate for assessing malignancy risk for every single patient that comes in the door with an anexal mask, and so it will just become part of the standard procedure that physicians use when they have a patient with an anexal mask. And having that continuous ability to monitor it is a big part of driving adoption. Doctors really like to see those patients back periodically. They will often have them come back and have a follow-up ultrasound. We believe over time, the ultrasound and the Overwatch test will be ordered at the same time for follow-up.
Speaker Change: Important is that we have tests now that will be appropriate for assessing malignancy rest for every single patient that comes in the door with an in Nashville math and so it will just become part of the standard procedure that physician views when they have a patient with international math and having that continue with our ability to.
Speaker Change: <unk> is a big part of driving adoption doctors.
Speaker Change: Really likes to see those patients back.
Speaker Change: Periodically they will often have them come back and Havent follow up ultrasound, we believe over time, the ultrasound and the Overwatch test will be ordered at the same time for the follow up.
Speaker Change: Okay, great. Thank you and then could you expand on the recent anthem update and then provide some more color on what you're expecting in terms of timing of potential coverage and contracts to come through.
Nicole Sandford: Okay, great. Thank you. And then could you expand on the recent Anthem update and then provide some more color on what you're expecting in terms of timing of potential coverage and contracts coming through?
Speaker Change: Sure.
Torsten Hombeck: Torsten, do you want me to cover that, or are you able to comment? Yeah, so
Speaker Change: And do you want do you want me to cover that or are you able to comment.
Torsten Hombeck: Yeah, so with Anthem, we signed the first agreement, which covered the Blue Crosses of California, which added approximately 6 million covered lives to our portfolio. We are in the process of credentialing with Anthem for additional territories, and we would expect the next step to be seen in the next few weeks.
Speaker Change: Yeah, So with anthem, we signed the first agreement, which covered the Blue Cross of California, which added approximately 6 million covered lives to our portfolio. We are in the process of credentialing with the anthem for.
Speaker Change: For additional territories and we would expect.
Speaker Change: The next step to be seen in the next few weeks.
Speaker Change: The plan there is to continue to add contracts Oh, sorry, Maggie so the plan will be to continue to add contracts. So the way. The anthem works is it really has to kind of go region by region.
Torsten Hombeck: The plan there is to continue to add contracts, oh, Maggie, so the plan will be to continue to add contracts. The way that Anthem works is you really have to kind of go region by region, contract by contract, but our plan is to do what we can to focus our energies on areas of the country where we have volumes so that we can get the most bang for the buck in terms of those additional contracts.
Maggie Buoy: Backed by contract, but our plan is to do what we can focus our energy on.
Maggie Buoy: Areas of the country, where we have volumes so that we can get the most bang for the Buck in terms of those those additional contracts, but one of the main keys that we we're credential now.
Torsten Hombeck: But one of the main keys is that we're credentialed now, and it's for the OVA suite, which is the first time that we've been able to say that we have credentialing and contracting for the entire suite versus a single test.
Maggie Buoy: And it's for over suite, which is which is the first time that we've been able to say that we have credentialing and contracting for the entire suite versus a single attack.
Maggie Buoy: Yeah.
Speaker Change: Makes sense. Thanks, so much for taking our questions today.
Andrew Frederick Brackmann: Make sense. Thanks so much for taking our questions today. Sure. Thanks, Meg.
Operator: Sure. Thanks, Maggie. Thanks, Maggie.
Sure. Thanks Maggie.
Speaker Change: Hi.
Speaker Change: As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.
Operator: As a reminder, if you would like to ask a question, please press star 1 on your telephone keypad. Our next question is from Doe Kim with Water Tower Research. Please proceed with your question. Hi, good morning.
Speaker Change: Our next question is from do Kim with water Tower Research. Please proceed with your question.
Speaker Change: Hi, good morning, Thanks for taking our questions.
Doe Kim: Thanks for taking our questions. First question: For the longitudinal monitoring of overwatch, how often or is there an expected frequency of repeat testing, optimal time between tests, or is it dependent on the patient? And does the reimbursement coverage have limitations in the number of tests?
Speaker Change: First question on <unk>.
Speaker Change: For the longitudinal monitoring Ah Overwatch.
Oh, Austin or is there an expected frequency of repeat testing.
Speaker Change: Optimal time between test or is it dependent on the patient and.
The reimbursement coverage have limitation in the number of customers.
Speaker Change: Hi, good morning, Thanks for the question.
Nicole Sandford: Good morning, though. Thanks for the question. So we made a very conscious decision not to prescribe a certain interval. What we found in our research was that individual physicians and healthcare providers have sort of their own judgments that they apply to how often they want to see those patients. We did see in the research that the most frequently selected interval was timed with an ultrasound, which was somewhere between three and six months.
Speaker Change: So we made a very conscious decision not to prescribe a certain interval, but we found in our research was that individual physicians and health care providers have sort of their own judgment that they apply to how often they wanted to see was patients. We did see in the research that.
Speaker Change: The most frequently.
Speaker Change: Selected interval was timed with a ultrasound, which was somewhere between three and six months or.
Nicole Sandford: So that's going to be up to the physician. Of course, a lot of things can change between that first draw. So, you know, we're gonna, we're going to continue to study, but doctors were very clear to us that they didn't want to be told how often they ought to be taking the test. They wanted that judgment to be in their hands as well. I'm sorry, Joe. Can you repeat the second part of your question?
Speaker Change: So that that's that's going to be up to the physician of course, a lot of things can change between that first draw. So you know we're going to we're going to continue to study, but doctors were very clear to us that they didn't want to be told how often they ought to be drawing the tests. They wanted that judgment to be in their hands.
Speaker Change: Well I'm sorry can you repeat the second part of your question.
Nicole Sandford: Are there any limitations from insurance payers on the frequency of the number of tests?
Speaker Change: Are there any limitations from insurance payers on the.
Speaker Change: The frequency or the number of testing lab.
Nicole Sandford: Oh, okay. No, we don't have anything in any of their existing contracts that would restrict that.
Speaker Change: Oh, Okay. No we don't have anything in any of their existing contracts that would restrict that.
Nicole Sandford: Okay, great. How do you plan to use these publications, and congratulations on getting those studies published as an effective marketing tool?
Speaker Change: Okay great.
Speaker Change: How do you plan to use these publication.
Speaker Change: And congrats on getting those studies published Oh.
Speaker Change: As an effective marketing tool.
Speaker Change: A few different ways, we've already trained the sales team on the the outcomes of the studies, we provided them with a with a summary of the study beyond the poll papers. They are out there talking to their existing ordering providers. We're also having our inside sales team.
Nicole Sandford: A few different ways. We've already trained the sales team on the outcomes of the studies. We've provided them with summaries of the studies and the full papers. They are out there talking to their existing ordering providers. We're also having our inside sales team reach out to physicians that have already used Overwatch to let them know that this feature is now available. So we're pretty aggressively going out there with that marketing side of things and also plan on hosting some virtual roundtables and KOL events.
Speaker Change: Reach out to physicians that have already used overwatch to let them know that this feature is now available.
Speaker Change: We're pretty aggressively going out there with that marketing side of things and and also plan on hosting some virtual round tables and kols events.
Speaker Change: Great.
Doe Kim: Great. And one last question, shifting over to endometriosis. Aspirin. Do you have any updated thoughts on how the diagnosis of endometriosis is improving, the level of undiagnosed patients still out there, and how much overlap is there between your over-sweeped marketing efforts, your sales force, versus the endometriosis population?
Speaker Change: And one last question shifting over to the.
Speaker Change: Endometriosis.
Speaker Change: Testing.
Speaker Change: Do you have any updated thoughts on how the diagnosis of endometriosis.
Speaker Change: The improving.
Speaker Change: Hum.
Speaker Change: And diagnose patients still out there and how much overlap is there between your oldest weeks.
Marketing efforts or your sales force.
Versus the endometrial.
Speaker Change: No materials this population.
Speaker Change: Yeah.
Nicole Sandford: I'll comment on that piece and then I'll ask Sandy if she has anything to add on the diagnosis landscape for endometriosis. The overlap is significant. Most of the physicians that we'll see Patients that have pelvic pain or sort of consistent symptoms with things that drive them to use an overwatch pack So, you know, it's the same physician typically a gynecologist and nurse practitioner Someone in a OBGYN office will be most likely to be the first to identify the potential for for all of these mass related and and pain driven disease diagnoses, And Sandy, you can comment, but I would say that without our test, there really hasn't been any major innovation that's helping women to be diagnosed with endometriosis sooner at this point.
Speaker Change: Well all I'll comment on that piece and then I'll ask Andy if she has anything to add on the day.
Andy: The diagnosis landscape.
Andy: For endometriosis just that the overlap is significant most of the physicians that will see pace.
Andy: Patients that have pelvic pain or sort of consistent symptoms with things that drive them to use and Overwatch Tac. So no. It's the same physician typically a gynecologist the nurse practitioner someone in our obgyn office will be most likely to be the first to identify the.
Andy: For for all of these mask related and and pain driven disease diagnoses.
Andy: And Sandy you can comment, but I would say that without our test.
Sandy: There really hasn't been any any major innovation, that's helping women to be diagnosed with endometriosis sooner at this point.
Sandy: Yes, I agree with you Nicole I think it's a great question I do think the one area that we've seen an uptake is the additional conversation and awareness I think that patients are more generally aware of what their symptomatology could be driving them to the physician's office and so you know hopefully overtime well see that that Stan.
Sally Ann Yanchus: Yes, I agree with you, Nicole. I think it's a great question.
Sally Ann Yanchus: I do think the one area that we've seen an uptake is additional conversation and awareness. So I think that patients are more generally aware of what their symptomatology could be driving them to the physician's office. And so, hopefully, over time, we'll see that that standard accepted figure of seven to 10 years of diagnosis starts to come down. However, as Nicole has pointed out, there isn't anything currently on the market, whether it's a diagnostic or an imaging study, that has been
Speaker Change: <unk> accepted figure of seven to 10 years of diagnosis starts to come down however, as Nikolas pointed out there isn't anything currently on the market, whether it's a diagnostic or in imaging study that has been qualified and certified or cleared for the diet.
Speaker Change: No sense of endometriosis, so as it stands the gold standard for the diagnosis of endometriosis is still an invasive laparoscopic surgery. So we're still.
Nikolas: Moving towards a better diagnostic capabilities and of course, we're hoping that we will remain a front runner in that area.
Nikolas: Yeah.
Nicole Sandford: I'll add one thing to that. Thank you, Sandy.
Sandy: All I'll add to that thank you Sandy do just.
Speaker Change: One thing that we did recently.
Speaker Change: And in our marketing team, we went out and we took a look at the social media footprint for endometriosis focused groups and particularly on Facebook and Instagram and we found a dozen that had literally thousands and we had more more than four or five that had more than 100000.
Speaker Change: Members. So you know this awareness.
Speaker Change: This is a really important part of our strategy when we rollout our first endometriosis test, there's a an aggressive pull from the market for a better diagnosis and endometriosis that I think could be incredibly valuable to us as we launch those tests.
Speaker Change: Absolutely agree we're excited about your progress.
Doe Kim: Absolutely agree. We're excited about your progress. Congratulations on the quarter, and thanks for taking our questions. Thank you, Joe. At this time, there are no further questions in the queue. I will now turn it back to Nicole Sandford for closing remarks.
Speaker Change: And thanks for taking our questions.
Joe: Thank you Joe.
Speaker Change: At this time there are no further questions in the queue I will now turn it back to the Nicole Sanford for closing remarks.
Nicole Sandford: Well. Thank you everyone for joining us today, and we look forward to continuing the progress of our execution and providing another update on our next quarterly earnings call. Thanks, everyone.
Nicole Sandford: Well, thank you, everyone, for joining us today. We look forward to continuing the progress of our execution and providing another update on our next quarterly earnings call. Thanks, everyone.
Nicole Sandford: This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Operator: This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.