Q2 2024 Sera Prognostics Inc Earnings Call

August 7, 2024

Speaker Change: Good afternoon and welcome to the Sera Prognostics conference call to review second quarter fiscal year 2024 results. At this time, all participants are in a listen-only mode.

Unknown Executive: At this time, all participants are in a lesson-only mood.

Unknown Executive: We will be facilitating a questioning answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes.

We will be facilitating a question and answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Peter DeNardo of Capcom Partners for a few introductory comments.

Peter Denardo: I would now like to turn a call over to Peter DeNardo of Capcom Partners for a few introductory comments.

Unknown Executive: Thank you, operator.

Evguenia Lindgardt: Good afternoon, everyone. Welcome to Sera Prognostics' second quarter fiscal year 2024 earnings conference call. At the close of the market today, Sera Prognostics released its financial results for the quarter ended June 30, 2024.

Peter Denardo: Thank you, operator. Good afternoon, everyone. Welcome to Sarah Prognostics' second quarter fiscal year 2024 earnings conference call.

Speaker Change: At the close of the market today, Sera Prognostics released its financial results.

Evguenia Lindgardt: Presenting for the company today will be Genia Lindgardt, President and CEO, and Austin Aerts, RCFO. During the call, we will review the financial results we released today; after which we will host a question-and-answer session. If you have not had a chance to review our quarterly earnings release, it could be found on our website, SeraPrognostics.com. This call can be heard live by a webcast at SeraPrognostics.com, and a recording will be archived in the investor's section of our website.

for the quarter ended June 30, 2024.

Speaker Change: Presenting for the company today will be Jenya Lindgardt, President and CEO , and Austin Aerts, our CFO .

Speaker Change: During the call, we will review the financial results we released today, after which we will host a question-and-answer session. If you have not had a chance to review our quarterly earnings release, it can be found on our website at seraprognostics.com.

Speaker Change: This call can be heard live via webcast at seraprognostics.com and a recording will be archived in the investors section of our website.

Unknown Executive: Please note that some of the information presented today may contain projections or other forward-looking statements about events and circumstances that have not yet occurred, including plans and projections for our business, future financial results, and market trends and opportunities. These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company follows from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K. It is quarterly reports on Form 10-K and its current reports on Form 8-K.

Speaker Change: Please note that some of the information presented today may contain projections or other forward-looking statements about events and circumstances that have not yet occurred, including plans and projections for our business, future financial results and market trends, and opportunities.

Speaker Change: These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons.

Speaker Change: We refer you to the documents the company follows from time to time with the Securities and Exchange Commission.

Speaker Change: Specifically, the company's annual report on Form 10-K , its quarterly reports on Form 10-Q , and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections and other forward-looking statements.

Unknown Executive: These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections and other forward-looking statements.

Unknown Executive: As a reminder, a webcast replay of this call will be available on the investor's section of our website.

Speaker Change: As a reminder, a webcast replay of this call will be available on the investors section of our website. I will now turn the call over to Eugenia, Sera Prognostics President and CEO . Eugenia?

Evguenia Lindgardt: So now turn the caller to Jenya, SeraPrognostics President and CEO.

Evguenia Lindgardt: Thank you so much, Peter, and good afternoon, everyone. We're pleased with our progress at this point in the year against our strategic goals towards positioning SeraFew for future growth in test volumes and revenue. As we shared last quarter, we've been focused on publication of our important Avert and Prime clinical study results, getting regulatory approvals for innovations we rolled out for our preterm test collection and processing methods, building awareness of our capabilities to help improve patient care and outcomes, and lastly improving overall access to our products through patient and physician education and rolling out the improved collection methods, all of which are important steps for building scalability.

Evguenia Lindgardt: Thank you so much, Peter, and good afternoon everyone. We're pleased with our progress at this point in the year against our strategic goals towards positioning Sera for future growth in test volumes and revenue. As we shared last quarter, we've been focused on publication of our important AVERT and PRIME clinical study results. One of these cornerstones we've recently celebrated completing was the publication of our positive abort preterm trial results in the international peer-reviewed journal Diagnostics, making the front cover of the July issue.

Evguenia Lindgardt: Thank you so much, Peter, and good afternoon, everyone. We're pleased with our progress at this point in the year against our strategic goals of positioning Sera for future growth in test volumes and revenue. As we shared last quarter, we've been focused on publication of our important AVERT and PRIME clinical study results. Getting regulatory approvals for innovations will be rolled out for our preterm test collection and processing method, building awareness of our capabilities to help improve patient care and outcomes. And lastly, improving overall access to our products through patient and physician education and rolling out improved collection methods, all of which are important steps for building scalability.

Eugenia: Thank you so much Peter and good afternoon everyone. We're pleased with our progress at this point in the year against our strategic goals towards positioning Sera for future growth in test volumes and revenue.

Speaker Change: As we shared last quarter, we've been focused on publication of our important AVERT and PRIME clinical study results.

Speaker Change: Getting regulatory approvals for innovations we rolled out for our preterm test collection and processing methods.

Speaker Change: building awareness of our capabilities to help improve patient care and outcomes, and lastly, improving overall access to our products through patient and physician education and rolling out the improved collection methods, all of which are important steps for building scalability.

Evguenia Lindgardt: We believe by executing these steps, we will achieve the prerequisites we've shared before that should be the key cornerstones for increasing adoption and overall recognition of Sera's unique capabilities, building payer coverage, fostering the development of care guidelines, facilitating revenue growth, and better profitability, and growing shareholder value. One of these cornerstones we've recently celebrated completing was the publication of our positive abort preterm trial results in the international peer-reviewed journal Diagnostics, which was on the front cover of the July issue.

Speaker Change: We believe by executing these steps...

Speaker Change: we will achieve the perrequisit we've shared before that should be the key cornerstones for increasing adoption and overall recognition of seras unique capabilities building payer coverage fostering development of care guidelines facilitating revenue growth and better profitability

Evguenia Lindgardt: One of these cornerstones we've recently celebrated completing was the publication of our positive Avert preterm trial results in the international peer-reviewed journal Diagnostics, making the front cover of the July issue. Publication illustrated that our preterm test and treat strategy demonstrates statistically and clinically significant improvement in neonatal health outcomes and hospital lengths of stay. Specifically, the results indicated for key findings. First, an 18% reduction in severe neonatal morbidity and mortality. A seven-day reduction in neonatal hospital length of stay for babies within the longest hospital stays. For those babies born before 32 weeks, the test and treat strategy led to increased average de-stational age at birth by 2.5 weeks and also at 28-day reduction in neonatal length of hospital stay.

Speaker Change: growing shareholder value.

Speaker Change: One of these cornerstones we've recently celebrated completing was the publication of our positive abort preterm trial results in the international peer-reviewed journal Diagnostics.

Evguenia Lindgardt: The publication illustrated that our preterm test and treat strategy demonstrates statistically and clinically significant improvement in neonatal health outcomes and hospital length of stay, all of which we are really excited by knowing that babies are born later and leave the hospital earlier and healthier. In publicizing such remarkable results, the manuscript also reported that neonatal morbidity and mortality and hospital and NICU length of stay were significantly reduced in the entire intent-to-treat population. Our test and treat strategy was associated with decreased odds of preterm birth and spontaneous birth at various gestational ages across and along with a reduction in NICU length of stay, but these were not planned to be analyzed in the interim dataset.

Evguenia Lindgardt: The publication illustrated that our preterm test and treat strategy demonstrates statistically and clinically significant improvement in neonatal health outcomes and hospital length of stay. Specifically, the results indicated four key findings. First, an 18% reduction in severe neonatal morbidity and mortality, and a seven-day reduction in mean neonatal hospital length of stay for babies within the longest hospital stays. For those babies born before 32 weeks, the Test and Treat strategy led to an increased average gestational age at birth by two and a half weeks, and also a 28-day reduction in neonatal length of hospital stay.

Speaker Change: making the front cover of the July issue. Publication illustrated that our pre-term test and treat strategy demonstrates statistically and clinically significant improvement in neonatal health outcomes and hospital length of stay.

Speaker Change: Specifically, the results indicated four key findings.

Speaker Change: First, an 18% reduction in severe neonatal morbidity and mortality.

Speaker Change: a seven-day reduction in neonatal hospital length of stay for babies within the longest hospital stays for those babies born before 32 weeks.

Speaker Change: The test-and-treat strategy led to increased average gestational age at birth by two and a half weeks, and also a 28-day reduction in neonatal length of hospital stay. The number of expectant mothers needed to be screened to save one NICU day is between three and four.

Evguenia Lindgardt: The number of expectant mothers needed to be screened to save one NICU day is between 3 and 4. All of which we are really excited by, knowing that babies are born later and leave the hospital earlier and healthier. In publicizing such remarkable results, the manuscript also reported the neonatal morbidity and mortality, and hospital and NICU length of stay were significantly reduced in the entire intended treat population. Our test and treat strategy was associated with decreased odds of preterm birth and spontaneous birth at various gestational ages across and along with a reduction in NICU length of stay.

Evguenia Lindgardt: The number of expectant mothers needed to be screened to save one NICU day is between three and four, and we are really excited by knowing that babies are born later and leave the hospital earlier and healthier.

Speaker Change: All of which we are really excited by knowing that babies are born later and leave the hospital earlier and healthier.

Evguenia Lindgardt: In publicizing such remarkable results, the manuscript also reported that neonatal morbidity and mortality and hospital and NICU length of stay were significantly reduced in the entire intent-to-treat population. Our test and treat strategy was associated with decreased odds of preterm birth and spontaneous birth at various gestational ages across and along with a reduction in NICU length of stay. I want to emphasize this key point.

Speaker Change: In publicizing such remarkable results, the manuscript also reported the neonatal morbidity and mortality and hospital and NICU length of stay were significantly reduced in the entire intent-to-treat population.

Speaker Change: Our test-and-treat strategy was associated with decreased odds of preterm birth and spontaneous birth at various gestational ages across and along with a reduction in NICU length of stay.

Evguenia Lindgardt: I want to emphasize this key point. Keep in mind that the Avert preterm trial results demonstrated that the health of babies can be improved in asymptomatic pregnant mothers without typical risk factors by a combination of biomarkers for spontaneous preterm birth risk and targeted interventions. So, not surprisingly, with the advent of diagnostics publication highlighting these results, we were also pleased that several publications such as Health News, Contemporary OBGYN, the number one red publication in the field for subsequently picked up the important Avert news. Coverage like this can heighten our visibility among the key stakeholders, such as payers, physicians, patients, guidelines-setting bodies, and the investment community.

Evguenia Lindgardt: Keep in mind that the AVERT preterm trial results demonstrated that the health of babies can be improved in asymptomatic pregnant mothers without typical risk factors by a combination of biomarkers for spontaneous preterm birth risk and targeted intervention. So, not surprisingly, with the advent of diagnostics publications highlighting these results, we were also pleased that several publications, such as Health News, Contemporary, OB-GYN, the number one read publication in this field, Forbes, subsequently picked up the important adverse news.

Speaker Change: I want to emphasize this key point. Keep in mind that the AVERT preterm trial results demonstrated that the health of babies can be improved in asymptomatic pregnant mothers without typical risk factors.

Speaker Change: by a combination of biomarkers for spontaneous preterm birth risk and targeted intervention.

Speaker Change: So, not surprisingly, with the advent of diagnostics publications highlighting these results, we were also pleased that several publications such as Health News, Contemporary OB-GYN, the number one read publication in this field, Forbes.

Evguenia Lindgardt: Coverage like this can heighten our visibility among key stakeholders, such as payers, physicians, patients, guideline-setting bodies, and the investment community. July was a good month for us because, shortly before this key overt news, we also celebrated Sera being added to the Russell 2000 and 3000 indices following the conclusion of the 2024 indices annual reconstitution, bringing additional investment firms and investor visibility to our company.

Speaker Change: subsequently picked up the important AVERT news. Coverage like this can heighten our visibility among the key stakeholders such as payers, physicians, patients, guideline-setting bodies, and the investment community.

Evguenia Lindgardt: July was a good month for us because shortly before this key avert news, we also celebrated Sarah being added to the Russell 2000 and 2000 indices following conclusion of the 2024 indices annual reconstitution, bringing additional investment firms and investor visibility to our company.

Speaker Change: July was a good month for us because shortly before this key evert news, we also celebrated Sera being added to the Russell 2000 and 3000 indices.

Speaker Change: following conclusion of the 2024 Indices Annual Reconstitution, bringing additional investment firms and investor visibility to our company.

Evguenia Lindgardt: I'd like to give some insights into the publication process for the Prime study and what we've been up to since we announced stoppage of the trial for efficacy in December 2023. In Q2, we initiated submission of a manuscript reporting the interim results with a very prestigious journal. The results were strong, and the reviewers underscored the importance of data that we were expected to bring in the full print study data set, which is expected to be available next month, but were not planned to be analyzed in the interim data set. As such, we've decided to work on manuscripts for each of these data sets and target one or more publications that maximize the impact of the results for adoption of preterm test.

Evguenia Lindgardt: I'd like to give some insights into the publication process for the PRIME study and what we've been up to since we announced the stoppage of the trial for efficacy in December 2023. In Q2, we initiated submission of a manuscript reporting the interim results to a very prestigious journal. The results were strong, and the reviewers underscored the importance of data that we were expected to bring in the full-print study data set, which is expected to be available next month, but were not planned to be analyzed in the interim dataset.

Speaker Change: I'd like to give some insights into the publication process for the PRIME study and what we've been up to since we announced stoppage of the trials for efficacy in December 2023.

Speaker Change: In Q2, we initiated submission of a manuscript reporting the interim results with a very prestigious journal. The results were strong, and the reviewers underscored the importance of data that we were expected to bring in the full-print study dataset, which is expected to be available next month.

Austin Aerts: As such, we've decided to work on manuscripts for each of these datasets and target one or more publications that maximize the impact of the results for adoption of preterm tests. I'm also pleased to share that just a couple of weeks ago, we received conditional approval from New York State for our preterm test utilizing this new collection method. This is inclusive of our direct outreach and well-defined digital marketing programs to build awareness among physicians, patients, and payers.

Evguenia Lindgardt: As such, we've decided to work on manuscripts for each of these datasets and target one or more publications that maximize the impact of the results for adoption of preterm tests. Should the results be ready in time and if a manuscript is accepted, we may seek publication in connection with the key pregnancy and maternal health conferences in Spring 2025. As a reminder, this timeline enabled by closing the study early due to the interim look success is still up to one year earlier than if we had continued the study as originally planned.

Speaker Change: but were not planned to be analyzed in the interim data set. As such, we've decided to work on manuscripts for each of these data sets and target one or more publications that maximize the impact of the results for adoption of preterm tests.

Evguenia Lindgardt: Should the results be ready in time, and if the manuscript is accepted, we may seek publication in connection with a key pregnancy and maternal health conference in spring 2025. As a reminder, the timeline enabled by closing the study early due to the interim look success is still up to one year earlier than if we had continued the study as a regional aid plan. With our solid Aerts results being published and the prime results pending, we are actively engaging with guideline-setting bodies to help them develop care guidelines that leverage our study findings for improved pregnancy outcomes.

Speaker Change: Should the results be ready in time and if a manuscript is accepted, we may seek publication in connection with the key pregnancy and maternal health conferences in Spring 2025.

Speaker Change: As a reminder, this timeline enabled by closing the study early due to the interim look success is still up to one year earlier than if we had continued the study as originally planned.

Evguenia Lindgardt: With our solid AVERT results being published and the PRIME results pending, we're actively engaging with guideline-setting bodies to help them develop care guidelines that leverage our study findings for improved pregnancy outcomes. We believe that publication of AVERT and PRIME will further promote the benefits of our test and treat strategy, and that, coupled with the establishment of care guidelines, should support broad and fair coverage and patient and physician adoption. With that, we definitely will need to ensure we have suitably broadened availability of our tests and our ability to scale to process higher test volumes once that occurs.

Speaker Change: with our solid avert results being published and the prime results pending we are actively engaging with guidelines setting bodies to help them develop care guidelines that leverage our study findings for improved prgancy outcomes

Evguenia Lindgardt: We believe that publication of Aert and Prime will further promote the benefits of our test and tweet strategy, and that coupled with establishment of care guidelines should support broad and fair coverage and patient and physician adoption. With that, we definitely will need to ensure we have suitably broadened availability of our test and our ability to scale in processing higher test volumes once that occurs. In our last call, we announced that the first kits enabling Indian whole blood collection were shipped to customers, and we're happy to announce that since that time, we've begun receiving commercial samples from those kits and processing them in our lab.

Speaker Change: We believe that publication of AVERT and PRIME will further promote the benefits of our test-and-treat strategy and that, coupled with establishment of care guidelines, should support broad and fair coverage and patient and physician adoption.

Speaker Change: With that, we definitely will need to ensure we have suitably broadened availability of our tests and our ability to scale in processing higher test volumes once that occurs.

Evguenia Lindgardt: In our last call, we announced that the first kits enabling ambient whole blood collection were shipped to customers, and we're happy to announce that since that time, we've begun receiving commercial samples from those kits and processing them in our lab. We're extremely excited about the benefits of those kits, namely improved physician and patient access to our test, significantly lower cost of goods, and significantly increased lab capacity, all of which enhance the scalability of our product and improve the unit economics of our business in anticipation of an inflection point in our commercial success.

Speaker Change: In our last call, we announced that the first kits enabling ambient whole blood collection were shipped to customers, and we're happy to announce that since that time, we've begun receiving commercial samples from those kits and processing them in our lab.

Evguenia Lindgardt: We're extremely excited about the benefits of those kits, namely improved physician and patient access to our test, significantly lower cost of goods, and significantly increased lab capacity, all of which enhance the scalability of our product and improve the economics of our business in anticipation of an inflection point in our commercial success.

Speaker Change: We're extremely excited about the benefits of those kits, namely improved physician and patient access to our test.

Speaker Change: significantly lower cost of goods, and significantly increased lab capacity, all of which enhance the scalability of our product and improve the unit economics of our business in anticipation of an inflection point in our commercial success.

Evguenia Lindgardt: I'm also pleased to share that just a couple of weeks ago, we received conditional approval from the New York State for our preterm test utilizing this new collection method. This allows us to offer the new, simpler, dry blood collection method in addition to our previously available dried serum option to all customers nationwide, and is an important validation of the quality and regulatory rigor of our testing.

Evguenia Lindgardt: I'm also pleased to share that just a couple of weeks ago, we received conditional approval from New York State for our preterm test using this new collection method. This allows us to offer the new, simpler dry blood collection method, in addition to our previously available dried serum option, to all customers nationwide, and is an important validation of the quality and regulatory rigor of our testing.

Speaker Change: I'm also pleased to share that just a couple of weeks ago, we received conditional approval from the New York State for our preterm test utilizing this new collection method.

Speaker Change: This allows us to offer the new, simpler dry blood collection method in addition to our previously available dried serum option to all customers nationwide, and is an important validation of the quality and regulatory rigor of our testing.

Evguenia Lindgardt: In terms of commercial development and strategy, we're focused on several cost-effective means of educating physicians regarding the benefits of preterm and developing inroads for care management. This is inclusive of our direct outreach and well-defined digital marketing programs to build awareness across physicians, patients, and peers. First, we've partnered with a leading professional medical network and digital marketing platform to promote and avert Test and Treat educational campaign. This is the leading platform for United States medical professionals with more than 80 percent of U.S. doctors and 50 percent of nurse practitioners and physician assistants as members. We have provided the platform key information about Avert to enable it to develop and utilize a well-articulated educational program to target members of its user base.

Evguenia Lindgardt: In terms of commercial development and strategy, we're focused on several cost-effective means of educating physicians regarding the benefits of preterm care and developing inroads for care management. This is inclusive of our direct outreach and well-defined digital marketing programs to build awareness across physicians, patients, and payers. First, we've partnered with a leading professional medical network and digital marketing platform to promote and avoid test-and-treat educational campaigns. This is the leading platform for United States medical professionals, with more than 80% of U.S. doctors and 50% of nurse practitioners and physician assistants as members. We have provided the platform with key information about AVERT to enable it to develop and utilize a well-articulated educational program for targeted members of its user base.

Speaker Change: in terms of commercial development and strategy we're focused on several cost-effective means of educating physicians regarding the benefits of pre-term and developing in roads for hear management

Speaker Change: This is inclusive of our direct outreach and well-defined digital marketing programs to build awareness across physicians, patients, and payers.

Austin Aerts: First, we've partnered with a leading professional medical network and digital marketing platform to promote and avoid test-and-treat educational campaigns. We have provided the platform with key information about AVERT to enable it to develop and utilize a well-articulated educational program to targeted members of its user base. Coupled with that campaign, we've also been executing a direct physician multi-channel education program. This includes direct outreach to current customers about the ease of our whole blood collection kits and converting them to that more cost-effective test collection process, which is expected to expand availability and our test profit margins over time.

Speaker Change: First, we've partnered with a leading professional medical network and digital marketing platform to promote and avert Test and Treat educational campaign.

Speaker Change: this is the leading platform for united states medical professionals with more than eighty percent of u s doctors and fifty percent of nurse peitioners and physician assistance as members

Speaker Change: We have provided the platform key information about AERT to enable it to develop and utilize a well-articulated educational program to targeted members of its user base.

Evguenia Lindgardt: Approximately 22,000 healthcare practitioners have been targeted to date, with final campaign results showing a high level of what they classify as deep engagement, with 23.4% of targets deeply engaged. These results are rather encouraging and illustrate the significant need for better care information that AVERT can support. Coupled with that campaign, we've also been executing a direct physician multi-channel education program. This includes direct outreach to current customers about the ease of our whole blood collection kits and converting them to that more cost-effective test collection process, which is expected to expand availability and our test profit margins over time.

Evguenia Lindgardt: Approximately 22,000 healthcare practitioners have been targeted to date, with final campaign results showing the high level of what they classify as deep engagement, with 23.4 percent of targets deeply engaged. These results are rather encouraging and illustrate the significant need for better care information that Avert can support.

Speaker Change: Approximately 22,000 healthcare practitioners have been targeted to date with final campaign results showing a high level of what they classify as deep engagement with 23.4% of targets deeply engaged.

Speaker Change: These results are rather encouraging and illustrate the significant need for better care information that AVERT can support.

Evguenia Lindgardt: Coupled with that campaign, we've also been executing a direct physician multi-channel education program. This includes direct outreach to current customers about the ease of our blood, whole blood collection kits and converting them to that more cost effective test collection process, which is expected to expand availability and our test process margins over time. We are also developing social media and email campaigns to broaden awareness and eventually enable electronic ordering of free-term kits, which will allow patients the benefit of collecting blood with a simple fingerprint at home without having to go to a full bottle. The availability of these new kits is also allowing us to explore the ability to target and eventually penetrate certain US states that have a high rate of preterm birth where patients' maternity health care needs may be underserved.

Speaker Change: Coupled with that campaign, we've also been executing a direct physician multi-channel education program. This includes direct outreach to current customers about the ease of our whole blood collection kits.

Speaker Change: and converting them to that more cost-effective test collection process, which is expected to expand availability and our test profit margins over time.

Evguenia Lindgardt: We are also developing social media and email campaigns to broaden awareness and eventually enable electronic ordering of preterm kits, which will allow patients the benefit of collecting blood with a simple fingerprick at home without having to go to a phlebotomy.

Speaker Change: We are also developing social media and email campaigns to broaden awareness and eventually enable electronic ordering of preterm kits, which will allow patients the benefit of collecting blood with a simple finger prick at home without having to go to a phlebotomist.

Evguenia Lindgardt: The availability of these new kits is also allowing us to explore the ability to target and eventually penetrate certain U.S. states that have a high rate of preterm birth where patients' maternity health care needs may be underserved. We plan to share more on this initiative later once certain agreements are in place. Further to the physician education campaigns I discussed a moment ago, we're also looking forward to the airing and distribution of our planned TV programs, Viewpoint with Dennis Quaid and Empowered with Meg Ryan.

Speaker Change: The availability of these new kits is also allowing us to explore the ability to target and eventually penetrate certain U.S. states that have a high rate of preterm birth where patients' maternity health care needs may be underserved. We plan to share more on this initiative later once certain agreements are in place.

Austin Aerts: We plan to share more on this initiative later once certain agreements are in place. We anticipate that just before year-end, these cost-effective programs in documentary format will be distributed to public television stations in all 50 states, and short commercial segments featuring Sera are also expected to be broadcast during primetime in over 84 million homes via MSNBC, CNBC, CNN, or similar networks. This will broadly support our goal of informing the public about our test-and-treat offering and how it can support improved pregnancy outcomes.

Speaker Change: Further to the physician education campaigns I discussed a moment ago, we're also looking forward to the airing and distribution of our planned TV programs Viewpoint with Dennis Quaid and Empowered with Meg Ryan.

Evguenia Lindgardt: We anticipate that just before year and these cost effective programs in documentary format will be distributed to public television stations in all 50 states, and short commercial segments featuring Sera are also expected to be broadcast during primetime in over 84 million homes via MSNBC, CNBC, CNN or similar networks. This will broadly support our goal of informing the public about our test and treat offering and how it can support improved pregnancy outcomes.

Evguenia Lindgardt: We anticipate that just before year-end, these cost-effective programs in documentary format will be distributed to public television stations in all 50 states, and short commercial segments featuring Sera are also expected to be broadcast during primetime in over 84 million homes via MSNBC, CNBC, CNN, or similar networks.

Speaker Change: We anticipate that just before year-end, these cost-effective programs in documentary format will be distributed to public television stations in all 50 states.

Speaker Change: and short commercial segments featuring Sera are also expected to be broadcast during prime time in over 84 million homes via MSNBC, CNBC, CNN or similar networks.

Evguenia Lindgardt: This will broadly support our goal of informing the public about our test-and-treat offering and how it can support improved pregnancy outcomes. To leverage our latest data, we've updated the economic model, showing the preterm value proposition to payers. We've retained a specialist consulting firm to help us communicate the strength of our offering to payers across the country.

Speaker Change: This will broadly support our goal of informing the public about our test-and-treat offering and how it can support improved pregnancy outcomes.

Evguenia Lindgardt: To leverage our latest data, we have updated the economic model showing the preterm value proposition to payers. We've retained a specialist consulting firm to help us communicate the strengths of our offering to payers across the country. This is the leading market access platform and advisory firm for a number by a form of diagnostic and medical device companies and providing the capability across a wide range of coverage and reimbursement issues from pricing and distribution to patient support services. Their insights will help inform our strategy to cost effectively for the penetrate the market we serve while deploying our capital in a carefully targeted manner best suited to harness the most bang for the buck in growing preterm adoption.

Speaker Change: To leverage our latest data, we've updated the economic model showing the preterm value proposition to payers. We've retained a specialist consulting firm to help us communicate the strength of our offering to payers across the country.

Evguenia Lindgardt: This is a leading market access platform and advisory firm for a number of biopharma, diagnostic, and medical device companies, and it provides unique capabilities across a wide range of coverage and reimbursement issues, from pricing and distribution to patient support services. Their insights will help inform our strategy to cost-effectively further penetrate the market we serve while deploying our capital in a carefully targeted manner best suited to harness the most bang for the buck in growing preterm adoption.

Speaker Change: this is a leading market access platform and advisory refirm for a number of b phma diagnostic and medical device companies and providing new capability to across a wide range of coverage and reimbursement issues

Austin Aerts: from pricing and distribution to patient support services. Their insights will help inform our strategy to cost-effectively further penetrate the market we serve while deploying our capital in a carefully targeted manner best suited to harness the most bang-for-the-buck in growing preterm adoption.

Evguenia Lindgardt: We believe this multi-prong approach towards building awareness and options through highly targeted and cost effective channels will afford us many shots and goals throughout our business over time.

Evguenia Lindgardt: We believe this multi-pronged approach towards building awareness and adoption through highly targeted and cost-effective channels will afford us many shots at goal to grow our business over time. In conclusion, we're delighted to have published our BERT study results and look forward to executing an additional cornerstone in the development of our company growth once we achieve publication of our pivotal prime study. We still have lots of work to do this year, but step by step, we're achieving one by one all of the necessary prerequisites to drive a step change in our revenue trajectory in 2025 and beyond.

Speaker Change: we believe this multi-prong approach towards building awareness adoptions through highly targeted and cost-effective channels will afford us many shuts on goals throughgrow our business over time

Evguenia Lindgardt: In conclusion, we're delighted to have published our bird study results and look forward to executing an additional cornerstone in the development of our company growth once we achieve publication of our pivotal prime study. We still have lots of work to do this year, but step by step, we're achieving one by one all of the necessary prerequisites to drive a step change in our revenue trajectory in 2025 and beyond.

Austin Aerts: In conclusion, we're delighted to have published our BERT study results and look forward to executing an additional cornerstone in the development of our company growth once we achieve publication of our pivotal prime study. Now, let me turn it over to Austin for a finance update.

Austin Aerts: In conclusion, we're delighted to have published our BERT study results and look forward to executing an additional cornerstone in development of our company growth once we achieve publication of our pivotal PRIME study.

Austin Aerts: We still have lots of work to do this year, but step-by-step, we're achieving one-by-one all of the necessary prerequisites to drive a step change in our revenue trajectory in 2025 and beyond.

Evguenia Lindgardt: While we haven't given you a deeper update on our new products and will do so in our next call, we did want to mention we're making great progress and are also testing our predictive analytics product and are getting ready to share data on time to birth product prior to its launch.

Evguenia Lindgardt: While we haven't given you a deeper update on our new products, and we'll do so in our next call, but I did want to mention we're making great progress and are alpha testing our predictive analytics product and are getting ready to share data on our time-to-birth product prior to its launch. Now, let me turn it over to Austin for a finance update.

Austin Aerts: While we haven't given you a deeper update on our new products, and will do so in our next call, but did want to mention we're making great progress and are alpha testing our Predictive Analytics product and are getting ready to share data on Time-to-Birth product prior to its launch.

Austin Aerts: Now let me trade over to Austin for a finance update.

Austin Aerts: Now, let me turn it over to Austin for a finance update.

Austin Aerts: Thanks, Evguenia, and good afternoon, everyone. Let me review our financial results for the quarter and also briefly review our thinking around managing operating expenses and ensuring we have the continued balance sheet strength to achieve our future revenue goals. Net revenue for the second quarter of 2024 was $24,000, compared to $123,000 in the second quarter of 2023. As noted last quarter, this revenue level is consistent with our carefully optimized investment in commercial activities, while we focus on the prerequisites we need to have in place prior to any commercial expansion that could accelerate test volumes in 2025 and beyond.

Operator: Thanks, Evguenia, and good afternoon, everyone. In the first half of 2024, we continue to manage our cash toward what we believe are the best investments that could optimize revenue growth over time. With that in mind, total operating expenses for the second quarter of $9.3 million were down 20% from $11.6 million for the same period a year ago. The net loss for the second quarter of 2024 was $8.3 million, down 21% from $10.5 million for the second quarter of 2023.

Austin Aerts: Thanks, Danielle.

Austin Aerts: Good afternoon, everyone. Let me review our financial results with a quarter and also briefly review our thinking around managing operating expenses and ensuring we have the continued balance sheet strength to achieve our future revenue goals. Net revenue for the second quarter of 2024 was $24,000 compared to $123,000 in the second quarter of 2023. As noted last quarter, this revenue level is consistent with our carefully optimized investment in commercial activities. While we focus on the prerequisites, we need to have in place prior to any commercial expansion that could accelerate test volumes in 2025 and beyond. In the first half of 2024, we continue to manage our cash toward what we believe are the best investments that could optimize revenue growth over time.

Operator: Thanks Evguenia, and good afternoon everyone.

Operator: Let me review our financial results for the quarter and also briefly review our thinking around managing operating expenses and ensuring we have the continued balance sheet strength to achieve our future revenue goals.

Operator: Net revenue for the second quarter of 2024 was $24,000 compared to $123,000 in the second quarter of 2023.

Operator: As noted last quarter, this revenue level is consistent with our carefully optimized investment in commercial activities, while we focus on the prerequisites we need to have in place prior to any commercial expansion that could accelerate test volumes in 2025 and beyond.

Austin Aerts: In the first half of 2024, we continue to manage our cash toward what we believe are the best investments that could optimize revenue growth over time. We have exercised careful expense management following the right sizing of our cost structure last year as we have focused on building our evidence portfolio and accomplishing the other key prerequisites to success. With that in mind, total operating expenses for the second quarter of $9.3 million were down 20% from $11.6 million for the same period a year ago.

Operator: In the first half of 2024, we continued to manage our cash toward what we believe are the best investments that could optimize revenue growth over time.

Austin Aerts: We have exercised careful expense management following the right sizing of our cost structure last year as we have focused on building our evidence portfolio and accomplishing the other key prerequisites to success. With that in mind, total operating expenses for the second quarter of 9.3 million dollars were down 20% from 11.6 million dollars for the same period a year ago. Research and development expenses were 4.4 million dollars and up about 19% from 3.7 million dollars for the second quarter of 2023 due primarily to product development costs. Selling general administrative expenses for the second quarter were 4.9 million dollars and down 38% from 7.8 million dollars for the same period a year ago.

Operator: We have exercised careful expense management following the right sizing of our cost structure last year as we have focused on building our evidence portfolio and accomplishing the other key prerequisites to success.

Operator: With that in mind...

Operator: Total operating expenses for the second quarter of $9.3 million were down 20% from $11.6 million for the same period a year ago.

Austin Aerts: Net loss for the second quarter of 2024 was $8.3 million, down 21% from $10.5 million for the second quarter of 2023. Research and development expenses were $4.4 million, and up about 19% from $3.7 million for the second quarter of 2023, due primarily to product development costs. Selling general administrative expenses for the second quarter were $4.9 million, and down 38% from $7.8 million for the same period a year ago, again as a result of our efforts to reduce expenses while managing toward revenue growth in the future.

Operator: Net loss for the second quarter of 2024 was $8.3 million, down 21% from $10.5 million for the second quarter of 2023.

Operator: Research and development expenses were $4.4 million and up about 19% from $3.7 million for the second quarter of 2023, due primarily to product development costs.

Operator: Selling general administrative expenses for the second quarter were $4.9 million, and down 38% from $7.8 million for the same period a year ago, again, as a result of our efforts to reduce expenses while managing toward revenue growth in the future. As previously stated, we have budgeted cash operating expenses of around $26 million in 2024, and our current gross burn rate is still less than that on an annualized basis. As we've stated before, we believe that our cash will last us well into 2027.

Operator: Selling general administrative expenses for the second quarter were $4.9 million and down 38% from $7.8 million for the same period a year ago, again as a result of our efforts to reduce expenses while managing toward revenue growth in the future.

Austin Aerts: Again, as a result of our efforts to reduce expenses while managing toward revenue growth in the future. Looking ahead, we will continue to exercise strong fiduciary management of our expenses, protecting our strong cash position while also beginning to invest in suitable commercial opportunities that may result from achieving the prerequisites that are expected to drive revenue, such as study publications and improved market awareness of preacher. As of June 30, 2024, the company had cash, cash equivalents, and available-for-sale securities of approximately 80.9 million dollars. As previously stated, we have budgeted cash operating expenses of around 26 million dollars in 2024, and our current growth burn rate is still less than that on an annualized basis.

Operator: Looking ahead, we will continue to exercise strong fiduciary management of our expenses, protecting our strong cash position, while also beginning to invest in suitable commercial opportunities that may result from achieving the prerequisites that are expected to drive revenue, such as study publications and improved market awareness of preterms. As of June 30, 2024, the company will have cash, cash equivalents, and available for sale securities of approximately $80.9 million. As previously stated, we have budgeted cash operating expenses of around $26 million in 2024, and our current gross burn rate is still less than that on an annualized basis.

Operator: that may result from achieving the prerequisites that are expected to drive revenue, such as steady publications and improved market awareness of preterm.

Operator: As of June 30, 2024, the company had cash, cash equivalents, and available-for-sale securities of approximately $80.9 million.

Operator: as previously stated we have budgeted cash operating expenses of around twenty-six million dollars in two thousand andtwenty four and our current gross burnid is still less than that on an annualized basis

Austin Aerts: As we've stated before, we believe that our cash will last us well into 2027. We do not have a near-term need to raise capital given the current length of our runway. We also understand the uncertainties of the current and future capital markets environment.

Operator: As we've stated before, we believe that our cash will last us well into 2027. We do not have a near-term need to raise capital given the current length of our runway. We also understand the uncertainties of the current and future capital markets environment. So to maximize our flexibility regarding cash and simply as a matter of good corporate housekeeping, today we have filed an S3 registration statement and entered into an at-the-market or ATM sales agreement with TD Calendar. It should be noted that this is the first regular filing date where the company has been eligible to file the S3. Operator, we can now open the call for questions.

Operator: As we've stated before, we believe that our cash will last us well into 2027.

Operator: We do not have a near-term need to raise capital given the current length of our runway.

Operator: We also understand the uncertainties of the current and future capital markets environment. It should be noted that this is the first regular filing date where the company has been eligible to file the S3. Operator, we can now please open the call for questions.

Operator: We also understand the uncertainties of the current and future capital markets environment. So to maximize our flexibility regarding cash and simply as a matter of good corporate housekeeping, today we have filed an S3 registration statement and entered into an at-the-market or ATM sales agreement with TD Cowen.

Austin Aerts: So to maximize our flexibility regarding cash and simply as a matter of good corporate housekeeping, today we have filed an S-3 registration statement and entered into an at-the-market or ATM sales agreement with TD Cowan. It should be noted that this is the first regular filing date where the company has been eligible to file the S-3.

Operator: It should be noted that this is the first regular filing date where the company has been eligible to file the S-III.

Unknown Executive: Operator, we can now please open the call for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press the star followed by the one on your touchstone phone. You will hear a prompt that your hand has been raised. Us just will be taken in the order received. Should you wish to cancel your request, please press the star followed by the two. If you are using a speaker phone, please lift a handset before pressing any case. Once again, that a star wants you to wish to ask a question.

Speaker Change: operator we can now please open the callfor question

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the 1 on your touchtone phone. You will hear a prompt that your hand has been raised. Us will be taken in the order we are given. Should you wish to cancel your request, please press the star followed by the. If you are using a speakerphone, please lift the handset before pressing any key.

Speaker Change: brhal ladies and gentlemen we will now begin to question answer session should you have a question please press a store followed by the one under touch don' bound you will be a prompt that your hand has been raised 's just will be taken in order received

Operator: Should you wish to cancel your request, please press the star followed by the. Once again, that is star one should you wish to ask a question.

Operator: Should you wish to cancel your request, please press the star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys.

Operator: Once again, that is stage one should you wish to ask a question. Your first question is from Andrew Brackmann from Merlin Blair. Please ask your question.

Andrew Brackmann: Your first question is from Andrew Brackman from William Blair; please ask your question.

Speaker Change: Once again, that is STAAR. I want you to re-staff a question.

Speaker Change: Your first question is from Andrew Brackmann from Roland Blair. Please ask your question.

Unnamed Questioner: Hi, good afternoon. Thanks for taking the questions. First, just congrats on publishing the AVERT results. That's exciting to see. But maybe can you just sort of talk about some of the feedback that you've received across the different stakeholder groups following that publication? And just how are you sort of thinking about including this feedback in your discussions with payers, guideline bodies, and any commercial opportunities going forward? Thanks.

Evguenia Lindgardt: Hi, good afternoon. Thanks for taking the question. First, just congrats on publishing the overt results. That's exciting to see. But maybe can you just sort of talk about some of the feedback that you've received across the different stakeholder groups following that publication? And just how are you sort of thinking about including this feedback in your discussion with payers, guideline bodies, any commercial opportunities going forward? Thanks.

Andrew Brackmann: Hi, good afternoon. Thanks for taking the questions. First, just congrats on publishing the AVERT results. That's exciting to see. But maybe can you just sort of talk about some of the feedback that you've received across the different stakeholder groups following that publication? And just how are you sort of thinking about including this feedback in your discussions with payers, guideline bodies, and any commercial opportunities going forward? Thanks.

Unnamed Questioner: Hi, good afternoon. Thanks for taking the questions.

Unnamed Questioner: First, just congrats on publishing the AVERT results. That's exciting to see.

Unnamed Questioner: but maybe can you just sort of talk about some of the feedback that you've received across the differentce stkeholder groups following that publication and just how are you start for of thing about including this feedback in your discussion with payers guideline bodies any commercial opportunities going forward thanks

Evguenia Lindgardt: Andrew, thank you so much for the question. We are excited and received very positive reaction from stakeholders across the KOLP and guideline setting body communities. The payer community was most excited to see the data that came out of Avert that shows the economic benefit as well as clinical benefit in NICU day savings. I highlighted it in my prepared remarks that to save one NICU day from the data that we see, the number of expected mothers that are needed to be screened is only three to four. Which means that at the current cost of a NICU day in the United States, which ranges pretty widely depending on the level of the NICU between 4,000 per day to up to 20,000 per day, makes it really easy for the payers to realize significant savings by deploying the preterm test and treat strategy within the six months of deploying the test and the expenditure.

Evguenia Lindgardt: Andrew, thank you so much for the question. We are excited and received very positive reaction from stakeholders across the KOL, PAYA, and guideline-setting body communities. The PAYA community was most excited to see the data that came out of AVERT that shows the economic benefit as well as clinical benefit in NICU day savings. I highlighted it in my prepared remarks that to save one NICU day from the data that we see, the number of expectant mothers that are needed to be screened is only 3 to 4, which means that at the current cost of a NICU day in the United States, which ranges pretty widely depending on the level of the NICU, between $4,000 per day to up to $20,000 per day, makes it really easy for the payers to realize significant savings by deploying the Pre-Term Test and Treat strategy within the six months of deploying the test and the expenditure.

Speaker Change: Andrew, thank you so much for the question. We are excited and received very positive reaction from stakeholders across the KOL, PEA, and guideline-setting body communities.

Speaker Change: the paer community was most excited to see the data that came out of avert that shows the economic benefit as well as clinical benefit in nicu day savings

Speaker Change: I highlighted it in my prepared remarks that

Speaker Change: To save one NICU day from the data that we see, the number of expectant mothers that are needed to be screened is only three to four.

Speaker Change: which means that at the current...

Speaker Change: cost of a nqu day in the united states which ranges pretty widelydepending on the level of the nicu between four thousand per day to up to twenty thousand per day makes it really easy for the payers to realize significant savings

Speaker Change: by deploying the Pre-Term Test-and-Treat strategy within the six months.

Evguenia Lindgardt: So that has been really heartening, and we are engaging with more and more payers this fall to showcase the updated economic models on the basis of AVERT data. I will be happy to report more at the next quarterly conference as these conversations continue.

Evguenia Lindgardt: So that has been really heartening, and we are engaging with more and more payers this fall to showcase the updated economic models on the basis of our data.

Speaker Change: of deploying the test and the expenditure. So, that has been really heartening, and we are engaging with more and more payers this fall to showcase the updated economic models on the basis of our data.

Andrew Brackmann: I'm happy to report more in the next quarterly conference as these conversations continue. Perfect, thanks for that.

Evguenia Lindgardt: I will be happy to report more at the next quarterly conference as these conversations continue.

Evguenia Lindgardt: Happy to report more in the next quarterly conference as these conversations continue.

Andrew Brackmann: And then maybe as my follow-up, just on the infrastructure and the organization as a whole, you know, as you're working towards what's this hopeful inflection in volumes and revenue and 25 and beyond, can you just sort of talk about maybe some areas of the organization where you might feel the desire to invest a little bit more ahead of that inflection? Any specific needs or color that you want to provide there? Thanks.

Evguenia Lindgardt: And then maybe as my follow-up, just on the infrastructure and the organization as a whole, as you're working towards what's the hopeful inflection volumes and revenue in 25 and beyond, can you just sort of talk about maybe some areas of the organization where you might feel the desire to invest a little bit more ahead of that inflection and any specific needs or color that you want to provide there. Thanks, definitely. So the couple of key areas we've started beefing up already is specifically our key account management. We've brought additional capacity there. MSL medical science leads on to start engaging with physicians deeper around the new data.

Speaker Change: Perfect. Thanks for that. And then maybe as my follow-up, just on the infrastructure and the organization as a whole, as you're working towards what's this hopeful inflection in volumes and revenue and 25 and beyond,

Speaker Change: Can you just sort of talk about maybe some areas of the organization where you might feel the desire to invest a little bit more ahead of that inflection, any specific needs or color that you want to provide there? Thanks.

Evguenia Lindgardt: Definitely. So the couple of key areas we've started beefing up already are specifically our key account management. We've brought additional capacity there, MSLs, medical science liaisons, to start engaging with physicians deeper around the new data. Last but not least is operations regarding the revenue cycle and, of course, collections as we start operating at a greater scale. There's more to say about additional capabilities we will bring for new products, but I will reserve that infrastructure support that we're bringing in when we talk more about our upcoming launches.

Evguenia Lindgardt: Definitely.

Speaker Change: So, the couple of key areas we've started beefing up already is specifically our key account management. We've brought additional capacity there, MSLs, medical science liaisons, to start engaging with physicians deeper around the new data.

Evguenia Lindgardt: Last but not least is operations about the revenue cycle and, of course, collections as we start operating at a greater scale.

Speaker Change: Last but not least is operations about the revenue cycle and, of course, collections as we start operating at a greater scale.

Evguenia Lindgardt: There's more to say about additional capabilities we will bring for new products, but I will reserve that infrastructure support that we're bringing in when we talk more about our upcoming launches.

Speaker Change: There is more to say about additional capabilities we will bring for new products, but I will reserve that infrastructure support that we are bringing in when we talk more about our upcoming launches.

Evguenia Lindgardt: Perfect, and then if I could just sneak in one more here. Thanks for all the color around what you're working on in order to get sort of the prime results published here. Can you maybe just sort of review what's in your control there in terms of sort of the data that working through the data and what's not in your control in sort of in order to get it published in the time. Thank you. Great question. It had really teased up my answer as we're engaging with the editors, and as you know, it's a back and forth process.

Andrew Brackmann: Perfect. And then if I could just sneak in one more here,

Unnamed Questioner: Perfect. And then if I could just sneak in one more here,

Evguenia Lindgardt: Thanks for all the color around what you're working on in order to get sort of the prime results published here. Can you maybe just sort of review what's in your control there in terms of sort of the data, working through the data, and what's not in your control and sort of in order to get it published and the timing there? Thank you.

Unnamed Questioner: Thanks for all the color around what you're working on in order to get sort of the prime results published here. Can you maybe just sort of review what's in your control there in terms of sort of the data, working through the data, and what's not in your control and sort of in order to get it published and the timing there? Thank you.

Unnamed Questioner: Perfect. And then if I could just sneak in one more here. Thanks for all the color around what you're working on in order to get sort of the prime results published here. Can you maybe just sort of review what's in your control there in terms of sort of the data, working through the data and what's not in your control and sort of in order to get it published in the timing there? Thank you.

Evguenia Lindgardt: As we're engaging with the editors, and as you know, it's a back and forth process, questions came up about the exploratory analyses that are typically reserved for the final data set. So what's not in our control is when that data set becomes available. That has been planned for the coming months, and as soon as it becomes available, we will continue the dialogue, responding to the reviewer comments on the additional data that was requested.

Evguenia Lindgardt: Great question! It really ties up my answer.

Evguenia Lindgardt: Great question.

Evguenia Lindgardt: It really tees up my answer. As we're engaging with the editors, and as you know, it's a back and forth process, the questions came up about the exploratory analyses that are typically reserved for the final data set.

Evguenia Lindgardt: The questions came up about the exploratory analyses are typically reserved for the final data set. So what's not in our control is when that data set becomes available that has been planned in the coming months, and as soon as it becomes available, we will continue the dialogue responding to the reviewer comments around the additional data that was requested. What is in our control is meeting the timeline for, for example, abstract submissions for the upcoming spring conferences. We will do our very best as soon as data becomes available, and of course engaging with the journals to make sure that we can get the data out as quickly as possible and respond to their comments.

Evguenia Lindgardt: So what's not in our control is when that data set becomes available. That has been planned in the coming months.

Unknown Executive: at this time, all participants are in a lesson only mood. We will be facilitating a questioning answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes.

Evguenia Lindgardt: And as soon as it becomes available, we will continue the dialogue responding to the reviewer comments around the additional data that was requested.

Peter Denardo: I would now like to turn a call over to Peter DeNardo of Capcom Partners for a few introductory comments. Thank you, operator. Good afternoon everyone.

Evguenia Lindgardt: What is in our control is meeting the timelines for, for example, abstract submissions for the upcoming spring conferences. We'll do our very best as soon as data becomes available, and, of course, engaging with the journals to make sure that we can get the data out as quickly as possible and respond to their comments.

Evguenia Lindgardt: What is in our control is meeting the timelines for

Unknown Executive: Welcome to Sera Prognostics second quarter fiscal year 2024 earnings conference call. At the close of the market today, Sera Prognostics released its financial results for the quarter ended June 30, 2024. Presenting for the company today will be Genia Lindgardt, President and CEO, and Austin Aerts, RCFO. During the call, we will review the financial results we released today, after which we will host a question and answer session. If you have not had a chance to review our quarterly earnings release, it could be found on our website SeraPrognostics.com.

Evguenia Lindgardt: For example, abstract submissions for the upcoming Spring Conferences will do our very best as soon as data becomes available.

Evguenia Lindgardt: and, of course, engaging with the journals to make sure that we can get the data out as quickly as possible and respond to their comments.

Speaker Change: Great, thank you so much.

Unknown Executive: Thank you.

Dan Brennan: Thanks again. Your next question is from Dan Brennan from TD Cowen. Please add your question.

Dan Brennan: Your next question is from Dan Brennan from TD Cowan. Please ask your question. Hi, thank you very much question. My first question is just kind of like what extent do you expect a product in the pipeline be it like preclamps the airtime to birth test to contribute to your revenue. And I want to follow up. Absolutely, Dan, to a great extent. If your if the question behind the question is what portion of revenue let's say three years from now do we expect to come from preclampsia or time to birth product that's probably too early to say we still expect the lion share of of the revenue three years from now to come from preterm.

Evguenia Lindgardt: Thanks again.

Evguenia Lindgardt: Thank you. Your next question is from Dan Brennan from TD Cowen. Please add your question.

Dan Brennan: Hi, thank you for taking my question. My first question is, just kind of like, to what extent do you expect a product in the pipeline, be it like preeclampsia or time-to-birth tests, to contribute to your revenue?

Unknown Executive: This call can be heard live by a webcast at SeraPrognostics.com, and a recording will be archived in the investor's section of our website. Please note that some of the information presented today may contain projections or other forward-looking statements about events and circumstances that have not yet occurred, including plans and projections for our business, future financial results and market trends, and opportunities. These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons.

Speaker Change: Hi, thank you for taking my question. My first question is, just kind of like, to what extent do you expect a product in the pipeline, be it like preeclampsia or time-to-birth tests, to contribute to your revenue?

Dan Brennan: Absolutely, Dan, to a great extent. If the question behind the question is, what portion of revenue, let's say three years from now, do we expect to come from preeclampsia or time to birth products? That's probably too early to say, but we still expect the lion's share of the revenue three years from now to come from pre-tax. However, we do expect meaningful contribution from new products. That's why we're investing resources in them in this really critical preterm year for Sera.

Speaker Change: and i want ball up

Evguenia Lindgardt: Absolutely, Dan, to a great extent.

Evguenia Lindgardt: If the question behind the question is...

Evguenia Lindgardt: what

Speaker Change: portion of revenue, let's say, three years from now, do we expect to come from preeclampsia or time-to-birth product?

Speaker Change: That's probably too early to say. We still expect the lion's share of the revenue three years from now to come from pre-term. However, we do expect meaningful contribution from new products. That's why we're investing resources in it in this really critical for pre-term year for Sera.

Unknown Executive: We refer you to the documents the company follows from time to time with the Securities and Exchange Commission, specifically the company's annual report on form 10K. It is quarterly reports on form 10K and its current reports on form 8K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections and other forward-looking statements. As a reminder, a webcast replay of this call will be available on the investor's section of our website.

Evguenia Lindgardt: However, we do expect meaningful contribution from new products. That's why we're investing resources in it in this really critical for preterm year for Sarah. Does it help?

Dan Brennan: Yes, thank you very much.

Austin Aerts: Yes, thank you very much. Yeah, and then I forgot to mention this is William Inferdan, but my follow-up would be, could you just remind us your estimated COGS per test outlay for preterm and to what extent your ACMS approach would reduce costs from the prior workflow? Absolutely. Austin, do you want to jump in on that?

Austin Aerts: Yeah, and then I'm for elementary's William and for Dan, but my follow-up would be, could you just remind us your estimated COGS protest outlay on pre-term and to what extent your AC and S approach would reduce costs from the prior workflow? Yeah, absolutely. Austin, do you want to jump in on that? Sure, I'll take that one. Thanks for the question. So we aren't disclosing exact prices, but our COGS, in general, are sort of right in line with what you expect from a diagnostics company. Those sort of margins are sort of right where we're operating with our current, or I should say our old COGS.

Speaker Change: Does that help?

William: Yes, thank you very much. Yeah, and then I forgot to mention, this is William in for Dan, but my follow-up would be, could you just remind us your estimated COGS per test outlay on preterm, and to what extent your ACMS approach would reduce costs from the prior workflow?

Evguenia Lindgardt: So now turn the caller to Jenya, SeraPrognostics president and CEO. Thank you so much, Peter, and good afternoon everyone. We're pleased with our progress at this point in the year against our strategic goals towards positioning SeraFew future growth in test volumes and revenue. As we shared last quarter, we've been focused on publication of our important avert and prime clinical study results, getting regulatory approvals for innovations we rolled out for our preterm test collection and processing methods, building awareness of our capabilities to help improve patient care and outcomes, and lastly improving overall access to our products through patient and physician education and rolling out the improved collection methods, all of which are important steps for building scalability.

Austin Aerts: Yeah, absolutely. Austin, do you want to jump in on that? Sure, I'll take that one.

Austin Aerts: Thanks for the question. We aren't disclosing exact prices, but our COGs, in general, are sort of right in line with what you would expect from a diagnostics company. Those sort of margins are sort of right where we're operating with our current, or I should say our old COGs. We do think the reductions that we've made from the new sample collection and lab process are seeing at least 35% to 50% or more reduction from where they were. So we already had really great margins, but further reductions of 35% to 50%, maybe even 60%, are sort of what we're expecting. Got it. Thank you very much.

Evguenia Lindgardt: Yeah, absolutely. Austin, do you want to jump in on that? Sure, I'll take that one. Thanks for the question. So we aren't disclosing exact prices, but our...

Speaker Change: cogs in general are sort of right inline with what you expect from diagnostics company those sort of margins are sort of right where we're where we are operating with our current or i should say our old cogs we do think are the reduions that we've made from the new sample collection and lab process

Austin Aerts: We do think are the reductions that we've made from the new sample collection and lab process are seeing at least 35 to 50% or more reduction from where they were. So we already had really great margins, but further reduction of 35 to 50, maybe even 60% are sort of what we're expecting.

Speaker Change: are seeing at least 35% to 50% or more reduction from where they were. So we already had really great margins, but further reductions of 35% to 50%, maybe even 60%, are sort of what we're expecting.

Unknown Executive: Got it, thank you very much. Thank you. Once again, ladies and gentlemen, please press score one for the wish to ask a question. Once again, that is star one should wish to ask a question.

Speaker Change: thank you very much

Operator: Thank you. Once again, ladies and gentlemen, please press star 1 if you wish to ask a question. Once again, that is star one should you wish to ask a question. There are no further questions at this time. I will now hand the call back to Jeanne Lindgardt for

Speaker Change: Thank you. Once again, ladies and gentlemen, please press star 1 if you wish to ask a question.

Evguenia Lindgardt: One of these cornerstones we've recently celebrated completing was the publication of our positive avert preterm trial results in the international peer reviewed journal diagnostics, making the front cover of the July issue. Publication illustrated that our preterm test and treat strategy demonstrates statistically and clinically significant improvement in new natal health outcomes and hospital lengths of state. Specifically, the results indicated for key findings. First, and 18% reduction in severe neonatal morbidity and mortality.

Speaker Change: once again that his thllar one should wishto ask a question

Unknown Executive: There are no further questions at this time.

Operator: There are no further questions at this time. I will now hand the call back to Jeanne Lindgardt for her closing remarks.

Evguenia Lindgardt: I will now hand a call back to Jean-Neil and Gorge for the closing remarks. Thank you so much, Operator. And thank you all for attending our call today. Publication of our keyword study and the receipt of the New York State conditional approval of our whole blood collection method are solid steps forward this quarter to executing on our prerequisites to prepare for revenue growth. And we look forward to sharing more with you on our progress through the rest of the year.

Operator: There are no further questions at this time. I will now hand the call back to Jeanne Lindgardt for the closing remarks.

Jeanne Lindgardt: Thank you so much, Operator, and thank you all for attending our call today. Publication of our key overt study and the receipt of the New York State Conditional Approval of our whole blood collection method are solid steps forward this quarter.

Evguenia Lindgardt: A seven-day reduction in neonatal hospital length of stay for babies within the longest hospital stays. For those babies born before 32 weeks, the test and treat strategy led to increased average de-stational age at birth by 2.5 weeks and also at 28-day reduction in neonatal length of hospital stay. The number of expectant mothers needed to be screened to save one NICU day is between 3 and 4. All of which we are really excited by knowing that babies are born later and leave the hospital earlier and healthier.

Jeanne Lindgardt: to executing on our prerequisites to prepare for revenue growth. And we look forward to sharing more with you on our progress through the rest of the year. I'll now turn it back over to the operator to conclude the call. Operator?

Unknown Executive: I'll now turn it back over to the operator to conclude the call, operator. Thank you.

Unknown Executive: Ladies and gentlemen, the conference has now ended. Thank you all for joining me all this connector in line.

Jeanne Lindgardt: Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect your lines.

Evguenia Lindgardt: In publicizing such remarkable results, the manuscript also reported the neonatal morbidity and mortality and hospital and NICU length of stay were significantly reduced in the entire intended treat population. Our test and treat strategy was associated with decreased odds of preterm birth and spontaneous birth at various de-stational ages across and along with a reduction in NICU length of stay.

Evguenia Lindgardt: I want to emphasize this key point. Keep in mind that the avert preterm trial results demonstrated that the health of babies can be improved in asymptomatic pregnant mothers without typical risk factors by a combination of biomarkers for spontaneous preterm birth risk and targeted interventions. So, not surprisingly, with the advent of diagnostics publication highlighting these results, we were also pleased that several publications such as health news, contemporary OBGYN, the number one red publication in the field for subsequently picked up the important avert news. Coverage like this can heighten our visibility among the key stakeholders, such as payers, physicians, patients, guidelines setting bodies and the investment community.

Evguenia Lindgardt: I'd like to give some insights into the publication process for the prime study and what we've been up to since we announced stoppage of the trial for efficacy in December 2023. In Q2, we initiated submission of a manuscript reporting the interim results with a very prestigious journal. The results were strong and the reviewers underscored the importance of data that we were expected to bring in the full print study data set, which is expected to be available next month, but were not planned to be analyzed in the interim data set.

Evguenia Lindgardt: As such, we've decided to work on manuscripts for each of these data sets and target one and more publications that maximize the impact of the results for adoption of preterm test. Should the results be ready in time and if the manuscript is accepted, we may seek publication in connection with a key pregnancy and maternal health conferences in spring 2025. As a reminder, the timeline enabled by closing the study early due to the interim look success is still up to one year earlier than if we had continued the study as a regional aid plan.

Evguenia Lindgardt: With our solid Aerts results being published and the prime results pending, we are actively engaging with guideline-setting bodies to help them develop care guidelines that leverage our study findings for improved pregnancy outcomes. We believe that publication of Aert and Prime will further promote the benefits of our test and tweet strategy, and that coupled with establishment of care guidelines should support broad and fair coverage and patient and physician adoption. With that, we definitely will need to ensure we have suitably broadened availability of our test and our ability to scale in processing higher test volumes once that occurs.

Evguenia Lindgardt: In our last call, we announced that the first kits enabling Indian whole blood collection were shipped to customers, and we're happy to announce that since that time, we've begun receiving commercial samples from those kits and processing them in our lab. We're extremely excited about the benefits of those kits, namely improved physician and patient access to our test, significantly lower cost of goods, and significantly increased lab capacity, all of which enhance the scalability of our product and improve the economics of our business in anticipation of an inflection point in our commercial success.

Evguenia Lindgardt: In terms of commercial development and strategy, we're focused on several cost effective means of educating physicians regarding the benefits of preterm and developing inroads for care management. This is inclusive of our direct outreach and well-defined digital marketing programs to build awareness across physicians, patients, and peers. First, we've partnered with a leading professional medical network and digital marketing platform to promote and avert test and treat educational campaign. This is the leading platform for United States medical professionals with more than 80 percent of U.S, doctors and 50 percent of nurse practitioners and physician assistants as members.

Evguenia Lindgardt: We have provided the platform key information about avert to enable it to develop and utilize a well articulated educational program to target members of its user base. Approximately 22,000 healthcare practitioners have been targeted to date with final campaign results showing the high level of what they classify as deep engagement with 23.4 percent of targets deeply engaged. These results are rather encouraging and illustrate the significant need for better care information that avert can support.

Evguenia Lindgardt: The availability of these new kits is also allowing us to explore the ability to target and eventually penetrate certain US states that have a high rate of preterm birth where patients' maternity health care needs may be underserved.

Evguenia Lindgardt: We anticipate that just before year and these cost effective programs in documentary format will be distributed to public television stations in all 50 states and short commercial segments featuring Sera are also expected to be broadcast during primetime in over 84 million homes via MSNBC, CNBC, CNN or similar networks. This will broadly support our goal of informing the public about our test and treat offering and how it can support improved pregnancy outcomes.

Evguenia Lindgardt: Their insights will help inform our strategy to cost effectively for the penetrate the market we serve while deploying our capital in a carefully targeted manner best suited to harness the most bang for the buck in growing preterm adoption. We believe this multi-prong approach towards building awareness and options through highly targeted and cost effective channels will afford us many shots and goals throughout our business over time.

Evguenia Lindgardt: In conclusion, we're delighted to have published our bird study results and look forward to executing an additional cornerstone in development of our company growth once we achieve publication of our pivotal prime study. We still have lots of work to do this year, but step by step, we're achieving one by one all of the necessary prerequisites to drive a step change in our revenue trajectory in 2025 and beyond.

Evguenia Lindgardt: While we haven't given you a deeper update on our new products and will do so in our next call, but did want to mention we're making great progress and are also testing our predictive analytics product and are getting ready to share data on time to birth product prior to its launch.

Austin Aerts: Now let me trade over to Austin for a finance update. Thanks, Danielle. Good afternoon, everyone.

Austin Aerts: Let me review our financial results with a quarter and also briefly review our thinking around managing operating expenses and ensuring we have the continued balance sheet strength to achieve our future revenue goals. Net revenue for the second quarter of 2024 was $24,000 compared to $123,000 in the second quarter of 2023. As noted last quarter, this revenue level is consistent with our carefully optimized investment in commercial activities. While we focus on the prerequisites, we need to have in place prior to any commercial expansion that could accelerate test volumes in 2025 and beyond. In the first half of 2024, we continue to manage our cash toward what we believe are the best investments that could optimize revenue growth over time.

Austin Aerts: Again, as a result of our efforts to reduce expenses while managing toward revenue growth in the future. Looking ahead, we will continue to exercise strong fiduciary management of our expenses protecting our strong cash position while also beginning to invest in suitable commercial opportunities that may result from achieving the prerequisites that are expected to drive revenue such as study publications and improved market awareness of preacher. As of June 30, 2024, the company had cash, cash equivalents and available for sale securities of approximately 80.9 million dollars.

Austin Aerts: As previously stated, we have budgeted cash operating expenses of around 26 million dollars in 2024 and our current growth burn rate is still less than that on an annualized basis. As we've stated before, we believe that our cash will last us well into 2027. We do not have a near-term need to raise capital given the current length of our runway. We also understand the uncertainties of the current and future capital markets environment.

Austin Aerts: So to maximize our flexibility regarding cash and simply as a matter of good corporate housekeeping, today we have filed an S3 registration statement and entered into an at-the-market or ATM sales agreement with TD Cowan.

Austin Aerts: It should be noted that this is the first regular filing date where the company has been eligible to file the S3.

Unknown Executive: Operator, we can now please open the call for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchstone phone. You will hear a prompt that your hand has been raised. Us just will be taken in the order received. Should you wish to cancel your request, please press the star followed by the two. If you are using a speaker phone, please lift a hand set before pressing any case. Once again, that a star wants you to wish to ask a question.

Andrew Brackmann: Your first question is from Andrew Brackman from Willem Blair, please ask your question. Hi, good afternoon. Thanks for taking the question. First, just congrats on publishing the overt results that's exciting to see. But maybe can you just sort of talk about some of the feedback that you've received across the different stakeholder groups following that publication? And just how are you sort of thinking about including this feedback in your discussion with payers, guideline bodies, any commercial opportunities going forward?

Andrew Brackmann: Thanks. Andrew, thank you so much for the question. We are excited and received very positive reaction from stakeholders across the KOLP and guideline setting body communities. The payer community was most excited to see the data that came out of avert that shows the economic benefit as well as clinical benefit in NICU day savings. I highlighted it in my prepared remarks that to save one NICU day from the data that we see, the number of expected mothers that are needed to be screened is only three to four.

Andrew Brackmann: Which means that at the current cost of a NICU day in the United States, which ranges pretty widely depending on the level of the NICU between 4,000 per day to up to 20,000 per day, makes it really easy for the payers to realize significant savings by deploying the preterm test and treat strategy within the six months of deploying the test and the expenditure. So that has been really heartening and we are engaging with more and more payers this fall to showcase the updated economic models on the basis of our data. I'm happy to report more in the next quarterly conference as these conversations continue. Perfect, thanks for that.

Evguenia Lindgardt: We've brought additional capacity there. MSL medical science leads on to start engaging with physicians deeper around the new data. Last but not least is operations about the revenue cycle and of course collections as we start operating at a greater scale. There's more to say about additional capabilities we will bring for new products, but I will reserve that infrastructure support that we're bringing in when we talk more about our upcoming launches.

Evguenia Lindgardt: Thank you. Great question. It had really teased up my answer as we're engaging with the editors and as you know it's a back and forth process. The questions came up about the exploratory analyses are typically reserved for the final data set. So what's not in our control is when that data set becomes available that has been planned in the coming months and as soon as it becomes available we will continue the dialogue responding to the reviewer comments around the additional data that was requested.

Evguenia Lindgardt: What is in our control is meeting the timeline for for example abstract submissions for the upcoming spring conferences will do our very best as soon as data becomes available and of course engaging with the journals to make sure that we can get the data out as quickly as possible and respond to their comments. Thank you.

Dan Brennan: Your next question is from Dan Brennan from TD Cowan. Please ask your question. Hi, thank you very much question. My first question is just kind of like what extent do you expect a product in the pipeline be it like preclamps the airtime to birth test to contribute to your revenue. And I want to follow up. Absolutely Dan to a great extent. If your if the question behind the question is what portion of revenue let's say three years from now do we expect to come from preclampsia or time to birth product that's probably too early to say we still expect the lion share of of the revenue three years from now to come from preterm. However, we do expect meaningful contribution from new products. That's why we're investing resources in it in this really critical for preterm year for Sarah. Does it help?

Austin Aerts: Yes, thank you very much. Yeah, and then I'm for elementary's William and for Dan, but my follow-up would be, could you just remind us your estimated COGS protest outlay on pre-term and to what extent your AC and S approach would reduce costs from the prior workflow? Yeah, absolutely. Austin, do you want to jump in on that? Sure, I'll take that one. Thanks for the question. So we aren't disclosing exact prices, but our COGS in general are sort of right in line with what you expect from a diagnostics company.

Austin Aerts: Those sort of margins are sort of right where we're operating with our current, or I should say our old COGS. We do think are the reductions that we've made from the new sample collection and lab process are seeing at least 35 to 50% or more reduction from where they were. So we already had really great margins, but further reduction of 35 to 50, maybe even 60% are sort of what we're expecting.

Austin Aerts: Got it, thank you very much. Thank you. Once again, ladies and gentlemen, please press score one for the wish to ask a question. Once again, that is star one should wish to ask a question. There are no further questions at this time. I will now hand a call back to Jean-Neil and Gorge for the closing remarks. Thank you so much, operator. And thank you all for attending our call today. Publication of our keyword study and the receipt of the New York State Conditional Approval of our whole blood collection method are solid steps forward this quarter to executing on our prerequisites to prepare for revenue growth.

Evguenia Lindgardt: And we look forward to sharing more with you on our progress through the rest of the year.

Unknown Executive: I'll now turn it back over to the operator to conclude the call operator. Thank you.

Unknown Executive: Ladies and gentlemen, the conference has now ended. Thank you all for joining me all this connector in line.

Q2 2024 Sera Prognostics Inc Earnings Call

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