Q3 2024 Aspira Women's Health Inc Earnings Call
Good morning, ladies and gentlemen.
Welcome to spiral women's health incorporated third quarter 2024 earnings conference call.
At this time, all participants right now listen only mode.
Following managements prepared remarks, we will open the call for your questions. As a reminder, this call is being recorded today.
Before we begin I would like to remind everyone that forward looking statements as defined under the private Securities Litigation Reform Act of 1995 will be made during this call including statements relating to aspire is expected future performance future business prospects or future events or plans.
Although the company believes that the expectations reflected in such forward looking statements are based upon reasonable assumptions.
Actual outcomes and results are subject to risks and uncertainties and could differ materially from those anticipated due to the impact of many factors beyond the spiral woman's helps control.
The company assumes no obligation to update or supplement any forward looking statements, whether as a result of new information future events or otherwise except as required by law.
Disappoints are directed to the cautionary notes set forth in today's press release as well as the risk factors set forth in our spire is most recent annual report on Form 10-K, and quarterly report on Form 10-Q filed with the SEC For a description of factors that could cause actual results to differ materially from those anticipated in the.
Speaker Change: Forward looking statements at this time I'd like to turn the call over to Nicole Sanford Chief Executive Officer. Please go ahead.
Speaker Change: Yeah.
Nicole Sanford: Thank you and welcome everyone to our third quarter 2024 earnings Conference call with me today are Dr. Sandra Milligan, our president and Jon Glassy, our interim Chief Financial Officer.
Nicole Sanford: I will begin with highlights from our progress in the third quarter, followed by Sandy with an update on our development strategy and then Jon with a review of our financials, we will answer questions submitted through the online platform.
Wanted to start with a brief discussion of our commercial performance for the quarter, we delivered more than 6000 over three tests. During the three months ended September 30th 'twenty, 'twenty, 4% to 4% increase compared to the approximately 5783 over three tests for the same period in 2023.
Nicole Sanford: Our growth for the quarter was moderated by several factors, including seasonality something we've seen in the summer months in prior years.
Nicole Sanford: Our expanded field sales team had a very strong start in September are hitting new highs daily and weekly for volume severe weather, including Hurricane glean impacted many of our most productive territories in the south east at the end of the quarter, causing a short term reversal of that positive momentum we were not alone severe weather has been report.
Nicole Sanford: It is a factor for the third quarter performance of many diagnostic companies. Nonetheless, the number of tests per sales rep for the nine months ended September 30th 'twenty 'twenty four increased by 21% when compared to the same period in 2023 and all those severe weather events continued into the fourth quarter was hurricane Milton we've had.
Nicole Sanford: Several of our strongest volume days and weeks of the year in October and November It is clear that our tests play a critical role in delivering quality patient care, we believe our focus on improving commercial capabilities across the country helped to reduce the impact of regional interruptions. This quarter and will continue to do so in the future [noise] John will provide additional.
No commentary on our financial performance later on in his remarks.
Nicole Sanford: The second half of the year has been extremely important for the expansion of our ovarian cancer portfolio to include Overwatch, which was launched a longitudinal monitoring of ovarian masses in may with.
Nicole Sanford: With the expectation that providers will consider re testing of patients sometime between three and nine months, we believe reordering behavior will begin to change as we head into 2025.
Nicole Sanford: To further accelerate the adoption of our overseas portfolio, we announced a new agreement with doors Sada Health care software company with a mission to empower health care providers with best in market clinical decision, making tools.
Nicole Sanford: <unk> solutions are integrated into the EMR system of doctors, including Obgyns to improve consistency of patient care via automated clinical workflow processes.
Nicole Sanford: Together, we are collaborating with medical leadership of the 250, plus obgyn physician group based in the northeast to create a clinical workflow tool that will be embedded in the practices EMR system and guide clinical assessment of patients with an ovarian mass.
Nicole Sanford: The workflow tool will include automated access to biomarker testing such as our oversea test when appropriate the tools in the development phase endorsed order is planning for pilot user feedback in the first quarter. We expect the completed workflow tool to be ready for integration into the EMR system in 2025.
Nicole Sanford: And I told her we announced that the New York State Department of Health Clinical Laboratory evaluation program approved Overwatch for use in New York State. After a standard review process that span more than two years. This approval is required for lab developed tests to ensure compliance with New York State clinical laboratory regulatory standards and as a result.
Nicole Sanford: On a rigorous process to assess procedures for maintaining lab quality and risk management.
Nicole Sanford: By any measure this is a major development not only does this open access to one of the nation's largest health care markets. The approval of the Overwatch solidifies our position as a mature diagnostic company capable of developing innovative algorithmic paths that can achieve new York state approval.
Nicole Sanford: Following the approval, we moved quickly to expand our commercial distribution partnership with bio reference labs, adding overwatch two its test compendium.
Nicole Sanford: Bio reference sales team has been distributing over one plus since 2022 and will now introduce overwatch to the company's ordering physicians.
Nicole Sanford: Bio reference operates 10 laboratory facilities around the country is in network with the largest health plans in the United States and serves over 19 million patients annually.
Nicole Sanford: Now, let's shift gears to innovation of course, the most important development for the quarter was the announcement that aspire received a $10 million Federal award intended to fund the completion of our in development Multimarket blood test to aid in the detection of endometriosis.
Nicole Sanford: This test, which has been rebranded endo and form will rely on our powerful AI enabled algorithm that combines protein and micro RNA biomarkers and patient data and Leverages technology like that embedded in our ovarian cancer risk assessment blood tests.
Nicole Sanford: In addition to funding the award provides for access to a team of World class subject matter experts and advisers to support the successful completion and commercial launch of the test before the end of the two year contract term.
Nicole Sanford: This is an incredible achievement and validation of this virus capabilities. We have worked tirelessly to advance endometriosis diagnostic research for many years, but our strong scientific foundation alone would not have resulted in our success.
Nicole Sanford: We believe the intense focus on operational excellence and the rebuilding of our commercial capabilities over the past year were also instrumental in our selection from among the more than 1700 submissions.
Nicole Sanford: Today I'm happy to share that the team has made substantial progress against the first milestone and has submitted the deliverables and other required information related to its completion to ARPA H. The agency responsible for overseeing the award while it is difficult to predict the time it will take for the materials to be reviewed and payment to be processed we.
Nicole Sanford: <unk> received the first payment of $2 million before the end of the year.
Nicole Sanford: The R&D team continues its progress towards the second milestone, which we intend to complete in the first quarter of 2025.
Nicole Sanford: The announcement of the award has led to many incredible opportunities to expand our reach as a company. We hosted a press conference in our Connecticut offices with U S Representative Rosa Delauro, and Connecticut State Representative Jillian Gilcrest and we're recognized by Senator Chris Murphy's office as the Connecticut innovator of demand for November.
Nicole Sanford: Highlighting our continued commitment to innovation in women's health.
We intend to leverage the attention received from the ARPA age award for our greatest advantage and time to launch of a completely redesigned website and aggressive social media strategy with the award announcement.
Speaker Change: Now it is my pleasure to turn the call over to Dr. Sandra Milligan, who will continue the update on product strategy Sandy.
Speaker Change: Thank you Nicole following up with more detail as Nicole mentioned, we have secured a 10 million dollar award from ARPA H to fund the development of Endo inform our noninvasive multi omics diagnostic blood test for women suspected of having endometriosis ARPA H and inspire are aligned on the criticality of focused investment.
Speaker Change: In Endo and form where the goal of launching the diagnostic within the two year funding timeframe.
Speaker Change: Along with this honor of being an award recipient a spiral was named a spoke member of the Investor catalyst hub led by the ARPA program director eventual well.
Speaker Change: This membership provides us with access to a vast network of nearly 600 members from key organizations across the private public and nonprofit sectors.
Speaker Change: The driving principle for the Investor catalyst hub is to speed the transition of innovative ideas into practical accessible and promising solutions by connecting institution with relevant capabilities from incubators accelerators and venture investors to clinical researchers academic institution and commercialization resource.
Speaker Change: Yes.
Speaker Change: As our Endo informed project progresses, we plan to leverage our membership to gain insight connection and collaboration to accelerate its development and commercialization.
Speaker Change: This 10 million dollar award from ARPA H provides crucial support to complete development and commercialization and going for that.
Speaker Change: Funding milestones agreed to with ARPA H are not time based but rather are built on a cross divisional activities that are required mileposts for stage appropriate investment.
We provided a detailed overview of the award and its impact on our overall product development strategy on an R&D Investor day presentation in October.
Speaker Change: At that time, we stated that we had made a strategic decision to incorporate our prior endometriosis protein research into the development of Endo informed and as a result, the lunch at Endo check as a standalone endometrium a protein test has been prioritized.
Speaker Change: We are making solid progress on the endo inform clinical study with nearly 500 samples collected so far and several new clinical sites added.
Speaker Change: The ARPA each funding will accelerate the expansion of the clinical study and we are also exploring options for purchasing additional sample to meet the required numbers for launch.
Speaker Change: We remain focused on advancing both endo inform and Uber inform as quickly as possible based on the scientific progress and funding allocation.
Speaker Change: Importantly capabilities and infrastructure built through the ARPA H support at the end to inform project will also support the ongoing development of Oba inform creating efficiencies and resources across both initiatives.
Speaker Change: Funding supports the construction of our molecular laboratory, which will support the endo inform launch and commercialization of OCA and form.
Speaker Change: Recently, we collaborated with physicians and scientists of the Dana Farber Cancer Institute, Brigham and Women's Hospital Medical University of blood and the Harvard Medical school to publish a scientific paper and the gynecologic oncology journal, providing further evidence that the addition of micro RNA and metadata to our <unk>.
Speaker Change: Existing protein assay significantly improved sensitivity and specificity for the detection of early stage ovarian cancer more specifically, we found that they are in micro RNA and protein biomarkers are complementary and estimating the risk of malignancy and ovarian mass.
Integrated model with protein micro RNA and metadata offers the most accurate classification performance.
Speaker Change: And the addition of micro RNA improved sensitivity and specificity for identification of early stage ovarian cancer.
We shared more details about our development pipeline and the next steps for Endo inform in Oba informed during the R&D day presentation and I encourage you to access the replay on our Investor Relations page of our website.
Speaker Change: With that let me now turn it over to John for an update on our financials John.
Thank you Sandy let me begin with review of our third quarter 2024 financial results. What was suite revenue for the third quarter of 2024 was $2 3 million.
Speaker Change: The 2% increase from $2 $2 million from the same period last year and a slight decrease from $2 4 million in the second quarter of 2020 for.
Speaker Change: The number of overseas cash performed increased 4% for the third quarter of 2024.
Compared to 5783 tests in the same period last year.
Speaker Change: This growth in test volume was primarily driven by Overwatch, which increased 27% year over year for the quarter as the KOL discussed earlier, our growth for the quarter was negatively impacted by severe weather, especially of hurricane Helene that devastated several of our major markets in Florida, Georgia South Carolina.
Speaker Change: A lineup North Carolina, and Tennessee at September <unk>.
Speaker Change: Our average unit price was $376 for the third quarter of 2024 compared to $383 in the third quarter of 2023.
Speaker Change: The Overwatch average unit price increased 4% to $360 for the third quarter of 2024 compared to $347 in the same period last year.
Speaker Change: Watch test volume now makes up 22% of the total over Sweet test volume for the third quarter of 2024 compared to the 18% of the total for the same period last year contributing to a modest decrease in.
Speaker Change: <unk>.
Speaker Change: Our gross margins for the third quarter of 2024 improved to 60% compared to 59% for the third quarter of 2023.
Speaker Change: Research and development expenses for the quarter decreased by $90000 or 9% compared to the same period in 2023, as we deferred some spending while the ARPA H award process was ongoing.
Speaker Change: We expect research and development expenses to increase over the fourth quarter of 2024, as we focus on accelerating our endo informed development plan in connection with the ARPA Age Award.
Speaker Change: Sales and marketing expenses for the quarter increased by $441000.
Speaker Change: We're 26% compared to the same period in 2023 due to personnel costs for additional field sales representatives and the costs associated with the launch of a new corporate website.
Speaker Change: For the nine months ending September 32024 sales and marketing expenses increased by just 2% compared to the same period in 2023.
Speaker Change: General and administrative expenses for the quarter decreased by $675000 or 25% compared to the same period in 2023.
Speaker Change: For the nine months ended September 32020 for general and administrative expenses decreased by $1.8 million were 19% compared to the same period in 2023 decreases for both periods are related to reductions in personnel costs and in professional and legal fees.
Speaker Change: <unk>.
Speaker Change: Our cash used in operating activities in the third quarter of 2024 was $2 9 million.
Speaker Change: Down 12% compared to cash used in operating activities of $3 3 million in the third quarter of 2023.
Speaker Change: This is the first time since the launch of our over one plus test that we use less than $3 million in operating cash in a quarter.
Speaker Change: Cash and restricted cash as of September 30th 2024 was $2 $1 million down from $2 9 million as of December 31, 2023.
Speaker Change: In September we entered into an aftermarket offering agreement with H C. Wainwright targeting aggregate gross proceeds of up to $4 $5 million we.
Iterate our guidance for cash used in operations in 2024 to be less than $14 $5 million.
Speaker Change: The company has filed for an extension to November 19, 2024 or.
Speaker Change: We're filing its Form 10-Q for the quarter ended September 32024.
The extension is needed to complete the accounting, where the warrant inducement transaction entered into on July 31, 2024. This is a complex accounting matter that simply requires additional time for consideration. However, I do not believe the accounting conclusion with any impact on our reported cash or any.
Other financial information provided in our press release I will now turn the call back over to Nicole Nicole.
Nicole Sanford: Thank you John Aspire remain steadfastly focused on its mission to improve health outcomes for millions of women, while positioning ourselves for long term success. We are proud of what we've accomplished so far this year and thank you for the continued support of our shareholders.
Speaker Change: With that I would like to now open the call for questions. As was mentioned previously we will be taking questions using our online platform. If you have a question. Please click on the question button at the bottom of your screen. If you joined by phone and you have a question. Please E mail it to investors at aspire in W. H Dot com.
Nicole Sanford: Okay.
Sandy: Thanks, everyone. So this is sandy and while some of the questions come in well, let me answer the first one in the queue.
Speaker Change: So that question is Danny why do you think of Spyros Endometriosis proposal was chosen by ARPA age out of the 1700 submission.
Speaker Change: When I reflect on our experience in applying for the ARPA H Award it was intensely competitive.
Speaker Change: Thank the reason why we were selected as a winner with because we offer a complete package from development to commercialization with a track history for our over suites. So I do believe that ARPA H for the larger awards, such as the $10 million really wanted to see a.
Speaker Change: Those solutions make it all the way to the finish line. So I do think that that is one of the critical point not just our science not just our development capabilities, but also our commercialization capabilities that made us stand out.
Speaker Change: Okay, and just looking at the questions right now.
Speaker Change: So here is a question can we provide a range of estimated timelines for oba inform and endo inform development to commercialization.
Speaker Change: Will it likely take the full two years of ARPA each funding for end of Endo informed.
Speaker Change: So we have contracted with our page for a full two years of funding we are driving as hard as we can and the outside date would be the full two years, but we are moving as quickly as we can and are optimistic that we can accelerate the development that's come under that two years.
Speaker Change: For over in form we are continuing along the development process, but of course, we need to allocate the capital investment for appropriate stage gate progression, but we are still developing over inform at this point.
Speaker Change: [laughter].
Speaker Change: Let's see.
Speaker Change: An additional question regarding endo inform any thoughts on possible partnering with a company, creating and.
Speaker Change: Dimitrios just therapies in the future and how would I describe the current overall partnership environment. This is an excellent question and it certainly is in line of the way that we envision future partnerships right now we're focused with the ARPA grant and moving endo inform across the line as a diagnostic but as we.
Speaker Change: Commercialize it and gather additional data from patients we will look to a longitudinal diagnostic and prognostic diagnostic and a predicted diagnostic which is what you're alluding to in order to have a predictive diagnostic wherein we can predict the response of or monitor the response of a certain and dmitry.
Speaker Change: Has this therapy, we will be required to partner with a endometriosis innovation therapeutic company how would I describe the current overall partnership environment I think it's positive I'm, hoping that with the surge of interest in women's health that we will see additional investment by innovator drug companies in that.
Speaker Change: Space, which will basically increase the opportunities for us.
Speaker Change: And let me just refresh one fast.
Speaker Change: Okay Alright.
Speaker Change: Sorry, it's a new system.
Speaker Change: Yeah.
Speaker Change: Okay. So I think that's all the questions.
Speaker Change: That's.
Speaker Change: I can answer this morning and on behalf of the entire executive team. Thank you for joining us today, and we will look forward to finishing the year strong. Thank you very much.
Speaker Change: Thank you. This does conclude today's conference you may disconnect. Your lines at this time. Thank you for your participation.