Q4 2024 OncoCyte Corp Earnings Call

Operator: And thank you for joining us to discuss OncoCyte's fourth quarter 2024 results.

Fourth quarter 2024 results.

Operator: If you have not seen today's shareholder letter, please visit OncoCyte's website. investor relations page at investors.oncocyte.com. Today's prepared remarks build upon the information already shared in this robust letter.

If you have not seen today's shareholder letter.

Please visit the site.

Investor Relations page at investors Dot.

Dot com.

Today's prepared remarks built upon the information already shared in this robust letter.

Operator: Joining us today are OncoCyte President and CEO Josh Riggs, Chief Science Officer Ekkehard Schutz, and CFO Andrea James. We also have our analysts with us as panelists. After our prepared remarks, our analysts may ask questions.

Speaker Change: Joining us today, our Oncotype, president and CEO Josh range.

Science Officer Adhesions.

Andrea James: CFO Andrea James.

Andrea James: We also have our analysts with that asked panelists.

Andrea James: After our prepared remarks, our analysts may ask questions.

Operator: Attendees may also type questions into the Q&A.

Andrea James: Attendees may also type questions into the Q&A.

Operator: Before turning the call over to Josh Riggs, I'd like to go over our safe harbor. The company will make projections and forward-looking statements regarding future events. Any statements that are not historical facts are forward-looking statements. These statements are made pursuant to and within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

Josh range: Before turning the call over to Josh range.

Like to go over our Safe Harbor.

Josh range: The company will make projections and forward looking statements regarding future events.

Josh range: Any statements that are not historical facts are forward looking statements.

Josh range: These statements are made pursuant to and within the meaning of the safe Harbor provision of the private Securities Litigation Reform Act of 1995.

Operator: We encourage you to review the company's SEC filings, including the company's most recent form, 10-K, and subsequent forms, 10-Q, which identify risks and uncertainties that may cause future actual results or events to differ materially. Please note that the forward looking statements made during today's call speak only to the date they are made and OncoCyte undertakes no obligation to update them.

Josh range: Encourage you to review the company's SEC filings, including the company's most recent Form 10-K, and subsequent forms 10-Q, which identify risks and uncertainties that may cause future actual results or events to differ materially.

Speaker Change: Note that the forward looking statements made during today's call speak only to the date. They are made and Oncotype undertakes no obligation to update them and with that I would like to now turn the call over to Josh rates.

Joshua Riggs: And with that, I would like to now turn the call over to Joshua. Thanks, Gabby. Hello, everyone. Thanks for joining. We've gotten a lot done since our update in November. It's great to be closer than ever to having our clinical assay on mark.

Josh Rates: Thanks, Kevin Hello, everyone. Thanks for joining <unk> gotten a lot done since our update in November it's.

Josh Rates: It's great to be closer to an effort to having our clinical assay on market.

Joshua Riggs: While we detail our 2024 highlights in the shareholder letter, I'll just briefly recap them here. We launched Grab2Sure, which is our research-use-only kidney transplant test with some of the leading transplant centers in the world, proving that we could design, develop, and ship a lab test in kit form. Having that kit in the field since last July has been tremendously valuable to our IVD product development. the labs running graft-assured at some of the largest and most scientifically advanced transplant centers in the world. Feedback from those centers has led to improvements in user experience and assay to We are locking in those improvements as we which we believe will better position us from a competitive standpoint.

Josh Rates: While we detail our 2024 highlights in the shareholder letter I.

Josh Rates: I'll just briefly recap them here.

Josh Rates: We launched scrap to shore, which is our research use only kidney transplant tests with some of the leading transplant centers in the world grouping.

Josh Rates: Proving that we can design develop and ship a lab testing kit for them.

Josh Rates: Having that kit in the field since last July has been tremendously valuable to our IBD product development.

Josh Rates: The labs running graph assura at some of the largest and most scientifically advanced transplant centers in the world.

Josh Rates: Feedback from those centers has led to improvements in user experience and assay design.

Josh Rates: We are locking in those improvements as we speak which we believe will better position us from a competitive standpoint.

Joshua Riggs: We've been fortunate to be able to lean on our CSO, Dr. Ekkehard Schtz. He has a solid track record of innovative science and publications coupled with extensive experience in transplant assay development. Combining that with a group of eager early adopters who see this as the future of transplant management.

Josh Rates: We've been fortunate to be able to lean on our CSO. Dr. <unk> issues. He has a solid track record of innovative science and publications coupled with extensive experience in transplant assay development.

Josh Rates: Combining that with a group of eager early adopters, who see this as the future of transplant management.

Joshua Riggs: we find ourselves in a really good place heading into our U.S. and European regulatory submission. Our partner FIRST Approach has brought together an amazing group of clinician researchers.

Josh Rates: We find ourselves in a really good place heading into our U S and European regulatory submissions.

Josh Rates: Our partner first approach has brought together an amazing group of clinicians researchers.

Joshua Riggs: As far as new data, in the past year, we continued to advance the science in both oncology and transplant. This includes a groundbreaking and favorable publication in the New England Journal of Medicine. That study used our assay to monitor response to Felzartumab for patients at risk for kidney transplant rejection. This study led to breakthrough designation for the drug from the FDA. Importantly, we believe this signals TAM expansion in the future as these drugs come to market. And doctors need a tool to monitor for the drug working and disease recurrence. in another example of TAM expansion.

Josh Rates: As far as new data in the past year, we continued to advance the science in both oncology and transplant.

This includes the groundbreaking and favorable publication in the New England Journal of Medicine.

Josh Rates: That study used RSA to monitor response to build or to map for patients at risk for kidney transplant rejection.

Josh Rates: This study led to breakthrough designation for the drug from the FDA.

Josh Rates: Accordingly, we believe this signals a tam expansion in the future as these drugs come to market and doctors needed tool to monitor for the drug working and disease recurrence.

Josh Rates: And another example of Tam expansion.

Joshua Riggs: We published data showing that our assay can detect organ rejection in transplant patients 11 months ahead of standard protocols in certain high-risk populations. Then, within weeks of that publication, we achieved Medicare claims expansion to monitor these high-risk. Combined, these new indications can expand the total addressable market up to 20 percent. add to that the potential increased use of more marginal organs with the rollout of iotavir. and we expect meaningful market expansion over the next five years.

Josh Rates: Published data showing that our assay can detect organ rejection in transplant patients 11 months ahead of standard protocols and certain high risk populations.

Josh Rates: Then within weeks of that publication, we achieved Medicare claims expansion to monitor these high risk patients.

Josh Rates: Combined these new indications can expand the total addressable market up to 20%.

Josh Rates: I had two that the potential increased use of more marginal organs with the rollout of Iota. This summer and we expect meaningful market expansion over the next five years.

Joshua Riggs: Also, in 24, we attracted a key strategic partner in BioRed Laboratories.

Josh Rates: Also in 'twenty four we attracted a key strategic partner and bio Rad laboratories, which makes us look and feel like a multibillion dollar company as we go into signed new transplant centers and get them up and running.

Joshua Riggs: which makes us look and feel like a multi-billion dollar company as we go in to sign new transplant centers and get them up and running. I'm also happy to note that Bio-Rad participated in all three of our equity funding rounds over the last year, and we are grateful for their investment and partnership.

Josh Rates: I'm also happy to note that bio Rad participated in all three of our equity funding rounds over the last year and we are grateful for their investment and partnership.

Joshua Riggs: In the year, we also strengthened our team, welcoming Andrea as CFO and Dr. Paul Billings as Consulting Chief Medical Officer. They both have hit the ground running, with Andrea helping to grow our capital markets awareness and build for scale, and Dr. Billings providing strategic direction and connecting us to future potential strategic partners. Towards the end of the year, we had our first pre-submission meeting with the FDA to prep for our final submission later this year.

Josh Rates: In the year, we also strengthened our team welcoming Andrea CFO and Dr. Paul Billings as consulting Chief Medical Officer.

Josh Rates: They both have hit the ground running with Andrea helping to grow our capital markets awareness and build for scale and Dr billings, providing strategic direction and connecting us to future potential strategic partners.

Josh Rates: Towards the end of the year, we had our first pre submission meeting with the FDA to prep for our final submission later this year.

Joshua Riggs: meeting was very positive. They were engaged and thoughtful. While many of the folks on our team have been through the FDA process several times, this was a first for our company. It was a big step pushing us ever closer to having a regulated product on market. We walked away confident and feeling good about the packet we are putting together.

Josh Rates: Meeting was very positive they were engaged in thoughtful while many of the bulks on our team have been through the FDA process. Several times. This was the first for our company.

Josh Rates: It was a big step pushing us ever closer to having a regulated product on market, we walked away confident and feeling good about the package we are putting together.

Joshua Riggs: Now, I'd be remiss if I didn't touch upon some of the macro uncertainties around the federal government, which could affect our timeline and which we are monitoring. The FDA office that will be reviewing our assay is the FDA Center for Devices and Radiological Health, CDRH.

Now I'd be remiss, if I didn't touch upon some of the macro uncertainties around the federal government, which could affect our timeline and which we are monitoring.

Josh Rates: The FDA office that will be reviewing our assay is the FDA center for devices and Radiological health CVR age.

Joshua Riggs: In late February, the Department of Government Efficiency cut staff from CDC. then, a few days later, reversed its decision, and those folks were hired back. We were pleased to see that reversal. We believe that one advantage our industry has, amidst the doge cuts, is that the private sector helps to fund the FDA's device review process. Specifically, CDRH is partially funded by medical device manufacturers through fees that fall under the Medical Device User Fee Amendments, or MDUFA. And so, because the private sector is involved in the funding of the review process, from a federal budget standpoint, we hope CDRH will not be majorly affected.

Josh Rates: In late February the department of government efficiency cut staff from CVR age.

Josh Rates: Then a few days later reversed its decision and those folks were hired back.

Josh Rates: We were pleased to see that reversal.

We believe that one advantage our industry has amidst the dose cuts is that the private sector helps to fund the Fda's device review process, specifically CBRE is partially funded by a medical device manufacturers through fees that fall under the medical device user fee amendments or Madhu. So.

Josh Rates: So because the private sector is involved in the funding of the review process from a federal budget standpoint, we hope <unk> will not be majorly affected that said, we are watching the back and forth. The same as you are.

Joshua Riggs: That said, we are watching the back and forth the same as you are.

Joshua Riggs: The net takeaway today is that we are excited about 2025, about finalizing our assay design. launching and concluding our clinical trial and submitting our data package to the FDA. Our projected timeline for having an approved product on market is mid-2026.

Josh Rates: The net takeaway today is that we are excited about 2025.

Josh Rates: About finalizing our assay design.

Josh Rates: <unk> and concluding our clinical trial and submitting our data package to the FDA or.

Josh Rates: Our projected timeline for having an approved product on market mid 2026.

Joshua Riggs: In the interim, you can look forward to exciting updates about our clinical trial partners, including a KOL call this spring with our National Principal Investigator, and updates about our strengthening commercial pipeline with key institutions progressing through stages of signing and then assay validation.

Josh Rates: In the interim you can look forward to exciting updates about our clinical trial partners, including a KOL call. This spring with our national principal investigator and updates about our strengthening commercial pipeline with key institutions progressing through stages of signing and then assay validation.

Joshua Riggs: Taking a Step Back. Every once in a while, we get a chance to be reminded why we all choose to do this work. One of the potential unfortunate side effects of the immunosuppression given to transplant patients. is that it makes it much more likely that a patient will develop cancer. I've heard from many of our collaborators that they would like to study immunosuppression tapering in their patient populations. so that they can minimize such potential negative effects of immunosuppressive therapy.

Josh Rates: Taking a step back.

Josh Rates: Every once in a while we get a chance to be reminded why we all choose to do this work.

Josh Rates: One of the potential unfortunate side effects of the immunosuppression given the transplant patients.

Josh Rates: Is that it makes it much more likely that a patient will develop cancer.

Josh Rates: And I've heard from many of our collaborators that they would like to study immunosuppression tapering and their patient populations. So that they can minimize such potential negative effects of immunosuppressive therapy.

Joshua Riggs: Then, at a conference in the fall, I had the opportunity to listen to a patient advocate talk about their stage 4 cancer. One that they've got because they've been immunosuppressed for a very long time. And I tell you, the The need for more research and better guidelines really hit home. Couple that with the work that some of our partner centers are planning for pediatric patients, and it feels like we are a small part of something special. Putting our RUO test kit out there means transplant centers are finally free to do the research that matters to them.

Josh Rates: Then at a conference in the fall I had the opportunity to listen to a patient advocate talk about their stage four cancer.

Once they've got because they've been on immuno suppressed for a very long time.

Josh Rates: And I would tell you that.

Josh Rates: The need for more research and better get guidelines really hit home.

Josh Rates: Couple that with the work that some of our partner centers are planning for pediatric patients and it feels like we are a small part of something special.

Josh Rates: Putting our <unk> test kit out there means transplant centers are finally free to do the research that matters to them.

Joshua Riggs: and we are proud to be a partner.

Josh Rates: And we are proud to be a partner in that.

Joshua Riggs: We are reiterating our commitment today to have 20 transplant centers signed up by the end of 2025, which we believe will translate to roughly $20 million in future annual recurring revenue once we've achieved the appropriate regulatory approval. In fact, we are already about halfway to that goal and expect to have several more centers sign on in the coming months. And of course, we believe that that is just the beginning of several years of rapid growth in our transplant business. From research through to the clinic, our GraftaSure family of products are designed to be easy to deploy and easy to adopt.

Josh Rates: We are reiterating our commitment today to have 20 transplant centers signed up by the end of 2025.

Josh Rates: Which we believe will translate to roughly $20 million in future annual recurring revenue once we've achieved the appropriate regulatory approvals and.

Josh Rates: In fact, we're already about halfway to that goal and expect to have several more center sign on in the coming months.

Josh Rates: And of course, we believe that that is just the beginning of several years of rapid growth in our transplant business from research research through to the clinic or grabbed assure family of products are designed to be easy to deploy and easy to adopt.

Joshua Riggs: We're in a good place as a company, and we're going to have the opportunity to do something really great.

Josh Rates: We're in a good place as a company and we're going to have the opportunity to do something really cool.

Joshua Riggs: Next year, assuming regulatory clearance, the transplant testing market changes as local testing becomes a realistic option. You shouldn't have to send patient samples across the country or halfway around the world to get the answers you need. If you're a transplant doc, it shouldn't matter where you are in the world. With our kitted product, you'll have access to the diagnostic tool that you need to manage your transplant patients in real time. Most of our target institutions can already do their own HLA tests. So we see DDC-FDNA as just the next logical step, one with strong reimbursement and margins here in the US.

Josh Rates: Next year, assuming regulatory clearance the transplant testing market changes as local testing becomes a realistic option.

You shouldn't have to send patient samples across the country, we're halfway around the world to get the answers you need.

Josh Rates: If youre a transplant dock it shouldn't matter, where you are in the world with our kitted product you'll have access to the diagnostic tool that you need to manage your transplant patients in real time.

Josh Rates: Most of our target institutions can already do their own HLA testing. So we see DTC a PMA is just the next logical step one.

Josh Rates: One was strong reimbursement and margins here in the U S.

Joshua Riggs: Some of you on the call are new to us, and we appreciate your support in funding our company. The product cycles and upfront investment are often higher in health care than they are in many other markets. And yet we believe that the bulk of the time and investment are behind us. We believe that our momentum will only build over the course of the next two years.

Josh Rates: Some of you on the call are new to us and we appreciate your support and funding our company the.

Josh Rates: The product cycles and upfront investment are often higher in health care than they are in many other markets and yet we believe that the bulk of the time and investment are behind US. We believe that our momentum will only build over the course of the next two years.

Andrea James: Now, I'm going to hand the call over to Andrea to take us through our numbers. Thank you, Josh. Hello, everyone.

Josh Rates: Now I'm going to hand, the call over to Andrea to take us through our numbers Andrea.

Andrea James: Thank you John Hello, everyone, it's great to be providing this update today and to be doing so over to you and thank you to gabby for helping to moderate and they also want to thank the investment community for joining us, especially as we do our first zoom earnings call.

Andrea James: It's great to be providing this update today and to be doing so over Zoom. And thank you to Gabby for helping to moderate. And I also want to thank the investment community for joining us, especially as we do our first Zoom earnings call. Okay, so at the conclusion of our shareholder letter, you can find our financial tables. I do want to highlight a few things. First, you'll see that in Q4, we reported farmer services revenue of one and a half million, with a growth margin of 40%. We're pleased about this and it exceeded our expectations.

Andrea James: Okay. So at the conclusion of our shareholder letter you can find our financial people and do you want to highlight a few things first you'll see that in Q4, we reported pharma services revenue of $1 5 million with a gross margin of 40%. We're pleased about this and it exceeded our expectations our team in Nashville did an excellent job utilizing their expertise.

Andrea James: Our team in Nashville did an excellent job utilizing their expertise and our lab capacity to generate this revenue at the end of the year. It's a testament to the team and their ability to achieve the on time delivery of clear, scientifically sound and accurate data sets to our pharma services clients.

Andrea James: <unk> in our lab capacity to generate this revenue at the end of the year, It's a testament to the team and their ability to achieve the on time delivery of clear scientifically sound and accurate datasets to our pharma services clients.

Andrea James: The way we think about our pharma services business is that it provides non dilutive But it's not a core pillar of our long-term molecular diagnostics revenue strategy. It allows us to monetize our national lab by performing studies and testing instruments for paying customers. And we're especially grateful to our R&D team for balancing these services while remaining focused on our primary goal, which is developing our kitted assay. Our solid execution in pharma services also holds strategic value. It helps us to deepen our relationships with potential future strategic partners. These customers are actually counting on our lab to deliver data that supports their own FDA submissions.

Andrea James: The way, we think about our pharma services business is that it provides non dilutive capital.

Andrea James: But it's not a core pillar of our long term molecular diagnostics revenue strategy. It allows us to monetize our Nashville lab by performing studies and testing instruments for paying customers and we are especially grateful to our R&D team for balancing these services, while remaining focused on our primary goal, which is developing our kitted assay.

Andrea James: Our solid execution in pharma services also hold strategic value it helps us to deepen our relationships with potential feature strategic partners.

Andrea James: These customers actually counting on our lab to deliver data that supports their own FDA submissions and these customers are coming away impressed about the capabilities of our team and gaining confidence regarding potential future development projects.

Andrea James: And these customers are coming away impressed about the capabilities of our team and gaining confidence regarding potential future development projects. We do expect to see some continued revenue from pharma services in the first half of 2025. At this time, we expect that revenue for the entire first half to come in as less than what we realized in Q4. That said, our clients are pleased with our work and sometimes ask us to perform more, and we're happy to oblige.

Andrea James: We do expect to see some continued revenue from pharma services in the first half of 2025.

Andrea James: At this time, we expect that revenue for the entire first half to come in at less than what we realized in Q4.

Andrea James: Our clients are pleased with our work and sometimes asked us to perform more and we're happy to oblige.

Andrea James: The takeaway is that pharma services revenue will naturally vary as we balance it with our strategic priorities. The priority for our sales team this year is to raise awareness of our transplant assay and to support transplant centers, which we expect to become future recurring revenue customers.

Andrea James: The takeaway is that pharma services revenue will naturally vary as we balance it with our strategic priorities.

Andrea James: The priority for our sales team. This year is to raise awareness of our transplant assay and to support transplant centers, which we expect to become future recurring revenue customers.

Andrea James: Also in the coming months, we will need our Nashville Lab employees to prioritize supporting our own FDA submission package, which is strategically more relevant to our long-term success.

Andrea James: Also in the coming months, we will meet our Nashville allowed employees to prioritize supporting our own FDA submission package, which is strategically more relevant to our long term success.

Andrea James: Turning to expense management cash flow. In the fourth quarter, our outgoing cash flow was $5.6 million, and this was favorable to our targeted spend of $6 million. This includes quarterly operating cash expenses, as well as CapEx or purchases of property and equipment. Recall that last year I had told you on my first earnings call with OncoCyte that I had enjoyed stepping into a company that is so focused on operational efficiency. That discipline allowed us to finish the year with $10 million in cash. And then in February, so just last month, we successfully raised an additional $29 million.

Andrea James: Turning to expense management and cash flow in the fourth quarter, our outgoing cash flow was $5 6 million and this was favorable to our targeted spend of $6 million. This includes quarterly operating cash expenses expenses as well as capex or purchases of property and equipment.

Speaker Change: Recall that last year I had told you on my first earnings call with uncle site that I had enjoyed stepping into a company that is so focused on operational efficiency.

Andrea James: Discipline allowed us to finish the year with $10 million in cash.

Andrea James: And then in February So just last month, we successfully raised an additional $29 million. This most recent fundraise was fantastic for US It was a simple and clean transaction with street common stock with no incentive warrants nor discounts.

Andrea James: This most recent fundraise was fantastic for us. It was a simple and clean transaction with straight common stock with no incentive warrants nor discounts. Our five largest shareholders led the funding round. that included Bio-Rad, which made its third equity investment in OncoCyte and also pledged to provide non-dilutive support for the clinical trial and with our pilot site program. Bio-Rad support should help us to mitigate the level of expense increase this year and we're appreciative of that.

Andrea James: Our five largest shareholders led the funding round.

Andrea James: That included bio Rad, which meet its third equity investment and uncle site and also pledged to provide non dilutive support for the clinical trial and with our pilot program.

Andrea James: Bio Rad support should help us to mitigate the level of expense increase this year and we're appreciative of that.

Andrea James: Everyone at the company has worked incredibly hard to get to this point, which is the point where our top shareholders were confident enough to invest the equity capital required to fully fund the development of our clinical kitted assay. Looking at 2025 and beyond, we are excited about the potential future value of our business, and we aim to continue executing to systematically retire risk and to reduce the time distance to meaningful revenue. Every step we take toward finalizing our assay, toward launching and conducting our clinical trial, and toward expanding relationships with major transplant centers brings us meaningfully closer to building a scalable, high margin, and recurring revenue business.

Andrea James: Everyone at the company, who has worked incredibly hard to get to this point, which is the point, where our top shareholders. We're confident enough to invest the equity capital required to fully fund the development of our clinical kitted assay.

Andrea James: Looking at 2025 and beyond we are excited about the potential future value of our business and we aim to continue executing to systematically retire risks and to reduce the time distance to meaningful revenue.

Andrea James: Every step we take towards finalizing our assay towards launching in conducting our clinical trials and towards expanding relationships with major transplant centers brings us meaningfully closer to building a scalable high margin and recurring revenue business. We also remain committed to disciplined cash management in 2002.

Andrea James: We also remain committed to disciplined cash management. In 2025, we continue to target about $6 million per quarter in cash burn, and that ensures us a financial runway of well over a year. The timing of that spend may vary, however, and at this time, we expect Q2 and Q3 to be our heaviest cash expense quarters of the year. Q2 is the quarter in which we pay out the company bonuses, and we also expect to have some incremental sales and marketing expense in the middle of the year as we welcome new pilot sites for GraftAssure, as well as start to incur clinical trial expenses.

Andrea James: Five we continue to target about $6 million per quarter in cash burn and that insurers a financial runway of well over a year.

Andrea James: The timing of that spend may vary however, and at this time, we expect Q2 and Q3 to be our heaviest cash expense quarters of the year Q2 was the quarter in which we pay out the company bonuses.

Andrea James: Also expect to have some incremental sales and marketing expense in the middle of the year as we welcome new pilot sites for graft assure as well as start to incur clinical trial expenses.

Andrea James: We are deeply, deeply grateful for the team's hard work and dedication. And we're grateful for the investor support as we advance our mission to democratize access to molecular diagnostic testing and improve patient outcomes.

Andrea James: We are deeply deeply grateful for the team's hard work and dedication and we're grateful for the investor support as we advance our mission to democratize access to molecular diagnostic testing and improve patient outcomes.

Mark Massaro: And with that, Gabby, let's start taking All right, we will take our first question from Mark Massaro from BTIG. Hey, guys. Thank you for taking the questions. So I wanted to ask about the regulatory pathway. I think in the pre-sub, the FDA indicated you can use the de novo pathway and likely not the 510k pathway. Obviously, you've given us the time frames, but can you just give us a sense for, you know, my guess is approximately six months or so, but how should we think about the timing from submitting to getting approved? And can you walk us through the advantages of having a de novo versus a 510k?

Andrea James: And with that Gabby, let's start taking questions.

Andrea James: Yeah.

Speaker Change: Alright, we will take our first question from Mark Massaro from BTG.

Mark Massaro: Hey, guys. Thank you for taking the questions.

Mark Massaro: So I wanted to ask about the regulatory pathway.

Mark Massaro: I think in the pre sub the FDA indicated you can use the de novo pathway.

Mark Massaro: And likely not the 500 10-K pathway.

Mark Massaro: Obviously, you've given us the timeframes, but can you just give us a sense for.

Mark Massaro: My My guess is approximately six months or so, but how should we think about the timing from submitting to getting approved.

Speaker Change: And can you walk us through the advantages of having a de novo versus a 500 10-K.

Joshua Riggs: You're on mute, Josh. You know, we're learning here, so thanks for the question, Mark. I think, you know, we're budgeting 7 months. That's kind of the guidance for the de novo pathway. There's no real advantage for us going de novo versus. 510K. I think 510K is if there is a predicate device very clearly established. There isn't one for donor-derived cell-free DNA, so I think we were put on this path because we were the first ones going through. That makes sense.

Josh: Youre on mute Josh.

Speaker Change: We're learning.

Josh: So.

Josh: Thanks for the question Mark I think.

Mark Massaro: We're budgeting seven months, that's kind of the guidance for the de Novo pathway.

Mark Massaro: There is no real advantage for us going de novo versus.

Mark Massaro: 500, 10-K, I think fight in case, if there is a predicate device very clearly established.

Mark Massaro: There isn't one for donor derived cell free DNA, So I think.

Mark Massaro: We were put on this path because we were the first one is going through.

Mark Massaro: Yes that makes sense.

Mark Massaro: Can you give us a sense for the number of centers? I know you've talked about the goal is to get to 20 signed up by 2025. You said you're about halfway there now.

Mark Massaro: Can you give us a sense for the number of centers that I know you've talked about the goal to get to 20 signed up by 2025, you said youre about halfway there now.

Mark Massaro: I maybe just want to get a little more specificity around the number of... sites that will be required for the FDA package, and if you can share maybe the number of patients that the FDA is asking you to enroll.

Mark Massaro: Maybe just wanted to get a little more specificity around the number of <unk>.

Mark Massaro: Sites that will be required for the FDA package.

Mark Massaro: And if you can share maybe the number of patients that the FDA is asking you to enroll.

Joshua Riggs: Yeah, I can, I can take that.

Mark Massaro: Yes, I can I can take that and then maybe ask Pete to give just a little bit of color on the.

Joshua Riggs: And then I maybe ask Ekkehard to give just a little bit of color on, you know, the the size of the trial. You know, we're expecting at a minimum three sites is what's required just to do the reproducibility work. I expect that we will double that here in the US, just with the way the study is designed, and then we'll have a couple of centers in Europe as well to support our IVDR submission.

Mark Massaro: The the size of the trial.

Pete: We're expecting it at a minimum three sites is what's required just to do the reproducibility work.

Speaker Change: I expect that we will double that here in the U S. Just with the way. The study is designed and then we will have a couple of centers in Europe as well to support our IBD our submission, but maybe you can comment on the size of the study.

Ekkehard Schutz: But, you know, maybe Ekkehard, you can comment on the size of the study that we're running. You're on mute there too, brother. We're going to get this right at some point.

Pete: We're running here.

Speaker Change: Youre on mute there two brother.

Pete: We're going to get this right at some point.

Pete: Alright.

Ekkehard Schutz: Actually, one part of the presub was that the FDA made our lives easier for the clinical trial because they only wanted to really see one part. But which is pretty much defined. So how good is your essay in detecting rejection? So let's talk. quite a bigger part that we have thought we needed to do out. And for exactly that question, we need about roughly 150. samples. biopsy match samples that would give us this answer with high enough statistical accuracy. Power. And so that's why we are not really need... 20 centers, we can actually really, Josh just told you, get away with a limited number of centers that are doing higher numbers of biopsies.

Pete: Yes, so the.

Pete: Actually what we're one part of the piece of <unk> is that the FDA made our life easier for the clinical trial, because they only wanted to read you see one part.

Pete: Coverages.

Pete: Pretty much defined so.

Pete: God, if your essay and detecting.

Rejections, so that talk.

Pete: Quite a bigger positive VF thought we needed to do out.

Pete: For exactly that question, we need about roughly 150 samples.

Pete: Biopsy Mitch samples.

Pete: That will give us this enzo with high enough statistical.

Pete: Power.

Pete: And so that's why we are not really need.

Pete: <unk> <unk> <unk>.

Pete: And actually we really all.

Pete: Just told you get away with a limited number of centers that are doing.

Pete: <unk>.

Pete: Higher numbers of.

Ekkehard Schutz: And also, we can use 20 percent of the samples coming from outside of the U.S., and that's where Germany and perhaps also Austria will supply.

Pete: Biopsies and also.

Pete: Can use 20% of the samples coming from outside of the U S and Thats well.

Pete: How many in.

Pete: Perhaps also Austria.

Pete: <unk>.

Pete: Supply samples for us.

Mark Massaro: Okay, maybe one last one for me. And I understand that, obviously, we're living in some uncertain times with funding and staffing of federal agencies. But I wanted to just ask about the timing.

Pete: Okay, maybe one last one for me.

Pete: And I understand that obviously, we're living in some uncertain times with funding and staffing of federal agencies.

Pete: But I wanted to just ask about the timing I think if I haven't right.

Joshua Riggs: I think if I have it right, I think on the last call, you talked about a plan to submit to the FDA in mid-25. And now I think you're giving us a guidance by the end of this year. So if I have that right, I think that's about a two-quarter push. How much of that is related to perhaps conservatism versus events that are outside of your control with FDA versus maybe things on the ground with the clinical trial enrollment of the study? No, thanks. It's a good question. You know, I think we're very confident that six centers can enroll 150 patients rather quickly.

Pete: Think on the last call you talked about.

Pete: Our plan to submit to the FDA in mid 'twenty five.

Now I think you are.

Speaker Change: Giving us the guidance by the end of this year.

Pete: So if I have that right I think that's about a two quarter.

Speaker Change: Bush how much of that is related to perhaps conservatism.

Pete: Versus.

Pete: Events that are outside of your control with FDA versus.

Pete: Maybe things on the ground with the clinical trial enrollment of this study.

Pete: No. Thanks, Thats a good question.

Pete: I think we're very confident that six centers can enroll 150 patients rather quickly.

Joshua Riggs: That doesn't seem to be a very large lift from our point of view and from our clinical research partners point of view. I think there is a lot of uncertainty in DC right now that we're trying to understand. And so I think we're just being as cautious as we can there, not knowing what that environment is going to be like. Got it.

Pete: That doesn't seem to be a very large lift from from our point of view and from our clinical research partners point of view.

Pete: I think there is a lot of uncertainty in D. C. Right now that we're trying to.

Pete: Understand.

Pete: I think were just being as cautious as we can there not knowing.

Pete: What that environment is going to be like.

Mark Massaro: All right, cool.

Pete: Got it alright, cool I will hop back in the queue and let some others ask.

Operator: I will hop back in the queue and let some other... Thank you, Mark.

Mike: Thank you Mike.

Mike Mattson: We'll take our next set of questions from Mike Mattson from Needham. Yeah, thanks. Thanks for taking my questions.

Speaker Change: We will take our next set of questions from Mike Matson from Needham.

Mike Matson: Yeah. Thanks, Thanks for taking my questions.

Joshua Riggs: I guess first, you know, just wanted to ask about the centers that, you know, have started using the trial graft assure kits. You know, have they worked through those? Have you seen any actually starting to purchase kits? And, you know, if not, when do you expect that to happen? And can we see any sort of material revenue before you get the FDA clearance? Or is it really going to come after the clearance? Yeah, I'll take those in kind of reverse order there. So I think we're not projecting any material revenue from the RUO product. This year, I think we're, we're very, you know, cautiously optimistic that that'll get adopted in rest of world markets.

Speaker Change: Guess first.

Speaker Change: Just wanted to ask about the the centers that have started using the trial graft assure kits.

Speaker Change: They've worked through those have you seen any actually starting to purchase kits.

Speaker Change: If not when do you expect that to happen and could we see any sort of material revenue before you get the FDA clearance or is it really going to come after the clearance.

Speaker Change: Yes, I'll take those in kind of reverse order there. So I think we're not projecting any material revenue from <unk> product.

Speaker Change: This year I think we're we're very cautiously optimistic that that'll get adopted and rest of world markets, but I think the the big revenue opportunity for US is regulated product in both the United States and in Europe.

Joshua Riggs: But I think the the big revenue opportunity for us is regulated product in both the United States and in Europe. So going through FDA and IVDR, we haven't shown any revenue in Q4 for the RUO product. I'd say we are taking advantage of some of the feedback that we've gotten from our beta sites and we're adopting that into our product.

Speaker Change: Going through FDA and IBD are we haven't.

Speaker Change: Shown any revenue in Q4, four for the <unk> product I.

Speaker Change: I'd say we are.

Speaker Change: Taking advantage of some of the feedback that we've gotten from our beta sites and we are adopting that into our product and so I think once that when it gets out that will be more likely to generate revenue for us probably towards the second half of this year.

Joshua Riggs: And so I think once that one gets out, that will be more likely to generate revenue for us probably towards the second half. Okay, got it.

Speaker Change: Okay got it and then just the shareholder letter does mentioned that bio Rad may provide some clinical support sorry support for clinical trial and commercialization.

Joshua Riggs: And then just the shareholder letter does mention that Bi-Rad may provide some clinical support, sorry, support for clinical trial and commercialization. So is that something where you've kind of established like a dollar amount or is that yet to be negotiated? And can you just talk about the amount and the timing there and what exactly they're going to do beyond kind of the investments they've already made in the and a lot of consumables involved with this type of trial? And I think that's where we'll get the support. I think that we can't be terribly specific about the number there, but we do expect that it's going to offset a significant portion of that spend.

Speaker Change: Is that something where you kind of establish like a dollar amount or is that yet to be negotiated and can you just talk about the amount and the timing there and what exactly they're going to do beyond kind of the investments they've already made in the company.

Speaker Change: Yes, I mean as you can imagine there are a lot of instruments and a lot of consumables involved with this type of trial.

Speaker Change: Thank you no that's where we will get the support.

Speaker Change: I think we can.

Speaker Change: Can't be terribly specific about the number there, but we do expect that it's going to offset a significant portion of that spend this year.

Mike Mattson: Okay, got it. Thank you.

Speaker Change: Okay got it thank you.

Mason Carrico: Thank you, Mike. And we'll take our next set of questions from Mason Carrico from Stevens.

Mike Matson: Thank you Mike.

Speaker Change: And we will take our next set of questions from the meeting cargo from Stephens.

Mason Carrico: Hey, thanks.

Speaker Change: Hey, thanks.

Mason Carrico: Could you talk about what your clinical evidence priorities will be? following FDA approval? I mean, what evidence do you need to see to drive broader utilization once you've moved past the regulatory hurdle?

Speaker Change: Could you talk about what your clinical evidence priorities will be.

Speaker Change: Following FDA approval I mean, what evidence do you need to see to drive broader utilization once you move past the regulatory hurdle and ultimately.

Joshua Riggs: And ultimately, how do you see centers balancing the economic benefits of your assay versus the clinical evidence that backs the LDTs today. Now it's a it's a good question. And I would say when we show our data side by side. You know, the negative predictive value, positive predictive value, I think we compare favorably to any test that's on market. I believe we're the only company that's published randomized interventional data. You know, I think we're the only company in the New England Journal of Medicine last year. So I think I feel really good about the work that Ekke and his team have done, you know, proving that the assay is clinically useful and robust.

Speaker Change: How do you see centers balancing the.

Speaker Change: The economic benefits of your assay versus.

Speaker Change: The clinical evidence that backs the ODT is today.

Speaker Change: No I'd say.

Speaker Change: It's a good question and I would say when we.

Speaker Change: Show, our data side by side.

Speaker Change: The negative predictive value positive predictive value I think we compare favorably to to any test.

Thats on market.

Speaker Change: Believe we're the only company that's published randomized interventional data.

Speaker Change: I think we are the only company in the New England Journal of Medicine last year. So I think I feel really good about the work that <unk> and his team have done.

Speaker Change: Proving that the assay is clinically useful and robust.

Joshua Riggs: You know, obviously, we're going through the FDA on kidney right now, which is the 85% of the market or so. You know, I expect that it will bring that to our own LVT lab, and we will update our submission to Moldex with the regulated product, and that'll bring all of these claims over to it. So, like the de novo DSA screening application that we got covered this year, I think. That helps. It certainly helps in Moldex, where we're based.

Speaker Change: Obviously, we're going through the FDA on kidney right now, which is the 85% of the market or so.

Speaker Change:

Speaker Change: I expect that.

Speaker Change: He will bring that to our to our own LDP lab, and we will update our submission to <unk> with the regulated product and that will bring all of these claims over to it so like the de Novo DSA screening application that we got covered this year I think.

Speaker Change: That helps it certainly helps and and.

Speaker Change: <unk>, where we're based.

Joshua Riggs: Beyond that, I think we would invest in heart and then liver-lung kind of second, third, fourth, if you will, in terms of priority. But we're 100% focused on making sure that the centers are going to be able to come up and manage their kidney transplant patients on day one.

Speaker Change: Beyond that I think we would invest in.

Speaker Change: And heart and then liver lung kind of second third fourth.

Speaker Change: If you will in terms of priority.

Speaker Change: But we're 100% focused on making sure that the citrus going to be able to come up and manage their kidney transplant patients on day one.

Mason Carrico: Got it. Thank you.

Speaker Change: Got it thank you.

Joshua Riggs: And how should we think about early utilization dynamics, specifically assuming these centers take on the reimbursement risk with a kitted product? How do you plan on driving utilization ahead of broader commercial coverage? Yeah, I would, I'm going to break that in two parts. So we believe that inside of Moldex, we will have an opportunity to bridge the reimbursement from our service lab to the kitted product. And so that helps a portion of the market, not all of it. And so I think you'll see faster adoption there than you will outside of that jurisdiction, where we'll need to go kind of Mac by Mac to work on reimbursement.

Speaker Change: And how should we think about early utilization dynamics just physically assuming.

Speaker Change: These centers take on the reimbursement risk with a kitted product how do you plan on driving utilization ahead of broader commercial coverage.

Speaker Change: Yes, I would I'm going to break that in two parts.

Speaker Change: We believe that inside of <unk>, we will have an opportunity to bridge the reimbursement from our service lab to the kitted product and so that helps a portion of the market and not all of it.

Speaker Change: And so I think youll see faster adoption. There then you will outside.

Speaker Change: That jurisdiction, where we'll need to go kind of Mac by Mac to work on reimbursement.

Joshua Riggs: As far as adoption within centers, I don't expect that these guys are going to flip 100% of their volume on day one. Nobody does that. And I think Andrea back in our shareholder letter in the summer last year put out a nice model that shows kind of cautious adoption at first as centers, you know, for the first two quarters or so of, you know, bringing it in-house, learn how it works, learn how to integrate it with their systems and their approach to patient management, and then it increases from there. And so I think we expect the largest increase in revenue to start happening in 2027 as our day one sites really figure out how to integrate this into their care management protocols to make sure.

Speaker Change: As far as adoption within centers I don't expect that these guys are going to flip a 100% of their volume on day, one nobody does that.

Mike Matson: I think Andrea back in our shareholder letter in the summer last year put out a nice model that shows kind of.

Mike Matson: Cautious adoption at first as centers for the first two quarters or so of <unk>.

You get in house learn how it works learned how to integrated with their systems and their approach to patient management and then it increases from there and so I think.

Mike Matson: We expect the largest increase in revenue to start happening in 2027.

Mike Matson: As our as our day, one sites really figure out how to integrate this into their care management protocols to.

Mason Carrico: Did I answer your question there, Mason? Yeah, you did.

Mason: Just to make sure that I answered your question there Mason.

Speaker Change: Yes, you did and if I could ask one more here just on the works workflow side of it.

Joshua Riggs: And if I could ask one more here, just on the workflow side of it. How easy does your offering integrate into the existing workflow? What level of incremental education is required there? Have the existing LBT providers done a lot of the heavy lifting for you? Man, I tell you, this is my favorite thing that happened over the past six or seven months is, you know, the feedback that we got from our sites. And, you know, Ekke and his team have done such a wonderful job streamlining the workflow here. It's two pipetting steps and you're done.

Speaker Change: How easy does does your offering integrate into the existing workflow what level of incremental education is required there has the existing LDC provider has done a lot of the heavy lifting for you.

Speaker Change: Man I would tell you this is my.

Speaker Change: My favorite thing that happened over the past six or seven months is.

The feedback that we got from our sites and <unk> and his team have done such a wonderful job streamlining the workflow here, it's to pipe heading steps and Youre done it's about as easy as it workflows, you can possibly put into a molecular lab.

Joshua Riggs: It's about as easy as a workflow as you could possibly put into a molecular lab. If you know how to extract DNA and, you know, put it into a master mix, run preamp, and then put it on to a workflow, you're done. Basically, if you're doing HLA today, you can do this, no problem. And and I think 75 to 80 percent of the top transplant centers in the United States are already doing HLA in-house. So this is a very easy add for them.

Speaker Change: You know how to extract DNA and put it into a master mix run preamp, and then put it onto a to workflow youre done.

Speaker Change: Basically if youre doing HLA today, you can do this no problem.

Speaker Change: And.

Speaker Change: I think 75% to 80% of the top transplant centers in the United States are already doing HLA in house.

Speaker Change: So this is a very easy add for them.

Operator: Got it. Thank you guys.

Speaker Change: Got it thank you guys.

Operator: Does anyone have any follow up questions? I just wanted to address some of the timeline questions.

Speaker Change: Does anyone have any follow up questions.

Speaker Change: I just wanted to address some of the business.

Mike Mattson: Sorry, I saw Mike pop up. I want to make sure that he didn't have a question.

Speaker Change: Alright, Thats all might pop up I want to make sure that he didn't have a question yes.

Mike Mattson: Yeah, actually I do. I do have one more. So, you know, I'm just curious.

Speaker Change: Actually I do I do have one more so I'm just curious I mean, I don't know if youre willing to talk about this on a public call but.

Mike Mattson: I mean, I don't know if you're willing to talk about this on a public call, but, you know, if you game things out in terms of like the competition, you know, these lab-based competitors, you know, how do you think they're going to kind of respond, you know, once you're in the marketplace, you know, with a cleared test and, you know, is there do you think there's Anything they can do to kind of throw some hurdles in your way that you need to plan for? You know, I think they will point to the hundreds of thousands of patient samples that they've run and say that, you know, they've been in the market serving patients for five to seven years.

Speaker Change: If you're a game things out in terms of like the competition. These lab based competitors, how do you think theyre going to kind of respond.

Speaker Change: Once you are in the marketplace with a cleared tests and.

Speaker Change: No.

Speaker Change: Is there do you think there is.

Speaker Change: Anything they can do to kind of throw some hurdles in your way you need to plan for.

Speaker Change: I think they will point to the hundreds of thousands of patient samples that they've run and say that they've been in the market serving patients for five to seven years.

Joshua Riggs: And, you know, that's going to have some stickiness. And I think that's where we will have to show that we can generate the same answer for those patients with a quality level that is useful for the clinical environment. I think that's what the FDA study does. I think it proves that point, but we'll have some convincing to do when we get to the market and it'll be center by center and they'll have convincing to do internally. But I think at the end of the day, the data is what matters. And we're gonna encourage people to run the side-by-sides, run head-to-heads, do what you need to do to get comfortable.

Speaker Change: And if thats going to have some stickiness.

Speaker Change: That's where we will we will have to show that we can generate the same answer for those patients with your.

Speaker Change: Got quality level that is useful for the clinical environment I think that's what the FDA study does I think it I think it proves that point, but we will have some convincing to do when we get to the market and it will be center by center and they'll have convincing to do internally, but I think at the end of the day the data is what matters and.

Speaker Change: We're going to encourage people to run it run the side by sides run head to heads do what you need to do to get comfortable we're confident that at the end of the day, you're going to trust, what we're putting out there.

Joshua Riggs: We're confident that at the end of the day, you're gonna trust what we're putting out there.

Mike Mattson: Okay, got it. Thank you.

Speaker Change: Okay got it thank you.

Andrea James: Yeah, I just want to just address the timeline questions just a little bit. From our perspective, we're still on sort of the rough timelines we have given, that we gave, I want to say like last August, November. So we're just we're still generally within those rough timelines. But yes, we've certainly communicated just a little bit about watching the FTA back in Okay, thank you Andrea.

Speaker Change: Yeah I just wanted to just address the timeline questions just a little more.

Speaker Change: From our perspective, we're still on sort of the rough timeline, we have given that we gave I wonder if you like last August November.

Speaker Change: So we're just we're still generally within those rough timelines, but yes, we've certainly communicated just a little bit about watching the FDA back and forth.

Speaker Change: Okay.

Andrea James: Okay. Thank you Andrea do you have any follow up questions.

Operator: Do we have any follow-up questions? Well, Josh, that sounds like it.

Josh: Hi, Josh.

Joshua Riggs: Can you please close us out? Yeah, I mean, thanks, everybody. Thanks for joining this experiment. Actually, it's kind of fun getting to see faces while we do this call, instead of just, you know, talking into a black hole. You know, we're obviously, we're pumped up, we're excited. I think, you know, 25 is going to be a very interesting, very fun year for us. And I think we have, you know, partnering opportunities. We have more data coming out that we're excited about, and we look forward to sharing that with you guys as it comes available. Just appreciate the support and look forward to updating everybody on our progress in about six or eight weeks or so when we get on our RQ1 call.

Speaker Change: And can you. Please go ahead.

Speaker Change: Yes, let me thanks, everybody. Thanks for joining this experiment actually this kind of fund getting to see faced as well while we do this call instead of just talking into a black hole.

Speaker Change: Obviously, we are pumped up we're excited I think 25 is going to be a very interesting very fun.

Speaker Change: Year for Us and I think can we have partnering opportunities we have more data coming out that we're excited about and you look forward to sharing that with you guys as it comes available Dupree.

Speaker Change: I appreciate the support and look forward to updating everybody on our progress in about six or eight weeks or so when we get on our Q1 call.

Operator: Thank you, everybody. Thank you.

Speaker Change: Thank you everybody.

Speaker Change: Okay.

Speaker Change: Okay.

Operator: Goodbye.

Speaker Change: Goodbye.