Q1 2025 Sera Prognostics Inc Earnings Call
Daniel Brennan, Andrew Brackmann, Dustin Aerts, Evguenia Lindgardt
Sarah: Good afternoon and welcome to the Sera Prognostics Conference Cult to review first quarter physical year 2025 results. At this time all participants are in listen only mode.
Sarah: 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 a call over to Peter DeNardo of Capcom Partners for a few introductory comments.
Peter Denardo: Thank you, Andrew. Good afternoon, everyone. Welcome to Sera Prognostics' first quarter fiscal year 2025 earnings conference call. At the close of the market today, Sera Prognostics released its financial results for the quarter ended March 31, 2025.
Speaker Change: Presenting for the company today will be Daniel Lindgardt, President and CEO , and Austin Aerts, our CFO . During the call, we will review the financial results we released today, after which we will host a question and answer session.
Speaker Change: If you've not had a chance to review our quarterly earnings release, it could be found on our website at Sera.com This call can be heard live by a webcast at Sera.com and a recording will be archived in the Investors section of our website.
Speaker Change: Please note that some of the information presented today may contain projections or other forelooking statements by events and circumstances that have not yet occurred.
Speaker Change: including plans of 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: We refer you to the documents the company files from time to time with the Securities and Change Commission.
Speaker Change: Specifically, the company's annual report on Form 10K. It's quarterly reports on Form 10Q and its quarterly reports on Form 8K. These documents identify important risk factors that could cause the actual results to differ materially from most contained in our projections and other reporting statements.
Speaker Change: As a reminder, a webcast replay of this call will be available on the Investors section of our website.
Speaker Change: I will now turn the call over to Genia, Sera Prognostics President and CEO , Genia.
Thank you, Peter, and good afternoon everyone.
Speaker Change: It has been just a few short weeks since the last held our quarterly earnings call near the end of March, during which we shared a lot of updates regarding prime and commercial priorities.
Speaker Change: So I'll aim to keep my comments brief today. We've continued to make progress in driving the transition from our clinical evidence development phase with the full pivotal prime study results being communicated in January toward their next phase to pursue commercial growth opportunities.
Speaker Change: We are progressing nicely towards publication of the prime study results in a peer-reviewed journal.
Speaker Change: Today, I'll lay out our commercial roadmap over the next few quarters, which follows a geographically focused ecosystem playbook with three primary components, which will look to perfect first in about half a decade.
and a nationally premier.
Speaker Change: First component is reimbursement, with a balanced approach towards commercial insurers, employers and Medicaid, which is a key payer for most physicians with about 43% of all births in the United States paid for by Medicaid programs.
Speaker Change: The third pull-through of testing volume. It's only gained adoption, but also catalyzed. My
Speaker Change: on reimbursement and Medicaid in order to foster that reimbursement we are simultaneously focused on the following.
Speaker Change: First, we're renting a Medicaid plan pilot in the state's most active agreement during the course.
Speaker Change: Whitley, Worcester, Lutheran, Anchored by the Science and Evident Cost Savings, and Responsiveness and Awareness by Physicians, gives us a solid shot on goal in states with higher premature of birth than the national average.
Speaker Change: For example, regarding cost savings and healthcare economics, the prime study results reported in January demonstrated that he can save one very expensive NICU day on average about 4,000 per day nationwide, but depending on the level of the NICU up to $20,000 per day.
Speaker Change: by screening on average just three to four patients with the pre-term test.
Speaker Change: Compared to other screening tools for risk of preterm birth, namely, transvaginal ultrasound, physicians need to screen more than three times fewer patients to save one NICU admission with the preterm test.
Speaker Change: The number needed to screen for transvaginal ultrasound to save a NICU admission is 150 expectant mothers and for the preterm test, only 31 expectant mothers.
Speaker Change: In addition to that, we've been following the patients for the first 12 months post-birth, and the data we're gathering on the savings during that first year is further strengthening our health-economics case.
Speaker Change: That is especially critical because Medicaid states are now covering the first 12 months of healthcare for newborns and this should further support the economic value of our test.
Speaker Change: We mentioned on our last call that we're looking at several states where we have support from keeping in leaders and prime studies, died in situations.
Speaker Change: Advocacy from early adult or physicians can influence and Medicaid's plans willingness to pilot the coverage of our test by sharing their experience with preterm testing.
Speaker Change: With that, Advocate Support, our initial focus would be on Medicaid providers that are innovative and forward thinking, and where we can leverage our opinion leaders and our existing field-to-field representatives.
Speaker Change: We already have sales presence for key states like California, Nevada, and recently added sales presence for other target states such as Texas.
Speaker Change: and we are targeting to direct our spend towards the best commercial opportunities by expanding our sales force in the target state.
Speaker Change: We're currently pursuing promising pilots for managed Medicaid plans across these geographies. Although there are no guarantees, we believe we should be able to close some of these within months.
Speaker Change: The second focal point for reimbursement is of course commercial payers with substantial number presence in our focus states that have a history of covering innovations in the material care space before medical society guidelines.
Speaker Change: And third, we will look to engage with dominant anchor employers.
and or self-funded organization.
Speaker Change: We want to further increase the percentage of physician office reimbursement mix that is covered by each part of reimbursement, whether by Medicaid, insurance, or employer coverage.
Speaker Change: Our goal is to create as many possible reimbursement pathways as possible for each physician that we are opening up.
Speaker Change: We're also, of course, have patient assistance programs in place already.
Speaker Change: In building awareness, we're continuing to be laser focused on spending with a measured approach that can yield high ROI. With geofence digital education of providers, we have roughly 3,000 warm leads generated in recent campaigns where we find doctors to be engaged and their responses.
Speaker Change: We're working to develop a high-quality pipeline across our targeted areas. These leads will provide a strong starting point for the Salesforce we're expanding across the target states.
Speaker Change: Over time, we should be able to measure the cost effectiveness and time to close for each account so we can improve our sales efficiently, efficiency and success.
Speaker Change: So what does our commercial playbook look like when we open a new customer?
Speaker Change: Starting up new customer offices begins with integration with the Office's electronic medical record system and practices patient communication tools.
Speaker Change: We then collaborate with the practice and external resources to educate physicians on the use of the preterm test, and train nursing staff in the practice on the point of our intervention bundle. Lodos Asprin, Vaginal Progesterone, and Weekly Care Management Protocol.
Speaker Change: We also invest in educating patients ahead of the second trimester when the test is administered to help doctors to discuss the preterm test efficiently in the relevant office visit.
Speaker Change: A good example of patient education through external resources is our collaboration with what to expect in baby center, which collectively reaches 80% of moms across their pregnancy journey to deliver targeted education and awareness at key pregnancy milestones.
Speaker Change: This partnership allows us to reach expectant mothers with relevant information about the preterm test and premature birth, precisely when they needed the most.
Speaker Change: Building national awareness and share of voice quickly through broad media campaigns can be very expensive and inefficient.
for our stage of development.
Speaker Change: So, we will take a measured and synergistic approach that starts off
Speaker Change: Localized in specific states to maximize return and investment. This involves deploying a traditional toolkit that can include speaker programs, sharing studies from quality and investigator-led initiatives within major institutions to engage physicians and deploying targeted research.
Speaker Change: To contact them though in those areas, most in need of a solution to spontaneous premature births.
Speaker Change: Preterm is the only molecular diagnostic test to predict risk of preterm birth on the market.
Speaker Change: Without other companies to contribute to building a ground swell of awareness, we must shoulder the burden of finding physicians who have used our tests, have seen it's benefit on their patients, and a passion about improving on the status quo care.
Speaker Change: The strongest force in changing the status quo is of course medical society guidelines, which heavily influence how each obstetrician practices. At the same time, medical societies want to hear from physicians who have used the test before they consider recommending it in their guidelines.
Speaker Change: We believe publication of our prime study results may generate commercial momentum by urging forward thinking positions who won solutions for the country's intractable preterm birth problem to try the preterm test.
Speaker Change: We expect that Pulsar can be further supported by continuing to provide real-world evidence, and through early adopter physicians illustrating the benefit of pre-term tests with improved care and outcomes for months and babies.
Speaker Change: These physicians see the critical need for screening provided by our test and the need for paradigm change in maternal care so that can be one of the many voices to affect change.
Speaker Change: According to a recent study published by JAMA Network Open, a medical journal published by the American Medical Association, an increase in pregnancy-related deaths was observed in the US between 2018 and 2022.
Speaker Change: The increase based on age standardized annual and aggregated rate was staggering 27.7% during the period from 25.3 deaths per 100,000 live births to 32.6.
Speaker Change: Furthermore, maternal mortality review committees have reported that 80% of these deaths caused the pregnancy are preventable.
Speaker Change: These mortality rates occur with significant disparities, such as a 2-3-fold increase during the period in maternal mortality among non-Hispanic black patients, for his white patients.
Speaker Change: We believe we should all share the urgency of changing this.
Speaker Change: In fact, just this month, the American College of Citrusions and Gynecologists, or ACOG, released an updated clinical consensus on palering prenatal care delivery for pregnant individuals.
Speaker Change: The report includes important updates to prenatal care related to incorporation of risk assessments based on medical, social, and structural drivers of health. Recommendations include changes to the frequency of monitoring, the visits, the use of telemedicine, and support of services.
Speaker Change: In collaboration with providers, patients can elect a tailor prenatal schedules. For example, fewer proposed visits or evaluations for patients that lack risk factors, for example, prior pregnancy or medical conditions, and more intense schedules and care for patients at greater risk.
Speaker Change: We recognize ACOG's emphasis on the importance of risk assessments in prenatal care. Our Prime Studies supports the use of the preterm test as a component of comprehensive risk assessment in prenatal care.
Speaker Change: As the preterm test results can help direct interventions and limited resources towards those most at risk for preterm birth.
Speaker Change: We believe that prime publication in context of ACOG's updated statement may create an opportunity for clinical opinion leaders to evaluate and issue guidelines along around new technologies that can help with the risk assessments called for by ACOG.
Speaker Change: Any such developments could potentially influence the adoption of our patron test and affect our future market opportunities.
Speaker Change: With that in mind, we will have a strong presence at the ACOG Annual Clinical and Scientific Meeting in a couple of weeks where we will meet with attendees to cultivate interest in continued investigator initiated evidence generation for preterm test and treat strategy.
Speaker Change: We have a lot of work to do in ramping up the commercial opportunities of outline today and we plan to update you on our execution of these primary components of our growth strategy over the coming quarters.
Speaker Change: In summary, we believe 2025 will be a year where we will kick off a flywheel of commercialization and build a movement across a broad range of stakeholders interested in better care outcomes along with reduced healthcare costs with biomarker risk stratification strategies in pregnancy
Now, I'll turn it over to Austin. Austin.
Austin Aerts: Thanks, Jenny, and good afternoon, everyone. Let me review our financial results for the first quarter.
Austin Aerts: Net revenue for the first quarter of 2025 was $38,000 compared to NIL for the first quarter of 2024.
Austin Aerts: Total operating expenses for the first quarter of $9.3 million were up slightly from $9.1 million for the same period a year ago.
Austin Aerts: Research and development expenses of $3.3 million were down approximately 9% relative to the prior year period, primarily due to lower clinical study costs as third-party expenses related to prime study analysis have continued to decrease.
Austin Aerts: Selling General and Administrative Expenses for the first quarter of $5.9 million were up from $5.4 million for the first quarter of 2024 as we continue careful management of commercial activities focused on driving future growth while adding some strategic headcount and investing in targeted awareness and other initiatives as we prepare for the publication of Prime
Austin Aerts: Net loss for the quarter was $8.2 million, relatively flat with $8.1 million for the same period a year it goes.
Austin Aerts: As of March 31st, 2025, the company had cash, cash equivalents, and available for sale securities of approximately $114.2 million.
Austin Aerts: As you noted, we are being selective where we deploy capital this year as we evaluate commercial opportunities to elevate test adoption and increase revenue.
Austin Aerts: We will continue to be prudent in our approach to building awareness among patients and physicians region by region as part of our overall strategy.
Operator, we can now please open the call for questions
Thank you.
Speaker Change: Ladies and gentlemen, we will now begin the question and after session.
Austin Aerts: Should you have a question, please press the star followed by the number one on your touch
Austin Aerts: You will hear prompt that your hat has been raised.
Austin Aerts: Should you wish to decline from Napoleon Corsesse, please press the star followed by the number
Austin Aerts: If you are using a speaker phone, please lift the headset before pressing any keys.
One moment please for your first question.
Speaker Change: Your first question is from Andrew Brackmann from William Blair, please go ahead.
Speaker Change: Hey, everyone. This is Maggie on for Andrew today. Thanks for taking our questions. Maybe first, if you could talk about the strategic headcount investments you started to make, can you talk about what you expect the progression of that to look like throughout the year and how large of an investment you expect that to be for 2025.
Maggie, good to hear you. Thank you for the question.
Speaker Change: For now, we're planning to expand our commercial presence by 5-10 FCEs, and of course we'll monitor how quickly we make progress in our targeted states.
Speaker Change: to first resource the states that I mentioned appropriately and then if it goes very well, potentially extend to the next wave of states.
Speaker Change: So 5 to 10 for now and we will report back probably in the next quarterly conference on how is it going and if we might want to increase that.
Speaker Change: Okay, great. Thank you. And then obviously, no, it's hard to predict the timing but any updates you can give us just in terms of how the prime study publication is progressing.
Speaker Change: Thank you. I wish I could tell you precisely when it's going to be published. I really want to. Unfortunately, I don't have the precise estimate. However, I do want to report that we pass the next milestone in engagement with the target journal and. I'm going to. I'm going to.
Speaker Change: are looking forward to the next milestone and hopefully good news after that.
Great to hear. Thanks so much.
Wonderful.
Speaker Change: Your next question is from Dan Brennan from PE Cowan. Please go ahead.
Dan Brennan: Great, thanks for the questions. Maybe the first one, you went over kind of quickly, just what was the ACOG bulletin update? Could you just elaborate a little bit on that?
and just speak to what the potential impact is about
Dan Brennan: You know, you are progressing your outlook going forward for getting into guidelines.
Dan Brennan: Great question. Thank you. ACOG Bulletin last month was a huge development in our space.
Dan Brennan: The guidelines for prenatal care protocol were put in place something like about 100 years ago, first in 1930s, and the overall protocol has not been significantly changed since
Dan Brennan: Last month's ACOG bulletin specifically shifted away from one size fits all protocol to tailoring care based on risk certification of expectant mothers in their pregnancy.
Dan Brennan: It's specifically talked about titrating interventions, including the frequency of visits, the particular medical interventions, not just based on medical conditions, but presence of risk in the pregnancy.
Dan Brennan: So what got us very in the community, very excited about it is our preterm screen and to treat strategy, suggests that biology of pregnancy is different for every mom.
Dan Brennan: and stratifying the risk based on biomarkers and clinical factors could direct interventions to much better clinical and health-canomic outcomes of the pregnancy.
Specifically, in our case, we've seen across dozens of clinical trials.
That...
Dan Brennan: If we identify a higher risk pregnancy, mom, in weeks 18-20 with pre-tremptest.
and deploy our intervention bundle, tested with multiple clinical trials.
Dan Brennan: that were published recently, namely AVERT in July of last year in Diagnostics Journal and now PRIME Study, abstract of which was published in January 2025 in the Pregnancy Journal.
Dan Brennan: shows that deploying that intervention to retrim test identified higher risk moms can have significant clinical outcomes improvement to those pregnancies.
Dan Brennan: So in our product research, we've seen the tailoring care is enormously beneficial to the cost of moms and babies.
Dan Brennan: and seeing that in the guidelines from our top professional society ACOG has been wonderful to see and in terms of the opportunity for preterm test.
It's...
Dan Brennan: A first step of guidelines setting bodies in looking at the research available to date.
Dan Brennan: to start helping physicians risk stratified pregnancies. And of course we're excited at the right time whenever the guidelines setting bodies prioritize reviewing care protocols for spontaneous preterm births.
Dan Brennan: To take a look at the research that we are about to publish on and include their assessment and recommendation on how clinicians can use preterm tests in risk certification for specifically the tailored care that they are recommending physicians to deploy.
Dan Brennan: Great, thank you for that. Maybe this is a follow-up. How often does ACOG do these updates? And I'm just wondering, just remind us.
Dan Brennan: I know we're super early post the data release earlier this year, but...
Dan Brennan: Just kind of remind us now that you're, you know, a few more months into the process about Contemplating all the things that need to get done like a how often do they update and be what's what's you know? How do you think about?
Dan Brennan: You know, kind of the predicate range of outcomes that could occur here if in fact you get into guidelines, you know, what's the what's the best case medium term and like worst case in terms of timing?
Dan Brennan: Yeah, no, great question. Depends whether it's general update to guidelines or specific bulletin that governs our topic, which is bulletin 234 from ACOG that governs treatment for spontaneous preterm birth.
Dan Brennan: Each of these bulletins gets updated when a lot of new data becomes available and on average between 24 and 48 months in between the revisions.
Dan Brennan: Our relevant bulletin 234 was last updated in August 2021, so we're coming up on time, where it would be natural for a call to refresh that.
Dan Brennan: It also happens that 2025 is a very exciting year with a lot of new data coming out on Spontaneous
Dan Brennan: of course one of which is our very exciting data in pre-term trial.
Dan Brennan: As you are asking about how could the guideline recommendation journey evolve? We see three scenarios.
Dan Brennan: Of course, the guideline revision timing is entirely up to ACOG and Society for Maternal Feetal Medicine, the two sister societies that collaborate closely on developing these guidelines.
Dan Brennan: They prioritize about two, three topics per year for revision, then form at about a 20% committee that includes MSMs.
OB-GYNs
Dan Brennan: Nurses, neonatologists, statisticians, health economists to review all of the latest literature that has been developed by the community in the last two, three, four years, and then upon the review and the insights of data guidelines.
Dan Brennan: Insights and Subanalyses on a very, very rich 5,000-patient data set and done by our illustrious
Speaker Change: and not only by Sera, but other institutions are conducting a lot of research in preterm birth space.
Speaker Change: We're hoping that 2026 or 2027 could be that year when the societies may prioritize preterm birth and spontaneous preterm birth as a bulletin to provide revisions to.
So
Speaker Change: If that happens, then the scenario of when the recommendations could be updated is the year after, so 27, 28.
Speaker Change: So that's the Scenario Number One. Scenario Number Two could be that the latest data that I mentioned, the JAMA Network Open article, that pointed to about 28% increase in maternal mortality.
Speaker Change: and very unfortunately stable 10.4% premature birth rate in the United States.
is seen by the current administration in public health.
Speaker Change: Opinion Leaders as the top priority topic that might change the prioritization and bump it up on the priority list to be reviewed sooner rather than later.
Speaker Change: If that happens, then potentially the committee could be convened sooner than 2026 or 2027, and therefore guidelines could be updated even before 2027.
and option three is
Speaker Change: Time for the spontaneous speech from birth and speech from birth to bubble up to the priority list of topics to be reviewed.
Um, um,
Speaker Change: and, therefore, guideline change will occur more in the 3-5-plus-year time frame. So, these are the scenarios we see and the process that the societies follow.
I hope that helps.
Speaker Change: Great, yeah, that was great. Maybe just last one and then I'll kind of go
Speaker Change: Kind of mac and me. You just obviously Medicaid. You discussed it during the prepared remarks. You're pretty excited there. I mean, that's an interesting opportunity. Just what have you learned so far? I know it's early in terms of this opportunity, the state that you're identifying and. [inaudible]
Speaker Change: If we're sitting here 18 months from now, what are the potential outcomes with progress or success in some of these states?
It's been the opposite [inaudible]
Um. Um.
Speaker Change: We've seen a lot of engagement with state Medicaid plans, who all are governed, of course, every state is different and sets their policy. According to their priorities and some states are doing great on preterm birth, others are really not.
Speaker Change: So depending on how critical preterm birth priority is for that state, of course we started focusing on the ones that need solutions for preterm birth the most.
Speaker Change: Second, we take a look at what quality metrics the state sets for the plans and what outcomes do they measure state Medicaid plan performance on?
Speaker Change: and we target the plans where we believe we can make a major difference for planned performance that they're measured on and the metrics where the state is looking to move the needle on.
Speaker Change: Sometimes it's a negative mission, sometimes it's the rate of c-section, sometimes it's birth weight of the neonates.
Speaker Change: For us, we've analyzed and published through Prime Study Aftract a lot of exciting outcomes we've already observed in the Prime Study.
and are looking forward to-
Speaker Change: Giving Medicaid plans opportunity to see on what deployment of a preterm test and intervention bundle.
Speaker Change: Strategy can do for their members in terms of clinical outcomes to meet their quality metrics in their state and of course the cost of care outcomes.
Speaker Change: What makes us particularly excited about Medicaid is in the year when overall Medicaid program is looking to cut costs.
Speaker Change: Preterm test and treat strategy can put costs without cutting benefits. And that is a huge opportunity, of course, that's where the policy makers should look first at solutions that can reduce cost without reducing benefits.
Speaker Change: Great, actually let's see one more in. I know in the last call you discussed Medicaid pilot programs. You could have two to four programs over the next 12 months. Is that still you're thinking?
Yep, that's exactly right.
Great, okay, thanks.
Speaker Change: Ladies and gentlemen, as a reminder, should you have any questions? Please press the star key followed by the number one.
Speaker Change: There are no further questions at this time, I will turn it all over to Danielle Lindgardt for closing remarks.
Zinnia Lindgardt: Thank you, operator. Before my closing remarks, I'll make one correction. I think I miss spoke and stated that number needed to screen of expectant mothers in order to save one NICU admission was 31. In fact, it is 41 as stated in our corporate deck on our website.
Zinnia Lindgardt: With that, thank you everyone for attending our call today. We are pleased that we have now entered a new commercialization phase, empowered by our prime study results.
Zinnia Lindgardt: Which have garnered interest and we expect to help open a lot of doors commercially. With those results in hand we believe 2025 will be a build year for Sera and we look forward to sharing our progress with you. I'll now turn it back over to the operator to conclude the call. Operator?
Speaker Change: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and I ask that you please disconnect your lines.