Q1 2025 Lucid Diagnostics Inc Earnings and Business Update Call
I'd now like to turn the conference call over to Mr. Matt Riley Lucid diagnostics senior director of Investor Relations. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone. Thank you for participating in today's business update call. Joining me today on the call our Doctor Alicia I caught chairman and Chief Executive Officer of Lucid diagnostics, along with Dennis Mcgrath Chief Financial Officer.
Speaker Change: The press release announcing our business update and financial results is available on <unk> website. Please take a moment to read the disclaimers about forward looking statements in the press release the business update press release and conference call include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual.
Speaker Change: Alts to differ materially from statements made.
Speaker Change: Factors that could cause actual results to differ are described in the disclaimer and in our filings with the SEC.
Speaker Change: Or less than a description of these and other important risks and uncertainties that may affect our future operations.
Speaker Change: Part one item one a entitled risk factors and lucid. Its most recent annual report on Form 10-K filed with the SEC and any subsequent updates filed in quarterly reports on forms 10-Q, and subsequent forms 8-K.
Except as required by law, we used to disclaims any intentions or obligations to publicly update or revise any forward looking statements to reflect changes in expectations or in events conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward looking statements.
Speaker Change: I'd now like to turn the call over to Dr. Lisa I call. It the chairman and CEO of Lucid you Shaun.
Speaker Change: Yeah.
Speaker Change: Yeah.
Matt Riley: Thank you, Matt and good morning, everyone. Thank you all for joining our quarterly update call today.
Matt Riley: As always I like to thank our long term shareholders for your ongoing support and commitment. Our team here is lucid remain singularly focused on driving this enterprise towards its substantial commercial potential and to enhance our long term shareholder value.
Matt Riley: I really believe we're now better positioned than ever to capitalize on Easter guards really huge clinical and market opportunity. We continue to make steady progress since the last update which was just six weeks ago.
Matt Riley: Perhaps most importantly, we have secured capital to extend our runway past some reimbursement milestones and we are continuing to drive our cash pay a contracted programs that we launched earlier this year targeting crosshairs medicine practices that employers.
Matt Riley: We continue to have momentum in our engagements with regional commercial insurers are securing if a card coverage.
Matt Riley: We're waiting to hear back from the multi X program on E cigarettes, Medicare coverage, which we continue to believe it's a minute.
Matt Riley: Thanks to our recent financings, we have plenty of runway and we're well positioned to accelerate our commercialization once we secure Medicare coverage.
Matt Riley: So let's start with some key highlights related to our commercial execution.
Matt Riley: So we performed 3000 at 34, he took our tests in the first quarter.
Matt Riley: The upper end of our range is 2500 or 3000 tests per quarter and as we mentioned before we're kind of happy to maintain that volume, but we've been able to maintain that volume walthers transitioning our commercial team to these new sales channels to drive revenue such as <unk> and employers are revenue of.
Matt Riley: $800000 felt a bit short due to external headwinds and greater concentration of testing for health care Benson who'll provide some more details and color on that.
Matt Riley: Okay.
Matt Riley: We also launched our embrace the future campaign.
Matt Riley: Showcasing Easter checks groundbreaking collect them protect style collection technology relative to antiquated spud to on stream devices that can go I'll provide some more details on that a bit later.
Matt Riley: We have had a successful partnership with a major health system to launch a comprehensive.
Matt Riley: The guards esophageal cancer testing program and this will expand access to at risk patients across the full spectrum of Barrick digestive health team is their gastroenterologist in.
Matt Riley: Primary care and for the first time.
Matt Riley: Concierge Medicine program that is housed within a major health system will have a more formal announcements coming in the very near term on this.
Matt Riley: And we have continued momentum in executing our concierge medicine program to expand E cigarette access on a cash pay basis, we doubled our total number of contracts in the past six weeks and our team is starting to build a critical procedures in materials marketing materials that other patient materials to drive.
Matt Riley: Patient volume once contracts are in place.
Matt Riley: We continue to expect an impact on revenue from this effort in the say in the <unk>.
Matt Riley: Second half of this year, and we're also making meaningful progress executing employer markets contracts and we have a strong pipeline of opportunities both of employers as well as with fire departments. We doubled the number of employed Florida contracts in the first quarter and of course these two efforts.
Matt Riley: Cash pay concierge medicine practice as well as our direct contracting with employers fire Department is where it really serves to complement our ongoing efforts that traditional reimbursement coverage and positive medical policy from private payers and I'll end with Medicare.
Matt Riley: Now, let's discuss some of our recent strategic accomplishments.
Matt Riley: As I noted earlier I'm extremely happy that we strengthened our balance sheet with an underwritten public offering of common stock that netted.
Matt Riley: Approximately $16 1 million in proceeds just really significantly bolsters, our balance sheet with over $40 million.
Matt Riley: And pro forma cash at the end of the first quarter.
Matt Riley: And that's importantly extends our runway well into 2026 and pass key milestones and that's really mitigates our risk from the perspective of external factors and it also provides us the resources to immediately ramp up our commercial effort to after we receive Medicare approval.
Matt Riley: We're also happy to report that the new.
Matt Riley: A new piece of clinical data that the NCI sponsored study.
Matt Riley: <unk>.
Matt Riley: That Easter guard was effective at detecting itself ships pre cancer and at risk patients without heart failure Heartburn garden centers and that this will ultimately support an expanded indication in multi opportunity.
Matt Riley: The initial study that led to the larger ongoing.
Matt Riley: Pfizer and I study for which a large NIH grant was secured and it showed 100% negative predictive value. So no false negatives in our prevalence in this population of patients without GERD symptoms, who otherwise have risk factors are consistent with the American Gastroenterology Association.
So it was about 8%, which is really not that much lower than in the hardware population. So it really demonstrates that.
Matt Riley: This is a target population that could could emerge in the future.
Matt Riley: The NIH study replicates decided in fact, the target population experience to patients without symptoms of heartburn that all.
Matt Riley: Our already large $60 billion total addressable market could increase by as much as 70%.
Speaker Change: So before turning the call over to Dennis I, just wanted to provide a bit more detail on a couple of select topics.
Speaker Change: I'd like to review a bit more detail on our ongoing reimbursement efforts and then talk a bit about our embrace of future campaign related to EBIT.
Speaker Change: And our experience with that at the Big easy That'd be conference earlier this month.
Speaker Change: Well, let's start with commercial Payors, so as we announced in March we have secured our first.
Speaker Change: A positive policy coverage from Highmark Blue Cross Blue Shield of of New York and.
Speaker Change: And that policy will be active I've just a couple of weeks later this month and.
Speaker Change: Our expectations with with regard to that have.
Speaker Change: It has played out. So this is clearly is helping us in our conversations with other regional plans.
Speaker Change: Including other Blue Cross regional Blue Cross Blue Shield plans. It serves as a precedent to drive additional policy a positive policy coverage decisions and that's that's played out in the field as we continue to engage and we remain deeply engaged with.
Speaker Change: With a robust pipeline of regional plans at least quarterly are expressed in the past and I just to reiterate that we believe there's plenty of opportunity to hunt in this in the regional plan territory that thought.
Speaker Change: But that's a larger plants, though nationwide United Phantoms.
Speaker Change: Others.
Speaker Change:
Speaker Change: Others are will likely wait for us to secure Medicare coverage.
Speaker Change: Another big area again, just in the last six weeks that we've noticed is that as we announced in March the M C.
Speaker Change: Our national comprehensive cancer care.
Speaker Change: Updated network updated its clinical practice guidelines to include for the first time, a section on our Softgel pre cancer screening that mimics the Gi guidelines and we got we knew this is highly influential with kids.
Speaker Change: It's always something that payers pay a lot of attention to but what we've already learned just to get in the field is that this has been very helpful. In already in our conversations with payers.
Speaker Change: We've already had multiple meetings, where our medical directors at regional plans have acknowledged the importance of these LCC and guidelines and it was acknowledged that.
Speaker Change: Having it there would be helpful. So we really do believe just even on the early experience from just a few weeks into this that the M C.
Speaker Change: Ah clinical practice guidelines will really be a valuable tool in helping us drive positive.
Speaker Change: Insurance policy coverage decisions in the coming months.
Speaker Change: It was the Medicare so just to.
Remind people where the history here, we previously at the end of last year, our submitted our complete if a guard clinical evidence package of support of our request for reconsideration of an existing Medicare LCD that seeks to cover them.
Speaker Change: Isa Guard and testing this category based on existing Oh crap coverage criteria that are aligned with the American College of Gastroenterology guidelines and we really believe that this package.
Speaker Change: It is outstanding its complete and provides unprecedented data and as I actually just really aligns with the criteria for coverage that are already in the existing LCD. So we really remain optimistic about the outcome. The next step will be the issuance of a draft LCD.
Speaker Change: Proposal Medicare coverage and.
Speaker Change: And we really again believe this is imminent and we're in good shape with plenty of runway to navigate this process before ultimately accelerating commercialization once we secure Medicare coverage, which again, we believe is eminent.
Speaker Change: Moving onto our embrace the future campaigns.
Speaker Change: Just thought we'd give you a little bit of a highlight of what we're doing in this space.
Speaker Change: Historically, our marketing efforts to to the physician community is focused on Easter card and thats appropriate because thats the actual test that's delivering.
Speaker Change: The results and giving the positive and negative results that drive patient care, but theres really an opportunity that we've decided to Ah.
Speaker Change: Highlight to rotate to really highlight.
Speaker Change: Standing performance of not just east regard, but our cell collection.
Speaker Change: <unk> now 30000 patients to date and it's a really contrast that with <unk> legacy.
Speaker Change: Sponge on a string devices, which are decades old data sort of equivalent of a brillo pad.
Speaker Change: Versus our soft a balloon monitoring soft balloon device.
Speaker Change: There are there have been publications out there for other tests there'll be some presentations electric test that seek to.
Speaker Change: Enter the space using the sponge out of <unk> devices. So we thought that this was the opportunity to highlight to the Gi community.
Speaker Change: What the future of esophageal cell collection is and so we have been put forth as you can see on the slide here a variety of.
Speaker Change: Marketing materials that demonstrates the pristine safety record really high patient satisfaction very high success rates of over 95%, 96%. The fact that Easter check can be performed in less than three minutes for early down to less than two.
Speaker Change: And in our hands and contrast that to the.
Speaker Change: The safety profile to the FDA recalls that have occurred with.
Multiple spits out a string devices and.
Speaker Change: So this has been a successful tavis.
Speaker Change: We are really positive experience at BBW highlighting this in a pretty.
Speaker Change: Sort of what's to say AD campaign.
Speaker Change: That highlights this contract and we'll continue to do that really to just to remind the.
Speaker Change: The gastroenterology community in particular.
Speaker Change: Of the unique features that visa check that we think ultimately play a critical role in the performance of Easter Guard.
Speaker Change: Data the clinical what are the data we've been able to generate.
Speaker Change: Okay.
Speaker Change: So with that before handing it over to Dennis to summarize I would like to summarize by saying, we really believe we're set up very well from a commercial point of view and based on our financial resources and balance sheet to really advance the ether guard through our efforts to gain Medicare and commercial coverage as well as through our new sales.
Speaker Change: Channels that would be where we seek to drive to drive revenue.
Dennis I: So we really do look forward to continuing to maintain our test volume and around and grow revenue over the coming quarters, So with that lets pass the call onto Dennis.
Dennis I: Okay.
Dennis I: Thanks, Lee and good morning, everyone. Some refinance our results for the first quarter, we reported in our press release that has been distributed.
Dennis I: On the next three slides I'll emphasize a few key financial highlights from the first quarter, but encourage you to consider those remarks in the context of full disclosure it's covered in our annual report and on Form 10-Q.
Dennis I: With regard to the balance sheet.
Dennis I: Cash at the end of the quarter at March 31 was $25 2 million.
Dennis I: Obviously this does not include the net proceeds from the recent 16 million confidentially marketed public offering completed on April 11th.
Dennis I: Which when added to the bug would give us the pro forma cash of about 41 million as we entered the second quarter.
Dennis I: Youll recall that during the fourth quarter, we refinanced our convertible debt, which is a five year note interest only at 12% with a $1 conversion price.
Dennis I: That's held by long term shareholders.
Dennis I: The fair value of the convertible notes at $32 8 million at quarter end, that's really the only other substantive change from the previous reported balances at the end of December.
Dennis I: The fair value increase reflects a mark to market.
Dennis I: Quarterly adjustment in parallel with the common stock price increase of 82% from.
Dennis I: From December 31 to March 31st.
The quarterly burn rate was 11 $3 million, which is slightly higher than the average burn rates with the four preceding quarters of 11.1.
Dennis I: Part of which is due to a full quarter's interest charge on the convertible debt mostly paid in cash.
Dennis I: The burn in the first quarter included $8 2 million from ongoing operations.
Dennis I: $3 1 million from the quarterly management services agreements.
Dennis I: Shares outstanding, including Unvested Rsa's as of last week are approximately.
Dennis I: $108 million.
Dennis I: The GAAP outstanding shares as of March 31 of $84 4 million are reflected on the slide as well as on the face of the balance sheet in the 10-Q.
Dennis I: GAAP shares do not reflect all invest it.
Dennis I: Restricted.
Dennis I: Service Awards.
Dennis I: At present pathway continues to be the single largest shareholder of lucid diagnostics with ownership of approximately 29% of the common shares outstanding.
Dennis I: Although patent that no longer has voting control lucid.
Dennis I: Avnet together with the board and management still have significant influence over lucid with more than 27% of the voting interests.
Dennis I: As Youre aware loose its financing last year included the issuance of series of voting convertible preferred securities whereby the preferred shareholders are significantly incentivize to delay conversion of the preferred shares into common shares until 2026, namely the second anniversary from a closing.
Dennis I: If all of the preferred shares that were converted to common shares as of today, there would be an additional 49 6 million shares outstanding.
Dennis I: With regard to the P&L.
Dennis I: This slide compares this year's first quarter to last year's first quarter on certain key items that structural review the information on my comments in light of the cautionary disclosure to bottom slide about supplemental information, particularly.
Dennis I: Particularly non-GAAP information.
Dennis I: With over 3000 tests for the first quarter, we invoiced more than seven 5 million.
Dennis I: And recognize revenue of approximately 800000, largely based on the amounts collected during the quarter.
Dennis I: Collections were lower sequentially and year over year, mostly related to the delayed cash collections from Unitedhealthcare.
Dennis I: We generally pays us at the Medicare rate, but within a reasonable timeframe, but had a national issue with rolling out its new.
Speaker Change: Mm Jack Z code for molecular pathology claims that the late processing claims.
Speaker Change: Still working through the backlog with a 60 to 90 day time delay from the initial C code assignment to final CPT code pairing and claim readiness.
Speaker Change: Additionally, the quarterly test mix included some larger testing events that involve Kaiser or we're still working through claim denials with that insurer.
Speaker Change: With new investors once again, joining us for this call it's worth repeating what we've communicated in past quarters about revenue recognition.
Speaker Change: The key determinant of how revenue is recognized at this point in our reimbursement journey as the probability of collection.
Speaker Change: Therefore, due to the fact that we are in the early stages of the reimbursement process means revenue recognition or claims.
Speaker Change: To traditional government or private health insurers will be recognized when the claim is actually collected first one the patient report is delivered invoiced and submitted for reimbursement.
Speaker Change: Youll see in our 10-Q. This is called variable consideration that target of gaps ASC 606 revenue recognition guidelines are presently there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician.
Speaker Change: For billable amount contracted directly with employers or through concierge medicine.
Speaker Change: And that are fixed and determinable will be recognized as revenue when our contracted services delivered generally that means when they report it's delivered to the referring physician.
Speaker Change: Our non-GAAP loss for the first quarter of $11 2 million.
Speaker Change: Slightly higher than the trailing four quarter average of $10 8 million. However.
Speaker Change: If adjusted for the 800000 financing cost incurred in the quarter would have been modestly lower than the four quarter average.
Speaker Change: The non-GAAP net loss per share of <unk> 16.
Speaker Change: Is lower sequentially as well as in each of the last four quarters with a trailing four quarter average of 20 cents per share.
Speaker Change: On a GAAP EPS basis.
Speaker Change: First quarter noncash charges accounting for approximately 36 per share include <unk> 13 per share related to the series B preferred dividend.
Speaker Change: We issued on March 13th.
Speaker Change: With regard to our operating expenses.
Speaker Change: This slide is a graphic illustration of our operating expenses after eliminating noncash expenses for the periods reflect it.
Speaker Change: non-GAAP operating expenses were flat sequentially and after normalizing for deal expenses and interest expense for both the fourth quarter and first quarter are in line with the last six quarters.
Speaker Change: Let me close with a few reimbursement highlights for the first quarter.
Speaker Change: In the first quarter, we build 3034 tests.
Speaker Change: Collecting just over seven 5 million in pro forma revenue.
Speaker Change: During the first quarter, we collected 800000 from traditional reimbursement claims of that amount collected.
Speaker Change: About 20% was for claims submitted in the first quarter.
Speaker Change: About 60% from claims submitted in the previous quarter and the balance from claims submitted more than six months ago with the longest dated item.
Speaker Change: Roughly 21 months ago.
Speaker Change: The claims submitted in the first quarter.
Speaker Change: About 60% have been adjudicated.
Speaker Change: 40% are pending.
Speaker Change: Out of the 60% that had been adjudicated.
Speaker Change: About 30% resulted in an allowable amount by the insurance company with an average of about $13 62 per test.
Speaker Change: Important to note that the median.
Speaker Change: It's the rate at the Medicare rate $19 38, and one set.
Speaker Change: Of those denied about 50% are either a.
Speaker Change: Medically necessary.
Speaker Change: The require prior authorization or see required additional medical records.
Speaker Change: Additionally, about 30% were deemed to be non covered.
Speaker Change: So with that operator, let's open it up for questions.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Yeah.
Richard Carlson: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one and you touched on for you than your problem. So your hand has been right Sidney Richard Carlson from Barclays. Please press the star followed by the Q.
Speaker Change: If you are using speaker phone please lift the Ann Thank you for your pricing.
Richard Carlson: The first question.
Speaker Change: And your first question comes from Mark Massaro from BTG. Please go ahead.
Mark Massaro: Hey, good morning, guys.
Richard Carlson: Thanks for taking the questions.
Richard Carlson: Hey.
Richard Carlson: I just figured I'd start with the Q1 volumes.
Richard Carlson: Obviously, you did come in above the high end of that 2500 to 3000 threshold that you've talked about too.
Richard Carlson: To get a <unk>.
Richard Carlson: A large enough number of claims for payers. So that so that's good can you just give us a sense if weather was an impact in the quarter and then as we think about.
Richard Carlson: Q2 would it be reasonable to think that that number might increase or is it still a little too early based on the timing of events.
Mark Massaro: Yeah. Thanks, Thanks, Mark that you characterized it correctly as we said before during this period, while we're waiting for broader coverage our goal is to sort of maintain.
Richard Carlson: Correct.
Richard Carlson: Cash burn on operating expenses to maintain our volume in this range that gives us sufficient volume to remain engaged with the recall.
Richard Carlson: Payers and that's held up the one the one thing we've done is hinted that that was different.
Richard Carlson: Directly answer your question no. We don't we don't believe weather.
Richard Carlson: No evidence, let's just say the weather was a factor the one the one thing that that had hinted that which may be worth emphasizing is that.
Richard Carlson: As we've made this transition with our sales team to have a subset of our focus.
Richard Carlson: On new sales channels, such as our concierge medicine and.
Increasing emphasis on contracted and revenue generating.
Richard Carlson: The targets that the proportion of the volume that is represented by these larger check your accretive event has increased and that's just sort of natural the natural effect of that as those events are much more efficient they're there allow us to kind of reach these numbers and drought.
Richard Carlson: The number of claims submissions to the traditional plan one thing that comes of that is they tend to be lumpier right. So if you have.
Richard Carlson: Tests that are being ordered by a whole variety of physicians versus.
Richard Carlson: A handful of on fire fire departments, where they where theres a single payer typically for that it tends to be lumpier and so that can make the revenue number open lumpier, but overall no. We're things are pretty steady beyond that beyond that somewhat shift more towards the check for the visa and theoretically if that's the hope here Vince.
Richard Carlson: And I would still.
Recommend.
Richard Carlson: We recommend that we sort of assume that will be in this range until.
Richard Carlson: We get Medicare.
Richard Carlson: We're able to drive.
Richard Carlson: Towards.
Richard Carlson: Elderly populations or as the <unk>.
Richard Carlson: Commercial coverage as we start to get Brian and commercial coverage at which point well look to drive volume and beyond these levels.
Richard Carlson: Okay, Great and then.
Richard Carlson: I think Lisa you you indicated that you think the Palmetto GBA decision for Medicare coverage could be imminent.
Richard Carlson: Curious if you could.
Richard Carlson: Provide any color with respect to whether or not there is active dialogue or is this more of like you had a conversation or meeting months ago, and you're just waiting for to hear something.
Richard Carlson: That's a good question no we haven't gone back and engaged with.
Speaker Change: With the multi X group.
Speaker Change: It wasn't a meeting we had multiple meetings with multiple engagements heading up to the submission and our expectations with regard to how long it would take them too.
Speaker Change: Process.
Speaker Change: This request for reconsideration is based on the details of those of those conversations.
Speaker Change: Binder.
Speaker Change: Substance of that is that.
Speaker Change: We submitted was a request to reconsider the previous LCD, which was written as a coverage LCD, but with non covered because there were no test that had sufficient data at the time that was published about two years ago.
Speaker Change: And so the.
Speaker Change: The work that was required for them.
Speaker Change: It's very different than substantially less than a typical new LTE.
Speaker Change: Or even a typical reconsideration, which are which seeks to change their coverage criteria change other meaningful aspects of the LTV. We did not do that we just say here's our data here is a summary of our data we provided.
Speaker Change: A detailed summary that.
Speaker Change: Frankly.
Speaker Change: The Red line of the existing LCD that simply incorporates our data and ask that.
Speaker Change: That would be covered based on that because of that because the group had already done all of the hard work that typically takes a period of time.
Speaker Change: Assessing the space in understanding the underlying.
Speaker Change: Clinical and scientific basis for all of this.
Speaker Change: That's where our estimates as to what how long it would take.
Speaker Change: Two.
Speaker Change: To complete that process of reviewing our data.
Speaker Change: Lodging that it aligns with the coverage criteria and that's why we still think it's coming.
Speaker Change: Coming soon.
Speaker Change: Okay, Great and then I'll ask one more and then hop back in the queue.
Speaker Change: It was great to see the NCI sponsored study.
Speaker Change: Which showed the value of Isa guard.
Speaker Change: In patients without symptomatic GERD I'd be curious to understand what is next.
Speaker Change: I imagine that additional studies or data would have to be.
Speaker Change: Presented in order to longer term potentially gain Medicare coverage and I think there was an NIH grant that was associated with that so how are you thinking about investing in additional data and what are your thoughts about timelines.
Speaker Change: Yeah, exactly so, let's let's take let's make sure. We put this you got that right, let's just make sure. We put this in the right perspective right now our goal is to target the $30 billion plus.
Speaker Change: Patients, who have who fulfill the more conservative American college of Gastroenterology guidelines, which require that the patient have longstanding heartburn plus three out of fixed risk factors, there's plenty of.
Speaker Change: For us to add to that.
Speaker Change: In that space and our conversations with payers frankly, including Medicare are limited to that right. So the Medicare LCD criteria.
Speaker Change: Match that are identical to that more conservative criteria.
Speaker Change: However, there is a growing understanding within the Gi community that.
Speaker Change: GERD heartburn as not as powerful a risk factor and also very hard to document.
Speaker Change: Accurately.
Speaker Change: In.
Speaker Change: The reason for that is a variety of things, but one of them being that patients who are taking PPI medications that are effective at suppressing symptoms, but also the development of these pre cancerous conditions can can blunt silicones. So theres, an increasing realization that that was first manifested in the fact that the other big GI Society the American gas.
Speaker Change: Our electrical association.
Speaker Change: Reboot, a requirement for GERD and just made it to be at risk factors. So that's it's that momentum within the Gi community and sort of the understanding of the clinical situation here that in order for us to to really have.
Speaker Change: Maximal effect that preventing cancer that we have to look at these asymptomatic patients.
Speaker Change: NCI sponsored study with the first step towards that end.
Speaker Change: It showed as I said, two really critical things one that Isa guard.
Speaker Change: Maybe patients who don't have heart, Birmingham, not surprised by that but we had sort of a 100% negative predictive value for youth regard, but perhaps the more important.
Speaker Change: At least as important data point was that 8% prevalence here that you might wonder if you remove heartburn that okay, well, maybe that's a lower risk population there may be there at 3%, 4% in the long term opportunity to justify testing and someone in a group of patients that have less pre cancer it might be lower so that 8% number is really right up there in the.
Speaker Change: In a similar range to those who have GERD.
Speaker Change: Is that first box has been checked youre right thats not going to be sufficient for for there to be expanded.
Speaker Change: The Universal guidelines for ultra guidelines to say that and frankly for the payers to Brian that's going to require more data and Thats, where the NIH study comes out so the.
Speaker Change: Group led by Brian case, Western but that include.
Speaker Change: Multiple major academic centers.
Speaker Change: I received an NIH $8 billion in France to replicate the data from this pilot study on a larger basis I believe the number is 800 patients over the coming years and that data will be.
Speaker Change: Turning to data that will drive the.
The expansion of the clinical indications and therefore the expansion of <unk>.
Speaker Change: Market opportunity.
Speaker Change: I don't think we'll need any more data beyond that.
Speaker Change: Oh Wow okay.
Speaker Change: Thanks, very much guys.
Speaker Change: Yeah, great. Thanks, Mark.
Speaker Change: Thank you.
Speaker Change: Your next question comes from Kyle mix makes sense with Canaccord Genuity. Please go ahead.
Speaker Change: Good morning, Paul.
Speaker Change: Hey, guys. Good morning, Thanks for the questions I wanted to two times. The volume that is helpful. On ESP, though and I know, what you're just collecting cash and I can its not perfect.
Speaker Change: System right now given the lack of reimbursement but.
Speaker Change: You are I feel like we're working with more concierge medicine more contracting.
Speaker Change: And the payment rates should be a little more like at least will be elevated I thought and now it looks like it declined quarter over quarter the.
Speaker Change: The effect of ASP. So one can you just talk about mix in the quarter I know you got the guidance.
And everything we've just mix and then how that flows into pricing and everything.
Speaker Change: Like maybe how we should think about it for the rest of the year.
Speaker Change: Yeah, Let me, let me have Dennis talk about that but just to start off just a reminder, that the institutions, particularly the concierge practice on the expanded targeting of the contract with cornerstone Scott happened.
Speaker Change: We recently right that this shift in the sales team happened at the beginning of the year, we just started pulling in contracts.
Speaker Change: The past couple of months and.
Speaker Change: We've expanded the number of contracts, where we've demonstrated that we can get.
Speaker Change: Countries practices onboard, but translating that into patients that were actually getting past that even with the lower bar to recognize revenue on those patients.
Speaker Change: Phil.
Speaker Change: Somewhat early in that process. So I think Dennis can probably comment on that.
Speaker Change: Contribution to the current revenue numbers and the ASB is.
Minimal for this quarter for the first quarter. Thanks Dennis.
Speaker Change: Yes.
Speaker Change: Absolutely true Kyle I don't want to put too much undue weight on this topic because we were in network. This wouldn't even be a discussion point is it would not even affect.
Speaker Change: Our revenue.
Even our analysis of the business performance, maybe uptick in our receivables, but not affecting our <unk>.
Speaker Change: Our revenue.
Speaker Change: Because just because of the accounting methodologies. So the only issue is that we are still working through reimbursement in that central actor here is still the storyline is Medicare approval, but with that let me give you a couple stats.
Speaker Change: The two that I mentioned and you can use any AI generated.
Speaker Change: Data source Youll see that the C code issue is.
It's been a chronic issue with United but in any case.
Speaker Change: Both United.
Speaker Change: And Kaiser.
Speaker Change: In the last two quarters generated each.
Speaker Change: One 3 million and billable amounts.
Speaker Change: Specifically with United.
Speaker Change: The collection rate for United in the third quarter of last year was 30 plus percent, 32% I think it was in the first quarter was only 10%.
Speaker Change: And that ZIP code issue.
Speaker Change: Relate it to.
Speaker Change: Number of denials of Resubmission and working through it.
Speaker Change: Kaiser on the other hand came about.
Speaker Change: And that was about 10% of our volume in the first quarter.
Speaker Change: A little less than that.
Speaker Change: Fourth quarter at $1 three we have collected zero on and our teams are working through the Kaiser and other ideas like it will be important long term. So it's important we start filing claims we engage with that and we'll start that process to get into their network.
Speaker Change: But that result in zero of our collections so.
Speaker Change: There is some of the stats related to.
Speaker Change: The mix, but like I said I don't want to put it a whole lot of thought.
Speaker Change: Weighed on this topic simply because.
Speaker Change: It's not an indication of the performance of the businesses indication of where we stand with the reimbursement journey.
Maybe I could just ask one other thing Karl if you don't mind.
Speaker Change: Your focus.
Speaker Change: Around concierge and employers and that is.
Speaker Change: Again, there was not any.
Speaker Change: For contract activity in the first quarter, but.
Speaker Change: <unk> question is a really interesting one because theyre not traditional just sort of.
Speaker Change: Commercial payers, but they have health plans as well and we have had.
Speaker Change: Yes, there are a handful of them.
Speaker Change: One, obviously being Kaiser and a handful of others and our ability to engage with them as a result of the increased volume of activity within the government have been positive. So we've had some positive engagement with the larger idms and we look forward to securing <unk>.
Speaker Change: Corrected coverage with them.
Speaker Change: While we're sort of in the same vein as we're doing with the regional plans.
Speaker Change: Okay, perfect that was great and can you actually just talk about the Medicare mix and how that's trended recently and how you expect it to go going forward.
Speaker Change: Yes, we can always.
Jennifer: Go ahead Jennifer.
Speaker Change: Yes so.
Speaker Change: Interesting question I'm going to expand upon that so we have about <unk>.
Speaker Change: $19 million total in our backlog that our reimbursement teams are working on collecting up $15 million of that is in the last 12 months.
Speaker Change: And the Medicare percentage changes every quarter.
Speaker Change: We focus on this because when we get final approval you've got the 12 months.
Speaker Change: Backlog that you can submit claims.
Speaker Change: And that varies quarter by quarter and given that we are now awaiting the approval and our teams have been focused on the concierge medicine.
Speaker Change: Percentage of Medicare is lower it's probably right now.
Speaker Change: Ken 12% to 15% of our volume, but obviously the goal there is 40% when you think about the 30 million patients that are symptomatic.
Speaker Change: Part of the ACG guidelines of what we're seeking for Medicare.
Speaker Change: 40% of that $30 million is our targeted audience could be even higher than that but that's generally the way, we think about it and with Medicare approval, we already have plans in place.
Speaker Change: And.
Speaker Change: The tactics that are ready to go to start hunting for that particular patient that is in the Medicare group and our goal will be as quickly as possible to take that 12% to 15% up to 40% of our test volume and a growing test volume.
Speaker Change: Perfect and finally.
Speaker Change: Yes, I guess youre alluding to partnering with a major health system to deal with a comprehensive.
Speaker Change: <unk> testing program do you think a lot of those health systems in the pipeline or is this more of like a pilot and we'll try it out and Youll see if others makes sense to partner with them.
Speaker Change: No we haven't but we have a good pipeline of those but these are long lead time I think this particular, one we've been working on it for about a year.
Speaker Change: We've had positive engagement with the Gastroenterologists and and whats.
Speaker Change: Interesting.
Speaker Change: Also by the way, we haven't sort of announced every time, we have a major health system.
Speaker Change: <unk> been careful to just sort of wait and see how they develop in terms of traction, but what's interesting about this one as I said, we'll provide a more detailed analysis on one side.
Speaker Change: What.
Speaker Change: We have.
Speaker Change: Sign off to do so from the institution from the health system is that they have a very large concierge medicine practice. So this was the first time, where we've gone into our whole system instead, we'd like.
Speaker Change: Not only to implement broad based esophageal pre cancer testing that include visa check in the youth regard and work out exactly who is going to deal with the cell collection and how we're going to go target patients and how are we going to commute.
Speaker Change: Communicated with the primary care physicians and all of the all of the things that go into building that kind of a program. This particular health system in many as theyre not unique in this.
Speaker Change: It has a large a concierge medicine practice. So the work we've done and learning how to engage with concierge medicine practices over the last couple of months really paid off and so this is a this is.
Speaker Change: And engagement that covers all of the above and it requires some slight tweaks to how it is done within the <unk> group versus the broader group and so it does serve as a template for the future, but we do have a significant pipeline of others that we're working on but there are longer lead time. So we have to do this as long as well as the other the other path too.
Speaker Change: Engaging.
Speaker Change: Employers fire departments, and as well as individuals and smaller practices.
Speaker Change: Okay. That's interesting thanks Vishal thanks Dennis.
Scott: Yes, Thanks Scott.
Speaker Change: Thank you and the next question comes from Mike Matson from medium Company. Please go ahead.
Scott: Yes.
Scott: Glad to hear that you're.
Scott: I'm feeling positive about the <unk>.
Scott: I guess.
Scott: Not to sound.
Scott: Negative here.
Speaker Change: Do you have any contingency plans or I guess, what would you do if for some reason you don't get it when you expect that.
Speaker Change: Well I mean, I think the key thing is that where we have already sort of started I wouldn't say contingency plan really but because we do expect to get it but we are also we are.
Speaker Change: Building this parallel pipeline of concierge and acquire.
Speaker Change: Our contracted revenue to drive revenue and kind of talk last time about our our expectations with how that book that were registered in the second half and cut our burn.
Speaker Change: The most important mitigating factors that we raise capital to get us through these milestones and so we're well positioned to handle any delays, but we really are expecting at the time has come given the amount of work that we expect to do in order to do the analysis and proceed with the draft coverage.
Speaker Change: Okay got it and then.
Speaker Change: And then my next question just on the Concierge program, So I guess I'm not real familiar with how those things work, but.
Speaker Change: How did the patients that are enrolled in those kind of hear about <unk>.
Speaker Change: So card and decide whether or not that's something they wanted to opt in for.
And is there anything you can do to kind of market tests.
Speaker Change: We provide information to those people on those in those plans.
Speaker Change: Yes. So that's exactly what you described is exactly what we're doing and we're not we're not inventing this from scratch. So there are other companies that have done this most notably Grail that.
Speaker Change: Zinc has been engaged with concierge practices for a while and have sort of figured out the secret sauce to go from having a concierge practice. Thank you went over it and you have convinced this is something that they should be offering to their patients on a cash pay basis, along with other other testing.
Speaker Change: That is attractive to this particular patient population and it's exactly what you described and that's exactly what I was mentioning earlier that we are in the process of doing so we now know that our team can go out and secure contracts that that's clear our top track the data that we've built that.
Speaker Change: Has worked very well and our ability to engage physicians to say hey, this is something I'd like to offer my patients.
Speaker Change: My congratulations and now we are in the process of of of optimizing and kind of fine tuning our patient facing materials to target. This particular patient population and also our processes by which we work hand in hand with the practice to.
Speaker Change: To go out and let their patients know that this is available and why it might be valuable.
Speaker Change: Who is at risk and who is that.
Speaker Change: Would be the appropriate patients to do that so thats a very active process that we're engaged with and we are making.
Speaker Change: You might imagine we have a pretty robust methodology for doing that from our traditional approach going.
Speaker Change: <unk> primary care physicians that include even helping them.
Speaker Change: Figure out how to go to their EHR and identify at risk patients and contacting them directly and proactively to suggest that so we have experience doing this we're just in the process of tailoring those processes and materials to the unique aspects of our customers.
Speaker Change: That is in practice patient.
Speaker Change: Okay got it thank you.
Speaker Change: Great. Thanks, Mike.
Speaker Change: Thank you <unk>.
Speaker Change: Next question comes from Jeremy Hellman from Maxim Group. Please go ahead.
Jeremy Hellman: Hey, guys how are you.
Jeremy Hellman: And how are you doing well so this shift in commercial strategy more towards the cash pay and concierge medicine is that was that is that more short term to just bridge the gap until the potential Medicare coverage or is that market in the cash pay concierge is large enough and have you seen that it's worthwhile to continue that commercial push even at.
Jeremy Hellman: After.
Jeremy Hellman: A potential approval from Medicare at that point, you would supplement.
Speaker Change: Sales reps and <unk>.
Jeremy Hellman: Target additional insurers.
Jeremy Hellman: So let's be careful about worked here because I don't want to characterize this as a shift really it's really just supplemental alongside.
Jeremy Hellman: It's all of the above right, where we're going we're targeting.
Jeremy Hellman: Coverage and payment and revenue everywhere, we can so we're on the traditional side we are.
Jeremy Hellman: Engaging with regional plans that we believe we can secure even before Medicare rates that we have hi, Mark Hi, Mark.
Jeremy Hellman: Coverage policy is helping us engage with others and we think that will continue to remain fruitful the larger plans away from Medicare Medicare, obviously, well wait for Medicare.
Jeremy Hellman: And then on top of that supplementing that we've.
We've allocated resources towards.
Jeremy Hellman: <unk>.
Jeremy Hellman: The areas, where there are patients that.
Jeremy Hellman: Can pay out of pocket.
Jeremy Hellman: And so that or institutions like entities like employers and fire departments that can pay on a contracted basis. So we guarantee revenue. So that's what we're doing now we're not shifting.
Jeremy Hellman: We've shifted some resources, but we are now shifting our strategy overall it remains on all of the above efforts, while we're pushing on the covered side once we get broad.
Jeremy Hellman: Once we get broad Medicare coverage and that leads to broader commercial coverage.
Jeremy Hellman: Vast majority of it.
Jeremy Hellman: The opportunity here the vast majority of that 30 million patients are going to be within traditional plans and that's where we will we will put our resources, but I wouldn't underestimate.
There is a significant.
Jeremy Hellman: On the employer side about half.
Jeremy Hellman: 50% of the population are in self insured plans through their employer, so theres still a lot of opportunity to two.
Jeremy Hellman: To grow there and the concierge medicine sector is exploding.
Speaker Change: Given the attractive.
Speaker Change: Attractiveness of the economics of targeting those I suspect, we'll continue to do so but once once we have broad coverage.
Speaker Change: A more traditional pathways are going to be and then it will become dominant.
Understood and then just one last question from US there is some legislative efforts underway in some states I think it's even been in essence. Some states can cover biomarker testing, particularly in cancer patients does that have any effect on your business and are you.
Speaker Change: Helping with that is that how would that.
Speaker Change: Yes, we are and where.
Speaker Change: Actively engaged so that we're helping with that we are.
Speaker Change: I'm active in Azimut and other groups that that are seeking to push those that new Jersey just passed one just across the river from us.
Speaker Change: And there are examples where that can be helpful. But there's always there's generally a fair amount of hair on them.
Speaker Change: You start with a with a still at this stage, let's state legislation that mandates, but translating that into actually forcing payers to pay for for.
Speaker Change: Your test.
Speaker Change: Takes time, there are larger advocacy groups that are sort of helping to narrow that.
Speaker Change: Make that more straightforward. So we are actively involved in that but we're not.
Speaker Change: That that is going to be the panacea by by any by any stretch.
Speaker Change: That'll be helpful, but I don't think you're that person.
Speaker Change: Understood Alright, thank you for taking my questions.
Speaker Change: Thanks.
Speaker Change: Thanks, Jeremy.
Speaker Change: Thank you.
Speaker Change: And your next question comes from Ross ask Brian from Cantor Fitzgerald. Please go ahead.
Ross Askbrian: Thanks for taking my questions.
Speaker Change: Good morning.
Speaker Change: So looking at your growing body of clinical utility data would be curious to hear feedback from physicians and what theyre excited about recent allocation.
Speaker Change: And how youre feeling about general awareness and eat there from the clinical community.
Speaker Change: That's a great question, something we talk about and that's probably the key.
Speaker Change: Clinical validity data is sort of a sexier.
Speaker Change: Part of your clinical evidence package, but.
Speaker Change: <unk>.
What's exciting is that we have the sort of full chain of evidence right. Now we have evidence published in all of these are published that physicians use the E cigarette test appropriately.
Speaker Change: To triage.
Speaker Change: Patients who are positive to enough to be a negative to not getting any further testing.
Speaker Change: According to that is nearly 100% we have.
Speaker Change: Published data that shows that when patients are.
Speaker Change: When patients have a positive Easter guard test about $85 to 85% compliance with them getting the endoscopy, which is really a high number relative to other tests, where you triage patients to a more invasive test and notably we have.
Speaker Change: And you haven't highlighted it's a whole lot, but it's a double what the compliance rate is within endoscopy without sungard. So if somebody positioned to says hey, I'd like you to get in endoscopy, only about 40% of the patients will do that if they have a positive. These regard tests the likelihood of them completing that is double.
Speaker Change: And then the data that shows that when you.
Speaker Change: On the patients do get in their endoscopy the yield from that.
Speaker Change: It could be in terms of the number of positive pre cancers that are detected.
Speaker Change: 5% to three fault. So all three of those are really important.
Speaker Change: They're particularly important for different target population different physician groups that currently the.
Speaker Change: Primary referring docs.
Speaker Change: Want to know that there.
Speaker Change: Got that.
Speaker Change: Okay, I understand how to use the test appropriately and then at the very end the Gastroenterologists Theyre excited about the fact that they're endoscopies are going to have a higher yield or to find more positive patients that they will they will put through surveillance and then.
Speaker Change: Interventional ablation.
Speaker Change: <unk>.
Speaker Change: The awareness.
Speaker Change: Excuse me has been has been increasing and good it's something that with a small company always you always have to work hard at to get attention I think the this is this was our <unk> meeting is.
Speaker Change: The biggest gastroenterology meeting in the world with a massive meeting this year was in Seattle, and we had a very strong presence. There. This year, we had a very active booth, we had a second area that I showed on the slides, where we were able to talk about the advantages of a great Easter check works and you can tell just from the general traffic in general engagement that there is.
Speaker Change: Much much better.
Speaker Change: Awareness and understanding of the availability of.
Speaker Change: Testing.
Speaker Change: And so that's all been positive we look forward to a very soon having.
Speaker Change: Being able to release data that collaborates with <unk> will make our efforts.
Speaker Change: But most will strengthen our efforts in this area, which is we're in the final stages of collecting a very large.
Speaker Change: <unk> thousand patient experience with <unk> and you subtract testing in the real World Real World experience that provides really outstanding data on how <unk> performed as well as on the.
Speaker Change: The types of patients that are being tested and how that's playing out in the real world and that that kind of real world. Evidence is also often very useful, particularly when you have such a large sample size. So that will be coming soon as well and that will help with those efforts, but that those efforts are going well.
Speaker Change: Great glad to hear it thanks for taking our questions. Okay.
Ross Askbrian: Alright, Thanks, Ross Great question.
Speaker Change: Thank you.
Speaker Change: And your last question comes from Andrew <unk> from.
Speaker Change: Can you capital. Please go ahead.
Speaker Change: Yes. Thanks for taking my question. My question is what's your visibility for large testing events for the rest of the year and is there any seasonality to them.
Speaker Change: The pipeline for the large testing events are great.
Speaker Change: We have a deep pipeline, we're rescheduling lumps and advance our goal of course I think we've said this before our our goal is to.
Speaker Change: Its the transfer to transition those larger testing and so we still are dominated by fire departments, but will be increasingly including self insured employers.
Speaker Change: To have those be contracted in advance and so our team we have now a dedicated team that's working on working with the fire departments on grants and other ways to make sure that when we do these larger events.
Speaker Change: We get.
Speaker Change: Get paid without having to go through the traditional claims process.
Speaker Change: And the visibility has also been great we have.
Speaker Change: And just about every week, there's local media coverage, particularly with the fire departments, we get really strong local media coverage on testing a fire fire departments and firefighters.
Speaker Change: And so there's increasing visibility, but the key aspect there is really transitioning those high volume events, two months, which where we are now we have contractually guaranteed payment.
Speaker Change: Thanks.
Speaker Change: Great well, thanks for answering my questions and I wish you guys. Good luck. Thank you.
Ed: Thanks, Ed.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time I will now like to call back over to Dr. Li Zhang Please continue.
Speaker Change: Great.
Speaker Change: Thank you all for your time and attention. This morning. Thanks Robyn.
Speaker Change: Questions.
Speaker Change: Hope you got a sense that where we feel really confident and like we're in a really well positioned to capitalize on this opportunity that we have in front of US with these regard to that there is a variety of things that are imminent. We believe Medicare coverage are imminent. We believe we're going to continue to gain momentum with the regional commercial insurers in that the larger insurers will follow.
Speaker Change: With Medicare.
Speaker Change: Well, we have really.
Good early signs with the cash pay and contracted sales channels are those efforts that began in the first quarter will be believe will stall, we'll actually start reflecting in our revenue numbers over time.
Speaker Change: Happy that we have a stronger balance sheet to be able to navigate this process over the coming quarters.
Well again, we appreciate your time, we encourage you to keep abreast of our progress of your earnings release incentives in these calls as well as on our.
Speaker Change: Our website and through social media on Twitter and Linkedin.
Speaker Change: Thanks, again, everybody and have a great deal.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Gentlemen, This concludes your conference call for today, we thank you very much for your participation. Please disconnect and have a great day.
Speaker Change: Okay.
Speaker Change: [laughter].
Speaker Change: Okay.
[music].
Speaker Change: Okay.
Speaker Change: Yes.