Q2 2025 Exagen Inc Earnings Call

Our focus on disciplined execution physician engagement and continued innovation is driving positive momentum as we look to build on our leadership in autoimmune diagnostics.

John Aballi: scientific and operational efforts. Our focus on disciplined execution, physician engagement, and continued innovation is driving positive momentum as we look to build on our leadership in autoimmune diagnostics. Here are our highlights. Q2 revenue came in at $17.2 million, representing 14% year-over-year growth and the highest quarterly revenue in company history. AVISE CTD test volume growth was substantial, and the team delivered the best quarterly volume since we made our strategic adjustments in the summer of 2023, which is a strong step in the right direction. What's especially encouraging is that this growth is being driven organically by our existing commercial team and the growing clinical recognition of our differentiated science. For Q2, we effectively still had 40 territories, meaning our average revenue per territory reached just over $430,000 for the quarter.

Here are highlights.

Q2 revenue came in at $17 2 million representing.

Representing 14% year over year growth and.

And the highest quarterly revenue in company history.

Advise CTD test volume growth was substantial and the team delivered the best quarterly volume since we made our strategic adjustments in the summer of 2023, which is a strong step in the right direction.

Whats, especially encouraging is that this growth is being driven organically by our existing commercial team and the growing clinical recognition of our differentiated science.

For Q2, we effectively still had 40 territories.

Meaning our average revenue per territory reached just over $430000 for the quarter.

That's an encouraging sign of commercial leverage, especially when you consider where we were a couple of years ago, averaging $285000 per territory.

John Aballi: That's an encouraging sign of commercial leverage, especially when you consider where we were a couple of years ago, averaging $285,000 per territory. We've seen our per-territory revenue grow by over 50% since I joined, and it's important to note that the expected impact of our sales expansion likely won't be felt until at least Q4, further accelerating our trajectory. Layer on top of that, the fact that we've begun to expand into areas we believe have high growth potential with team members of incredibly high character and talent, and it's hard not to get excited about the special business we are creating. The sequential revenue growth we saw in Q2 is coming from increased ordering within our physician base, an expansion of our physician base, and continued improvement in our revenue cycle efforts. It's great to have growth driven by multiple levers.

We've seen our per territory revenue grow by over 50% since I joined and it's important to note that the expected impact of our sales expansion likely won't be felt until at least Q4 further accelerating our trajectory.

Layer on top of that the fact that we've begun to expand into areas. We believe have high growth potential with.

With team members are incredibly high character and talent.

And it's hard not to get excited about the special business, we are creating.

The sequential revenue growth. We saw in Q2 is coming from increased ordering within our physician base and expansion of our physician base and continued improvement in our revenue cycle efforts.

It's great to have growth driven by multiple levers.

As I've said before we're committed to building a business that scales profitably and the changes we've made over the past 18 months to our commercial leadership sales processes and operational discipline are continuing to show meaningful traction.

John Aballi: As I've said before, we're committed to building a business that scales profitably, and the changes we've made over the past 18 months to our commercial leadership, sales processes, and operational discipline are continuing to show meaningful traction. We're seeing consistent ordering patterns from high-value clinicians and continued onboarding of new physicians, a testament to both the strength of our platform and the execution of the field team. Our biomarker launch this past January continues to go extremely well. The addition of novel T-cell and RA markers has been a meaningful catalyst in our commercial conversations, and we continue to hear enthusiasm from clinicians who are eager to learn about new science in a field that's seen very little biomarker innovation in the past 50 years plus. I was out in the field a couple of times this quarter, once in Arizona and again locally in San Diego.

We're seeing consistent ordering patterns from high value clinicians and continued onboarding of new physicians.

Testament to both the strength of our platform and the execution of the field team.

Our biomarker launched this past January continues to go extremely well.

The addition of novel T cell and RNA markers has been a meaningful catalyst in our commercial conversations and we continue to hear enthusiasm from clinicians who are eager to learn about new science in a field that seemed very little biomarker innovation in the past 50 years plus.

Yes.

I was out in the field a couple of times this quarter once in Arizona and again locally in San Diego and in San Diego I had the opportunity to speak with a physician who shared a powerful case for why he has switched as biomarker profiling exclusively to the advice platform.

John Aballi: In San Diego, I had the opportunity to speak with a physician who shared a powerful case for why he has switched his biomarker profiling exclusively to the AVISE platform. This clinician had a patient present with joint pain and had a negative serological profile by conventional standards. After ordering AVISE CTD with our new seronegative RA markers, the result came back positive for RA33, and subsequently, he ordered a joint X-ray. The result confirmed joint erosion and a diagnosis that would have likely been missed without AVISE. Additionally, we've had 2 very interesting examples of the impact our T-cell markers can have come up in the past quarter as well. The first was a patient in Florida who had been diagnosed with lupus 20 years ago and then lost to follow-up.

This condition had a patient presents with joint pain and had a negative serological profile by conventional standards.

After ordering advise CTD with our new Cerro negative RNA markers. The result came back positive for Ari 33, and subsequently he ordered a joint X-ray the result.

Firm joint erosion, and a diagnosis that would have likely been missed without of eyes.

Additionally, we've had two very interesting examples of the impact our T cell markers can have come up in the past quarter as well.

The first was a patient in Florida, who had been diagnosed with lupus 20 years ago and been lost to follow up.

Do you want to see a new rheumatologist, who uses of buys and his practice and initially the doctor wasn't convinced that the original diagnosis was correct.

John Aballi: She went to see a new rheumatologist who uses AVISE in his practice, and initially, the doctor wasn't convinced that the original diagnosis was correct. He ran the AVISE CTD profile, and the traditional lupus markers weren't present. Instead, this patient was only positive for ANA, BC4d, which is unique to Exagen, 2 of our new T-cell markers, and 1 other non-lupus autoantibody. The clinician told us that if it weren't for the unique markers Exagen provides, he would not have been convinced of the lupus diagnosis and instead taken a different path in treating this patient. The second T-cell example we stumbled upon when 1 of our scientists noticed an interesting abstract at a conference. This was a presented case study of a very interesting patient who had ANA negative lupus nephritis, which is rare and at odds with the current ACR SLE guidelines.

He ran the advise CTD profile and the traditional lupus markers more present.

Instead this patient was only positive for M&A.

<unk>, which is unique to X Gen. Two of our new T cell markers and one other non lupus auto antibody.

The clinician told us that if it werent for the unique markers estrogen provides who would not have been convinced that a lupus diagnosis and instead taken a different path in treating this patient.

The second T. Cell example, we stumbled upon when one of our scientists noticed an interesting abstract at a conference.

This was a presented case study of a very interesting patient who had an a negative lupus nephritis, which is rare and at odds with the current ACR SLE guidelines.

But nevertheless, the case study detailed how our 42 year old male presented to the hospital with lower extremity pain and swelling with mild proteinuria.

John Aballi: Nevertheless, the case study detailed how a 42-year-old male presented to the hospital with lower extremity pain and swelling with mild proteinuria. The clinicians evaluated him for SLE, but ANA was negative, and so the suspicion faded initially. The patient continued in and out of the hospital for a few weeks with various forms of hematuria and nephrotic range proteinuria and continued to be treated with steroids and hypertensive medications. Ultimately, a kidney biopsy was performed, and it revealed Class IV lupus nephritis. AVISE testing confirmed a positive T-cell profile, which was the only serological abnormalities identified consistent with lupus in this patient. The patient was subsequently treated with additional steroids, but also strong immunosuppressive therapy, and discharged.

The clinicians evaluated him for SLE, but anr was negative and so the suspicion faded initially.

The patient continued in and out of the hospital for a few weeks with various forms of hematuria and nephrotic range proteinuria.

<unk> continued to be treated with steroids and hypertensive medications.

Intimately a kidney biopsy was performed and it revealed class for lupus nephritis.

Our buys testing confirmed a positive T cell profile, which was the only serological abnormalities identified consistent with lupus in this patient.

The patient was subsequently treated with additional steroids, but also strong immunosuppressive therapy and discharged.

Upon reevaluation is creatinine had improved along with the symptoms and wall continued long term follow up as needed. This is a great example of how our efforts to bring novel Biomarkers to the clinic can have such a significant impact on patients and in moving the rheumatology field forward.

John Aballi: Upon reevaluation, his creatinine had improved along with his symptoms, and while continued long-term follow-up is needed, this is a great example of how our efforts to bring novel biomarkers to the clinic can have such a significant impact on patients and in moving the rheumatology field forward. This is the type of clinical impact we're building for, and that's what our science is about. We also made two important additions to the Exagen team this quarter. First, we welcome Dr. Michael Mahler as our new Chief Scientific Officer. Michael is one of the most accomplished scientific leaders in autoimmune diagnostics, with more than two decades of R&D experience. He's widely regarded as a key opinion leader in biomarker development and was responsible for commercializing PAD-4 at Warfarin, a marker we plan to launch later this year. Michael brings deep scientific credibility and cultural alignment to our team.

This is the type of clinical impact we're building for and Thats, what our science is about.

We also made two important additions to the <unk> team this quarter.

First we welcome Dr. Michael <unk>, as our new Chief Scientific Officer.

Michael I was one of the most accomplished scientific leaders in autoimmune diagnostics with more than two decades of R&D experience.

He is widely regarded as a key opinion leader in biomarker development and was responsible for commercializing pad for orphan a marker we plan to launch later this year.

Michael brings deep scientific credibility and cultural alignment to our team.

He understands the rigorous pathway to launch and scale high impact diagnostics and shares our vision for building a company that transforms autoimmune care through precision medicine.

John Aballi: He understands the rigorous pathway to launch and scale high-impact diagnostics and shares our vision for building a company that transforms autoimmune care through precision medicine. Second, we added Chas McKhann to our board of directors. Chas is a proven executive in the life science tool space and brings a strong strategic lens to our boardroom. His addition was opportunistic and reflects our belief that when smart opportunities present themselves, we will move decisively to execute. We continue to make strong progress across our R&D pipeline. First, as it relates to lupus nephritis, both our urine and blood-based efforts are advancing well. The intended use applications are becoming increasingly clear, and we are actively working on strategies to secure reimbursement so that patients can access these tools. We're at the tail end of our first pharma engagement using the urine platform, and we expect to unlock additional partnerships moving forward.

Second we added chasms onto our board of directors.

Chassis is a proven executive in the life science tool space and brings a strong strategic lens to our boardroom.

His addition was opportunistic.

And reflects our belief that when smart opportunities present themselves, we will move decisively to execute.

We continue to make strong progress across our R&D pipeline.

First as it relates to lupus nephritis, both our urine and blood based efforts are advancing well.

The intended use applications are becoming increasingly clear and we are actively working on strategies to secure reimbursement so that patients can access these tools.

We're at the tail end of our first farmer engagement using the year end platform.

And we expect to unlock additional partnerships moving forward.

More to come but the science is exciting.

John Aballi: More to come, but the science is exciting. Second, our efforts to discover novel blood-based biomarkers of kidney damage are advancing. We've secured additional validation cohorts through the NIH, and these studies are progressing well. We believe the potential to combine these markers with our urine-based platform could be a significant opportunity but are also optimistic on their standalone value long term. Lastly, and closest to commercial launch, is our efforts to expand our seronegative offering through the inclusion of the anti-PAD4 biomarkers. We plan to submit the clinical and analytical validation package to the New York State Department of Health in August and expect to hear back by year-end. We remain on track to launch commercially heading into 2026.

Second our efforts to discover novel blood based biomarkers of kidney damage are advancing.

We secured additional validation cohorts through the NIH and these studies are progressing well.

We believe the potential to combine these markers with our urine based platform could be a significant opportunity but are also optimistic on their standalone value long term.

Lastly, and closer to commercial launch is our efforts to expand our Cerro negative offering through the inclusion of the anti pad for Biomarkers.

We plan to submit the clinical and analytical validation package to New York State Department of Health in August and expect to hear back by year end.

We remain on track to launch commercially heading into 2026.

On the financial front, and Jeff will provide more detail, but we ended the quarter with just over $30 million in cash and equivalents and are approaching neutral operating cash flow on a quarterly basis, the public offering a new credit facility. We completed earlier in the quarter give us the financial flexibility, we need to continue investing thoughtfully and growth both commercially.

John Aballi: On the financial front, Jeff will provide more detail, we ended the quarter with just over $30 million in cash and equivalents and are approaching neutral operating cash flow on a quarterly basis. The public offering and new credit facility we completed earlier in the quarter give us the financial flexibility we need to continue investing thoughtfully in growth, both commercial and scientific, while staying disciplined with expenses. At Exagen, we're building something special. We talk about it all the time here in our building, it's really a commitment to redefining how autoimmune disease is diagnosed and managed. It's redefining the journey for the patient. We're attracting leaders who share that vision. We're launching innovations that clinicians are asking for. We're helping physicians catch diseases earlier, make better decisions, and ultimately improve outcomes for patients.

And scientific while staying disciplined with expenses.

At <unk>, we're building something special we talked about it all the time here in our building, but it's really a commitment to redefining how autoimmune disease is diagnosed and managed is redefining the journey for the patient.

We're attracting leaders who share that vision, we're launching innovations that clinicians are asking for we're helping physicians catch diseases earlier make better decisions and ultimately improve outcomes for patients.

Our growth this quarter in volume revenue ASP.

John Aballi: Our growth this quarter in volume, revenue, ASP, clinical adoption, and leadership strength is a reflection of that vision taking hold. We're grateful for your continued support, and we look forward to sharing more progress next quarter. With that, I'll turn it over to Jeff.

Clinical adoption and leadership strength is a reflection of that vision taking hold.

We're grateful for your continued support and we look forward to sharing more progress next quarter.

With that I'll turn it over to Jeff.

Thank you John and good morning, everyone.

As John mentioned, we delivered another record revenue quarter. It was also a busy quarter as we executed on initiatives to shore up the balance sheet.

Jeffrey Black: Thank you, John, and good morning, everyone. As John mentioned, we delivered another record revenue quarter. It was also a busy quarter as we executed on initiatives to shore up the balance sheet. As we discussed during the last earnings call, we refinanced our debt and added additional tranches that we can utilize at our option. On the heels of the debt refinance, we tapped the equity markets with a $20 million follow-on offering. We added several new fundamental investors with key participation from our existing investor base and continued support post-offering. Our balance sheet now provides us with the flexibility to invest in growth while maintaining a clear path to positive operating cash flow.

As we discussed during the last earnings call, we refinanced our debt and added additional tranches that we can utilize at our option.

On the heels of the debt refinance we tap the equity markets with a $20 million follow on offering we added several new fundamental investors with key participation from our existing investor base and continued support post offering.

Our balance sheet now provides us with the flexibility to invest in growth, while maintaining a clear path to positive operating cash flow.

Turning to revenue, we delivered $17 2 million in the second quarter, a 14% increase over 2024 and this growth came from an increase in volume, which was up 14% sequentially from the first quarter and 7% from the second quarter of 2024 as well as.

Jeffrey Black: Turning to revenue, we delivered $17.2 million in Q2, a 14% increase over 2024. This growth came from an increase in volume, which was up 14% sequentially from Q1 and 7% from Q2 2024, as well as continued ASP expansion. Our trailing 12-month AVISE CTD ASP grew $27 year over year to $428, primarily driven by our new biomarkers, which are still in the early days of collection cycles. We've taken a conservative approach this quarter with new biomarkers, adjusting our accrual rate down to align with what we're seeing in actual cash collections. We expect to see continued expansion in H2 as we see the impact of patient deductibles maxing out and the complete revenue cycle process for our new biomarkers begin to take effect.

<unk> ASP expansion.

Our trailing 12 month device CTD Asps grew $27 year over year to $428.

Primarily driven by our new Biomarkers, which are still in the early days of collection cycles.

We've taken a conservative approach this quarter with new Biomarkers, adjusting our accrual rate down to align with what we're seeing in actual cash collections.

We expect to see continued expansion in the second half of the year as we see the impact of patient deductibles maxing out and the complete revenue cycle process for a new biomarkers begin to take effect.

Gross margin in the second quarter.

Was just over 60% up from about 59% in the first quarter and 60% in the second quarter of 2020 for.

Jeffrey Black: Gross margin in Q2 was just over 60%, up from about 59% in Q1 and 60% in Q2 2024. This improvement reflects the growing contribution of higher ASP and the gradual normalization of lab operations following our Q1 investments. We expect continued gross margin expansion throughout the year, driven mostly by our expected ASP improvements. Operating expenses for Q2 were $13 million, up from $12.5 million in Q1 and $11.6 million in Q2 2024.

This improvement reflects the growing contribution of higher asps.

And the gradual normalization of lab operations following our Q1 investments.

We expect continued gross margin expansion throughout the year, driven mostly by our expected ASP improvements.

Operating expenses for the quarter were $13 million up from $12 5 million in the first quarter and $11 $6 million in the second quarter of 2024. This increase reflects the impact of some onetime expenses in the second quarter, our continued investment in R&D, including <unk> leadership.

Jeffrey Black: This increase reflects the impact of some one-time expenses in Q2, our continued investment in R&D, including 2 key leadership hires, clinical studies, and pipeline advancement, as well as strategic additions to our commercial team. We expect operating expenses to remain roughly at these levels for the remainder of 2025 and increase modestly over time in absolute dollars as we scale, but should decline as a percentage of revenue reflecting growing operating leverage. While we're now very well-positioned from a balance sheet perspective to make the investments needed to support our expected growth, equally important, we have the ability to modulate spend down or up and to invest opportunistically as we fit. Our net loss for Q2 was $4.4 million, compared to $3 million in the same period last year.

<unk> clinical studies and pipeline advancement as well as strategic additions to our commercial team.

We expect operating expenses to remain roughly at these levels for the remainder of 2025 and increase modestly over time in absolute dollars as we scale, but should decline as a percentage of revenue, reflecting growing operating leverage.

And while we are now very well positioned from a balance sheet perspective to make the investments needed to support our expected growth.

Equally important we have the ability to modulate spend down or up and to invest opportunistically as we sit here.

Our net loss for the second quarter was $4 4 million compared to $3 million in the same period last year. The most significant drivers of this change being the impact of our new debt facility, which added 600000 noncash interest and fair value adjustments 300000 per loss on debt extinguishment.

Jeffrey Black: The most significant drivers of this change being the impact of our new debt facility, which added $600,000 in non-cash interest and fair value adjustments, $300,000 for loss on debt extinguishment, and $400,000 in cash interest expense. Adjusted EBITDA loss was $1.7 million in Q1 versus $1.6 million in Q2 2024. Profitability remains a core focus for the company, with a positive adjusted EBITDA firmly in sight in the foreseeable future. As a reminder, our adjusted EBITDA excludes stock comp expense, since it's a non-cash item. Please refer to our earnings release issued earlier today for a reconciliation of adjusted EBITDA to net loss. Shifting to the balance sheet, we ended Q2 2025 with cash equivalents, and restricted cash of $30 million.

And 400000 in cash interest expense.

Adjusted EBITDA loss was $1 7 million in the first quarter versus $1 6 million in the second quarter of 2024.

Profitability remains a core focus for the company with positive adjusted EBITDA firmly insight in the foreseeable future.

As a reminder, our adjusted EBITDA excludes stock comp expense a non cash item. Please.

Please refer to our earnings release issued earlier today for a reconciliation of adjusted EBITDA to net loss.

Shifting to the balance sheet. We ended the second quarter of 2025 with cash cash equivalents that are shifted cash of $30 million operating cash burn for the second quarter was just under $3 million and $2 5 million before interest payments.

Jeffrey Black: Operating cash burn for Q2 was just under $3 million and $2.5 million before interest payments, positioning us for H2 2025 to be at or near free cash flow positive. We're very well positioned from a balance sheet perspective with over $40 million in combined cash and accounts receivable at 30 June, and up to an additional $50 million in available future credit capacity if and when needed. In closing, 2025 continues to shape up as another transformative year for Exagen. We delivered record revenue in Q2, returned AVISE CTD to volume growth, and remained on track to deliver over 17% revenue growth in 2025. We're making strategic investments in our R&D pipeline and commercial expansion, all while focused on path to profitability, improving patient lives, and building long-term shareholder value.

Positioning us for the second half of 2025 to be at or near a free cash flow positive.

We're very well positioned from a balance sheet perspective with over $40 million in combined cash and accounts receivable at June 30, and up to an additional $50 million in available future credit capacity, if and when needed.

In closing 2025 continues to shape up as another transformative year for <unk>, we delivered record revenue in the second quarter returned advise CTD to volume growth and remained on track to deliver over 17% revenue growth in 2025.

We're making strategic investments in our R&D pipeline and commercial expansion.

All while focused on path to profitability improving patient lives.

And building long term shareholder value.

We entered the second half of 2025 with positive momentum and great confidence in our trajectory and to that end, we're providing full year revenue guidance of between 65 and $70 million and at the high end of that range. We would expect to hit positive adjusted EBITDA in the fourth quarter and on a sustain.

Jeffrey Black: We enter H2 2025 with positive momentum and great confidence in our trajectory, and to that end, we're providing full-year revenue guidance of between $65 and 70 million, and at the high end of that range, would expect to hit positive adjusted EBITDA in Q4 and on a sustainable basis throughout 2026. We'll now open the call up for questions.

Well basis throughout 2026.

We'll now open the call up for questions.

Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May Press Star two if you would like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up.

Operator: The first question is from Daniel Brennan from TD Cowen. Please go ahead.

With your handset before pressing the star keys.

Please while we poll for questions.

The first question is from Dan Brennan from TD Cowen. Please go ahead.

Hi, guys. Thanks for the question. This is William Ruby on for Dan and congrats on the quarter.

William Rubio: Hi, guys. Thanks for the question. This is William Rubio for Dan, and congrats on the quarter. You grew volume by 7% and grew volume for the second straight quarter. I'm just wondering how sustainable you think this volume growth is. Then on the volume growth this quarter, I heard you say it wasn't from the sales force expansion, but is it more just an execution of the team with the existing base, or are the markers a big contributor with new customers to this volume growth? Just wondering what's contributing to it. Thank you.

You grew volume by 7% and grew volume for the second straight quarter I'm. Just wondering how sustainable you think this volume growth is and then on the volume growth. This quarter I heard you say it wasn't from the sales force expansion, but is it more just an execution of the team with the existing base or are the markers that big contributor with new customers just volume growth I'm, just wondering kind of what's contributing to.

Thank you.

Yes, good morning, William Thanks, a lot for the question.

Jeffrey Black: Yeah. Good morning, William. Thanks a lot for the question. We think the growth in sales, which was phenomenal this past quarter, is really attributed to the strong team that we've established, and the caliber of individuals that we now have in place. We've talked in the past, but about a quarter to almost a third of the team is new in the last 12 months, and they're getting up to speed, getting familiar with the product, our processes in the rheumatology community. As they gain that comfort level and that confidence, their clinical conversations can gain greater depth. Ultimately we become a more consultive resource for clinicians. We think the stability of the team, our voluntary turnover is way down, compared to where it was a few years ago. We're in the single digits now, and that includes one retirement.

So we think the growth in sales, which was phenomenal. This past quarter is really attributed to the strong team that we've established.

And the caliber of individuals that we now have in place.

We've talked in the past, but about.

About a quarter to almost a third of the team.

Is new in the last 12 months and Theyre getting up to speed getting familiar with the product our processes in the rheumatology community and so as they gain that comfort level on that confidence.

Their clinical conversations can gain greater depth and then ultimately we become a more consultative resource for our clinicians. So we think the stability of the team are voluntary turnover is way down compared to where it was a few years ago. We're in.

Single digits now and that includes one retirement so.

Fantastic team as far as that goes just caliber of individuals and then.

Jeffrey Black: Fantastic team as far as that goes, just caliber of individuals and then the training and time in the seat, if you will. The new markers certainly served as a catalyst. That has absolutely proven to be a valuable contribution to our progress here in the H1. It gives our team something new to talk to clinicians about, plus the value proposition that we've conveyed is panning out in first-hand examples, and I've highlighted a few on this call, and I have on prior calls as well. I think those two factors are very key. You referenced sustainability. We think this is very sustainable. We have a large market, and we're around just under 10% penetrated from our own internal calculations. We have a ways to go. We're expanding our sales force. You're exactly right.

The training and time in the seat if you will.

The new markers certainly served as a catalyst so that is absolutely proving to be a valuable.

Contribution to our progress here in the first half.

It gives us.

Our team something new to talk to clinicians about plus the <unk>.

Value proposition that we've conveyed is panning out in firsthand examples I have highlighted a few on this call and I have on prior calls as well. So I think those two factors R. R.

Our very key you you referenced sustainability. We think this is very sustainable we have a large market.

And we're.

Around just under 10% penetrated from our own internal calculations. So we have a ways to go we're expanding our sales force you're exactly right Q2, we don't believe those results are attributed to some of the new territories.

Jeffrey Black: Q2, we don't believe those results are attributed to some of the new territories, primarily because those were established towards the end of Q2. It takes us somewhere 6 to 9 months for a new rep to get up, going and contributing. We expect to see the results of that expansion transpire later in the year. We'll have more additional markers on the seronegative front.

Primarily because those were established towards the end of Q2.

And it takes us somewhere six to nine months for a new rep to get up and go.

<unk> and contributing so we expect to see the results of that expansion transfer.

Transpire later in the year, we will have more additional markers on the sterno negative front so.

The effect that we're seeing here at the start of the year. We believe should continue the headwind there would be some.

John Aballi: The effect that we're seeing here at the start of the year, we believe should continue. The headwind there would be some traditional seasonality in the back half of the year, but our team is motivated and we'll kind of see how it plays out. Long term, we believe this is absolutely sustainable.

Traditional seasonality in the back half of the year, but.

Our team is motivated and we'll kind of see how it plays out but long term. We believe this is absolutely sustainable.

Thank you and just one follow up.

On the ASP progress towards that $90 increase in ASP.

William Rubio: Thank you. Just one follow-up. On the ASP progress towards that $90 increase in ASP, it seems like maybe the trailing 12-month increase is a little bit more modest this quarter versus Q1, understandably. Just does that $90 increase to trailing 12-month ASP still seem reasonable to get to by the end of 2025? Just wondering how that stands.

It seems like maybe the trailing 12 month increase just a little bit more modest this quarter versus the first quarter understandably, but just is that $90 increase the trailing 12 months asp's still seem reasonable to get to by the end of 2025, just wondering if how that stands.

Yes, that's a great question.

Thanks for the chance to elaborate so.

John Aballi: Yeah, that's a great question. Thanks for the chance to elaborate. In any given quarter, there's likely going to be things that both positively and negatively impact our ASP, and that's why we pointed folks to a trailing 12-month number. As you noted, that did continue to climb here in Q2. The pace of climb has been something that I've always struggled with providing a temporal component to. Knowing the exact pace relative to the magnitude there is difficult to forecast. I am very bullish on our ability to continue to drive this number higher over time. We have a lot of opportunity relative to our Clinical Laboratory Fee Schedule, and we're executing the right strategy there. I do want to address your question.

Given quarter, there is likely going to be things that both positively and negatively impact our ESP and that's why we pointed folks to a trailing 12 month number.

As you noted that did continue to climb here in Q2, the pace of client has been something that I've always struggled with providing a <unk> component to knowing the exact.

Exact pace relative.

To the magnitude there is difficult to forecast so I am very bullish on our ability to continue to drive this number higher over time, we have a lot of opportunity relative to our clinical lab fee schedule and we are executing the right strategy there.

But I do want to address your question. So we recognize revenue on an accrual basis, which takes actual testing volume build out in a quarter and multiply that by an anticipated accrual rate that rate is based on long term expectations post appeal cycle and what we think we're going to cross the finish line with in Q2.

John Aballi: We recognize revenue on accrual basis, which takes actual testing volume build out in a quarter and multiplies it by an anticipated accrual rate. That rate is based on long-term expectations, post appeal cycle, and what we think we're going to cross the finish line with. In Q2, we did make some adjustments to a few accrual rates, which brought them closer to what we're seeing from a cash collection standpoint real time. The reason for that is really, we don't want to get several quarters down the line and have to take a potential write-down of some sort. We do still feel very bullish that the 90, potentially even higher than that, is absolutely where we should sit.

We did make some adjustments to a few accrual rates, which brought them closer to what we're seeing from a cash collection standpoint real time and the reason for that is.

Really.

We don't want to get several quarters down the line and have to take a potential write down of some sort we do still feel very bullish that the 90.

Even higher than that is absolutely where we should sit we just thought it was a prudent measure that.

John Aballi: We just thought it was a prudent measure that, given the progress on those markers, we should adjust closer to cash right now and then recognize that increase in future quarters. That's kind of how we viewed it. Hopefully, that provides a little extra color. We're tracking very well operationally. We continue to make progress on many of our revenue cycle operations, and we're seeing very good collections there.

Given the progress on those markers, we should we should I guess closer to cash right now and then recognize.

That increase in future quarters, So that's kind of how we viewed it hopefully thats.

Provides a little extra color, but we're tracking very well operationally, we continue to make progress.

On many of our revenue cycle operations.

We're seeing very good collections there.

Thank you very much appreciate it.

Yes.

William Rubio: Thank you very much. Appreciate it.

The next question is from Kyle Nixon from Canaccord. Please go ahead.

John Aballi: Yeah.

Operator: The next question is from Kyle Mikson from Canaccord. Please go ahead.

Great. Thanks, guys for the questions Congrats on a great quarter.

Just to put a finer point on the volume question in that theme.

Kyle Mikson: Great. Thanks, guys, for the questions. Congrats on the great quarter. Just to put a finer point on the volume question and that theme. The Q2, that's typically a pretty strong quarter seasonally for you guys. Maybe just talk about what kind of a step down you would expect in the Q3 and then again, maybe Q4 trends as well. I think the key is you have the same physician base, and that's probably growing nicely sequentially, I guess, from penetrating this market. The ordering, the tests per physician is probably declining quarter to quarter. Just could you talk about that a bit? Thanks.

The second quarter, Thats, typically a pretty strong quarter seasonally for you guys.

Maybe just like talk about what kind of a step down you would expect.

In the third quarter, and then again, maybe fourth quarter trends. This fall and I think the key is you have the same physician base and thats, probably growing nicely. It looks sequentially I guess escape further penetrating this market, but the ordering the test per physician is probably declining quarter to quarter. So just can you talk about that a bit.

Good morning, Kyle Thanks for the question so.

John Aballi: Morning, Kyle. Thanks for the question. We don't guide volume on a quarter-by-quarter basis, but the way we think about it is, we had a fantastic Q2, and you're right, Q2 tends to be our best quarter of the year, but this outperformed what we've seen in terms of historical performance. This was a fantastic quarter. The team deserves a lot of credit. They really have prepared, and like I said, I think we've got high caliber folks that have gained some confidence and standing in their seat and are really adding value to clinicians, and that's reflected in the performance there. We expect that to continue to improve through the H2 of the year. We haven't done our sales expansion.

We don't guide volume on a quarter by quarter basis, but the way we think about it is we had a fantastic Q2 and that was you're right Q2 tends to be our.

Our best quarter of the year, but this outperformed what we've seen in terms of.

Our historical performance so.

This was a fantastic quarter the team deserves a lot of credit they really.

Have prepared and like I said I think we've got a high caliber folks.

<unk> gained some confidence in standing in their seat and are really adding value to clinicians and thats reflected in the performance there. So we.

We expect that to continue to improve through the back half of the year plus we have begun our sales expansion. So the traditional seasonality that we would expect.

John Aballi: The traditional seasonality that we would expect, we're anticipating with the sales expansion to have some tailwinds there to counter that. Exactly how we see Q3, Q4, like I said, we don't guide on a quarterly basis, but the aim here would be to continue to grow.

We're anticipating with the sales expansion to have some tailwind there to counter that so exactly how we see Q3 Q4 like I said, we don't guide on a quarterly basis, but the aim here would be to continue to grow.

Alright, Thanks, Sean that's great and then.

It sounds like Youre going to be launching new tests surgeries.

Kyle Mikson: All right. Thanks, Sean. That was great. It sounds like you're going to be launching new tests or at least one or two in the next six to 12 months, let's say. As you do those rollouts, just could you clarify if that's a headwind to ASP as you're doing this whole ASP extension situation with the new markers of CTD side? Just generally on pipeline efforts, could you just remind us of what the current snapshot of the strategy is to just generate some ROI off the R&D investment?

One or two look into next.

Six to 12 months, let's say.

As you do those Rollouts is that just could you clarify if that's a headwind to asps.

As you are doing this hole.

<unk> situation with new markers on the <unk> side, and then just generally on pipeline efforts I mean could you just remind us of what the current snapshot of the strategy is to yes.

Yes, just generate some ROI off that R&D investment.

Yes, absolutely. So the first one we plan to launch just for everyone's benefit we plan to launch two additional markers there the anti pad antibodies. These are useful in the zero negative raw space. So it continues to strengthen our value proposition as it relates to rheumatoid arthritis, and as we've seen with our launch here. This past January.

John Aballi: Yeah, absolutely. The first one, just for everyone's benefit, we plan to launch 2 additional markers. They're the anti-PAD antibodies. These are useful in the seronegative RA space. It continues to strengthen our value proposition as it relates to rheumatoid arthritis. As we've seen with our launch here this past January, that is adding real clinical value for clinicians and having meaningful impact as we've detailed. I would expect that to further strengthen the value proposition. We'll identify more seronegative patients in this context. Should actually be a tailwind to ASP. It won't be as meaningful as what we launched in January, namely the $90 impact we expect. However, it will be some impact. It should be a tailwind, actually. On the pipeline efforts, we have what we've talked about publicly, a few very exciting programs in development.

That is adding real clinical value for clinicians and having meaningful impact.

As we've detailed so I would expect that to further strengthen the value proposition while identify more so negative patients in this context should actually be a tailwind to <unk> ASP it won't be as meaningful as what we launched in January namely the $90 impact we expect.

However, it will be.

It will be some impact so it should be a tailwind actually.

On the pipeline efforts, we have what we've talked about publicly a few very exciting programs in development. One is a yearend program looking at lupus nephritis.

John Aballi: One is a urine program looking at lupus nephritis markers. The intended use here would be in the diagnosis, but also prognosis aspects of managing that disease. Understanding which patients are higher risk, which patients need escalated therapy, but also helping to diagnose those patients which can best benefit from treatment. That's a pretty challenging disease to diagnose, requires kidney biopsy, et cetera. We think high clinical need, and we're working with some of the top KOLs in the field there. Additionally, we took the approach of, if we're going to study the kidney in the context of lupus, and we're going to run some clinical trials as well, one is taking a look at biomarkers which relate to active inflammation, and that's the treatable aspect of this condition.

<unk> and the intended use here would be in the diagnosis, but also prognosis aspects of managing that disease, so understanding which patients are higher risk, which patients need escalated therapy, but also helping to diagnose those patients, which can best benefit from treatment.

That's a pretty challenging disease to diagnose requires kidney biopsy et cetera. So we think high clinical need and we're working with some of the top kols in the field. There. Additionally, we.

Took the approach of if we're going to study the kidney in the context of lupus.

And we're going to run some clinical trials as well.

One is taking a look at biomarkers, which relate to active inflammation and thats. The treatable aspect of this condition, but others are taking a look at biomarkers, which to note.

John Aballi: Others are taking a look at biomarkers which denote true damage to the kidney, so that you get a feel for how much of the kidney is left and what can be done. Our damage markers, our blood-based program, those are novel biomarkers that we've discovered ourselves and validated in multiple cohorts. We're working with the NIH to secure additional cohorts for further validation, but that's progressing nicely. We expect some combination of these two platforms to have meaningful impact in lupus nephritis. That would be our first goal here over the medium term. What I've said in the past is, we'll look for Medicare reimbursement prior to launching a commercial product. As multiple folks know on the call, that can take some time. We're looking for creative ways to approach that, but I don't have anything meaningful to convey at this time.

To damage to the kidney so that you get a feel for.

Uh huh.

How much of the kidney is left and.

And what can be done so our damage markers are blood based program. Those are novel Biomarkers that we have discovered ourselves and validated in multiple cohorts. We are working with the NIH to secure additional cohorts for further validation, but thats progressing nicely. We expect some combination of these two platforms to have meaningful impact in lupus.

<unk> that would be our first goal here.

Here over the medium term and what I've said in the past is we will look for Medicare reimbursement prior to launching a commercial product and has multiple folks know on the call that can take some time, we're looking for creative ways to approach that but I don't have anything meaningful.

Meaningful.

At this time, so right now the science is looking very attractive continues to.

John Aballi: Right now, the science is looking very attractive, continues to be very interesting and validate, and we've completed our first biopharma project. Additionally, we're looking at indicators of disease activity, both in rheumatoid arthritis and in lupus, and those are progressing as well. I've tried to very consciously stick with the current company performance, and I think that that's exciting in and of itself, while we continue to develop on the pipeline front. We've brought in Michael Mahler this past quarter, our new chief scientific officer. He has extensive experience in biomarker development, and again, we're just looking at creative ways to create clinical value for patients and clinicians, but then also be very shareholder-minded in creating value as well. I think we'll be successful with that.

To be very interesting and validate and we've completed our first Biopharma project. So we will see exactly how this those two efforts progress. Additionally, we're looking at indicators of disease activity, both in rheumatoid arthritis and in lupus and those are progressing as well, but I've tried to very consciously.

<unk> stick with the current company performance and I think that Thats exciting.

Of itself, while we continue to develop on the pipeline front so.

We brought in micro Moller this past quarter, our new Chief Scientific officer. He has extensive experience in biomarker development and again, we're just looking at creative ways to create clinical value for patients and clinicians, but then also be very shareholder minded and creating value as well. So I think we'll be successful at that.

Alright, perfect and then just on your last point there Sean about you mentioned Biopharma could you talk about the pipeline for that business and then how that kind of.

Kyle Mikson: All right. That was perfect. Just on your last point there, John, about, you mentioned biopharma. Could you talk about the pipeline for that business and how that kind of progressed or performed in Q2, especially? As you think about going forward, how do you think about some of the new modalities, like cell therapy, for example, getting into autoimmune more and more become more prevalent?

Progressed are performed in this in the second quarter, especially and then as you think about going forward. How do you think about some of the new one.

<unk> kind of get <unk> cell therapies for example, getting into autoimmune more and more with some more prevalent.

Yeah.

Your very interesting questions. So.

John Aballi: Yeah. That's actually a very interesting question. From a biopharma standpoint, historically, the company did maybe $200,000 of biopharma business on an annual basis, and now it's a concerted effort with a dedicated team that is being led by our Chief Medical Officer, Mike Nurenberg, Dr. Mike Nurenberg, who has done this in the past and set up similar institutions at other companies. I'm very pleased with the progress that we've had. We've continued to strengthen relationships with prior collaborators and then brought on a few new programs. As I'm sure you're aware, some of that revenue can be lumpy, meaning, in any given quarter, you can have outsized performance, and then it's all relative to when projects and programs are finished and when some of those revenue milestones, as defined in statements of work, actually get completed.

From our Biopharma Biopharma standpoint, historically the company.

Did.

Maybe maybe a couple of hundred thousand dollars of Biopharma business.

On an annual basis and now it's a concerted effort with a dedicated team.

That is being led by our Chief Medical Officer, Mike Nurenberg, who Dr. Mike Nurenberg, who has done this in the past and set.

Similar institutions at other companies and I'm very pleased with the progress that we've had we've continued to strengthen relationships with.

Prior collaborators and then brought on a few new programs as Im sure Youre aware some of that revenue is can be lumpy and meaning in any given quarter. You can have outsized performance and then it's all relative to win projects and programs are finished and when some of those revenue milestones as defined in statements of work actually get.

<unk>.

So I think we have great partnerships in some of the more cutting edge areas.

John Aballi: I think we have great partnerships in some of the more cutting-edge areas of pharmaceutical development in this space. We're sought after because of our high quality and unique markers. I think that that's a combination that would be difficult to replicate. I expect that to lead to future business. As our pipeline brings more novel biomarkers in adjacent disease areas, I could see this growing fairly substantially. The biopharma revenue for Q2 is in the other testing line. I'll leave it to Jeff to comment on some of those details. Like I said, it can be lumpy. We'll have to see how it materializes throughout this year. We do expect that to be a contributing factor in the back half.

Pharmaceutical development in this space are sought after because of our high quality and unique markers and I think that thats.

The combination that would be difficult to replicate so I expect that to.

Lead to future business and then as we our pipeline brings more novel Biomarkers in adjacent disease areas.

I could see this growing fairly substantially so.

Biopharma revenue for Q2, and the other testing line and I'll leave it to Jeff to comment on some of those details, but like I said it can be lumpy, we'll have to see how it materializes throughout this year, but we do expect it to be a contributing factor in the back half.

And then you mentioned a little bit of our asked a little bit as we develop additional modalities how does it play in here and we view this as a way to Derisk some of our R&D development, meaning if we can partner with a pharma organization and specifically take a look at well characterized clinical samples, which helped us with our.

John Aballi: You mentioned a little bit of, or asked a little bit of, as we develop additional modalities, how does it play in here? We view this as a way to de-risk some of our R&D development, meaning, if we can partner with a pharma organization and specifically take a look at well-characterized clinical samples which help us with our validation efforts, what a win for us. If you do it in a manner which has reasonable margins and is accretive on a revenue basis, I think you're really setting yourself up well there. That's our objective. We've done it in a few areas. I think we'll continue to do it in the lupus nephritis area, but more to come there. Anything else you want to add, Jeff?

Validation efforts.

Win for Us and if you do it in a manner, which has reasonable margins and is accretive on a revenue basis, I think youre really setting yourself up well there. So that's our objective we've done it in a few areas I think will continue to do it in the lupus nephritis area.

But more to come there anything else you want to add Jeff I think you covered it in to your question.

We're running about anywhere from $181000.

Jeffrey Black: I think you covered it. To your question, we're running about anywhere from 100 to $200,000 a quarter. That's what we saw in Q2. As John said, dependent on timing, there's a real opportunity and a nice setup in H2 to see expansion. Just to reiterate that expansion, this business is generally margin accretive, so it'll be a nice contributor to our path to profitability as well.

A quarter that is.

What we saw in the second quarter, but as John said depend.

Dependent on timing there is a real opportunity and a nice set up in the second half to see expansion and just to reiterate that expansion of this business is generally margin accretive so it'll be a nice contributor to our path to profitability as well.

Okay, great color guys. Thanks, a lot.

Okay. Thank you.

Kyle Mikson: Great. Great call, guys. Thanks a lot. Appreciate it.

The next question is from Andrew Bachmann from William Blair. Please go ahead.

John Aballi: Thanks.

Jeffrey Black: Thank you.

Operator: The next question is from Andrew Brackmann from William Blair. Please go ahead.

Hey, guys Matthew Bouley on for Andrew Bachmann, Thanks for taking our questions.

Maggie Bui: Hey guys, this is Maggie Bui on for Andrew Brackmann. Thanks for taking our questions. I just wanted to further expand upon your efforts to expand your territories. Can you just remind us of where you are at today? I believe you mentioned that you added a few territories towards the end of the quarter, and where do you expect to be at by year-end? Just looking ahead, how are you thinking about further investing in territories in 2026 and beyond?

I just wanted to further expand upon your efforts to expand your territory.

Just remind us of where you are at today I think I believe you mentioned that you added a few territories towards the end of the quarter and where do you expect to be at by year end and then just looking ahead. How are you thinking about further investing in territories in 2026 and beyond.

Yes, good morning, Matt. Thanks for the question. So just to level set we started the quarter right around 40 territories. We have just initiated our expansion, but 40 territories is certainly where we started the year and then kind of around the beginning of Q2.

John Aballi: Yeah. Good morning, Maggie. Thanks for the question. Just to level set, we started the quarter right around 40 territories. We had just initiated our expansion, but 40 territories is certainly where we started the year. Then kind of around the beginning of Q2, we initiated some expansion. We got to 42, so we went from 40 to 42 over the course of the quarter. We had a net addition of two territories, and we have a line of sight to two more additions here, call it Q3, early Q4. We've likely going to be in the 44 range. There may be opportunity for another one, potentially two territories as well near-term. We're always evaluating the US, taking a look at various metrics.

We initiated some expansion we've got 242.

From 40 to 42 over the course of the quarter. So we added two net addition of two territories and we have line of sight to two more additions here call. It Q3 early Q4, so we've.

Likely going to be in the 44 range there may be opportunity for another one potentially two territories as well but.

Near term, but we're always evaluating the U S. Taking a look at various metrics. We look at age demographics, we look at a rate of diagnosis, we look at.

John Aballi: We look at age demographics, we look at rate of diagnosis, we look at prescriptions for some of the more common therapies in this space. We're triangulating all of those factors when we identify a potential territory, and then we actually go scout it out, if you will, see what the rheumatology clinic dynamics are in that area and see if it justifies actually having someone in the clinic. What we have learned is that actually having that face-to-face interaction is essential for this clinical practice. Having a field-based rep is going to be the way that we're growing over time. We've tried other methodologies, inside sales and what have you, but I think having that field-based presence is certainly the most effective way to grow. We should end up somewhere around 44 to 45 by the end of the year.

Prescriptions for some of the more common therapies in this space and so we're.

Triangulating all of those factors when we identify a potential territory and then we actually go kind of scattered out if you will see what the rheumatology clinic dynamics are in that area and see that justifies actually having someone in the clinic, what we have learned is that.

Actually having that face to face interaction is essential.

For this.

The this clinical practice, so having a field based rep is going to be the way that we're growing over time. We've tried other methodologies inside sales and what have you, but I think having that field based presence is certainly the most effective way to grow and so we should end up somewhere around 45, 44% to 45 by the.

Ended the year and then we'll just do what smart I think it's.

John Aballi: We'll just do what's smart. I've made a very conscious effort to not do a sizing exercise which tells us we need X amount, call it 50 or something, to satisfy the US demand, because I think that those exercises can be extremely sensitive and if you're off by a couple of parameters, you can hire the wrong number of people and in some cases, substantially wrong number of people, as we've seen. From our case, we just do it empirically. Identify a few territories, add those folks, support them as best we can, get them performing at the level that we do expect, move on. We have a ton of opportunity in some of the large metropolitan areas. I'll give you 1 example.

I've made a very conscious effort to not.

Not do a sizing exercise, which tells US we need X amount call it 50 or something to satisfy the U S demand because I think that those exercises can be extremely sensitive and if you're off by.

A couple of parameters.

You can hire the wrong number of people in some cases substantially wrong number of people as we've seen so from our case, we just do it empirically.

Identify a few territories add those folks support them as best we can get them performing at the level that we do expect and then move on but where we have a ton of opportunity in some of the large metropolitan areas.

I'll give you one example.

In Manhattan for example, this is a territory that.

John Aballi: In Manhattan, for example, this is a territory that is not a meaningful contributor to our organization, and you know the number of people that are present in Manhattan. This is a focus of ours. We're starting with one individual there, and that's been a territory, but it's just been one where we've needed to find the right person. We think we have that now, and we'll see where it goes. There's opportunity in some of these large areas for more than one territory. We'll see long term.

Is not a meaningful contributor to our organization and you know the number of people that are present in Manhattan and so this is a focus of ours.

We're starting with one individual there and then we will.

Thats been a territory, but it's just.

Been one where we've needed to find the right person and so we think we have that now and we'll see where it goes but there is opportunity in some of these large areas for <unk>.

For more than one territory. So we will see long term.

Great. That's super helpful. Thank you and then just on Asp's outside of that $90 increase from the new new markers you are expecting for trailing 12 months as Steve.

Maggie Bui: Great. That's super helpful. Thank you. Just on ASPs, outside of that $90 increase from the new markers you're expecting for trailing 12 months ASPs, just as we think about that outlook for the rest of the year, what levers can you pull to further increase those trailing 12 months ASPs? How should we be thinking about those increases for 2026 and beyond? Thanks for taking our questions.

Just as we think about that for the rest of that outlook for the rest of the year what levers can you pull to further increase the trailing 12 months Asp's and then how should we be thinking about.

Those increases for 2026 MDI, thanks for taking our question.

Yeah.

Great question, I know asps, so critical and likely the most sensitive lever that we have to transforming our business and we've done a pretty good job over the last several years in boosting this and Thats all been on the base business that should continue and what I've.

John Aballi: Yeah. Great question. I know ASP is so critical and likely the most sensitive lever that we have to transforming our business. We've done a pretty good job over the last several years in boosting this. That's all been on the base business. That should continue. What I've worked to explain for folks is our Clinical Laboratory Fee Schedule rate for the existing AVISE CTD profile is $1,299. Our blended ASP now here, excuse me, at the end of Q2, is $428. We have some meaningful opportunity, substantial opportunity, for continued improvement there. Both of those numbers are inclusive of the current new markers. Our expectation is that through our appeals efforts and what we're doing on the revenue cycle side, we'll continue to drive those numbers up.

Work to explain for folks is our clinical lab fee schedule rate for the existing advise CTD profile is $1299 our blended ASP.

Now here.

Excuse me at the end of Q2 is $428. So we have some meaningful opportunity substantial opportunity for continued improvement there.

And both of those numbers are inclusive of the current new markers.

And so.

Our expectation is that through our appeals efforts and what we're doing on the revenue cycle side will continue to drive.

Those numbers up and we have opportunity with the major blues organizations and are making progress on a quarter by quarter basis.

John Aballi: We have opportunity with the major blues organizations and are making progress on a quarter-by-quarter basis. There's large national payers that we're working with to better understand our science and the value proposition we bring. There's other smaller regional plans that we target as well. We have a very strong market access team that's been strengthened over the last, call it 18 months. They're working diligently from a top-down standpoint to talk to various medical directors and really engage and bring our offering top of mind so that we can ultimately get covered and then work on an appropriate rate down the line. We continue to make meaningful progress. I highlighted a few wins in the last call, namely TRICARE, some of the ALJ wins we had organizationally.

Large national payers that were working with to better understand our science and the value proposition. We bring and then there is other smaller regional plans that we target as well we have a very strong market access team best and strengthened over the last call. It 18 months.

And Theyre working diligently from a top down standpoint to talk to at various medical directors and really engage and bring our offering top of mind. So that we can.

Ultimately get covered and then work on an appropriate rate down the line. So we continue to make meaningful progress I highlighted a few.

Wins in the last call, namely Tri care.

Some of the ALJ wins, we had organizationally those have continued the ALJ specifically so we've had multiple now.

John Aballi: Those have continued, the ALJ specifically, so we've had multiple now in many of the claims we have with Humana. Those will pay dividends over time. You have to be diligent. You have to be relentless, really, and work through the system, conduct the right prior auth, submit medical records and really show that your offering is being used appropriately in clinical practice, which ours absolutely is, and that it's adding significant value. Over time, we do expect that progress to occur.

And many of the claims we have with Humana, So those will pay dividends over time.

You have to be diligent.

Be relentless really and worked through the system conducted right prior off submit.

Submit medical records and really show that you are you are offering is being used appropriately and clinical practice, which are absolutely is and that is adding significant value and then over time, we do expect that progress to occur.

Sure.

Great. Thank you.

Yes.

Maggie Bui: Great. Thank you.

The next question is from Ross Osborne from Cantor Fitzgerald. Please go ahead.

John Aballi: Yep.

Operator: The next question is from Ross Osborn from Cantor Fitzgerald. Please go ahead.

Good morning, Congrats on a strong quarter.

Turning off and following up on your previous response with an improved and improving product supported by the right team now with the company what market access initiatives are in place to accelerate adoption to drive your timber set penetration higher is it simply a function of getting more feet on the ground or do you have a larger marketing campaigns in place anything to drive broader awareness.

Ross Osborn: Good morning. Congrats on another strong quarter. Starting off and following up on your previous response, with an improved and improving product supported by the right team now at the company, what market access initiatives are in play to accelerate adoption to drive your 10% penetration higher? Is it simply a function of getting more feet on the ground, or do you have larger marketing campaigns in place, anything to drive broader awareness?

Yes, good morning Ross.

Youre talking specifically relative to volume.

John Aballi: Yeah. Good morning, Ross. You're talking specifically relative to volume growth.

Growth that's correct okay.

So as it relates to volume growth our marketing campaigns.

Ross Osborn: That's correct.

John Aballi: Correct? Okay. As it relates to volume growth, our marketing campaigns continue to improve. We have digital campaigns bringing awareness. We're bringing novel new markers to the clinical practice, and this is in a field where the conventional serological evaluation leverages technology and biomarkers, which were from the late 1800s to the mid-1900s, right? 50 years of innovation, call it, in the early 1900s. To bring that type of change to folks takes time, right? You have to have trust and be valued from a consultative standpoint. That is really our primary focus. We've launched significant marketing campaigns. We're doing clinical research to routinely validate the utility of these markers, and I think those publications help. They serve as some form of marketing. That's where our marketing efforts are. We've invested quite a bit in training on the team.

Continued to improve we have digital campaigns, bringing awareness, we're bringing novel new markers to clinical practice and this is in a field, where the conventional serological valuation leverages technology in it.

And Biomarkers, which were.

From the late <unk> hundreds to the mid 19 hundreds right. So.

50 years of innovation call. It in the early 19, hundreds and so to bring that type of change.

Folks is.

It takes time right and you have to have trust and.

Devalued from a consultative standpoint, and so that is really our primary focus, but we've launched significant marketing campaigns, we're doing clinical research to routinely validate the utility of these markers and I think those publications help they serve as some form of marketing, so that's where our marketing efforts.

<unk>.

<unk>.

We've invested quite a bit in training on the team I think you have to be able to handle the clinical questions that youre going to get from clinicians around sensitivity specificity patient populations.

John Aballi: I think you have to be able to handle the clinical questions that you're going to get from clinicians around sensitivity, specificity, patient populations. What's the appropriate patient and when's the appropriate time for leveraging these biomarkers? Do they change over time? All these questions come up, and having our team adequately prepared and informed is essential, and I think our sales team, along with our marketing and clinical affairs teams, have done a fantastic job in doing that. We've also been looking at how to partner more with KOLs, specifically in this space, and you'll probably see that. We can point you to that with the PAD4 launch coming up. We've already had KOLs comment on the utility of some of these markers and how they'll impact clinical practice. That's primarily our approach.

Wednesday, what's the appropriate patient and when the appropriate time for leveraging these biomarkers do they change over time all of these questions come up.

And having our team adequately prepared and informed is essential and I think our our sales team along with our marketing and clinical affairs teams have done a fantastic job in doing that we've also been looking at how to partner more with Kols.

Specifically in this space and Youll, probably see that or we can point you to that with the pad foreign launch coming up and we've already had kols comment on the utility of some of these markers and how they'll impact clinical practice so.

That's primarily our approach.

Great. Thanks for taking my question.

Ross Osborn: Great. Thanks for taking our question.

And there are no further questions at this time I would like to turn the floor back over to John <unk>, President and CEO for closing remarks.

John Aballi: Thanks, Ross.

Operator: There are no further questions at this time. I would like to turn the floor back over to John Aballi, President and CEO, for closing remarks.

<unk> thanks, everyone for joining the call today.

John Aballi: Fantastic. Thanks, everyone, for joining the call today. It was a pleasure to present the results and really a fun quarter from our standpoint. We'll see how H2 progresses, but as I said, we are building something special, and I think it's apparent in the numbers. I especially want to thank the Exagen team for the incredible dedication and effort they continue to put in on a daily basis. I mean, this team is truly fantastic. It's energizing. There's a lot of really talented people here focused on clinical and patient care, and it's fun to see that coming together really in an efficient and effective manner. We appreciate your partnership and look forward to future updates. Thank you.

It was a pleasure to present the results and really a fun quarter from our standpoint, we'll see how the back half of the year.

Progresses, but as I said, we are building something special and I think it's apparent in the numbers.

I, especially want to thank the exigent team for the incredible dedication and effort. They continue to put in on a daily basis. I mean this team is truly fantastic. It's energizing theres a lot of really talented people here focused on clinical and patient care and it's fun to see that coming together really in an efficient and effective manner, we would.

<unk> your partnership and look forward to future updates. Thank you.

Okay.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.

Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.