Core Viewpoint - Exagen reported strong revenue growth driven by its AVISE CTD test, but continued to face widening net losses due to increased operating expenses and ongoing investments in sales and research efforts [1][5][7]. Financial Performance - Q2 2025 GAAP revenue reached $17.2 million, exceeding analyst expectations of $16.31 million, and representing a 14.2% increase from $15.1 million in Q2 2024 [2][5]. - GAAP EPS was $(0.21), worse than the expected $(0.15) and a decline from $(0.16) in Q2 2024, marking a 31.3% year-over-year deterioration [2][5]. - Gross margin improved slightly to 60.4%, up from 60.1% in the previous year, with management targeting mid-60% range in the long term [2][6]. - Cash and cash equivalents increased to $30.0 million, a 22.6% rise from $24.5 million in Q2 2024, bolstered by a recent equity offering [2][9]. Product and Market Dynamics - The AVISE CTD test, which accounts for approximately 90% of revenue, saw a 14% sequential increase in test volumes and a 7% year-over-year rise, reflecting growing clinical adoption [3][5]. - The average selling price (ASP) for AVISE CTD improved to $428, a $27 increase from the previous year, attributed to reimbursement progress and higher pricing on new biomarkers [5][6]. Operational Insights - Operating expenses rose due to increased hiring for sales and R&D, with R&D costs climbing to $1.5 million from $1.2 million in Q2 2024 [7]. - The net loss widened to $4.4 million from $3.0 million in Q2 2024, driven by higher spending and the need to scale revenue [7]. Reimbursement and Legal Developments - Exagen achieved a significant legal victory regarding a denied Medicare Advantage claim, which may set a precedent for future appeals [8]. - Positive policy decisions for AVISE CTD with TRICARE were secured, expanding coverage for military families after a two-year review [8]. Future Outlook - For fiscal 2025, management projects GAAP revenue between $65 million and $70 million, relying on continued momentum from AVISE CTD and reimbursement efforts [11]. - The company aims to reach break-even on adjusted EBITDA by Q4 2025, contingent on sales acceleration and expense management [11].

Financial Data and Key Metrics Changes - Exagen reported record revenue of $17.2 million for Q2 2025, representing a 14% year-over-year growth and the highest quarterly revenue in company history [4][22]. - The average revenue per territory reached over $430,000 for the quarter, up from $285,000 a couple of years ago, indicating significant commercial leverage [5][6]. - Gross margin improved to just over 60%, up from about 59% in Q1 and 60% in Q2 2024, reflecting higher average selling prices (ASP) and normalization of lab operations [23]. Business Line Data and Key Metrics Changes - The Advise CTD test volume growth was substantial, with the best quarterly volume since strategic adjustments were made in 2023 [5]. - The ASP for the trailing twelve months grew by $27 year-over-year to $428, driven primarily by new biomarkers [22]. Market Data and Key Metrics Changes - The company is currently around 10% penetrated in its market, indicating significant room for growth [35]. - The revenue growth was driven by increased ordering within the physician base and expansion of the physician base [6][19]. Company Strategy and Development Direction - Exagen is focused on building leadership in autoimmune diagnostics through disciplined execution, physician engagement, and innovation [4]. - The company plans to launch additional biomarkers, including anti PAD antibodies, to strengthen its value proposition in the rheumatoid arthritis space [52]. - Strategic investments are being made in R&D and commercial expansion while maintaining a path to profitability [28]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustainability of volume growth, attributing it to a strong team and the introduction of new biomarkers [35]. - The company expects to achieve positive adjusted EBITDA by Q4 2025 and maintain it throughout 2026 [28]. - Management highlighted the importance of building trust and value in clinical practice to drive adoption of new biomarkers [90]. Other Important Information - The company ended the quarter with over $30 million in cash and equivalents, positioning itself for near free cash flow positive status [26]. - Exagen made key leadership hires, including a new Chief Scientific Officer, to enhance its R&D capabilities [13][14]. Q&A Session Summary Question: Sustainability of Volume Growth - Management believes the recent volume growth is sustainable due to a strong team and the introduction of new biomarkers, with a market penetration of just under 10% [35]. Question: ASP Progress - Management remains optimistic about achieving a $90 increase in ASP by the end of 2025, despite some adjustments made to accrual rates [38][41]. Question: Seasonal Trends in Volume - Management does not provide quarterly volume guidance but expects continued improvement in the second half of the year, aided by sales expansion [48]. Question: Expansion of Territories - The company started Q2 with 40 territories and expanded to 42, with plans to reach 44 by year-end [71][72]. Question: Market Access Initiatives - Exagen is enhancing its marketing campaigns and focusing on building trust with clinicians to drive volume growth [90].

Core Insights - Exagen Inc. has appointed Dr. Michael Mahler as Chief Scientific Officer, enhancing its expertise in autoimmune testing [1][4] - Dr. Mahler has over 20 years of experience in immunology and autoimmune research, with a strong background in developing diagnostic solutions [3][5] - Exagen aims to improve the diagnosis and treatment of autoimmune diseases through innovative testing and strategic initiatives under Dr. Mahler's leadership [4][5] Company Overview - Exagen Inc. is a leading provider of autoimmune diagnostics, focused on transforming care for patients with chronic autoimmune conditions [5] - The company's flagship product, AVISE CTD, aids in the accurate diagnosis of complex autoimmune diseases such as lupus and rheumatoid arthritis [5] - Exagen's laboratory specializes in rheumatic disease testing, offering a comprehensive suite of AVISE-branded tests for diagnosis, prognosis, and monitoring [5] Dr. Mahler's Background - Dr. Mahler holds a Ph.D. from the University of Heidelberg and has collaborated with prominent figures in autoimmune research [2] - He has held significant roles in various diagnostic companies, most recently as Senior Vice President at Werfen, contributing to the discovery of novel autoantigens [3] - His scientific work includes over 300 peer-reviewed publications and numerous patents, advancing the field of autoimmune diagnostics [3]

Core Viewpoint - Exagen Inc. has secured a term loan credit facility of up to $75 million from Perceptive Advisors, with an initial funding of $25 million aimed at refinancing existing debt and enhancing the company's balance sheet [1][3]. Financing Details - The first tranche of $25 million was utilized to retire Exagen's existing term debt with Innovatus Capital Partners [3]. - Additional tranches include $10 million available through March 31, 2026, and another $10 million through December 31, 2026, both contingent on achieving specific revenue milestones [8]. - A business development tranche of $30 million is also available through March 31, 2027, at Perceptive's discretion [8]. Loan Terms - The interest rate for the credit agreement is set at Term SOFR + 7%, with a SOFR floor of 4.75% [5]. - Exagen will make interest-only payments for the first 60 months, with the total principal and interest due at maturity [5]. - The loan is secured by substantially all of Exagen's assets [5]. Equity Component - Exagen issued a warrant to Perceptive for 400,000 shares of common stock, with specific exercise prices based on the 10-day VWAP prior to the closing [6]. - Up to an additional 750,000 warrants may be issued, with exercise prices tied to the 10-day VWAP preceding each tranche's funding date [6]. Company Overview - Exagen Inc. is a leading provider of autoimmune diagnostics, focused on improving patient care through innovative testing solutions [10]. - The company's flagship product, AVISE CTD, aids in the diagnosis of complex autoimmune conditions such as lupus and rheumatoid arthritis [10]. - Exagen is committed to addressing challenges in autoimmune disease management through research, innovation, and patient-centered care [10].