Exagen(US:XGN)2020-07-29 03:14Financial Data and Key Metrics Changes - Total revenues in Q2 2020 were $8.9 million, a decrease from $12.5 million in Q2 2019, primarily due to the impact of COVID-19 [17] - AVISE CTD test revenue was $5.4 million in Q2 2020, compared to $8.1 million in Q2 2019, reflecting a decline in testing volumes [17] - Gross margin improved to 63% in Q2 2020 from 52% in Q2 2019, driven by higher SIMPONI revenues [20] - The net loss for Q2 2020 was $3.4 million, compared to a net loss of $2.8 million in Q2 2019 [22] Business Line Data and Key Metrics Changes - AVISE testing volumes recovered from a low in April, with 18,522 tests performed in Q2 2020, compared to 26,993 tests in Q2 2019 [17] - Revenue from the SIMPONI co-promotion agreement was approximately $2.1 million, benefiting from an amended prescription baseline [18] - The number of ordering healthcare providers was 1,442 in Q2 2020, slightly down from 1,450 in Q2 2019 [17] Market Data and Key Metrics Changes - AVISE CTD test volumes increased sequentially by approximately 45% in May and 52% in June 2020 compared to April [19] - The company experienced geographic irregularities in Q3 due to a resurgence of COVID-19 cases, impacting recovery [13] Company Strategy and Development Direction - The company aims to expand its product offerings and remains committed to investing in R&D, including a blood test for fibromyalgia and a prognostic test for lupus [14][15] - The amended SIMPONI co-promotion agreement allows for a potential contract renewal through 2022, indicating a strategic focus on long-term partnerships [11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of testing volumes, noting that patients with serious diseases like lupus will continue to seek care despite COVID-19 [26] - The company refrained from providing formal guidance for 2020 due to uncertainties related to COVID-19 [22] Other Important Information - The company has secured an agreement with Humana Military, expanding coverage for AVISE tests to 6 million lives [12] - Operating expenses were reduced to $12.4 million in Q2 2020 from $14.8 million in Q1 2020 due to cost-cutting measures [21] Q&A Session Summary Question: What was the testing volume in June? - Management indicated that testing volume was about 95% of normal in June, with expectations for continued recovery as states reopen [25] Question: How much pent-up demand is expected? - Management estimated that approximately 50% of patients were missing due to COVID-19, anticipating a significant return as restrictions ease [28] Question: What drove the improvement in gross margin? - The improvement was largely due to the high gross margin from SIMPONI revenue and aggressive cost-cutting in the lab [31] Question: What is the outlook for SIMPONI revenue? - Management expects to achieve a range of $1.3 million to $1.6 million in future quarters based on the new agreement [40] Question: How is the company addressing the impact of COVID-19 on sales? - The company has adjusted its sales force and is focusing on telehealth and telemarketing to maintain engagement with healthcare providers [42][45] Question: What is the status of the fibromyalgia test development? - The company is actively working on the fibromyalgia test and is committed to quality science, although timelines are still being established [73]