Renalytix plc(US:RNLX)2023-11-14 16:18Financial Data and Key Metrics - Revenue for Q1 FY2024 was $460,000, down from $970,000 in Q1 FY2023 [37] - Total tests conducted were 1,297, with 56% being billable, slightly higher than the previous quarter and year [37] - Operating expenses reduced to $8.8 million from $12 million in the prior year period, reflecting cost-cutting measures [40] - Net loss for Q1 FY2024 was $10.1 million or $0.11 per share, down from $12 million or $0.16 per share in Q1 FY2023 [42] - Cash balance as of September 30, 2023, was $13.9 million, with ongoing financing discussions to extend cash runway into 2026 [42] Business Line Data and Key Metrics - Payroll expenses reduced by over 35% and SG&A by more than 30% year-over-year [2] - Approximately half of the employee base is now directly responsible for sales and revenue recognition [3] - Sales team size will be 14 starting in 2024, focusing on high diabetes density regions [14] - Targeting primary care physicians serving high concentrations of diabetic patients, with 40% likely having chronic kidney disease [15] Market Data and Key Metrics - KidneyIntelX integration into Atrium Health expected to be finalized in December [4] - Anticipated hospital systems coming online with KidneyIntelX in 2024 [4] - Expected inclusion of KidneyIntelX in updated International Kidney guidelines [4] - Progress towards Medicare Local Coverage Determination (LCD) with National Government Services [4] - Initiation of payment from a second Medicare contractor, First Coast Options, in October 2023 [5] Company Strategy and Industry Competition - Shift towards preventative medicine in the kidney space, increasing burden on primary care to identify at-risk patients [8] - Pursuing programs to validate KidneyIntelX technology drug response scores with Pharma industry players and partners [9] - Focus on sales and marketing, with resources realigned from development and regulatory activities [76] - KidneyIntelX positioned to change preventative medicine in the large and costly population health market [6] Management Commentary on Operating Environment and Future Outlook - Optimistic about short-term events in fiscal 2024 to spur testing growth [3] - Market shift towards preventative medicine in the kidney space, with new drugs adding promise but complicating treatment decisions [24] - Real-world evidence programs at Mount Sinai and Atrium Wake Forest starting to bear fruit, aiding broader reimbursement and clinician adoption [72] Other Important Information - FDA De Novo Marketing Authorization for KidneyIntelX on June 29 [6] - Publication of new KidneyIntelX outcomes data submitted for peer review [5] - Sales team retooling and recruitment focusing on direct primary care sales efforts [14] Q&A Session Summary Question: Sales team optimization and territories [46] - Sales team targeting New York, Texas, Florida, North and South Carolina, and Ohio [47] - Current sales team size is 10, with 4 new hires expected by year-end [47] Question: EVERSANA partnership status [49] - Partnership with EVERSANA remains active [49] Question: NGS payment suspension and resumption [50] - Payment suspended during LCD review process, resumed in November 2023 [51] Question: First Coast LCD process and timing [57] - First Coast paying claims without requiring an LCD, meeting with medical directors in Q1 2024 to discuss future LCD necessity [58] Question: National Coverage Determination (NCD) [59] - Preference for diagnostic tests to be covered through LCD process, but NCD considered for tests with national Medicare policy implications [59] Question: Atrium Health integration and reimbursement [62] - Atrium Health integration expected to be completed in December, with commercial testing starting shortly thereafter [66] - Reimbursement at Medicare CLFS published price of $950 [67] Question: Sales growth outlook [74] - Focus on demonstrating commercial proof of concept in key markets, with sales team fully operational by March 2024 [76] Question: Fundraising and cash burn [80] - Targeting funding to extend cash runway into 2026, with cash burn expected to reduce to $3-5 million per quarter by end of FY2024 and $1-2 million by end of FY2026 [83] Question: Clin-Risk competitive threat [86] - Clin-Risk is a population-based risk score, differing from KidneyIntelX's in-vitro diagnostic approach [94] - KidneyIntelX captures patient biology through blood biomarkers, validated by FDA, and has broad-based reimbursement [96] Question: Cost reduction timing [93] - Cost reductions in process, with 30% reduction in SG&A expected by Q1 FY2025, evidence seen in immediate quarters ahead [113] Question: Pricing of billable tests [114] - Mount Sinai transitioned to full commercial reimbursement model, impacting average pricing due to some tests not being paid [115]