Renalytix Plc

Good morning and welcome to the Rentalytics conference call to review fourth quarter and full year fiscal 2023 financial results. At this time, all participants are in a listen only mode. We will be facilitating a question and answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Peter DiNardo of Capcom Partners for a few introductory comments. Please go ahead.

Thank you, Michelle, and thank you all for participating in today's call. Joining me today from Reno Lake Spread Formal Marks are James McCullough, Chief Executive Officer, Tom McClain, President, and James Sterling, Chief Financial Officer. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995. Any statements made during this call that relate to expectations or predictions of future results and events or performance are forward-looking statements. Examples of these statements include, without limitation, the potential benefits, including economic savings of kidney intellect, the commercial prospects of Kidney Intellects, including whether Kidney Intellects will be successfully adopted by physicians and distributed and marketed, our expectations regarding reimbursement decisions and the ability of Kidney Intellects to curtail costs of chronic and end-stage kidney disease, optimize care delivery and improve patient outcomes, friends in our market and potential benefits of government policy change, the impact of COVID-19 at other world events in our business, our expectations for hiring, product development, strategic partnerships and collaborations, reimbursement decisions, clinical studies, and regulatory submissions are business strategies and future growth, including plans, expectations, and opportunities for financing or operations, and revenue projections and guidance. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a description of the risks and uncertainties associated with our business, please refer to the risk factor section of our annual report on Form 10-K that was filed today, September 28, 2023, with the Securities and Exchange Commission. All forward-looking statements made on this call are based on management's current estimates and various assumptions. Renolytics disdains any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of the live broadcast today, September 28, 2023. I'll now turn the call over to James McCullough. James?

Thank you, Peter. Good morning. Good afternoon. In short order around this quarterly period, we crossed major thresholds in reimbursement outcomes data and achieved an FDA de novo marketing authorization for kidney IntelliX. Our progress was further amplified by inclusion of kidney Intel X in the draft leading kidney care guidelines, Cadego for 2023. It is rare to see all of these milestones pass sequentially measured in months. And we believe that these are significant for the broader adoption and clinical acceptance of kidney Intel X for early prognosis of individuals with type two diabetes and early stage kidney disease in the United States and abroad on the growth equation. Achieving these collective milestones now allows us to set the commercial target of a 1% United States market penetration over the next three years in our FDA authorized indicated use population of 14 million adults with diabetes and kidney disease. We intend to do this through expanding hospital system partnerships, working closely with insurance companies covering kidney Intellex, and through our direct-to-physician sales force, whose expansion is continuing in specific areas in the United States under the new leadership of experienced sales executive Howard Duran. In addition, the international opportunity with FDA in hand is also quite promising, particularly given the large growth in diabetes globally. As a reminder, we have been disciplined in maintaining a $950 price point or greater in our growing portfolio of contracted insurance companies. This pricing was originally set by Medicare. Importantly, post FDA authority, we have reviewed our operating cost basis and are taking decisive actions to reduce our quarterly cash burn rate. This reduction in cash burn should become most apparent in the second half of fiscal 2024. and is being undertaken without compromising our sales focus on growing testing volume and revenue. These reductions are on top of our net year-over-year OpEx reduction of $11 million. We will continue to look for opportunities to optimize cash expenditure and increase our cash position, particularly through non- or less-diluted strategic partnering and potential international licensing opportunities. As far as we are aware, Kidney IntellX is now the only machine learning-enabled prognostic tool in chronic disease preventative medicine with an FDA authorization, established payment by a broad array of insurance companies, including Blue Cross Blue Shield groups, Medicare and Medicaid, and real-world evidence demonstrating improved outcomes in both diabetes and kidney disease. After a four-year FDA process, which included over 1 million patient calculations, three independent trained tests validate algorithm runs, we are proud Kidney IntellX has validated a novel pathway for artificial intelligence enabled in vitro diagnostic medicine. Several hard-won regulatory innovations, including validation of a nonlinear machine learning algorithm, use of electronic medical record features, new predictive biomarkers, and importantly, accurate and reliable prognosis from the earliest starting point in a chronic disease category all provide kidney IntellX with unique competitive positioning. Our view is these precedents solidified in a full regulatory process will be difficult to replicate without a considerable investment over a multi-year period. In short, we are very pleased with our established long-term competitive advantages. As I noted earlier, we are pleased to have announced that Senior Executive Howard Duran has joined Renalytics to lead the global business effort, including U.S. direct-to-physician sales efforts. As of September, our direct-to-physician sales force is now active in several territories in the United States, in Texas, Florida, New York, and North Carolina, all where the rates of diabetic kidney disease are high, where we have existing or anticipated hospital partners, and where our insurance coverage in many cases exceeds 90% of the FDA-authorized indicated use population. We believe a number of pharmaceutical and medical device industry players would benefit from kidney and telex-driven patient prognosis and supported care management in the diabetes market. Recently, published data has shown that primary care physicians using kidney and telex are four times more likely to prescribe GLP-1 agonists, and SGLT2 inhibitors early on to diabetes patients at significant risk of kidney function decline. By identifying kidney care disease patients at risk early by using Kidney Intellex, the potential increase in new drug therapy use, particularly at the primary care level for pharmaceutical players, is compelling. Ongoing publication of both our own and third-party Kidney Intellex outcomes and utility data are critical for establishing a new broadly used preventative standard of care. At Renalytics, we have invested heavily in real-world evidence generation since we began full operations in late 2018. As we presented in this quarter, Kidney IntellX outcomes data has exceeded our expectation by showing an association with clinical actions that in under 12 months led to observable changes in the core measure for diabetes health and kidney health. Raising funds to fuel these clear commercial opportunities is essential. particularly now that we have reduced risks associated with a successful service product launch and adoption. To maximize our flexibility to fund business growth, we filed an S3 shelf registration statement to give us the ability to source capital at the right time. Again, we will continue to explore less dilutive and non-dilutive capital funding sources, particularly now that we have a unique product proposition post-FDA authorizations. I will now turn over to Tom McClain, our president, to discuss reimbursement activities and accomplishments during the period. Tom?