Verici Dx plc

Good afternoon, ladies and gentlemen, and welcome to the VericiDx investor presentation. Throughout this recorded presentation, investors will be in listen-only mode. Questions are encouraged. They can be submitted at any time using the Q&A tab situated on the right-hand corner of your screen. Just simply type in your questions at any time and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions and will publish those where it's appropriate to do so. Before we begin, we would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand over to CEO Sarah Barrington. Good afternoon.

Thank you, everybody. Appreciate the time. Let me just flip through. This is a progress report. and we will also have a financial section on the results that were issued earlier in June for the year end. Okay, so what I'd like to do is just give you an update. Obviously, the company is in its pivotal year, moving from just a pure play R&D company over to a commercial company. And that's reflected in the launch of Tutivia. That was at the beginning of the year. And we'll cover some of those points and some of the feedback that we've got. Obviously, as previously noted, we are using an early adopter program for that initial rollout. The benefits being that firstly, we can have KOL development That means that the clinicians that are using it in their sites will be able to be out in the marketplace talking to other clinicians. As you recall, your best credibility is clinician to clinician. So that will be a very practical way forward. Also for us, it enables us to understand how this gets rolled out. both commercially, how it sits within the clinic, how clinicians view it, and I'll go through that feedback, and also how you get into repeat ordering, both in the centre, across clinicians, and also across patients. So last week, the good news on Clarava. So that was successfully exited from the validation study and we'll go through the results and what those means. And then we'll have our initial commercial launch by the end of the year. On the commercial track, we did get a provisional pricing from Medicare. So what does that actually mean? So first of all, we talk about a code, a price, a coverage determination. This is on the pricing. The way that CMS is organized in the US is that it's got sub areas. We're in the Palmetto region under the Moldy X area. There are two very influential, what they call MACs, those are the governing bodies for CMS, that gave their view and their recommendation on the pricing. That tends to carry the day, so we are expecting this to carry through to national listing at the end of the year after public comment. This is the price that we asked for. So we were very happy to get that endorsed by our major area. And then, of course, just a reminder that given this was recommended by the Palmetto and all of our claims will go through the Palmetto, that is the pricing that we're expecting. For anyone that has seen a reduced price in the marketplace from us, that is our long-term aspiration, which is to pull down this pricing It's a bit like a volume discount. This is the price that we want to launch with. It's under the competitors pricing, but not so much so that it raises into question the credibility of the technology. But over time, we will pull that down if we can get into monitoring claims and the volumes go up. So this is exactly our sweet spot for launch. Then also we have what we call the false products. So if I can remind you, our clinical products are the pre-transplant, Clarava, Tutivia, early acute rejection, Protega long-term. The first two are out of the clinical validation now. The third one's still in the validation study, has a longer term outcome. But then behind all of that, we have a research asset and that's what we call our fourth product. That was subject to the wider collaboration with Illumina that we announced. And then essentially that enables us to have revenue generating collaborations in the research space. Again, that's what we see as our fourth product. Just as a reminder, we do have a large total addressable market. Happy to go through how we calculated that. That end-to-end platform is unique in our space. It not only is advantageous in terms of that continuum, but as we have noted before, the early data suggests that each test informs one another. And so you move out of launching three individual tests into being able to offer a solution, a platform, as it were. And that is something that's highly important. differentiated in the marketplace. And then obviously behind all of that, that data that's one of the largest sets in this area, in this disease group, and obviously of great interest for collaborations moving forward. Operationally, one of the things you will have heard us do is respond to the changing market conditions. As you all know, we IPO'd in what we might call a growth market. We've recognised that that tone of the market has moved away from growth into revenue-focused and prudent cash management. We have pivoted. We did issue before that we had extended our cash runway into the end of June 2024. And you will see us being smaller than we might have expected at IPO as we conserve those cash. So we have still hit our milestones. but we continue to very actively manage our cash and how we move on to the next few milestones. Operationally, just so we can have a nod to the regulatory, we were already clear approved in 45 states. That was also subject to an audit before you get your full certification. We did that this year. It was very successful. And now this is somewhat out of date as we address the remaining states. We're now 47 states and we are filed. Something that is of interest to both the CLEAR regulators and the clinicians themselves is something called an analytical validation. Essentially, the purpose of that is to really look at the reproducibility of testing in our lab. The last thing you want is varied responses depending on who is running the tests, at what time, etc. And we do the studies to prove that it's very, very consistent. And that was successful. Obviously, we've talked before about the code. We're now on pricing. And the other bit of, if you like, housekeeping that was exciting for us this year was the two key patents in the United States. Obviously, we've been having approvals on our patent portfolio worldwide. But I think these two were of particular interest, given the US is our initial large market. And these are the two that covered our two lead products, excuse me, Clarava and Tutivia. And so it was good to see those. Obviously, with patent protection, it's only one leg in in terms of how you preserve your assets. You have a defensive position. And what we have done is as we progress as a company with further developments, we wing fence this initial patent portfolio with our own filings so that you keep extending not only the protection, but the time limits on those. And then obviously we've talked about the research asset, which at some point we will name a little bit more elegantly. So feedback from Tutivia. Obviously, as we've gone out into the marketplace, as I've said, we're trying to get feedback. How is this perceived by clinicians? How do they want to use it? How do we get that widespread adoption? And I thought it would be very helpful to hear from the clinicians themselves. So here are three key quotes. Let me just talk to you about the themes. You know, when we look at tutivia, there's this early theme. One is early in time. So if I can refresh your memory on the main competition in this area, it's from a technology called Cell Free DNA. I've always said it's a bit like measuring the debris in the blood after the injury. It's a late biomarker. And obviously, our technology is hugely differentiated in so far that it gives a reliable response anywhere from the first week post-transplant. So those first few months are quite critical. A lot goes on then. And clinicians have felt that they haven't really had anything that they really rely upon in that timeframe. So the other gene expression test is to be used in a surveillance or protocol biopsy center. That's after 90 days. And the cell-free DNA, although they have an apparent coverage from 14 days, we've heard clinicians say that they don't really trust the results until sort of 60 to 90 days in. And so, you know, this idea that we have, if you like, the first reliable early biomarker is reflected in that first quote. Excuse me. There's another aspect to being early and that is being proactive. And you'll see that from Dr. Von Mica's quotes where he's seeing this advantage to being proactive, not only for patient outcome, but in terms of looking at your resources. Obviously, in a busy clinic, it's very easy to just allocate the same sort of time. to each patient. But if you've got those, so in our clinical validation, only 25% of the patient population were high risk. If you know who they are in your clinic, Those are the ones you spend a little bit more time with, but also you're going to have the expertise of the top clinicians in that clinic very focused on the increased testing to monitor what's going on with those patients. So for him, the idea of being very proactive and being able to really focus on the importance of having a risk score, I think it's very important. Ros has always been a fan. She was in our original press release, if you can remember that. And one of the things that she has noted is the advantage of the clinical study. You know, it's what we call an all comers. That really means in colloquial terms, we threw the kitchen sink at it. And that is what you're going to see in the clinic. You don't know your subgroups. You don't know who you're looking at. And so you want all types to be included in a clinical study to be able to show that that's really the performance you can expect in your clinic. And that's what we did. We did a good PPV. And that responded very favorably to our competitors. But mostly it was really impressive because there were no subgroups. There were no problematic groups removed from that performance. That is highly reflective of what I might call the kitchen sink approach. So, so far we're seeing some very good responses. responses from our clinicians. And I'm looking forward to sort of building upon that as we go further into the marketplace on the and, you know, obviously, use these kind of comments and reassurances clinician to clinician. Some of you may have seen some chit chat about CMS. So CMS obviously being the reimbursement agency on behalf of the government for Medicare. Medicare being the major source of reimbursement for transplant care. And they did an update, and this is our review of that update. Modiacs have basically said that this is just a clarification, but it has led to a little bit more of confusion in the marketplace, and we expect to see some further clarifications coming from them. So what does that mean to Verici? Well, long term, highly beneficial. One of the things we have been already marketing was that we were a single biomarker test with this balanced accuracy. That means that the performance are good on both measures, the PPV and NPV, your sensitivity and specificity. It's good to sort of update that where the tests that had come before us were very high on the NPV, not so good on the PPV. So very much a rule out test. we had now come forward and said, with one test, we can progress the field in those performances. We were up against a trend in the marketplace about putting two tests together, a gene expression plus a cell-free DNA. It's what was being used as termed as multi-modality by some of our competitors. CMS said, no, we're not going to reimburse two tests, choose one. It's one biomarker per patient encounter. uh that led to two products being immediately withdrawn from the marketplace and again you know it sort of preserves what i call is our uh rare space so as a single biomarker this was uh therefore um you know came to the forefront once again highly beneficial long term to breaching Where we do see some confusion and where I would expect to see further, you know, announcements from Maldiex is they use surveillance and protocol interchangeably. There are two ways of looking at this area, the word surveillance. One is protocol. It's time-based. So centres that say at a certain time point, we will have all patients come in for a biopsy. That's a protocol center, about 17%, 15% of all centers in the US do that, quite a low percentage. And if you have a surveillance, if you like coverage, they're pushing them to be used in those protocol centers. But surveillance is also being used by the clinical community for monitoring. That's more patient centric. And so this clarification saying that it had to be only used in a protocol center, but it was surveillance, led to some confusion. And I would see CMS going down that route in response to clinical comment about that that was more, that needs some further clarification. For calls, there was also a clarification, a time clarification, A pre-test is used before a biomarker test. That's very standard of care. They then put in a time limit on that of seven days. This obviously has had quite a lot of comments back. that flies in the face of diversity and inclusion measures. Obviously, for patients, that's not only highly inconvenient, but in some cases, detrimental. If you think about, we, I think, have seen estimates of about a third of all patients live more than 50 miles from their transplant centers. you can understand the difficulties of having to come back at regular intervals just to do your labs. And we do expect, given the reactions from a lot of the not-for-profits on this area, to see some further clarifications. So, if you do see some things, you'll see some clarifications in this area. I think that will be highly beneficial. We do note that we are spending time in the marketplace, chatting with clinicians on the CMS clarification. It somewhat detracts from just the pure clinical conversation, but we anticipate overcoming that this year. It's just, I think, interesting to note that there are these industry-wide progressions in the background. OK, let's talk about Chlorava. Now, a wonderful curve there. If you're not a scientist, you will wonder what some of these terms mean. I can point out, if you see that red diagonal, that represents random chance. And you obviously want to have an area or a curve that is to the left of that, showing that you are statistically significant. You are more than random chance. That's what area under the curve, AUC, represents. As you can see, 0.72. We're very happy with that. The p-value just represents that it was statistically significant there. So good results there. The performance, which is up against outcome and biopsy, That sensitivity and specificity, good results there. And I think one of the things that is highly significant and becomes really intuitive as to why clinicians may be very encouraged by these results is the odds ratio. What does that mean? Well, we're a risk score, so we return you're either high risk or low risk, this patient. And the high risk patients are six times more likely to have a rejection than those low risk patients. And what that really means is the test does differentiate in a very meaningful manner. There are more measures. There are more positioning that we would like to do before a commercial launch. This is a novel test. We are seeing evolving thinking from our clinical community on how they might use this. So we are convening an advisory board to get some consensus on how we might roll that out before the end of the year. Obviously we're in the summer, you know, the joys of summer holiday schedules. So we will do that in the fall, ready for our abstracts further down the line and commercial launch before the end of the year. But very encouraging. We were delighted to see that. And we do, you know, the feedback that we have got in these initial responses is that it's going to be clinically relevant and very useful. And there's a lot of excitement about that. Let's do numbers. David, over to you.

Thank you, Sarah. Good afternoon, everybody. So at the end of December, we had 9.8 million of cash. and spending just over 10 million in operations and 1.3 on investing. In terms of investing, the largest element of that was our build of the Tennessee lab of just over 820,000. That's obviously now complete. In terms of going forward, we would expect, we do expect that level of spend to reduce and reduce for two reasons. One being that we are over the hump in terms of our clinical trial costs. And secondly, as you would expect taking an eager eye in terms of expenditure and monitoring that carefully and spending what we need. That said, in terms of with our projections and also our assumed levels of revenue, as Sarah referenced earlier, we expect our cash one way through to the midpoint of 2024. In terms of the income statement, again, largest elements of expenditure being wages and R&D. As I mentioned earlier, R&D will come down this year. In terms of wages, we had, at the end of the year, 15 people in the business. We currently have 14 people in the business. And then in terms of the balance sheet... Sorry, Sarah.