Aspira Women's Health Inc.

Good afternoon, ladies and gentlemen, and welcome to Aspera's Women's Health Incorporated Second Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. Following management's prepared remarks, we will open the call for your questions. As a reminder, this call is being recorded today. Leading the call today is Nicole Sanford, President and Chief Executive Officer. Joining her is Dr. Torsten Hombach, Chief Financial Officer. After the prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind everyone that forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 will be made during this call, including statements relating to SBIRRA's expected future performance, future business prospects, and future events or plans. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those anticipated due to the impact of many factors beyond a spare women health control. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. Participants are directed to the cautionary note set forth in today's press release, as well as the risk factors set forth in ASPERA's most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, filed with the SEC for description of factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. At this time, I'd now like to turn the call over to Nicole Sanford, President and Chief Executive Officer. Please go ahead.

Thank you, operator, and good afternoon, everyone. I would like to welcome you to our second quarter 2023 conference call. Before I begin, I would like to officially welcome Dr. Torsten Holmbach to our senior leadership team. Torsten was appointed Chief Financial Officer on June 15th and brings over two decades of biotech experience, having served in several senior positions at life science companies. His extensive experience includes capital raising, M&A transactions, corporate strategic planning, product development and launch, and of course, expertise in all aspects of accounting and SEC reporting. Torsten has already made a major impact, including the successful closing of a $4.7 million capital raise just weeks after coming on board. He will provide remarks later related to our financial performance before we open up the call for questions. Now, let me begin with a review of our performance this quarter. As always, I'll start with growth. Oversuite product revenues for the second quarter were $2.5 million, representing growth of 23% compared to the second quarter of 2022. This continues our established trend of year-over-year quarterly growth for each of the quarters since I became CEO. The number of Oversuite tests performed in the second quarter was 6,289, an increase of 16% compared to the second quarter of 2022, with Overwatch contributing 884 tests to the total. This represents an 80% increase in Overwatch tests performed in the second full quarter of adoption. Oversuite tests performed for the six months ended June 30th, 2023, with 12,548, an increase of 22% versus the same period of 2022. Importantly, the volume growth was driven by a much leaner sales team, with year-to-date test volume for field representative improving substantially from 354 per rep in 2022 to 598 per rep in 2023. This demonstrates that our commitment to eliminating unprofitable and underperforming territories, along with a renewed focus on partnerships like BioReference Laboratories and Women's Care of Florida, are beginning to bear fruit. When we look beyond volume and focus on average unit price, I'm very pleased with our progress. our Oversuite AUP for the quarter increased to $396. Importantly, we began billing Overwatch under its unique PLA code on April 1st, which resulted in second quarter Overwatch AUP of $326, a 142% increase over the first quarter. While we are still in early days, we are pleased to see reimbursement patterns for Overwatch line up nicely with Overwatch Plus. We have launched an Oversuite payer adoption strategy for the second half of the year that is aimed at making as much progress as possible on the Oversuite test portfolio while we prepare for a successful launch of EndoCheck by the end of 2023. More broadly in reimbursement, events continue to unfold with CMS and Medicare reimbursement of diagnostic tests through national and local coverage decisions. We are actively participating in industry initiatives to collaborate with CMS and we'll disclose any changes that could have an impact on our future revenue. Lastly, in terms of our growth initiatives, we are now in the final stages of the commercial strategic refresh, which was launched last summer. The initial focus was on refining our core value proposition, improving the effectiveness of our field sales team, and rationalizing our overall sales and marketing spend. I'm proud of our progress as our sales and marketing expenses for the second quarter dropped once again, decreasing over 50%, when compared to the second quarter of 2022, while simultaneously achieving growth in both product revenues and volumes. While cost containment is critical to the company, I want to stress that our commercial refresh is not simply a cost-cutting exercise. It always has been and will continue to be about improving impact and the return on investment. As we move into the next phase of the commercial strategy in the second half of the year, we will focus on reaching physicians and other healthcare providers directly through multiple channels. The timing of this effort is very intentional. We are emerging from the seasonal slowdown of the early summer months and are preparing to expand Overwatch for use as a serial or longitudinal monitoring test. Specific activities will include the creation of a content hub for direct healthcare provider interaction, advertisements in high impact OBGYN journals, targeted virtual and in-person physician education, an Ovarian Cancer Awareness Month social media campaign, and the expansion of our sales capabilities to drive growth more efficiently in parts of the country that are outside of our field sales territory. As a result, we expect a modest increase in sales and marketing expense for the third and fourth quarters of 2023. Let me now turn to innovation. Last week, we announced that Dr. Ryan Fan has made the decision to step down as Chief Scientific Officer, effective September 15th. He is, however, expected to remain as an advisor to the company. It is difficult to describe the contribution Dr. Phan has made to the company during his tenure. He has worked tirelessly to enhance our scientific capabilities and made significant, measurable improvements in our operations. He has built a solid foundation and a professional team that will carry on his vision. We both remain confident in our path forward and expect to remain on track to complete our Overwatch Longitudinal Test clinical study publications and to commercially launch our EndoCheck diagnostic blood test by the end of the year. Let me briefly talk about each of these programs now. Overwatch was developed with the intention to launch commercially in two stages. The first phase was to launch Overwatch as a single point-in-time application for initial clinical assessment. The second phase expands the application of Overwatch for longitudinal monitoring testing. Although Overwatch currently can be ordered at intervals that are determined by the provider to be appropriate for each patient, We are finalizing a manuscript related to an ongoing clinical study that, if accepted for publication, may provide additional clinical data to support and drive adoption of the test as an effective clinical tool for longitudinal monitoring of the nexal masses. Moving on to EndoCheck, our first-generation protein-based blood test to aid in the detection of endometriosis. We are on track for a commercial launch by the end of 2023. Our current focus is on sample acquisition for clinical verification and validation, and we are on track to obtain sufficient cohort data to complete this important step. We have secured nine sites for our EndoCheck clinical study and continue to collect samples that meet our study criteria from other sources around the world, giving us the confidence that we will meet our launch timeline. In terms of operational excellence, we have once again decreased cash used in operations to $3.4 million in the second quarter, representing a 46% reduction over the prior year, while still showing sustained growth. We completed an equity raise recently, strengthening our balance sheet to support our long-term strategic vision. We have a high-quality, effective team determined to set a new standard of care and gynecologic health, in addition to an industry standard for prudent, high-impact capital deployment. Now, I would like to turn the call over to Torsten for a review of our financial performance. Torsten?

Thank you, Nicole, and good afternoon, everyone. It is a pleasure to be here today to provide this update. We have wasted no time in my first two months with the company, executing swiftly on the capital needs while continuing to drive the company forward in all of our plans. When I joined, I saw a company that offered tremendous promise in advancing the care of women with ovarian cancer. There have been very few innovations in this area to date, and broad adoption of the Oversweet products would be significantly forward in the practice of medicine. I would like to see this become a reality, and I'm proud to be part of a committed team executing on that promise. Now let me turn to the financial performance of the company. Product revenue for the three months ended June 30, 2023 was $2.5 million, an increase of 23% compared to $2 million for the same period in 22. Increase in revenue was primarily driven by an increase in over-sweet test performed during the quarter, which increased 16% to $6,289 compared to $5,411 for the same period in 2022, combined with an increase in average selling price or AUP. Revenue per over-sweet test performed for the three months ended June 30, 2023 increased 6% to $396 compared to $373 for the same period in 22, reflecting better than anticipated collections for Overwatch in its second quarter of adoption. So the gross profit margin for the three months ended June 30, 23 was 62% compared to 51% for the first quarter of 2023 and 47% to the second quarter of 22. Growth profit margin improved due to an increase in average unit price and our ongoing focus on process efficiencies and cost containment. Research and development expenses for the three months in the June 30, 23 were $700,000, a decrease of 51% compared to $1.4 million for the same period in 22. The decrease was primarily due to decreases in expenses for consulting, clinical trials, and supplies. Delta marketing expenses for the three months ended June 30, 2023 were $1.8 million, a decrease of 51% compared to the same period of 22. The decrease was primarily due to decreased personnel costs. General administrative expenses for the three months ended June 30, 2023 were $3.4 million, a decrease of 19% compared to the same period of 22. This decrease was primarily due to a decrease in personnel expenses and offset legal costs. Total cash, cash equivalents and strict cash as of June 30, 2023 was approximately $4.5 million. Cash used in operations for the three months ended June 30, 2023 was $3.4 million compared to $5.7 million for the three months ended March 30, 2023. and $6.3 million for the three-month end of June 2022. We continue to focus on prudent use of resources, and as a result, are lowering our expected cash to be used in operations for the remainder of 2023 to between $6 million and $8 million. In July, we completed a privately placed registered direct offering of straight common stock with Alliance Global Partners as placement agent. raising gross proceeds of approximately $4.7 million, adding approximately $4.3 million in net proceeds to our cash balance. We were very pleased that we saw a broad participation of long-term existing shareholders, as well as the entire board and management team, in addition to bringing in new healthcare-focused investors. We believe that the cash on hand following this transaction will be sufficient to achieve our development program goals for Oversweet and EndoCheck. I will now turn it back over to Nicole. Nicole?