DermTech, Inc.

Ladies and gentlemen, thank you for standing by. Welcome to DermTech's fourth quarter 2023 financial results call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would like now to turn the conference over to Steve Concebo. Please go ahead.

Thank you, operator. Welcome to Dermtech's fourth quarter 2023 earnings call. With me on today's call are Brett Christensen, our president and chief executive officer, and Kevin Sun, our chief financial officer. Our call today will include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements made on this call that do not relate to matters of historical fact are considered forward-looking statements. Forward-looking statements made during this call, including statements regarding projections of the future performance or financial outlook of DermTech, the performance, patient benefits, cost effectiveness, commercialization, and adoption of our products, and the market opportunity for our products are based on management's expectations as of today and are subject to various factors, assumptions, risks, and uncertainties which change over time. Actual results could differ materially from those described in such statements. Several factors that may contribute to or cause such differences are described in today's press release and our most recent filings with the SEC, including our annual report on Form 10-K, filed today. We undertake no obligation to update these statements except as required by applicable law. Our fourth quarter 2023 earnings press release and SEC filings are available on our investor relations website. A recording and transcript of this call will be available on our website later today. With that, let me turn things over to Brett.

Thank you, Steve, and thank you, everyone, for joining us. We are encouraged by the sustained improvement in many of our key performance indicators. as they continued to head in the right direction throughout the second half of last year. In the fourth quarter, ASP for the DermTech Melanoma Test, or DMT, grew 55% year over year. Test revenue increased 38% on the same basis. We also reported another all-time record high in the Medicare proportion of billable samples, which is about half of our addressable market, and posted our highest gross margin in six quarters. With the additional restructuring actions we announced last month, we may see a total reduction in annualized operating expenses of approximately $40 million compared to 2022. We will continue to emphasize reimbursed tests and growing revenue. Before I take you through a few commercial highlights, let me briefly revisit the key pillars of our story. First, we have a proprietary, non-invasive skin genomics technology that has demonstrated it can enhance the standard of care for evaluating lesions suspicious of melanoma. Approximately 4 million surgical biopsies are performed annually to find nearly 190,000 new cases of melanoma. Dermatologists are working hard to provide great patient care, but their practice can benefit from new tools that supplement existing methods. The DMT rules out melanoma with a 99% or greater negative predictive value, or NPV, and can support decision-making by clinicians. Second, we and many leading clinicians believe there's a place for the DMT in every dermatologic practice alongside established protocol. As a starting point with dermatologists, we're aiming to identify the numerous instances in which a healthcare provider doesn't want to biopsy a clinically suspicious lesion, but still wants to provide patients with peace of mind. Our customers and patients can trust the results when they use our test, and there is room for it to be integrated into the current melanoma care pathway. And third, We can reduce healthcare costs by providing genomic data to clinicians who can rule out the need for certain surgical procedures while also providing a better patient experience. On the payer front, all the insurance providers we brought on in 2023, which represent approximately 42 million new covered lives, have started paying some claims for the DMT. We're determined to continuously improve the onboarding and reimbursement process with payers to speed up the revenue benefits. Finally, the Blues Plan of Rhode Island and a Blues Plan in the Mid-Atlantic recently issued favorable coverage decisions for the DMT. In January, we were incredibly pleased to announce positive top-line data for the TRUST2 study. With a large cohort of more than 20,000 patients, the results reaffirmed the DMT's real-world clinical utility with an NPV of 99.7% to rule out melanoma, which is meaningfully higher than other currently available methods. For clinicians and patients, a high NPV delivers assurance that a suspicious pigmented lesion, which tests negative, is unlikely to be melanoma. This study is an important way to continue to build trust with our customers, and we're actively showcasing the clinical value of DMT in the field. The outstanding TRUST II study results will also allow us to reengage with insurance providers that don't cover our test. We're working to make the full study available in a peer-reviewed medical journal and expect to have an article published in the next several months. We will continue to reinforce our message around the clinical and health economic benefits of DMT with all stakeholders. Our visibility with payers also improves through state legislative efforts. Bills mandating insurance coverage of genomic testing or biomarker bills are gaining traction across the U.S. as lawmakers advocate for improving access to potentially life-saving genomic tests. Legislation has now been enacted in 14 states, and eight additional states introduced biomarker bills in 2023 that are making their way through the legislative process. Moving now onto our commercial business, where we continue to dedicate substantially all of our resources to growing reimbursed tests and boosting revenue. We now have two quarters behind us since we changed our approach. We believe it is evident these changes have had a positive impact on our top line, but we're still refining our tactics as we learn more. First, incentive compensation for our sales team continues to be linked to reimbursed tests and revenue over volume growth. We're also arming the field with robust analytics reporting to support these goals. More recently, we reduced the target list for our sales managers. This change also allows us to foster stronger relationships with our customers and increases touch frequency in the field. Second, as a result of additional restructuring actions we undertook in January, we dissolved certain sales territories and merged others to further optimize our footprint and focus on the highest value regions. As a result, we reduced our sales territories from approximately 60 to roughly 55. We are intentionally pursuing a strategy that prioritizes ASP and revenue growth over volume growth in the short term. In closing, we've significantly improved many of our key operating and financial indicators for two consecutive quarters. We believe this approach is the best way to reach a meaningful revenue inflection point. With that, let me turn the call over to Kevin for a more detailed financial review.