Insight Molecular Diagnostics Inc.

Welcome, everyone, and thank you for joining us to discuss Inside Molecular Diagnostics' fourth quarter 2025 results. If you have not seen today's shareholder letter, please visit Inside Molecular Diagnostics' investor relations page at investors.imdxinc.com. Today's prepared remarks build upon the information already shared in this robust letter. Joining us today are Inside Molecular Diagnostics President and CEO Josh Riggs, Chief Science Officer Eki Schutz, and CFO Andrea James. We also have our analysts with us as panelists. After our prepared remarks, our analysts may ask questions. Before turning the call over to Josh Riggs, I'd like to go over our safe harbor. The company will make projections and forward-looking statements regarding future events. Any statements that are not historical facts are forward-looking statements. These statements are made pursuant to and within the meaning of the Safe Harbor Provision of the Private Securities Litigation Reform Act of 1995. We encourage you to review the company's SEC filings, including the company's most recent form 10-K and subsequent forms 10-Q, which identify risks and uncertainties that may cause future actual results or events to differ materially. Please note that the forward-looking statements made during today's call speak only to the day that they are made, and Insight Molecular Diagnostics undertakes no obligation to update them. And with that, I would like to now turn the call over to Josh Riggs.

Thanks, Gabby, and thanks, everyone, for joining us today. We are thrilled to announce that we've submitted Graft Assured DX to the FDA for review. To recap the significance of this milestone, in January 23, when we first decided to go the kitted route, I mean, we pointed ourselves directly at the FDA and the EU equivalent. Now, about a half million data points later, we are, to our knowledge, the first DDC-FDNA assay to be submitted to the FDA for authorization. As we work with the FDA throughout the review process, our focus as an organization is shifting to product launch and pushing commercialization. Everything we are doing as a company right now is to accelerate adoption ramp post-authorization. To have a successful launch, we want to see three key things. Strong engagement in the registry, more head-to-head data, and some early adopters using the research-use-only version of our technology. Right now, driving engagement and utilization with our assays is the name of the game. Just like we're doing with the FDA, we need to convince clinicians across the country that GravDissure is safe and effective for managing their patients. And to do that, we have two big tools we can bring to bear, our galactic registry and head-to-head data. Since we announced the registry in the fall, we've had 28 centers start the process to become a trial site. That's over halfway to our goal of 50 in a very short period of time. As we're talking with the centers, we lead with two things. Firstly, that we are introducing the absolute and combination scores to our report, giving them more information to use in patient management. And secondly, that we expect to transition the study to in-house testing when appropriate. This combination of scientific and clinical interest is driving the solid engagement we are seeing. We believe that the first centers to bring Graft Assure in-house are going to be those that have been using it prior to FDA authorization. The registry program is a perfect way of both advancing the science, and also building familiarity, comfort, and credibility with clinicians across the country. That way, when we show up with a regulated product for the lab manager, they are getting enthusiastic support from the clinical team. The more centers that are engaged with the registry, the faster our ramp will be. To that end, we've made targeted investments in additional headcount in clinical and technical sales and medical and clinical affairs. The sales team is driving engagement, pulling in top centers, while the medical and clinical affairs team is focused on driving awareness and enrollment once those sites come online. We believe that we are appropriately staffed for this phase, but we'll plan to add some additional team members as we get closer to authorization. Convincing doctors to change what they are doing isn't always the easiest thing. And while the registry does a good job of getting clinicians to engage with our clinical report, it doesn't answer probably the biggest question in their mind. How does this compare to what I've been using? This is where head-to-head data comes in. At the most recent cutting edge of transplant meeting, a top transplant center that has been in both our pilot and FDA program got up on stage and presented preliminary data showing that they could get equivalent results to one of the national reference labs using our Graph2Sure technology. This was over 140 patient samples, so we're not talking a small study. And it was strong enough data that they announced their intent to use Graph2Sure in their core lab. It was amazing how fast the switch in mentality was from how does this compare to why should I send it out if I can get equivalent results in-house. We expect more head-to-head data to come out through the year, and more and more centers are going to be asking themselves that same question. We are actively encouraging centers to run these head-to-heads. It is a key part of the work being done by our commercial and clinical teams this year. The more direct comparison data that is out there, the faster our ramp will be. About 80% of transplant centers do their own donor-recipient matching, known in the industry as HLA testing, which is, like graft-to-short, an advanced molecular test. If we can convince them that DDC-FDNA measurement with graft-to-short is safe, effective, and equivalent to better than what they've been using, there's no reason DDC-FDNA won't look like HLA testing in the future. which means we believe that in-house GDC FDMA testing can become widespread and common. You can see in our shareholder letter we outline our 2026 goals, and I'll touch upon them briefly here. In addition to our goal of expanding market access activities and engagement with transplant centers, we outlined five other goals for 2026 in our shareholder letter. Those include commencing graph-assured research-use-only... Marketing Graft Assure Core and driving samples to our Tennessee lab. We want to get our clinical readouts into the hands of as many clinicians as possible, and Galactic is really the driving force here. And just as a reminder, Medicare reimburses Graft Assure Core at a rate of $27.53. Submitting Graft Assure for approval in the UK and EU. The UK is self-certified, so that will move quick, while the EU IVDR is a six- to nine-month lag post-submission. Reimbursement in these markets is still an open question, but we are seeing signs of progress. That being said, I spent last week talking with our European partners, and the demand is clearly there for a kitted product. And finally, pivoting our R&D teams to focus on expanding Graft Assure's utility into heart transplant testing. In a minute, Andrea will take you through what our investments will look like throughout the year to support these activities. But before that, I want to share with you where we see the puck going, and therefore where we are skating regarding transplant patient management. We believe that over the next three years, the organ transplant rejected testing market is going to shift from one that is primarily dominated by avoiding biopsies in poor cost patients to one that is more heavily focused on screening for organ rejection. In other words, shifting from rule out to rule in. Any approval of an anti-CD38 drug will accelerate this transition. Clinicians will be trying to catch organ rejection as early as possible so that kidneys experience less damage and stay in patients longer. The conversation is going to shift from one that is in PV only and start to sound like what we are hearing in oncology where sensitivity limit of quantification mrd and early stage detection are going to matter for clinical performance we believe the data show that our assay and droplet digital pcr are uniquely suited to meet this emerging clinical demand we get very excited about these things because we believe that it lights a path toward our assay becoming the de facto standard ddc of dna testing provider to the market But, of course, we must bring the kitted version of the assay to market this year, and we are highly focused on that. Andrea?

Thanks, Josh. Hi, everyone. Okay, so since you've known us, this company has done one highly focused thing, and that is invest in product development for a kitted kidney transplant assay. And this year, we're preparing to do two focused things. First, we intend to commercialize and begin scaling that kidney transplant assay. And so accordingly, we're making controlled investments in sales and marketing to do that. And second, we intend to maintain our product development momentum by expanding Graft-A-Shore into heart transplant testing. Last month, we completed a $26 million offering that allows us to do these two things at the same time. What's great about expanding into heart is that Dr. Eckie Schutz, who's on the call with us today, and his team actually designed Graft Assure to be organ agnostic from the beginning. So we get to leverage our previous investments in the technology. So what heart transplant investment looks like is sustaining our 2025 research and development investment levels rather than dropping R&D back down to the 2024 level. Of course, our balance sheet remains an area of focus for us. We continue to be quite thoughtful about where we will incrementally invest. You can see that in Q4, research and development ticked up quite a bit, which we had told you it would. This was tied to software development, our clinical trial costs, and materials costs to support our FDA submission. Those expenses should come back down again in Q1 to a number that is between the Q3 and Q4 levels. We know that the capital entrusted to us by shareholders deserves to be treated with the utmost care. In our February registered direct offering, we welcomed participation from BioRad, who invested in our equity for the fourth time at their pro rata ownership of just under 10%. We also welcomed participation from new and existing investors. We look forward to continuing to institutionalize our cap table as we transition into a commercial business in the coming quarters. The way we think about our spending optionality is thus. Our maintenance spending is about $5.5 million per quarter, and our growth spending is about $2 million per quarter. Growth spending includes the cost of clinical trials, our contract research partner, lab materials on new products, research and development, and incremental sales and marketing investment. We believe that our maintenance spending is covered at about $35 million a year in revenue. It's as if we assume a software-like gross margin that would ramp over time to get to that level on graph to shore. We believe that we have this level of revenue well within our sales pipeline. So when we talk about being engaged with 37 transplant centers in the United States, and we have told you in prior quarters that we expect to average about a million dollars in annual revenue per center, you can see why we believe we're starting to see a path to becoming a self-sustaining business. Of course, our near-term sales pipeline is just a starting point. The size of the market opportunity is pretty exciting. We value the total addressable market to be over $2 billion. That's on an annual basis. This represents our updated and more favorable pricing for Medicare, as well as the fact that Moldex has come out with coverage for screening or coverage guidance for screening. Previously, testing was only for cause, and so now we have better visibility into the reimbursement levels at a baseline level of testing for transplant patients. Okay, so that was a lot on the big picture. Let me take off some quick housekeeping. Number one, we expect low levels of revenue on lab services this year and almost no revenue in the first quarter. Number two, we introduced non-GAAP EPS and adjusted EBITDA tables into our financials this year, which we told you last quarter that we would do now. Number three, the intangible asset write-down that you see in Q4, which we back out of adjusted EBITDA, is tied to writing down the intangible value of the remainder of our oncology assets. We've been talking for several years now about our focus on transplant, and so this should not come as a surprise. We do believe that our oncology assets could be quite valuable after we properly invest in and monetize them and we continue to sustain a low level of activity on them. Okay. I know we give a lot of information to you. We think your two key takeaways today are very simple. Number one, the external validation of demand is growing. And number two, we are moving quickly to capture that opportunity. And then finally, I'll close with this. Last month, I was able to attend that presentation by a major university hospital at the Cutting Edge of Transplantation Conference, and that's the one that Josh just referenced, and we also talk about it in our shareholder letter. So this major hospital stood up on stage and presented head-to-head data that is favorable to our assay. And this was great because I don't actually get to hear a lot of this in the CFO seat directly from the customer. And this talk is basically the hospital and its researchers are saying the exact things that Josh Riggs has been saying quarter after quarter on conference calls for three years. So it was just really great to hear. These hospitals clearly want to do their own testing, and they view us as a partner that can enable their success. It was also meaningful to hear him talk about organ transplantation giving people a second shot at life. So I encourage you to seek it out and watch it. We appreciate these scientists and physicians and their regard for what we are doing. We also appreciate your investment and your interest in us, and we appreciate our analysts who are covering us and joined us today on the call. We seek to create value for patients, clinicians, and our hospital customers, and we seek to execute to return value to shareholders. Okay, Gabby, we can take questions, and Eric, if you could please bring everyone up into gallery view. And we're going to have Gabby call on you guys.