Lucid Diagnostics Inc.

Good morning and welcome to the Lucid Diagnostics fourth quarter 2024 business update conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Please note that this event is being recorded. I would now like to turn the conference over to Matt Riley, Lucid Diagnostics Senior Director of Investor Relations. Please go ahead.

Thank you, operator, and good morning, everyone. Thank you for participating in today's business update call. Joining me today on the call are Dr. Lishan Aklag, Chairman and Chief Executive Officer of Lucid Diagnostics, along with Dennis McGrath, Chief Financial Officer of Lucid. The press release announcing our business update and financial results is available on LUCE's website. Please take a moment to read the disclaimers about forward-looking statements in the press release. The business update, press release, and the conference call all include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in the disclaimer and are in our filings of the SEC. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A, entitled Risk Factors and Lucid's Most Recent Annual Report on Forms 10-K, filed with the SEC, and any subsequent updates filed in quarterly reports on Forms 10-Q and subsequent Forms 8-K. Except as required by law, LUCID disclaims any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions, or circumstances on which the expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statement. I would now like to turn the call over to Dr. Elishan Akhlog, Chairman and CEO of LUCID. Take it away, Elishan.

Thank you, Matt, and good morning, everyone. Thank you all for joining our quarterly update call today. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Our team remains singularly focused on driving this Lucid enterprise towards its substantial commercial potential and ultimately to enhance our long-term shareholder value. Lucid finished with a very strong 2024, and we're off to really an exceptional start in 2025. We've been marked by significant advancements in EtherGuard sales channels, reimbursement milestones as well as increases in our clinical evidence base. The collective progress we'll discuss today really sets the stage for 2025 to be a really pivotal and productive year in our history. We're poised to make our final push towards broader coverage and reimbursement to drive revenue and revenue growth for MesaGard. Let's start with some key highlights related to our commercial execution. In the fourth quarter, we generated $1.2 million in revenue. This fourth quarter revenue was at range with our recent quarters and relatively even with our record third quarter. Test volume in the fourth quarter was just over 4,000 tests. That represented a record quarterly test volume and substantially greater than our target of 25,000 to 3,000 tests per quarter, which is the amount necessary, the critical mass that's necessary for us to sustain our traditional revenue cycle management processes as well as our efforts to secure medical policy while protecting our overall cash flow. As I'll talk about in more detail later, and as we previewed last time, we've restructured our commercial team and our comp model to focus on revenue-driving activities. Towards that end, our concierge medicine cash pay program is off to a great start. We've only been at it for a few weeks now, and we've already signed 20 concierge medicine contracts in total. I'll get more on this later. Now let's start with our recent strategic accomplishments. As we noted recently, we're really excited to report that Highmark Blue Cross Blue Shield of New York established positive commercial insurance coverage policy for e-cigar, and this is our first positive insurance coverage policy. And we believe it represents an important precedent for future commercial and for future engagements with commercial payers. We are also happy to report this week that the NCCN, which is the National Comprehensive Cancer Network, clinical practice guidelines now include a section on screening for esophageal precancer. and that they align with the existing guidelines from the Gastroenterology Association that includes non-endoscopic biomarker testing such as C-Cigar as an acceptable alternative to endoscopy. We also believe this is a very important step. The NCCN is widely regarded as a really key indicator of standards of excellence for cancer care and prevention, and we expect this will help us drive positive policy coverage decisions from commercial payers. continue to expand our clinical evidence base. Most recently, we had two clinical utility studies, the CLU study and the MVET-BE studies that were accepted for peer-reviewed publication. The CLU study is now published. So that gets us to five peer-reviewed clinical utility studies on top of the clinical validity studies that we've previously announced. And not only the number of clinical utility studies, but this establishes a really solid chain of evidence on the clinical utility of ESAGARD. We've demonstrated previously that physicians will use the results of the e-cigarette test to inform, appropriately inform their medical decision-making and appropriately triage patients to endoscopy. We've also reported that patient compliance with the referral for endoscopy is excellent at 85%. And now with the NVET study, we've demonstrated a substantial increase in the yield of the more invasive endoscopy test, really locking down the role of e-cigarette as a triage tool to triage patients, at-risk patients to the more invasive endoscopy test. Additional strategic accomplishments include that we strengthened our balance sheet with long-term debt refinancing and a registered direct common stock offering, and now our runway extends well past our upcoming key reimbursement milestones. We're really excited at the award of an $8 million NIH grant to investigators at Case Western and University Hospitals. and this grant was to study e-cigar for an expanded indication to include patients without heartburn. The NIH's investment of substantial resources in our technology is a real testament to the groundbreaking nature, and if this study demonstrates what a pilot study seems to show, we believe that this has the potential to substantially increase the total addressable market of e-cigars to include patients without heartburn. As we've previously noted, our clinical evidence package was submitted and accepted by the MOL-DX group for reconsideration of e-cigar for Medicare coverage under the existing LCD. That submission was announced in late November, and we are expecting to hear back from the MOL-DX group within the first half of this year. Before diving into some of the business details, just a reminder, where we stand as a company, Lucid is a commercial stage cancer prevention company offering a solution that includes two technologies, ESO Check and ESO Guard, which together offer a comprehensive pre-cancer screening solution. And our mission is to prevent esophageal cancer deaths in at-risk patients. So this slide shows the steady growth in both our test volume and our revenue. We've done 30,000 cumulative tests since the launch of ESAGARD, and this represents just the early stages of our efforts to tackle what's a very large $60 billion total addressable market that's based on the fact that there are 30 million patients who are already recommended for testing by existing guidelines at an average price right around the Medicare price of $1,900. Let's move on to an update of our business. With our runway now secure, we're going to focus on two areas of our business, reimbursement as well as how we're seeking to drive revenue through our expanded sales channels. So on the reimbursement side, as I mentioned in our highlights, we were very excited to have secured our first commercial policy with Highmark. This really represents a, we believe will be a precedent for other commercial payers now that we have our first one secured under belt. We remain deeply engaged with payers across the country, and as we've talked about before, we are seeking to leverage biomarker legislation to secure coverage, and we've actually had some success in doing so with the Rhode Island Blue Cross Blue Shield plan, which is now covering our tests as well. As I've hinted earlier, the NCCN updated guidelines are extremely important. The NCCN is utilized by commercial payers as a marker of standards of excellence in cancer prevention and cancer care, and we look forward to highlighting these guidelines in our discussions with the commercial payers. On the Medicare side, we continue to view a decision from the Moldy X to be a first-half event this year. It could happen tomorrow. It could happen next week. However, we're confident it will be sometime in the first half of this year, and we remain optimistic about the outcome. So let's talk a little bit about some of the updates we've had to our sales channel. As we've talked about earlier, we've made some adjustments to our commercial team, our sales structure, and our compensation plans. to help drive ESAGARD revenue. So we see really three separate channels. The first channel is our traditional channel, so one we've been doing since we first commercialized this, targeting primary care physicians and specialists and having them submit traditional claims to the payers using our revenue cycle management process. And this process, as we've said before, is important for us to remain engaged with the payers to seek out to secure positive medical policy as we've done, for example, with Highmark. And, of course, a part of this process as well is our efforts within the Medicare community. However, we've really decided to push hard on two additional sales channels that are focused on driving revenue. One of those is direct contracting with employers and other self-insured entities and, of course, with fire departments with whom we've had a strong engagement now going on for several years. 50% of employers are self-insured, and this gives us the opportunity to offer the e-cigar test either as a benefit amendment to their existing health and wellness plans or just through contracted events. And our pipeline is actually quite robust with these, including small and medium-sized employers. And we look forward to documenting revenue for that in the coming quarters. And finally, we're really making great progress with our cash pay program that focuses on the concierge medicine sector. Off to a great start. We've only been a few weeks into this. We've allocated resources appropriately, and it's paying dividends. We've signed more than 20 contracts with concierge medicine practices over the past few weeks, and we're in active discussions with the major national aggregators in this sector. So our expectation really with regard to these last two programs, the direct contracting and particularly the cash pay program, is that they will start making an impact on our revenue starting in the second half of this year. So to summarize, before handing it over to Dennis, we're really excited with our recent progress on the reimbursement side and the commercial progress. This new structure on our commercial team that has a substantial portion of our team focused on revenue-generating programs such as concierge medicine and contracting, it's really working well, and we expect that to ramp up in the near future. Our whole program remains very scalable, so when we receive Medicare coverage and as the revenue efforts also start to scale up, we are in great position to scale up our laboratory operations, our manufacturing operations, and otherwise. And we really are setting ourselves up, we believe, for significant growth in our test volume and our revenue growth for the second half. So with that, let's pass the call on to Dennis.