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spk09: Ladies and gentlemen, thank you for standing by, and welcome to the fiscal 2020 year-end earnings conference 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 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Carrie Mendeville, Investor Relations. Thank you. Please go ahead, ma'am.
spk01: Thank you, and thank you all for participating in today's call. Joining me from Retalytics AI are James McCullough, Co-Founder and Chief Executive Officer, and James Sterling, Chief Financial Officer. Tom McLean, President and Chief Commercial Officer, Steve Koka, Co-Founder, and Fergus Fleming, Chief Technology Officer, will also be available for Q&A. Before we begin, I'd like to remind you that management will make statements during this call that include forward-looking statements within the meaning of private securities litigation reform act of 1995. Any statements made during this call that relate to expectations or predictions of future events, results, or performance are forward-looking statements. Examples of these statements include without limitation, statements related to Kidney Intellix's ability to lower healthcare costs, improve patient quality of life, and set a long-term standard of care, trends in our market and potential benefits of government policy change, the impact of COVID-19 on our business, our expectations for hiring, product development, strategic partnerships and collaborations, reimbursement decisions, clinical studies, and regulation submissions, and our business strategies and future growth. These statements involve material risks and uncertainties, that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For description of the risks and uncertainties associated with our business, please refer to the risk factors section of our final prospectus for our initial U.S. public offering filed with the Security and Exchange Commission on July 17, 2020. All forward-looking statements made on this call are based on management's current estimates and various assumptions. Renolytics AI disclaims any intention or obligation, except as required by law, to update or revise any financial projection or forward-looking statement, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information, and it's accurate only as of the live broadcast today, October 27, 2020. And with that, I'll turn the call over to James.
spk05: Thank you, Kerry, and good morning, everyone, and thank you for joining us. I'm pleased to welcome you to the Renalytics AI conference call to review our fiscal results for 2020. 2020 was nothing short of a pivotal year for Renalytics. Together with our colleagues at Mount Sinai and EKF, we founded Renalytics in 2018. with the goal of accelerating advanced diagnostic products and solutions in the clinical practice that could significantly lower healthcare costs and also improve the quality of life for the millions of patients currently living with chronic kidney disease in the United States and abroad. The social and economic impact of chronic kidney disease, or CKD, cannot be underestimated. CKD is one of the largest unmet medical challenges today. with more than 37 million individuals with CKD in the United States and an additional 660,000 people currently living with kidney failure. Our lead product, Kidney IntellX, provides critical information about the rate of CKD progression and the risk of kidney failure in an easily understood format to healthcare providers and patients. in an effort to support optimization of care delivery, effective use of available therapies to improve patient outcomes, and reduce the $120 billion annual cost of chronic and end-stage kidney disease in the United States healthcare system. Kidney IntellX is an artificial intelligence-enabled in vitro diagnostic that combines the power of blood-based protein biomarkers with features drawn from an electronic patient record, all processed by a powerful machine learning algorithm. The result is a first-in-class solution that can provide an accurate prognosis of a patient's risk of kidney function decline and or kidney failure early on in the CKD disease cycle. That's CKD stages 1, 2, and 3, early stage CKD, where over 80% of CKD patients reside. Taking a blood draw and measuring biomarkers means that we can capture the current picture of the patient's biology. A foundation in blood-based biomarkers also means that we are not wholly dependent on what is and is not in a patient's electronic record in order to generate an accurate risk score. We believe this represents a significant competitive advantage that will be difficult to overcome. And again, we believe it is necessary to take a blood draw and measure biomarkers in order to enable early stage prognosis, that is in stages one, two, and three of CKD. Most importantly, understanding risk progression in early stage CKD can also help provide doctors and patients with the most lead time to prepare an optimal treatment strategy and increase choices to slow or stop the march towards kidney failure. For patients who do progress to end-stage kidney disease, kidney IntellX early prognosis can potentially help provide more lead time to assess the options for home dialysis versus in-center hemodialysis, substantially reducing costs and potentially patient suffering. Because kidney IntellX is first and foremost an in vitro diagnostic, we were able to follow a well-developed roadmap to product validation for clinical use. This has enabled two critical commercial milestones. First, the ability to have a regulated product, and second, the ability to divine reimbursement payments in the U.S. medical system. While developing and validating an in vitro diagnostic can be time consuming and costly, we firmly believe this is an innovative and pragmatic route towards enabling the power of artificial intelligence through a regulatory pathway, achieving defined payment, and establishing long-term guidelines-ready standard of care. To date, our in vitro diagnostic strategy has yielded an acceleration of core milestones in period, including a distinct national reimbursement code, effective October 2019, a national Medicare price, effective January of this year, and New York State Department of Health approval, which we achieved in June, that has allowed us to begin commercial product sales. In addition, post-period, we submitted our final regulatory submission to FDA for consideration of Kidney IntellX clearance. This consideration is part of a process which began 18 months ago, as you know, with FDA awarding breakthrough device designation to Kidney IntellX in May of 2019. Operating under breakthrough designation has allowed us to have an ongoing dialogue with FDA to address some of the more innovative aspects of Kidney IntellX. I firmly believe running a full regulatory FDA process has helped make Kidney Intellex a more robust product that rises to the quality necessary to set a long-term standard of care. Initially, Kidney Intellex is indicated for adult patients with type 2 diabetes and existing CKD. This population accounts for roughly 20 to 30% of the estimated 37 million U.S. CKD patients. As you know, Kidney IntellX is a scalable platform, and we are pursuing development and validation of additional indicated uses, which we expect to submit for regulatory consideration as early as this December. We will share more on our platform expansion strategy in the coming quarters. Throughout the fiscal year 2020, we crossed several core milestones sooner than we expected, which are necessary for sustained long-term market adoption. In addition to the regulatory and reimbursement objectives mentioned, we've also signed key strategic partnerships, completed large-scale clinical trials, secured private insurance payer support, continued to generate clinical utility and health economics data, and we've also expanded our operating team. And, of course, we successfully completed the dual listing to NASDAQ global market, which raised over $85 million in gross proceeds. substantially strengthening our balance sheet and allowing us to pursue a more expansive product development and commercial implementation course. Hiring the right people to help us execute is a major focus. To date, we have filled several core positions, including VP Health Systems Partnerships, VP Chief Human Resources Officer, VP Project Management, Director Scientific Project Management, Senior Quality Director of Quality Assurance, and have expanded our internal software development and AI capabilities. Other roles added to support our commercial scale-up of Kidney IntellX include billing manager, client service director, senior psych reliability engineer, clinical laboratory scientists, senior manager technical accounting, clinical services specialists, among others. We have a mission-driven culture at Renalytics with an underlying commitment to transform the lives of patients with CKD and all of these people will be able to help us execute on that mission. As we continue to invest heavily across our technology platform, we are committed to retaining these core values that are critical to our long-term success. At the end of September, we crossed the key implementation milestone with the activation of Kidney IntellX in the Mount Sinai Health System in New York City. The Mount Sinai implementation has been proceeding in line with our expectations. Kidney and telex is currently being ordered with risk score reporting to more than 30 primary care physicians and more than 20 nephrology specialists. We expect the ordering group of physicians with Mount Sinai and other healthcare providers to grow in the coming quarters. Getting into more detail on our regulatory process, post-period in July 2020, We received a clinical laboratory permit from the New York State Department of Health to provide commercial testing of Kidney IntellX in New York State. The permit was granted following a review by a panel of New York State Department of Health scientists and external reviewers of the analytical and clinical validation results for Kidney IntellX. Officials from New York State successfully completed an inspection of the Renalytics New York Laboratory as part of this process with no findings reported. For reference, a New York state approval is the most stringent state-run regulatory process and serves as a cornerstone for our national commercial rollout. Achieving broad reimbursement coverage beginning as early as fiscal year 2021 remains one of our highest objectives. In fiscal 2020, we established several of the fundamental components necessary both for both private payer coverage and Medicare coverage determinations. Medicare recipients represent a substantial portion, if not a majority, in many U.S. regions of our addressable market, and Medicare coverage remains one of the defining milestones for Broad Kidney Intellect's commercial success. Further, to date, we have also executed Medicaid contracts in seven states, including Michigan, North Carolina, Rhode Island, South Carolina, Vermont, Wisconsin, and Wyoming. We expect to continue executing Medicaid contracts through fiscal 2021 and fiscal 2022. In the period, Kidney IntellX has achieved a distinct common procedural terminology code, or CPT code. That's a payment code which is included in the final 2020 clinical laboratory fee schedule by the Centers for Medicare and Medicaid Services, also known as CMS. As a reminder, a CPT code is a unique identifier for the kidney and telex test used by CMS as well as by private payers in the United States. And in January, this CMS set a price of $950 per reportable test result, which became effective nationally. In an interesting development post-period in August 2020, CMS submitted for public comment a rule on innovation which would provide an automatic national Medicare coverage determination for those diagnostic devices under FDA breakthrough device designation when they are approved. If it becomes effective, this new proposed CMS rule could help shorten the time to insurance coverage for some 12 million Americans within Kidney Intellex's initial indicated use population, adult diabetic kidney disease. In our New York City launch market, Medicare recipients represent a majority of insured DKD patients. Whether or not this rulemaking ultimately plays out, it is important to note the recent and ongoing favorable changes in the policy landscape for the diagnostics industry, and specifically the chronic kidney disease diagnostic landscape. We believe these policy changes will continue to benefit the Kidney Intellect's commercial path, for example, starting in January of 2021, patients with private insurance covered under a Medicare Advantage plan will be able to choose to stay with their private insurance company for kidney failure and dialysis treatment rather than being automatically transitioned over to Medicare. This policy shift will likely result in a material health economics burden to large private payers in the United States for managing kidney disease. We believe early and accurate identification of disease prognosis will become an even more important part of the private insurance equation in CKD in 2021. During the period, we continued to achieve traction towards private insurance coverage of Kidney Intellects, most notably with physician-led plan CDPHP in Albany, New York, and two large preferred provider organizations, including the Three Rivers Provider Network. Our conversations with additional insurance payers and healthcare providers continue to advance, and we expect to continue to grow private reimbursement coverage over the near term. We believe achieving FDA regulatory clearance will also be an important factor to building on our national reimbursement strategy. At the core of our commercial strategy is our focus on driving strategic collaborations. Strategic partnering activities are important to not only building commercial use cases for kidney and telex, but also validating kidney and telexis unique in the early stage CKD progression space. To date, we have announced collaborations with two major pharmaceutical companies, most recently with AstraZeneca. With AZ, we have entered into a multi-phase collaboration to develop precision medicine strategies for cardiovascular, renal, and metabolic disease. In our initial work together, we are examining the uptake of and patient adherence to chronic kidney disease treatments using the ability of Kidney IntellX of the Kidney IntellX platform to identify patients earlier with progressive kidney function decline. We expect to report our initial findings in collaboration with AZ in the first half of 2021. And based on study outcomes, A multicenter randomized control trial will be initiated to evaluate uptake and adherence to new potassium binding agents in patients with CKD and hyperkalemia. We are confident that Kidney IntellX's unique value proposition and the early but rapidly developing market for applications in CKD drug therapeutics will allow us to form long-term partnerships with key industry stakeholders, including pharmaceutical companies, service, and healthcare providers. Turning now to clinical evidence, as our health economics and clinical utility data continues to accumulate, Kidney IntellX has growing potential to be viewed as the compelling solution to promote early intervention in kidney disease where impact on cost and care is most effective. We have now completed an expanded validation study set from more than 12,000 blood samples and analyzed, 12,000 blood samples, which are analyzed across multiple time points in 6,000 patients, with positive results consistent with the Kidney and Telex interim analysis, excuse me, interim analysis announced on 9th of July, 2019. These study results were presented at the 80th Annual American Diabetes Conference and are under peer review currently for internationally recognized journal publications. These data results were part of our Kidney Intellex FDA filing submission clearance as well. Included in these data results is a collaboration study that was completed with the University Medical Center of Groningen in the Netherlands to determine the ability of Kidney Intellex to identify patients that will experience a progressive decline in kidney function or kidney failure in over 9,500 blood samples analyzed across multiple time points in about 3,700 patients followed longitudinally. Initial findings from this work are being prepared for presentation and publication. In addition, we are evaluating the response to drug therapy based on baseline risk and change in risk over time as defined by Kidney Intellix. Concurrent with our clinical data generation, our intellectual property portfolio is continuously evolving. In the period, the U.S. Patent and Trademark Office allowed claims extending the use of one of Kidney Intellect's primary blood markers, STNFR1, to all patients with diabetes to determine an increased risk of developing progressive kidney disease or kidney failure. We have also completed rights to additional patent applications for use with Kidney Intellects. We are currently activating and evaluating a number of in-licensing opportunities that will also enhance our competitive product positioning. As you know, we are working closely with leading clinical investigators, population health departments, clinical societies, and patient advocacy groups to make sure we have actionable, simply understandable, and accurate medical communications. Expert experience is reflected in the design of the Kidney IntellX test report and the newly launched product website, which can be seen at kidneyintellx.com. We believe our education and support program will be an important resource to help inform and improve care for early stage DKD patients and support future hospital system deployments of Kidney IntellX in the United States and abroad. We have been asked many times about the effects of COVID-19 on our business, Without question, this is an unprecedented operating environment. We ultimately cannot quantify the challenges which all of us may face with the emergence of the fall and winter infectious wave. But I am incredibly proud of the intensive effort and the innovation that our employees and our partners have demonstrated as we continue to build out the Kidney IntellX franchise to patients in need and to their clinicians. A particular highlight during this time is the level of proactive collaboration that we're seeing to solve the complexities of technology licensing translation and data generation. And while our focus remains specifically on chronic kidney disease, like many others in the diagnostic community, we are contributing to help find a diagnostic solution to this global crisis. In May 2020, we entered into a joint venture with Mount Sinai to form Kintaro Biosciences for the purpose of developing and commercializing test kits for the detection and quantification of blood antibodies to SARS-CoV-2. Yesterday, Kintaro announced CE Mark approval of its quantitative antibody testing kit, which can now be distributed to laboratories in the UK and Europe. Global manufacturing leader in immunoassay technology, Biotechnique Corporation, is Kintero's manufacturing and distribution partner, giving Kintero access to testing laboratories worldwide. A major advantage of the Kintero kit technology is that it doesn't require any specialized equipment to produce antibody test results, further expanding the commercial scale of potential. Kintero has applied for FDA review, and we're expecting to hear the results in the near term. In addition to the Kentaro joint venture, in August, we also announced a multicenter study to evaluate the risk of long-term kidney damage by kidney and telex to patients who have experienced hospitalization from COVID infection. Investigative teams participating in the study include the Icahn School of Medicine at Mount Sinai in New York, Yale, University of Michigan, Johns Hopkins, and Rutgers. We expect to report initial findings from the study in the first half of calendar 2021 and then subsequently prepare for regulatory filings. In conclusion, fiscal 2020 was a transformational year for Renalytics. We believe we have truly unprecedented opportunity and unprecedented opportunity to transform patient care for CKD patients with our artificial intelligence and feature diagnostic solution. We have made significant progress towards our operational, regulatory, and reimbursement goals and are now engaged in commercial rollout of Kidney IntellX in the United States. Looking ahead, we have a number of core milestones to achieve over the next 12 months including increasing reimbursement coverage, expanding strategic partnerships, FDA regulatory events, additional health system partnerships, and growing testing volumes. We intend to keep our heads down and focused on the fundamentals of execution. I want to thank the Rinalytics team again for their continuing hard work, and we look forward to updating you all on our progress in coming quarters. In the interim, please stay safe, and I'd like to turn the call over now to our Chief Financial Officer, James Sterling, to provide more detail on our financial results. James?
spk04: James Sterling Thanks, James, and good morning, everyone. The earnings release we issued today outlines our financial results for the fiscal year ended June 30, 2020, in full, and I'll review a summary of these results now. All figures are in U.S. dollars, which is our reporting currency. Our operating expenses were $11.1 million for fiscal 2020, compared to $7.1 million in fiscal 19 on an IFRS basis. The increase in operating expense was primarily driven by the scaling up of our organization as we begin commercial rollout of Kidney and Telex in the United States. On a GAAP basis, operating expenses were $10.3 million in fiscal 20 versus $42.3 million the year before. Fiscal 19's OpEx under GAAP included the Mount Sinai license fee and the fair value of the Jocelyn license, as well as R&D expenses which were all capitalized under IFRS. Net loss was $9.3 million, or 16 cents per share, for fiscal year 2020, as compared to $6.2 million, or 17 cents per share, for fiscal year 2019. On a GAAP basis, fiscal 20 net loss was $9.8 million, or 17 cents per share, versus $42.3 million, or 99 cents per share, in fiscal 2019. Turning to our cash, we ended fiscal year 2020 with $13.3 million. Shortly after fiscal year end, we completed the NASDAQ dual listing and associated financing, raising net capital of $76.1 million after commissions, fees, and offering expenses. Also subsequent to fiscal year end, we completed the spin-out of Verici DX, previously known as Fractal DX. which included a portfolio of advanced diagnostic and prognostic solutions used in kidney transplant. For each EDX is now under consideration for admission to the AIM market, the submarket of the London Stock Exchange. We will now open it up to questions. Operator.
spk09: As a reminder, if you would like to ask a question, please press star 1 on your telephone. To withdraw your question, press the pound or the hash key. Please stand by while we compile the Q&A roster. Your first question comes from Dan Arias from Stifel.
spk06: Hey, guys. This is Daniel Masek. I'm for Dan Arias. Congrats on the IPO and product roll-up.
spk05: Hey, Daniel. How are you?
spk06: Good morning.
spk05: Good.
spk06: Thanks. So I'm just wondering how Mount Sinai early days are. How many sites are you in there? What kind of volume trajectory? I know it's pretty early. You said 30 primary care and 20 specialists are ordering. But if you could just provide an update there, tech integration, it works. Thanks.
spk05: Topical question. It is early days. So we've been at it for just about a month now. And the technical integration was complex, which we knew it would be. The advantage is that once you are technically integrated, obviously you're able to address a large population and a large group of treating physicians with a fully integrated approach. Of course, getting there the first time is always an interesting journey. But we've been very pleased so far The implementation has gone relatively smoothly. And to be able to report live results into a major system like Mount Sinai less than 24 months after we did our primary financing, having run through product validation, we think is quite an achievement. Directly to feedback we've been getting, clinical feedback has been enthusiastic. We do believe we are hitting right at the heart of some of the core workflow issues, some of the ambiguity around understanding progression, which is key to giving clinicians and patients time to optimize treatment. It is also key to making sure that we understand which patients are really at high risk for disease progression and or kidney failure. And equally as important, understanding which patients are not at high risk for progression and can remain at the primary care physician level. So feedback has been very good and we're starting to get uptake now. We're not going to report a specific number because it is too early. We have deployed, to your question, in multiple sites within Mount Sinai, and it should be an interesting run going forward.
spk06: Great. Thanks. I guess from there, any comments on new business development from payers, large hospitals? I know you mentioned that conversations are going. You expect to... to have news on that front in the near term, but anything specific there you could comment on?
spk05: Yes, I represented during the IPO roadshow that we would have clear sight to three implementations over the next 12 months. That was back in July. I'm going to stick to my guns on that. So I do believe that we are on track to have three significant implementations, which will give us a direct addressable market that should support revenue growth. We continue to have multiple discussions with payers, and obviously we're laser focused on our Medicare coverage determination process. Those discussions are going well, and investors should expect us to provide additional color on coverage determinations for kidney and telex. It is a lasagna plate to achieve reimbursement coverage in the United States. It's a complex network. And the most important thing is to put the fundamentals in place so that you can start to get increasing coverage, which ultimately is sustainable over the long term. So we have a superb reimbursement team with a whole lot of experience. And I believe that we're doing all the right things necessary to start achieving broader coverage in calendar 2021. That starts in January.
spk06: Great. I'll ask one more and jump back in the queue. On regulatory FDA clearance you guys submitted a few months ago, I think the agency is probably pretty busy, but timeline on breakthrough is, you know, supposedly 90 days. Is this still the right way to think about it? Any update on hearing from them, or are you just submitted and you're just waiting to hear back?
spk05: Yeah, the answer I always give is it's a bit of a fool's game to call regulatory approval or in our case clearance times it would not be unreasonable for us to expect a regulatory clearance as early as the end of this year possibly beginning early next year the agency is under an enormous amount of pressure and we hear this from multiple places reviewers are dealing with a wave of COVID-related applications, and we certainly have a lot of sympathy for the agency because it is an unprecedented time. That being said, we are in the cycle under breakthrough device designation, which has been very helpful to us, continues to be helpful to us, and we were able to have a lot of discussion around some of the innovative aspects of kidney and telex, as I mentioned before, before COVID set in and continued to have discussions during the COVID period. So we're confident that we are on the road to a regulatory clearance. I'm always shy about talking about timing. And now that we're looking at the the expansion of the first wave or a third wave, depending on how you look at it coming into the United States, none of us ultimately knows how that's going to impact, uh, regulatory time and resources. But, uh, the good news is our process is still moving forward. Uh, so I'm quite hopeful that we'll be in a position going into next year where, uh, we've crossed that cross that Rubicon.
spk06: Definitely a fair assessment. All right. Um, uh, I'll let, um, Anyone else have a turn and I'll jump back in the queue. Thanks, guys. Thank you, Daniel.
spk09: Your next question comes from Tycho Peterson with JP Morgan.
spk02: Hey, I'm for Tycho. Thanks for taking our questions today. Our first question is on the mask COVID study. I was wondering if you can give us an update. Can we still expect to get initial results by the end of this calendar year? And are you still targeting commercially launching kidney intellect in the COVID population in the first half of next year?
spk05: So the answer is we are on track. When exactly that data will come out, I'm not exactly sure, but we do expect to be generating a fair amount of data this year. And yes, we could very well report some of that data later this year going into the first quarter of next year. This issue is a fascinating issue. The whole area of COVID long haulers and the complications that are emerging from post-hospitalization, from infection, is a a fascinating area that we believe kidney IntellX can play a core role in. It's clear that the same receptor pathways that are involved in kidney function and transport are related to COVID infectivity. So there's a lot of crossover going on, and it's clear that there are a lot of patients coming out of the hospital with longer-term kidney damage. Their progression risk, which is what Kidney IntellX was designed to do, becomes important for establishing a long-term care profile and also assessing the recovery times with those patients. This is an area we are focused on, and again, we are not a COVID company. We have to be very careful about the resources that we commit to COVID. We are very much a chronic kidney disease company at the moment, expanding into other disease indications. But this particular population, which is emerging, which unfortunately is getting larger, fits right in the wheelhouse of kidney and telexis. It's very complementary to the product development that we've been doing since inception. So I think this is going to be a fascinating place to be. And on the line with us is also Dr. Steve Koka, who is on the front lines of this situation. He's been going into Mount Sinai Hospital on a daily basis throughout the entire COVID epidemic. Steve, could you just give us one minute worth of color on the importance of applying kidney Intellix in this population and what you're seeing?
spk08: Sure, James. As many of you have likely seen, the coronavirus, COVID, is not just a respiratory illness, but it causes a significant amount of acute kidney injury, severe acute kidney injury with many patients requiring acute need for dialysis. What this translates into for long-term risk of chronic kidney disease is yet to be determined. We at Mount Sinai and several other investigators, including the ones we're collaborating with, are currently conducting these longer-term ascertainments of kidney function and injury. And we really need to explore and see if we can apply, again, the Kidney Intellect platform to risk stratify these patients for these long-term sequelae. like chronic kidney disease and the progression to end-stage kidney disease. Certainly, this will potentially add a whole new proportion of patients to the clinical staffing needs for nephrologists, and not everyone can be seen by a nephrologist after being hospitalized with COVID and having acute kidney injury. So this is the clinical utility and the value of having the risk stratification tool like Kidney Intellix to help triage these patients and get them to the nephrologist if they are high risk for the long-term kidney disease outcomes. Thank you, Steve.
spk02: That's extremely helpful. And we were wondering, has this helped in your conversations with health systems You mentioned it's still targeting three significant implementations in sort of the medium term. So has it helped the application of kidney intellect to the COVID population?
spk05: That's been a secondary discussion. We find actually that the health economics equation around kidney disease is something that is well known. the challenges. One of the advantages of operating in the kidney disease space is we don't have to do a lot of education with health systems, population health managers, or payers about the critical cost in the care pathway with kidney disease. So most of our focus is really to say, you know, here we have a progression tool, Kidney IntellX, which is supported by Care Navigation. and a comprehensive suite of data analytics that we could do on health economics. And that's been the primary focus. While COVID is an important issue, obviously, most of our discussion is really how to deal with the longer-term implications for the growing CKD population, and especially looking at progression in early-stage CKD, stratification of those patients into low, medium, and high-risk. That's been the primary focus.
spk02: That's great. Very helpful. And then one last one. I was wondering on the AstraZeneca collaboration, can you talk about the near-term goals? What updates we should expect in early 2021 and maybe touch on, if possible, the medium-term economics?
spk05: Yeah, we're very focused on in the short term on a couple of things, one of which is reimbursement, reimbursement, and reimbursement. So we've set up a paradigm here where we can get paid. We know what the rate is because Medicare has already established national pricing at $950 per reportable result on a distinct code. So our primary objective is let's generate coverage determination and we can do that through a number of different channels one of which we started to announce this through the preferred provider organizations and obviously working with individual insurance companies that are concentrated in our launch and subsequent rollout markets so for example there are a whole sequence of insurance payers that cover the New York City region as well as the New York State region. And we've been putting a significant amount of effort into achieving that coverage. And then, of course, on the government side, we're very focused on achieving Medicare coverage determination because that accounts for the majority of our indicated use population. And there are a number of different pathways that we're pursuing. I won't detail those on the call here. But again, as we've said from the very beginning of Renalytics, we know how to build a diagnostic product. We know how to run a regulatory process. We know how to engage clinicians and patients. The biggest risk to the business is achieving reimbursement coverage. And we've made a number of accelerated moves in that direction. We're continuing to put a significant amount of effort to do that. So you should expect additional color in the short and intermediate term. on building out that reimbursement picture, not only regionally, but also nationally. Other things that you should expect are additional strategic partnering. And there are more than one way to skin the cat in order to get adoption with Kidney Intellex and open up specific business channels, and one of those is through strategic partnering. We believe we're in a very unique position where Kidney IntellX is really the only product at the moment that can look at progression, disease progression, in early-stage CKD. The reason we can do that is because we take a blood draw and we have a core biomarker strategy. We do not believe that you can look at early-stage CKD progression strictly through data analytics alone or looking through a large data warehouse. You have to take a blood draw to capture the current biology. And you have to have a core biomarker strategy that starts you down accurate and early understanding of disease progression. So from a strategic partnering standpoint, and there are many stakeholders in the chronic kidney disease business, from a strategic partnering standpoint, we offer a unique value proposition. And that starts from very early stage one CKD. So you should expect us to be announcing additional strategic partnerships as the business rolls along over the course of the year. The third thing you should be looking for is obviously FDA clearance, which again, I won't put a timing on that, but we have put a significant amount of effort into that and we think that that is a marquee milestone for us introducing an artificial intelligence enabled in vitro diagnostic. which we believe is a distinct product class. And the regulatory process has made us smarter and also provides a very robust framework for a product that can establish a standard of care over the long term. That will also help us with reimbursement. So there are a number of key events that you can expect over the short and intermediate term. And then, of course, we're building the company in core ways. I mentioned a number of the key positions that we filled. The most important resources that we have are the ones that show up for the weekly all-employees Zoom call, which is the way you do it these days. And we're going to continue to add to our employee base in a number of core areas so that we have the ability to execute not only with Mount Sinai, but with other large healthcare systems as well. And I'm sorry, then you asked a question about intermediate term economics. What was the second part of your question?
spk02: Yeah, so with relation to the AstraZeneca collaboration and how to think about, yeah.
spk05: Yeah, in short, we're delighted with AZ. It is a very sharp team. And we're very engaged with AstraZeneca. There's a lot of questions that need to be answered. around the clinical workflow, around different types of therapeutic approaches, and we believe that Kidney IntellX and our relationship with investigators and other institutions, again, put us in a position to really maximize data generation with a group like AZ, not only in the short term, but over a multi-year period as we begin to expand out the characterization of the workflow in kidney disease. So AZ is very much the right partner, and you should expect us to start publishing on results with AZ and hopefully expanding the program with AZ in calendar 2021. Perfect.
spk02: Very helpful. Thank you.
spk05: Thank you.
spk09: Your next question comes from Jens Lindquist with Investec.
spk03: Hi there. Good morning. Hi there. Good morning. Just wondering if you could tell us a little bit more about the collaboration with the University of Michigan and the C-PROBE database and what you're hoping to get out of that. Secondly, just on Medicare reimbursement, again, we covered that topic off, but just specifically on the MOLD-DX, submission, just to clarify, is that now on hold pending the outcome of the new proposed rules providing some nationwide Medicare coverage for FDA-cleared breakthrough devices, or is it still underway? And if so, what is the timeframe for that? And then finally, perhaps, if there's anything you could say about the in-licensing activity that you mentioned earlier, would that be specifically to strengthen the kidney intellect franchise and expand its utility into additional areas, or are you looking at tangential opportunities in CKD or diabetes? Thank you.
spk05: So thank you, Jens, all three good questions. I'd like to bring Fergus and Tom into this discussion briefly, and why don't we start with the University of Michigan. Fergus, could you give us a one-minute summary? And obviously, this is a very exciting and interactive collaboration with a top group in the field.
spk07: Good afternoon, Jens. Fergus here. So just to keep it very brief in relation to University of Michigan and the CPRO cohort, the primary short-term objective here is to really examine the power of combining urinary biomarkers with plasma-based biomarkers. And specifically, which also speaks to your third question, looking at urinary EGF as a particular biomarker that has been shown to be very prognostic in terms of chronic kidney disease across a broad range of chronic kidney disease conditions. So there's three aspects, really. One is looking at that specific biomarker and how it can add to the kidney intellect platforms. looking at the combination of urinary and plasma biomarkers in the C-probe cohort and how that could form the launchpad for future product development. And then obviously then expanding, potentially expand the kidney intellect indication out to indications beyond the existing diabetic kidney disease population. So it has some short-term objectives, but longer term is really looking at the expansion of the Kidney Intellect platform in both in terms of biomarkers, sample types, and indicated use populations. So we've just started the program intensely in terms of moving those samples to and fro between the two groups, and analysis will be getting underway in a matter of weeks.
spk05: That's great. And Tom, moving on to Medicare reimbursements.
spk07: Yeah.
spk05: Yeah, please go ahead, Fergus.
spk07: No, I've done it. There is actually some very recent data published on the urinary UGF biomarker that we will add to our website so that people can view that. Okay, brilliant. Thank you.
spk05: Thank you, Fergus. And obviously, adding urine as a biofluid into kidney IntellX for me is quite exciting, having come out of the liquid biopsy space. So we're able to access two different compartments. Tom, can you please take us quickly through the Medicare strategy? And obviously we're full out on that regardless of CMET.
spk06: Absolutely, James. Hello, Jens. So the breakthrough national coverage determination rule proposal that CMS issued is actually still in comment. That comment period ends next week. That is an important and exciting development if that rule is finalized to give Medicare beneficiaries immediate access to innovative technologies as determined by the FDA. But that is we are not counting on that being the pathway for reimbursement. That would be a great upside. So with regard to a local coverage determination, we have, I guess, the advantage with two laboratory locations. to be pursuing local coverage determinations both with National Government Services and Naridian. And because Naridian participates in the MALDX program, also through MALDX. And all three of those coverage pathways are moving forward with getting the data and everything in line for that, and as James indicated earlier in the call, that local coverage determination process, which in effect would be a national coverage determination for samples run through those labs, all of those initiatives are moving forward in line with that end of 2021 goal for Medicare coverage. Okay, great. Thank you. You're welcome.
spk05: And then in terms of in-licensing opportunities, that really flows also from groups like University of Michigan. And we have a very good network of leading investigators who are working with academic medical centers of note, researchers, and We find ourselves in a fascinating position because there really has not been much development at all in early stage CKD progression. And again, that's where 80% of diabetic kidney disease patients reside is in the early stage. And we're answering a core question, which is who has kidney disease that matters and who doesn't? Who is going to progress? and who is not going to progress? And how does that risk change over time? This is a fundamental question to understanding how you allocate resources and ultimately how you develop care pathways and treatment paradigms. So being in that position is attracting a lot of interest because there hasn't been a platform like Kidney IntellX before. It is expandable, as we discussed, so we can add additional biomarkers, different features. We can expand the indicated use for Kidney IntellX horizontally into other disease states, and we can also get very deep in terms of kidney disease subtyping. specific types of kidney disease. This is what happened in oncology, so it's the cancer model. And because we have that platform available, and there really hasn't been one like this before, we've attracted a lot of conversations. We've accessed a lot of stored sample sets, and it's been a very robust discussion. I'm not going to say specifically what we're working on in licensing, but University of Michigan is a superb example where we can collaborate very openly with a leading group of investigators around a new fluid, around a new biomarker. We expect to be doing that a number of times over the coming months and years. And it's a very robust development program that's available for us. And Carrie, I think we have time for one more question at this point, yes?
spk09: Your next question comes from Edward Thomason with N1 Singer.
spk00: Hello, everyone. Thank you for the update. Excellent questions so far. I only have a short short two questions if I may I know we're running out of time but can you just provide a bit of an update on the actual rollout at Mount Sinai and particularly how it is going on in the Manhattan area and the when you anticipate speed of centre adoption and rolling out into other districts in the New York State and then the second question just on the Medicare breakthrough designation rule change and your view on the election outcome, which we'll find out in the next couple of weeks, or as I suspect, probably these changes are pan-party, but it would be good to get your view on that.
spk05: Thank you, Edward. The view on the election, oh boy, I'm going to stay away from that one. It's an interesting time in the United States. You know, from a medical device policy standpoint, you know, we've obviously been very pleased with what's taken place in the kidney disease space recently, starting with the presidential executive order in July that of 2019, which really realigned a lot of the incentives and economics around kidney disease, which very much played into the development space of Kidney Intellex, looking at disease progression early. I think those trends will continue, and these are really a continuation of some of the laws which were put in place under the Obama administration. So we are really living in summary in a value-based healthcare environment, which I think is only going to strengthen. Some policies may change, some avenues may open, others may close, but the reality is value-based healthcare has set in, and it should, because chronic kidney disease cost is simply unsustainable. And we have to develop precision medicine strategies. We need new tools to look at disease early, the same way you don't want to show up In the emergency room with stage four cancer, you want to catch it early. The same is true with kidney disease. If you are experiencing kidney function decline or at risk for kidney failure, you want to know as early as possible to set up the maximal treatment options, and that's what Kidney Intellix is all about. So I think regardless of who's inaugurated in January, the momentum from the policy perspective will continue. In terms of characterizing the Sinai rollout, we've We've commented on that. I don't want to go too much further because it is early days. And the most important thing for us is to make sure we have all the fundamentals in place. The marketing and communications is absolutely critical. The messages need to be clear and simple. The physicians need to be able to use this information and act on it according to guidelines. That's what's going to start to change outcomes and costs. The direct feedback we're getting from the physicians is invaluable. It's helping inform the process. It's a great set of feedback to be able to work with a system like Mount Sinai Health System directly. And we're very pleased about how things are taking shape. And again, we are reporting live results into the system, which is a major milestone. You should hear more about that in the December quarter. report and in the March quarter report as well. And we hope to have other systems coming online as well. And, Edward, you had one other question on CMIT, I believe. Tom, do you have anything else to add on the Medicare equation?
spk06: I think the only thing to say, Edward, on that is that CMIT, which is Medicare for Innovative Technologies, is a bipartisan matter. It has bipartisan interest. So the idea of Medicare beneficiaries, again, having access to innovative technologies is something that we perceive crosses party lines. We're actively engaged in supporting this and also because of our membership in industry associations and our own outreach, I think the consensus is that this rule change, the benefits of that are apparent to both parties in the United States at this point.
spk00: Brilliant. That's very clear. Thanks very much.
spk05: Thank you, Edward. And I think, unfortunately, we are out of time. But these have been very good questions and I expect we'll have a lot more to talk about as the year progresses and certainly moving into next year.
spk09: Ladies and gentlemen, this concludes today's conference call. Thank you very much for participating. You may now disconnect.
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