Renalytix plc

Ladies and gentlemen, thank you for standing by and welcome to the Rinalytics Second Quarter Fiscal 2021 Financial Results 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. 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.

Thank you. Thank you all for participating in today's call. Joining me today from ArenaLytics are James McCullough, Co-Founder and Chief Executive Officer, and James Sterling, Chief Financial Officer. Tom McLean, President, 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 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 regulatory 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 annual report on Form 20-F filed with the Securities and Exchange Commission on October 28, 2020. All forward-looking statements made on this call are based on management's current estimates and various assumptions. Reanalytics disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. This conference call contains time-sensitive information It's accurate only as of the live broadcast today, March 2nd, 2021. And with that, I'll turn the call over to James.

Thank you, Carrie, and good morning to everyone, and thank you for joining us to review our second quarter results for the fiscal year 2021. The past six months, and especially the recent quarter, have made the event horizon much clearer for Rinalytics and our stakeholders. Thanks to a major rule change in the reimbursement landscape, our growing partnership base, and an increasing awareness of the large unmet need in kidney disease, Renalytics is rapidly building the foundations necessary to bring kidney and telex precision prognostics to thousands of clinicians treating individuals with early-stage kidney disease. Today, I will focus on key developments in our business that have laid the groundwork for our growth strategy. First, on our reimbursement and regulatory pathways. On January 12, 2021, CMS finalized its Medicare Coverage of Innovative Technology Rule, also known as MSIT, giving renalytics a direct path to a national Medicare coverage determination for kidney and telex testing in the United States. As Medicare beneficiaries make up the majority of individuals with kidney disease in the United States, we believe this represents a watershed moment in the pursuit of our national commercial strategy. Under MSIT, Kidney IntellX would receive national Medicare coverage at $950 per reportable result when the FDA clears Kidney IntellX out of the Breakthrough Device program. We submitted our final Kidney IntellX regulatory package for review under Breakthrough Device in August of 2020. This was shortly following the FDA's announced reprioritization of resources due to the large influx of COVID-related emergency use applications appropriately slowing down the process across the board for diagnostics regulatory applications. Fortunately, on February 19th, we received written notification that FDA expected our review process would return to normal no later than April 15th of this year, and that FDA expected no further delays beyond this date. While we will not forecast a specific timeline for finalization of the FDA process, We view this notification as a positive step and anticipate FDA clearance and subsequent national Medicare coverage under MSET will likely take place in the current calendar year 2021. In addition, we are continuing to expand the regulatory and reimbursement expertise at Renalix and will continue to pursue multiple parallel pathways to secure comprehensive long-term private and public insurance reimbursement. Turning next to the real-world implementation of Kidney Intellects, During the quarter, we began our clinical testing experience with Kidney IntellX within the Mount Sinai Health System. To date, Kidney IntellX testing volume has run into the hundreds, and there are currently over 25 primary care and specialist physicians in the Manhattan region ordering early-stage risk assessment for diabetic kidney disease patients through the Mount Sinai electronic health record implementation. We are pleased to note that despite challenges presented by COVID restrictions, our experience has met or exceeded targeted quality metrics. With Kidney IntellX live testing reporting, we also performed a series of services for Mount Sinai to support physician and office practice education, care navigation development, and electronic order integration. These services are essential for both uptake and downstream clinical utility of Kidney IntellX over the short and long term. We continue to focus on the benefits of kidney IntellX machine learning enabled in vitro prognostic risk score in the context of everyday clinical practice, particularly as we deploy to an overburdened primary care physician base. Reporting a clear, easily understandable risk score with specific clinical actions attached, all supported by education and care navigation, is essential to drive testing growth and acceptance in early stage disease. Again, we define early stage disease as stages one, two, and three of kidney disease before irreversible damage to the kidney has occurred. We expect clinical testing will accelerate in the third and fourth quarters with the addition of more physician practice sites at Mount Sinai, and we also expect to start recognizing revenue from our work at Mount Sinai in the quarter ending March 31, 2021. Working alongside the experienced clinical and technology teams at Mount Sinai in the real-world environment is playing an important role in helping us further develop the integrated partnership deployment model. We are beginning this real-world experience with discussions with other large potential healthcare networks for Kidney IntellX implementations. As a case in point, the successful deployment of Kidney IntellX at Mount Sinai was a key part of the University of Utah's decision to partner with us. We intend to announce additional partnerships in 2021 that could significantly expand the reach of Kidney IntellX to treating clinicians. Turning now to our commercial strategy, as previously noted, strategic partners are essential in building commercial use cases for Kidney IntellX. The quality of the information from partnered implementations, such as with Mount Sinai, will help us avoid mistakes during product launch and scale. The partnering model remains a top strategic priority as we work to drive long-term sustainable addressable market opportunities prior to achieving a national Medicare coverage determination through MSIT. However, with MSIT, we are now engaged in an intense internal review of the strategic options to accelerate United States distribution for kidney and telex. Strategic partnering is certainly one way to accomplish expanded physician access. Our partnership with DaVita, announced on January 5th, provides a unique value proposition to insurance payers and healthcare networks that creates a first-in-kind, end-to-end care model in early chronic kidney disease. DaVita and Renalytics intend together to implement Kidney Intellex, starting an early stage 1 diabetic kidney disease, along with care management services in three major regional healthcare markets. These regional health care markets may contain multiple health care systems and also multiple insurance providers. The data and insight into utility flowing from this end-to-end model should also be quite unique and potentially give rise to a true value-based health care equation. Also on February 24th, we announced a partnership with the University of Utah, one of the top research institutions in the United States, that will implement Kidney Intellect system-wide at the University of Utah Health, Kidney IntellX will be deployed directly into the electronic health record system, providing over 1,700 clinicians access to seamless test ordering and patient risk score reporting as part of the standard clinical workflow. With the VITA and the University of Utah, we are now on track to exceed our stated goal of announced partnerships for three major Kidney IntellX deployments before the end of fiscal 2021. Given these successes, we are now increasing our deployment goal, our announceable deployment goal, expecting to announce five to seven partnerships before the end of calendar 2021. Next, I would like to highlight our product development roadmap and the expanding market opportunity ahead of us. While Kidney IntellX has initially been indicated for adult patients with type 2 diabetes and existing chronic kidney disease, a population that accounts for an estimated 30% of the U.S. chronic kidney disease population, we are now solidifying plans to broaden the Kidney Intel X platform with a new indicated use to the larger chronic kidney disease population. Notably, this new indicated use, when validated, will also include the underserved African and Hispanic ancestry populations, populations which show disproportionate risk of developing kidney disease and have poor outcomes. Due to these large and incremental populations, we estimate the TAM for Kidney IntellX platform could potentially grow to over three times its current size to an estimated 37 million individuals in the United States. Finally, and most importantly, we are continuing to build on our clinical data, supporting the performance and real-world utility of Kidney IntellX. We have submitted for presentation key findings from recent studies at the World Congress of Nephrology, the American Diabetes Association, and the Healthcare Information and Management Systems Society this year, and we expect additional important data will be submitted in collaboration with our study partners shortly. This growing body of evidence supports important findings for broader population validation, test monitoring, patient drug therapeutic response, and the impact on clinical decision-making and therapy management of the Kidney IntellX platform. We will continue to invest heavily in validation and utility study data development as we seek to establish Kidney IntellX as the standard for early stage precision medicine prognosis in kidney disease. Collectively, we believe the developments in reimbursement, partnering, and data development position Kidney IntellX for testing volume growth in fiscal 2022. Again, our mission for the remainder of this fiscal year is to lay the groundwork for broad healthcare system and physician access prior to an anticipated FDA clearance and national Medicare coverage. We are exploring multiple options to ramp U.S. distribution, keeping capital expenditure efficiency always in mind, so that we are prepared to take advantage of the scaled growth opportunity across large populations in the coming years. Expanding the Kidney Intellex platform with a new indicated use to the larger chronic kidney disease population, including individuals of African and Hispanic ancestry, would materially increase our total addressable market. Lastly, a note on the impact of COVID-19 on our operations. COVID has presented short-term challenges to our business, particularly during the high-intensity first deployment of Kidney Intellex in the Mount Sinai Health System during the second quarter. During the period, both New York State and Mount Sinai reinstated COVID surge protocols, which restricted our ability to operate. Fortunately, with broad-scale population vaccination now proceeding at pace, we expect COVID will have a substantially less impact on our operations moving into fiscal 2022. I would now like to turn over the call to James Sterling, our Chief Financial Officer, to provide more detail on the financial results. James?

Good morning, everyone. Today, we issued two releases. First is our six-month interim report under IFRS accounting, and the second is our quarterly SEC filing under U.S. GAAP that included three and six-month financials. Both reports are for periods ending December 31, 2020. Those releases include full details, and I'll summarize highlights from our unaudited GAAP financials here. All figures are in US dollars, which is our reporting currency. During our fiscal second quarter, which ended December 31st, we recognized $400,000 of pharmaceutical services revenue related to our work with AstraZeneca. We recorded about $250,000 in direct labor costs attributable to those services. We did not post revenue in the prior year period. Our operating expenses were $8.8 million for the quarter. compared to $2.7 million in the prior year period. The increase was primarily driven by a higher headcount as we continue to scale our organization for rollout of the Kidney Intellix platform in the United States. During the six months ended December 31st, our operating expenses totaled $14.2 million compared to $4.7 million in the prior year period. Net loss was $8.9 million for the quarter, or 12 cents per share. as compared to $4.7 million or $0.08 per share for the second quarter of fiscal 2020 on a GAAP basis. Net loss for the first half of fiscal 2021 was $16.1 million or $0.23 per share compared to $6.1 million or $0.10 per share in the prior period on a GAAP basis. Cash and equivalents were $74.5 million as of December 31, 2020. We will now open the call up to questions. Operator?

Ladies and gentlemen, at this time, if you would like to ask a question, please press star, then the number one on your telephone keypad. Again, that's star one to ask a question. To withdraw your question, press the pound key. Please stand by while we compile the Q&A roster. Our first question is from the line of Dan Arias with CIFL.

Yeah, good morning, guys. Thank you. James, I just wanted to start with some color on the launch at Mount Sinai. What are you seeing in terms of ordering physician growth, and then what's the line of thinking in terms of the penetration of that initial 65,000 patient diabetic kidney disease stage one through three population? And then to your point on expanding eligible populations, could that grow to a broader CKD indication? And then, you know, if I could tack one on to the end of that, relatedly, Last year you were talking about Mount Sinai committing to up to $6 million in assay usage, I believe. Over what period of time is that applicable at this point?

Thanks, Dan. All very good questions. I'm not sure I have answers to everything. I can tell you the integration with Mount Sinai has been working exactly the way we wanted it to, particularly from a quality standpoint. One of the big concerns when you launch a new assay into the market is really understanding exactly how it fits in the clinical workflow. For us, there is a large behavioral economics equation. That's the somewhat esoteric science around physician behavior, interpretation, for example, of the risk score, how they then take that risk score and affect patient outcome. how those interpretations work within that physician-specific environment, which at Mount Sinai is going to be very different, for example, than University of Utah. It's going to be different again with a large physician group practice that may not be affiliated with the university. All of this goes back to that initial uptake. So what I can say is we're very pleased that the integrated deployment with Mount Sinai is doing exactly what we want it to do and giving us very clear quality information on how kidney IntellX is moving into the system. So that's good news for the intermediate and long term. We have had restrictions with COVID. Of all the places to launch in Manhattan during COVID is probably not the most friendly environment. And that obviously has a short-term impact on our ability to scale. I don't expect those impacts to last much longer. How quickly we're going to be able to scale into the Sinai diabetic kidney disease population, we shall see. But the good news is we are now at a position where the whole system is set up. We've gotten our education protocols down. Everybody's becoming familiar with it, and we now have several months' worth of usage through hundreds of tests ordered and reported so that we've got a pretty good handle on what the landscape looks like. We're going to be adding additional physician practices now at what I would think would be an accelerating clip. starting in the March quarter and then moving into the June quarter. And then obviously with Medicare coverage and FDA, then that accelerates significantly. Sinai has committed up to $6 million worth of testing purchase. So that is a very important piece of the short-term revenue generating income before we have Medicare coverage and broad insurance coverage. And again, I expect to see, especially in the June quarter, an increase in the testing volume and the revenue growth. And please, that was a compound question. I didn't remember the second part. Expanding indicated use. You know, it's always been our plan to start with diabetic kidney disease, largely because that's a very defined population. the diabetic kidney disease patients often receive more attention because of their risk factors. Maybe in many cases they're better characterized within the clinical workflow. So it's a natural starting point for us, but ultimately where we want to move with Kidney IntellX is the ability to be able to detect early stage progression in the entire chronic kidney disease population. We've been working on those data validation sets with Kidney Intellex. We know how we're going to do it. And I expect that we could very well see a product introduction in calendar 2022. We would initially launch that as an LDT and then subsequently run a full regulatory process. The good news is we're now gaining a significant amount of experience with Kidney Intellex from a regulatory standpoint. pathway in diabetic kidney disease, I think that's going to help us a lot when we go to add a new indicated use to the platform.

Yep. Okay. All very helpful, Culler. And then just on the University of Utah deal, it sounds like you think you might be able to turn the assay on, so to speak, this year, which is actually a bit earlier than I was thinking for account number two. Are there Are there things that you're learning from the Mount Sinai experience that you think are ultimately going to help you ramp volumes there when that does get going? If so, I'd love to just sort of hear how the early days might inform the processes for accounts down the line.

Yeah, we have learned an enormous amount through the Sinai implementation. And obviously we didn't pick a small system to start with. what's the saying? If you can make it in New York, you can make it anywhere. And with Kidney and Telex implemented in Mount Sinai Health System, these are our partners and our friends, which is where we need to start. But, you know, Sinai is an enormous organization, 38,000 employees, or 36,000 employees, eight hospital systems. It's complex in terms of its spread among a diverse population set. So we cut our teeth with that fully integrated implementation with Kidney IntellX, and we learned an enormous amount. And not just from an operational standpoint, but we became very familiar with the data security issues, which are key concerns among all of the other institutions that we're now currently having conversations with. Privacy issues. These are things which are complex issues, and we think that we're now starting to develop actually quite an in-depth proprietary view on how rollout should take place so that both the healthcare system and renalytics, the patients and the treating physicians, have an appropriate data-secure and legally compliant view to kidney and telex. And so I think really to your point, the subsequent rollouts are going to be much, much easier. Nothing is ever easy, but certainly our experience with University of Utah, which is the announced example, that went much quicker than in terms of setting up that entire deal, that went much quicker than with Mount Sinai because we had all of this learning and experience coming out of Mount Sinai. And I would expect for the subsequent rollouts, next five to seven announceable implementations, which I hope to do this year, that things will start to move even smoother. So I really do think that the partnered implementation, it is a unique model. It is somewhat complex, but we are now getting a handle on those complexities, and that provides us with a substantial competitive advantage because once we're integrated within these systems, we're collecting data, The quality of the result is going to be very difficult to catch up to down the road for any potential competitors that might emerge. So I'm very pleased with where we are, and it is something to start doing live test ordering and reporting through the electronic medical record system and to hear real physicians and their reactions and real patients. And I believe we're very much on the right track.

Okay. And then if I could just stick one more in. You know, presumably within the body of business development activity that you have ongoing, you're having conversations with payers. Anything you can add just on how those conversations are going and what you're finding they want to see in order to think about implementing across a covered live space? And then maybe along those lines, You have that data from the economic modeling study that was done, which shows good cost savings, albeit hypothetical ones. So I'm just wondering if there are efforts coming together to sort of generate real-world evidence that makes the same type of argument there.

Thanks. Yeah, and backing into the question on health economics, which is fascinating, and we are working with Boston Healthcare Associates, which is a superb group, and I think the model is increasing with depth, and now we're getting real-world feedback. And yes, very much, this is part of our, and I mentioned this in the preamble, It's critically important that we develop the real-world evidence equation around kidney and telex. This is important for long-term sustainable reimbursement. It's important for clinical adoption. It's important ultimately to getting into the guidelines, right? Real-world evidence is going to be pulled into the health economics models. It's going to be pulled into the utility equations. It's going to be pulled into the performance equations. It's also going to help support and enhance the Kidney Intellex platform into new indicated uses. And we can look at large indicated uses like chronic kidney disease, but also subtypes like African ancestry and Hispanic populations, a critical group that's underserved, that suffers disproportionately from kidney disease. We can now start to take the benefits of Kidney Intellex to support that population. Very important mission. So yes, the answer is we are intending on an ongoing basis, I don't think it'll ever stop, we're going to intend to build out that model. And again, the health economics equation here is so strong. I didn't experience health economics like this in my several decades in oncology diagnostics, precision medicine. There's just so much ground that can be covered now that we are able to enable prognosis risk assessment in early stage kidney disease, stages one, two, and three. That just changes the entire downstream equation for outcomes and cost. So that's a very strong, important part for us. And I apologize, what was the first part of your question?

No, that was more or less. I was just curious what the experience was like with payers when you're talking to them and you're trying to get a sense for what it is that they need to get over the finish line on implementation across their covered live space.

Yeah, insurance payers. Our huge advantages with Medicare pricing, a distinct CPT code, and now MSIT, it has very much changed the complete equation for us. I couldn't ask for a better way to start to drive national private insurance coverage than coming into my indicated use with majority Medicare coverage at a defined price. And of course, this will apply to the 3,500 privately administered Medicare Advantage plans in the United States at that price under that code through the MSIT pathway. So I believe we're in a very good position As we go to start looking at national scale out, we're going to start regionally first, but as we start to scale this out nationally, the fact that we have a defined price code and the majority of the patients are covered by Medicare, that's a terrific position to be in to help private payers over the line for coverage. It will never be easy, and there are a range of private payers. There are the early adopters, the mid-level, and then the folks that, in my opinion, take too long. But this is an ongoing process, again, which will now be fed by the real-world utility data. It will be fed by an increasing number of systems that are adopting kidney IntelliX and working with it, and, of course, by the very strong health economics equation of getting into early-stage prognosis. And I just want to emphasize one other critical point. Our number one mission for the remainder of fiscal 21 and continuing into fiscal 22 is setting up distribution partners. And the primary model is through this healthcare system partnering implementation model, but we are also exploring now with MSIT, we have the ability now that we have clarity around the reimbursement channel of setting up alternative distribution channels as well. So, We're really looking at a comprehensive multifactorial distribution that ultimately is going to help everybody start to come on to the kidney and telex system. Okay. Thanks, James. I'll hop back in here. Thank you, Dan.

Again, that's star one to ask a question. Your next question is from the line of Tycho Peterson with J.P. Morgan. Hey, good morning.

You know, thinking about the five to seven deployments you're targeting for the year, I'm just curious about how you're picking, you know, the health systems you're starting with. I mean, the University of Utah is very different, you know, to Mount Sinai, which is different than to Vita. So can you just talk a little bit about how you're kind of prioritizing the health systems? And I appreciate, you know, there are learnings you can, you know, translate from Mount Sinai. But, you know, how quickly do you think you can get some of these other, you know, systems up and running?

Yeah. It's an interesting point. I wish in the beginning I could say there was a very specific comprehensive method to system selection. There wasn't as much as how it was really around engagement and dialogue. And each system is different. And this is an innovative program with University of Utah that's very much tied into the economics the economic goals of the state, as well as the translational goals. So it was a very forward-looking group at an executive level at University of Utah that we were able to deal with, which made setting up the deal easier. Going forward, we are introducing a priority list, which includes geographic centers where there's unfortunately, a high disease burden and where there's an infrastructure so that when we come in, we can talk the same language with clinical medicine, with IT, with the CFO's office. And I think that that's naturally evolving. But we are in discussions with several groups at the moment. Exactly how quickly this falls, I don't know. But I can say that the level and activity of discussions has increased. It's certainly increased since the December quarter. And with MSIT, we're now able to paint a picture of de-risking the reimbursement pathway, which obviously is very helpful in terms of us adjusting our capital spend and our resource allocation. But that's why I became comfortable saying, yes, let's step out to the market and target between five and seven announcements for implementations in calendar 2021, and I think we can get there.

Okay. And then maybe just shifting gears to DaVita, you know, I'm just curious how we should think about kind of the revenue recognition, the economic value, and, you know, any sort of kind of risk sharing or financial risk from your end.

Yeah, very good. DaVita is a fascinating partnership. I think it's a canary in the coal mine for the rate of change that is occurring in the kidney disease space. I did not expect to be partnering with one of the two major dialysis companies this early on in the game. DaVita is obviously a very street smart group. They have explored the entire industry, looking at ways to get into the early stage space, and their comment to me was, you know, we've seen everything, and kidney and telex really is the only early-stage progression tool in the market. And so they saw the vision like we did, which was let's put together the end-to-end solution in the care pathway, starting at stage one and looking all the way through to end-stage renal disease. And by virtue of doing that combination, early stage prognosis with kidney IntellX through the in vitro prognosis program and DaVita's extensive care management program, which is quite exquisite, those two things now generate a data stream and a view from early all the way through late stage that we haven't been able to find anywhere else. So that obviously goes to your point around, you know, how does this affect a value-based healthcare model and what is a value-based healthcare model? For me, it's really understanding from the early stage the changes that we can make in care management when we identify the fast-progressive group, the high-risk group, those patients that are likely to upstage and those patients that are likely to experience, if unmanaged, a kidney failure event. And exactly how does that slow or stop the progression ultimately to dialysis? How does it help the lead time with patients and physicians towards transplant, kidney transplant? How many people can we keep at the primary care level and manage them properly so that they don't start to progress to upstages of disease and need specialty care? What does it look like with drug therapeutic introductions? All of these things can now be analyzed in the continuum, and ultimately it leads us to say, what is the impact that we're making throughout the continuum, and exactly what is the value there? From a pragmatic implementation standpoint, We will be implementing with DaVita similar to what we're doing with Mount Sinai and University of Utah through an integrated deployment with a dominant healthcare system in a region. And as part of the exercise, DaVita and Renalytics together will go to the insurance company and say, you know, let's provide insurance coverage for kidney and telex, and now we can look at the entire continuum together to start to change outcome and cost savings. So it's a very progressive way of looking at this, and I think this partnership represents what is going to be a continuation in the industry going forward to take a look at the whole channel of kidney disease from early stage to end stage.

Okay, that's helpful. You know, another question we've gotten is just on AstraZeneca, and given how spread out it is across cardiovascular, renal, metabolic diseases, can you maybe just talk a little bit about, you know, what the end goals are here and how we should think about kind of milestones for that partnership?

Yes. AstraZeneca was a deal in CVRM, cardiovascular, renal, and metabolism. it was important for us to be looking at CVRM holistically again, not just kidney disease, because everything is related in the system. That's fascinating for us, and it provides some very interesting study data, perhaps down the line to, again, look at new indicated uses around the Kidney IntellX platform. With AstraZeneca and with Mount Sinai, and there will be others coming into this study group, we're really looking at physician interaction in early stage disease, how those physicians are ultimately treating those patients from a therapeutic management standpoint. And this becomes very important and valuable ultimately for understanding effectiveness of drug therapy, the clinical workflow around drug therapy, and how we can start to bend the curve obviously on patient health and outcomes. That data is starting to be generated now. We expect to generate it in abundance in calendar 2021. If it continues at the pace, and I'm not representing it will, but if it does, then we should expect to start to see data coming off of this collaboration in late calendar 2020, early calendar 2022. And obviously with AstraZeneca, we're discussing about expanding that program. But again, everybody is now looking at this early stage prognosis equation and how can it affect all of the downstream activity now that we have a progression tool in Kidney IntellX. And I just have to state in order to get into early stage prognosis, CKD stage one, two, and three, or DKD stage one, two, and three, you have to have current biology. And in our case, we're doing this through a blood draw from that patient at time zero, and we're looking at a biomarker cornerstone strategy along with electronic health record features. But if you don't take that blood draw, if you don't have a biomarker strategy, you cannot enable, in our view, early stage accurate prognosis. And once you do that with the biomarkers, now you set up the ability to analyze, again, all of the downstream activities that AstraZeneca and other parties are obviously very interested in taking a look at.

Great. One last one, kind of a revenue question. If I go back to our conference in January, I think you talked about the fact that with Mount Sinai you already had over 50 physicians ordering I think 30 PCPs, 30 nephrology specialists, yet you're not recognizing revenue. I think you said at the start of the call you'll start recognizing it in March. So first question is, you know, why is there a bit of a lag there, and how should we think about the $6 million, you know, agreement, you know, being paced out? And then maybe a bigger revenue question is just, you know, the street's modeling $20 million in revenues this year. We're kind of halfway through, and you're below $1 million. I know you don't give financial guidance, but can you give us some comfort that, you know, the line of sight you have on these incremental, you know, deployments could get you somewhere close to consensus?

Thanks. So I won't comment. Yeah, go ahead, OJ. Let me just say, I won't comment on consensus at this point. We're not giving guidance, unfortunately. And it is a it's a funny time with COVID. So I don't want to give guidance. But go ahead, OJ, you want to you want to take that revenue question?

Well, just to answer on the revenue, Mount Sinai couldn't pay us for tests, and we couldn't recognize revenue for tests until the IRB approval work was completed, and that took a lot longer than we had anticipated. It is done now. We continue to run tests nonetheless during that period, but we do have IRB approval now, and so we will be recognizing tests starting in this third fiscal quarter.

Okay, and how you're thinking about the pacing of the $6 million? Anything you can kind of comment on that?

Yeah, the $6 million remains intact as part of the agreement, and so it starts effectively now. And on the projection for the fiscal 21, as James said, we're not giving expectations, but yes, the delay in The start here will certainly impact what generally people are thinking about for fiscal 21 numbers. For fiscal 22, however, I'm still feeling quite strong with MSIT and partnerships like DaVita and University of Utah and so forth for accelerating things nicely in 22. Okay. Thank you.

There are no further questions. I will turn the call back over to Rinalytics.

Okay, very good. Well, thank you, everybody, for taking time to join us. We look forward to talking to you at the next quarter. And please, everybody, be safe, hopefully, for what will be an amelioration of COVID here as we get out the vaccination over the next few months. Carrie, I'll turn it back over to you.

Thanks. That concludes our call. We need to disconnect.

This concludes today's conference call. Thank you for participating. You may now disconnect.