Sera Prognostics, Inc.

Good afternoon and welcome to the Sarah Prognostics conference call to review third quarter results for fiscal year 2021. At this time, all participants are in a listen-only mode. We will be facilitating a question and answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Peter DiNardo of Capcom Partners for a few introductory comments.

Thank you, Danielle. Good afternoon, everyone. Welcome to Sarah Prognostics' third quarter 21 earnings conference call. At the close of the market's day, Sarah Prognostics released its financial results for the quarter ended September 30, 2021. Presenting for the company today will be Greg Critchfield, Chairman, President, and CEO, and Jay Moyes, our CFO. During the call, we will review the financial results we released today, after which we will host a question and answer session. If you've not had a chance to review our quarterly earnings relief, it can be found on our website at seraprognostics.com. This call can be heard live via webcast at seraprognostics.com, and a recording will be archived in the Investors section of our website. Please note that some of the information presented today may contain projections or other forelooking statements about events and circumstances that have not yet occurred, including plans or projections for our business, future financial results, and market trends and opportunities. These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. I will now turn the call over to Greg Serra-Pognacic, Chairman, President, and CEO.

Greg? Thank you, Peter, and good afternoon, everyone. Today, I will provide an overview of key business highlights during the quarter and our expected developments over the near term. Serra is a company that is moving at this point in time from a clinical development stage into a commercial stage enterprise. We are very pleased with our progress during the third quarter and excited by the opportunity ahead of us to grow the company and to achieve our vision of improved health care for mothers and babies. To achieve this, we are deploying our capital judiciously to build the capabilities to engage in full commercialization that we believe will generate significant revenue growth in the future. We are engaged in ongoing publication of serious science and technology to extend our leadership in pregnancies. We are building an effective commercial organization and we are collaborating with key individuals and organizations as we move forward to achieve our goals. Let me start by discussing further validation of our preterm testing technology and the significant positive impacts that serious testing can have on healthcare costs while bettering maternal and neonatal care. I'll then discuss a new key collaboration and the build-out of our company with additional staff and advisors. During Q3, we announced the publication of a detailed health economic analysis in the peer-reviewed journal Clinical Economics and Outcomes Research. This publication illustrated the clinical benefit of combining our preterm testing with evidence-based interventions to improve neonatal health and reduce total healthcare costs. This work adds to the growing body of evidence supporting the effectiveness of CIRA's test and treat strategy in identifying women at risk for spontaneous preterm birth and providing more proactive care in those pregnancies. Proactive care in more pregnancies that are truly at higher risk of premature birth has the ability to reduce complications of preterm birth, decrease hospital length of stay, and save healthcare expenses. A recent published Health economic analysis was conducted by SARA working in partnership with Anthem's analytics subsidiary, Health Corps, using actual claims data of more than 40,000 pregnant women and infants. The analysis evaluated the application of the preterm test and treat strategy by modeling testing to be conducted during weeks 19 or 20 of pregnancy and assessed the benefits across the population by providing proactive interventions in the higher preterm test risk cases. Note that the effective compliance model in the study was very conservative, with only 60% of eligible candidates assumed to receive proactive interventions. Key findings of this comprehensive and conservative analysis include 20% reduction in preterm birth less than 37 weeks of pregnancy, 33% reduction in very early premature births, less than 32 weeks of pregnancy, 10% reduction in neonatal intensive care admissions, 7% reduction in overall hospital length of stay, $863 net savings, that's $1,608 growth savings per pregnancy that was evidenced by the $54 million reduction in total costs in the population that was studied. Based on the $863 net savings, the authors of this conservative analysis estimate that more than $850 million could be saved annually in U.S. individual and employer-sponsored health plans. We believe this work provides a compelling economic rationale that is appealing to payers and that should help foster widespread adoption of our preterm test and treat strategy by health insurance payers. On the scientific front, last week we announced a rigorous peer-reviewed preterm test validation of a risk threshold that stratifies pregnancies into higher or lower risk categories for preterm birth. This work was published in the Journal of Clinical Medicine. This threshold enables more proactive interventions to help address higher risk of premature delivery in women whose preterm risk results are at or above twice the average population risk for spontaneous preterm birth. In a pregnancy where the risk is at or above that 15% threshold, the doctor and patient can decide to more proactively address that risk with interventions designed to help the mother and baby. This preterm test risk threshold underpins the published data demonstrating the performance and value of CIRA's preterm test and treat strategy. In published validation study of prematurity prediction, in published health economic models demonstrating its impact in populations, and in intervention studies where clinical benefits of the strategy are assessed. Note that the 15% risk threshold is also employed to interpret an individual mother's risk result as higher or lower when she receives service preterm testing commercially. In the recent threshold analysis publication, it was demonstrated that patients at or above 15% or twice the intended use population risk had significantly higher risk of spontaneous preterm birth and that they had a higher frequency of adverse clinical outcomes. Publication of this work adds to the growing body of evidence supporting the clinical validity and utility of our preterm test in identifying women at risk. This additional validated data for physicians, employers, and payers further demonstrates CIRA's ongoing efforts to improve pregnancy outcomes and reduce healthcare costs through studies and collaborations with respected independent parties and individuals. These efforts highlight CIRA's vision to provide actionable insights to benefit mothers and newborns and to save on healthcare costs by improving patient outcomes. CIRA has always been interested in addressing prematurity, both in the US and abroad. In the early days of the company, we worked on building predictors that could benefit underserved populations that are disproportionately affected by prematurity, particularly in Asia, in Africa, and in the US. Our earliest studies overrepresented underserved populations as we discovered and further validated our preterm tests to make sure that our tests would work well for them. Since 2015, CIRA has conducted work in cooperation with the Gates Foundation efforts, and we anticipate upcoming publication of work in non-U.S. geographies that further demonstrate the power of our technology to assess prematurity risk in low- and middle-income populations. Finally, our prime prospective intervention study being conducted across the U.S. includes underserved populations where prematurity risks are very high. We have maintained a constant focus to ensure that our predictors work well where they are needed the most. We have just announced an important key collaboration to further help underserved U.S. communities address healthcare disparities. by partnering with Preemie World, Global Preemies, and the Alliance for Black NICU Families, leading organizations all geared to empowering and supporting families impacted by preterm birth. The long-term goal of this collaboration is to help educate and stimulate conversations between patients, their families, and their physicians to improve individualized assessment for preterm birth risk. According to a study published in 2020, African American women in the U.S. are 50% more likely to deliver prematurely when compared to Caucasian women. And we believe that education and access to information is essential to changing this unacceptable statistic. We are proud to join with these leading organizations in a united effort to effect change and improve healthcare outcomes in this underserved segment of the patient population. A word about people. Sarah works internally and externally with very talented and dedicated people that are essential in building our company for success. We were pleased to announce last week the engagement of Dr. Woodrow Myers as an advisor to the company on public and political affairs. Dr. Myers is a nationally recognized leader in developing medical quality initiatives, and he has extensive experience and leadership in addressing health equity and disparities. We are honored to have him join our team and lead on a multidisciplinary effort to execute a national and state-specific political and public affairs strategy to help address healthcare disparities that disproportionately affect underserved communities. Data and analytical capabilities are a cornerstone of our business when it comes to extensively analyzing information to validate what we're doing to provide healthcare insights to patients, physicians, and payers, and to lead to new and improved products. At quarter end, we were very pleased to announce the appointment of Dr. Paul Kearney as Chief Data Officer, whose extensive data science, bioinformatics, and proteomics experience helps us to foster further innovation for CERA. I'm also very pleased to report that we have begun our build-out of the commercial team to robustly scale preterm testing. We have now hired a talented sales force comprised of 26 representatives concentrated in regions where we begin selling our tests with a good initial basis of third-party payment. We have sales representatives hired on both coasts, Western, Midwest, Southern, Mid-Atlantic, and Northeastern territories. By the end of this quarter, we anticipate having 30 active sales territories covering approximately 12 percent of all U.S. pregnancies. These sales representatives call on physician offices, educating them about preterm testing and how to incorporate testing into their clinical practices. We also have an experienced team of market access personnel who are in discussions with payers as we emphasize the health and economic benefits of our test and treat strategy and work to secure reimbursement contracts. From this base deployment, we expect to extend our testing ultimately throughout the U.S. Note that we are receiving payment from major payers in the United States as we are initially rolling out our preterm testing. We are building and deploying digital marketing programs to engage women who are the ultimate important customer for whom our testing has been created. We believe that the coordinated efforts to address the three key customers we have, doctors, patients, and payers will help us to grow revenues as our commercial team executes on our vision. And finally, to expand our talented pool of advisors, we are pleased to have just appointed Zhenya Lingard to CIRA Prognostics Board of Directors. Zhenya possesses significant expertise and deep understanding of both healthcare and consumer technologies that are important enablers of our strategy and can help drive adoption among patients, physicians and payers through her profound knowledge of consumer centric approaches. She currently serves as CEO of the common project foundation, a global nonprofit focused on enabling trust ecosystems for individuals data. And prior to that served as vice president of platform and customer engagement on the executive team at Uber. She's also served with the Boston consulting group and has served on the board of directors of city harvest, a New York city hunger charity. She shares our passion and vision to create better lives for women and newborns globally, and we welcome her aboard. Looking forward, we see a robust opportunity to potentially ramp adoption of our preterm test and treat strategy to address prematurity. While the COVID pandemic has somewhat impaired our initial scale up in Q3 and going into Q4, we believe that this problem is something we can successfully move through and look ahead to the time it will recede in the rearview mirror. Looking forward, we expect to announce upcoming contracts with payer, employer, and physician network groups who adopt our testing. A growing revenue ramp is expected to follow the signing and implementation of testing within these groups. We foresee additional clinical and economic data readouts and publications occurring in the future as well. We are very encouraged by our execution thus far in 2021 giving us confidence as we move into year end and into an exciting 2022. I'll now turn the call over to Jay for a brief review of our third quarter financial results and some color on our expectations through year end.