Sera Prognostics, Inc.

Good afternoon and welcome to the SARA prognostics conference call to review fourth quarter fiscal year 2023 results. At this time, all participants are in 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, Gary. Good afternoon, everyone. Welcome to Seropognostics' fourth quarter fiscal year 2023 earnings conference call. At the close of the market today, Seropognostics released its financial results for the quarter ended December 31, 2023. Presenting for the company today will be Zhenya Lingark, President and CEO, and Austin Ayers, 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 release, 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 forward-looking statements about events and circumstances that have not yet occurred. including plans and 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 to 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 8K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections and other forward-looking statements. I would also like to note that although we will not refer to it during today's earnings conference call, the company has just posted an updated slide presentation to the investor relations page of its website. As a reminder, a webcast replay of this call will be available on the investors section of our website. I will now turn the call over to Jenya Serapognozic, President and CEO. Jenya?

Thank you so much, Peter, and good afternoon, everyone. We're pleased with our progress last year and during the fourth quarter in laying out the foundation for future growth through key advancements in our prime and avert studies and product pipeline, all while controlling operating costs to ensure such growth is well-funded. With the key drivers of revenue in our business being publications validating our technology, signing on insurance fares, and broadening consumer and physician awareness of our products, we believe 2024 will be an exciting year for CERA with a number of expected catalysts and developments to support commercial expansion and shareholder value. Just before year-end, we were delighted to announce that the Data Safety Monitoring Board overseeing Sarah's pivotal prime study recommended stopping enrollment due to efficacy. This was due to either of the co-primary endpoints having met the stopping criteria for statistical significance at the pre-planned interim analysis. Something like this usually doesn't happen, so we're highly encouraged that following successful outcomes with our Prevent PTB and Avert Studies program, the interim prime readout may show similarly our test and treat approach enables better management and better health outcomes. It has been three months since we announced enrollment stoppage due to efficacy. Given the potentially breakthrough results we hope to report, we were urged to temper our desire to share more on prime and to take our time in publishing results in order to preserve the integrity of the publication. We saw the wisdom in this advice, and while diligently working towards a strong publication, we've engaged with both the guideline-setting bodies and with our target journals, which confirmed their interest in receiving a manuscript submission. In the next few months, we hope to have a powerful suite of accepted manuscripts, Prevent BTB, Avert, and Prime, that demonstrate consistent, clinically beneficial results. These results are anticipated to show that using the preterm test and acting on the information it provides can lead to reductions in severe neonatal morbidity and mortality, NICU length of stay, and the number of babies born prematurely. In the meantime, to catch up some of our newer investors and to give helpful context for the PRIME study, detailed results of AVERT have been submitted for publication. This study was designed to determine neonatal outcomes after risk assessment using our preterm test and guided intervention for those with elevated risk. As we've noted before, Top-level primary analyses found that neonates in the prospective arm were discharged from the hospital earlier and had lower neonatal morbidity index scores. The impact of our preterm test showed a two and a half week improvement in gestational age of infants, most at risk for early delivery. 21% reduction in neonatal hospital stay, 18% reduction in severe neonatal morbidity and mortality, and a remarkable 28-day reduction in neonatal intensive care unit length of stay for infants born before 32 weeks. These results are quite compelling and encouraging, and they have led to continuing conversations with prospective health insurance providers and the medical guideline community on the high-level findings. We are excited and eagerly awaiting the AVERT publication to become available to further validate our proteomic blood test for preterm birth risk. Our preterm commercial strategy remains focused on generating publications showing evidence of the value of our desk, increasing contracts with insurance payers, and creating greater overall awareness. This is the traditional commercialization approach of prognostic and diagnostic players, and it takes time. We're targeting prime publication in the second half of the year, and only with that publication in hand as a prerequisite can we expect payers to initiate policy coverage reviews. These reviews are expected to be a multi-month or longer processes. We view 2024 as a year to put foundational prerequisites in place for a potential major revenue inflection in 2025. Diving deeper into our publication strategy, while the priority is getting the interim prime data published, we're working with our principal investigators to prepare another publication focused on our intervention portfolio tested in prime study, as well as publishing the cost effectiveness of the results. Once the study completes and all of the nearly 5,000 recruited participants have delivered their babies, we will prepare the final publication, final economic results, as well as potentially one or two intervention-specific publications. What is important to understand in our commercial strategy is the holistic approach to leave no stakeholder behind between payers, physicians, and consumers. The awareness of the value of this test brings to society and the healthcare ecosystem. Even in advance of the prime publication, we're communicating the full value of the preterm test and treat strategy to payers. The economic cost of preterm birth is staggering for all, public and private payers and the economy. Adopting preterm delivers multiple sources of value for the payers. First, our economic model showed that utilizing the test and treat strategy not only saves payers over $800 per member after the projected test cost, as estimated by Elevance, modeling it across 40,000 of its members, Second, the payers should realize the lower cost of care as the benefits of healthier children are born. Third, payers have an opportunity to differentiate their competitive position through improving quality of care and health equity for maternal and neonatal health in their provider networks by utilizing the test. Payers have an important role to play in driving adoption to get full value from preterm by providing appropriate resources and benefits to their physician networks to leverage the test and treat model. we will work closely with payers to help drive outcomes they can expect from our test and treat strategy. We're also engaging with employers, particularly self-insured employers, who are recognizing the tremendous value of including preterm tests in their benefit portfolio, not only because of cost savings and health outcomes for mothers and babies, but also because additional value in the ability to attract and retain parents as healthier babies increase presenteeism and the effectiveness of their parent workforce. Our studies have shown that care coordination is an important following use of the preterm test to achieve the best possible outcomes for moms and babies. We have tested our care coordination protocol in two large studies now and have OBGYN nurses available to support implementation of the test and treat strategy with our institutional customers. We expect to work with the medical community and payers to find the best path to delivering care coordination to as many patients as possible. This is particularly important when one considers that, for example, hospital obstetric care is only available in half of the rural counties in the United States. It is a problem that needs urgent attention at the national level, especially when it comes to meeting the needs of underserved patients in healthcare deserts. We all have to do more to provide the solution. To broaden the availability of our blood test and to also address underserved communities, We have made solid strides on preterm sample collection and assay enhancements, which will provide simpler, cheaper collection methods and more efficient lab processing. We've been working on this for a while, and validation is nearly complete. With that, our plan is to launch a self-collection device for collecting dried capillary blood in the coming months across certain initial geographies. We anticipate the consumer convenience of self-collection could be a game-changer for preterm and other products we can bring to market for improving the maternal and neonatal experience. To use our resources efficiently, we will time broader physician and consumer education campaigns region by region to track with publication and payer coverage wins. As we gain payer coverage, we anticipate expanding our commercial activity and teams. we expect to kick off broad-based traditional media and social media advertising targeted physicians and expectant mothers in the second half of 2024. Although our preterm test is the first product we've brought to market, SARA is not just about preterm. Preterm is the first product from our proprietary platform and the data set that we've amassed from over 20,000 pregnancies and worked hard to develop proteomic capabilities that allow us to discover proteins that spell out the risk of particular pregnancy complications. This proteomics-enabled platform should allow us to take other products to market in the years ahead and offer us the opportunity to partner with or license our data to others in potentially high value applications in maternal and neonatal health. Our platform, which enables unique pregnancy insights, has been instrumental in our activities to continue to progress our product pipeline beyond our commercially available preterm test, with three products currently in later stages of development to build out our portfolio and diversify and support our revenue growth. These include a consumer-directed time-to-birth test, predictive analytics products for consumers and for physicians, and a pregnancy risk prediction panel targeted at physicians. Our time-to-birth test addresses one of the highest interest questions in pregnancy. When is the baby due? The due date prediction methodology currently used has limited accuracy and fewer than 4% of babies are born on their due date. Our time to birth blood test is designed to provide mothers with a more accurate delivery date for planning time off work, family arrival, moving to a bigger place, or securing child care support. This test is being developed as a self-order, self-pay, and self-collect kit. We're working to enable expectant mothers to order it online with a capillary blood self-collection kit sent to them by mail to be shipped back to the lab and priced as a consumer-paid test. To make it an economically accretive addition to Sarah's portfolio, this test will be launched on what is called an enzyme-linked immunosorbent assay, or ELISA platform. To ensure continued focus of our organization on our core strategic goals, we have partnered with a lab which will provide blood collection kits and analyze the blood specimen to support the launch of this product. Launching this consumer-directed product should allow us to build a relationship with women earlier in their pregnancy and should be accretive to building adoption of Sarah's clinical test preterm. Today's expectant mothers are digital natives, and much of the information they get about pregnancy is online. The majority of digital resources, such as baby apps, mainly provide generic information about the stage of a pregnancy. Your baby is the size of a sesame seed now, a pea, an almond. We believe mothers in the market are lacking a clinical research-based personalized pregnancy journey guide, laying out the propensity for a wide range of meaningful pregnancy characteristics, from chances of gaining an above-average amount of weight to chances of an early C-section. SARA is advantaged in its ability to leverage data set and portfolio of clinical research to provide information on the relative likelihood of specific outcomes or features of a pregnancy based on its proprietary predictive analytic algorithms. Over time, this could be even more valuable if our pregnancy journey companion can be enhanced by further tailoring it to specific pregnancy with the results of a biomarker test. OBGYNs and SMSMs are under strain in addressing a public health crisis of increasing maternal and neonatal mortality in the United States. CMS's Innovation Center launched a nationwide initiative transforming maternal health care in 2021 to improve maternal health care experience and outcomes. This initiative aims to address shortages of staff and equity of care across the country by providing stronger access to care, quality initiatives, and comprehensive risk-appropriate screening and care solutions. This shows how critical physician tools for risk certification and shared patient-physician decision-making will be in the next decade. Sarah is uniquely positioned to contribute through our predictive analytics toolkit and testing solutions. Our pregnancy risk prediction blood test, which is farther out on the horizon, is expected to further inform doctors and patients in care management decisions to promote better outcomes in pregnancies when about 30% of pregnancies in the United States include a major complication. In conclusion, the combination of the predictive analytics product and our blood test is expected to give unparalleled results not achievable with mRNA or any other technologies available and should put us in an enviable competitive position when launched. For this year, our strategic focus is aligned on two key areas. First, promoting to physicians, payers, the growing evidence of the clinical utility of preterm to build adoption. This is essential towards showcasing to the medical, payer, and guideline-setting communities through peer-reviewed publications that preterm has been validated and can truly make a difference. While we cannot control nor guarantee the timing of the publication, we are excited by the potential of publishing and hopefully in the near term on our prime and overt studies to back up the prior findings of the preterm PTB study. Second, building awareness with expectant mothers and developing patient-facing products that can put us in direct contact with women and expand and diversify our revenue opportunities. We plan to develop a digital storefront where expectant mothers can find key information to manage their pregnancies and where we can offer our products with easier ordering. This should enable greater awareness of Sarah beyond the medical community and allow us to provide more than one test to moms through convenient self-collection and generate more revenue through self-pay with a higher return on investment. Through this endeavor, We will seek to elevate and increase demand generation at the consumer level, and we will expect to share more with you as we pursue this advantageous strategic approach to the market we serve. We expect a range of scenarios over the coming year for how fast the achievement of our critical milestones will unfold, such as publications, pair coverage, and new institutional customers. Therefore, we're allowing for commensurate flexibility in our budget and cash expenditures to be able to invest behind our wins. With that, I will now turn the call over to Austin for a review of our fourth quarter financial results and more detail on our 2024 outlook. Austin?