Exagen Inc.

Greetings, ladies and gentlemen, and welcome to the Exigen, Inc. Fourth Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during this conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I will now turn the conference over to our host, Mike Cavanaugh, Investor Relations for Exigen. Thank you. You may begin.

Good afternoon, and thank you for joining us today. Earlier today, Exogen, Inc. released financial results for the quarter and fiscal year ended December 31, 2020. The release is currently available on the company's website at www.exogen.com. Ron Rocca, President and Chief Executive Officer, Kamal Adawi, Chief Financial Officer, and Mark Hazeltine, Chief Operating Officer, will host this afternoon's call. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical facts should be deemed to be forward-looking statements. All forward-looking statements, including without limitation statements regarding our business strategy and future financial and operating performance, including 2021 guidance, the impact of the COVID-19 pandemic on our business, our current and future product offerings, and reimbursement and coverage are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission, including our Form 10-K and subsequent filing. The information provided in this conference call speaks only to the live broadcast today, March 16, 2021. Exogen disclaims any intention or obligation, except as required by law, to update or revise any information, financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. I will now turn the call over to Ron Rocca, President and CEO of Exogen.

Thanks, Mike, and thank you to everyone joining the call today. As always, we appreciate your continued support of XGEN. We are very pleased with the exceptional performance in the fourth quarter. Our testing franchise continues to grow despite well-known challenges that patients have visiting healthcare providers. During the fourth quarter, we delivered a record 28,601 of our flagship advised CTD tests, which includes our advised lupus test, and in back-to-back years of over 100,000 tests for the full year. We believe this is a testament to the value patients and healthcare providers receive with our advised suite of testing solutions. Due to the pandemic, patients must make additional efforts to visit their doctors and get their symptoms correctly diagnosed, making our test volume even more impressive. This gives us confidence in the continued growth of our testing franchise especially as COVID-19 related restrictions ease and patients can again freely visit their healthcare providers. Along a similar vein, we saw 1,690 ordering healthcare providers in the quarter, including a record 635 adopters. Moreover, we had a high retention rate of 99% among adopting healthcare providers. Again, we are very proud of these numbers given the circumstances. This further demonstrates the unique utility of our advice franchise to rheumatologists who are challenged with clinically difficult to diagnose diseases. Additional value provided by our advice CTD test during this pandemic is the convenience and accuracy to cover multiple connective tissue disorders versus serial testing, which could take many doctor visits over numerous years. As we have said before, life-threatening diseases like lupus and chronic disorders like rheumatoid arthritis do not stop during a pandemic, and testing cannot either. With the pandemic making it more challenging for patients to see their doctors for treatment, the necessity of tests that can speed up the diagnosis and prognosis of autoimmune diseases is apparent. We believe our advised brands can address that need better than anything currently on the market. The Symphony Co-Promotion Agreement which was amended in December, delivered revenues of $1.7 million in the fourth quarter, which was near the contractually quarterly ceiling for the second consecutive quarter. That said, I do want to take this opportunity to provide some perspective around the future expectations. When we consider the opportunity provided by the new amended agreement coupled with COVID-19 pandemic Going forward, we expect Symphony revenue to come in at the quarterly contractual minimum of $300,000. As always, we evaluate our product portfolio and allocate our important resources to the opportunities to generate the most value for our organization and patients. I'd like to now turn to our sales force, which is a key driver of our performance. The team covered 56 territories as of December 31st, 2020. In the first quarter of 2021, we added seven new territories for a total of 63 territories, as well as the creation of an inside sales force to further our reach with rheumatologists in the white space, complementing our decentralized sales force and covering vacant territories. Our specialized team has adapted well to the pandemic, continues to expand Exogen's reach to rheumatologists, and is highly energized entering into 2021. I would also like to comment on the progress we have made on the reimbursement front over the course of 2020. This is a high-priority effort for Exogen and yielded over 14 million in-network lives over the course of the year, bringing us nearly to 60 million in-network lives as of the year end. We have maintained this momentum thus far in 2021, having recently completed a new covered and in-network agreement with Tricare West and Highmark, the fourth largest overall Blue Cross Blue Shield affiliate organization, as well as adding contracts in network services to two medical systems, the Tufts Medical Center and St. Charles Health Systems. Turning now to our R&D efforts, this remains a key strategic focus as we seek to solidify Exigen's position as a premier autoimmune company, providing an extensive range of testing solutions to help rheumatologists diagnose, treat, and monitor autoimmune diseases, which is notoriously difficult to do. We are focused on driving multiple sources of innovation and strengthening our intellectual property portfolio. For example, in November, we announced a new study in collaboration with Brigham and Women's Hospital in Boston to evaluate the effects of COVID-19 virus and its possible connections to subsequent autoimmune diseases. We will also continue to advance the development of further tests to add to our advised franchise, including our test for fibromyalgia, a disease which has a large addressable market. While not an autoimmune disease, it's often confused with connective tissue diseases and is therefore frequently diagnosed by rheumatologists. Adding an effective rule-in, rule-out test for fibromyalgia promises to be invaluable to healthcare providers. We believe that our advice tests are the most effective, complete, and differentiated series of tests for autoimmune diseases. and we remain focused on strategically enhancing that advantage. In closing, we are very pleased with our results in the fourth quarter and the full year of 2020. Our core testing franchise is strong and has proven to be resilient in the face of significant challenges. However, there are additional challenges which are out of our control, such as the inclement weather in February 2021 experienced in Texas and other parts of the country. We made a lot of progress on the reimbursement front during the year, and we will continue to give that a high priority. We will continue to invest in our R&D to find additional differentiated tests to add to our advice franchise. And finally, we will have a sales force in place to drive rheumatologists to our platform. We believe that XGEN is well positioned for the future. I would now like to turn over the call to Kamal to discuss our financial results.