Exagen Inc.

Greetings, ladies and gentlemen, and welcome to the Exigen Inc. 4th Quarter 2021 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 the conference, please press star zero on your telephone keypad. Please note that this conference is being recorded. I would now like to turn this conference over to your host, Ryan Douglas, Investor Relations for Exigen. Thank you. You may begin your presentation.

Good afternoon, and thank you for joining us today. Earlier today, Exogen Inc. released financial results for the quarter and fiscal year ended December 31st, 2021. The release is currently available on the company's website at www.exogen.com. Ron Rocca, President and Chief Executive Officer, Kamala Dowie, Chief Financial Officer, and Mark Hazeltine, Chief Operating Officer, will host this afternoon's call. Before we get started, I'd 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 fact should be deemed forward-looking statements. All forward-looking statements, including without limitation statements regarding our business strategy, and future financial and operating performance, including 2022 guidance, the impact of 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 risk 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 these risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission, including our Form 10-K and subsequent filings. The information provided in this conference call speaks only to the live broadcast today, March 22, 2022. Exogen disclaims any intention or obligation, except as required by law, to update or revise any information financial projections, or forward-looking statements, whether because of new information, future events, or otherwise. I'll now turn the call over to Ron Rocca, President and CEO of Exigen.

Thanks, Ryan, and thank you to everyone joining the call. Today, I will discuss our fourth quarter and 2021 highlights, as well as give updates on our payers, pipeline, and growth plans. I'll then hand it over to Kamal, our CFO, for details on our financial results As always, we appreciate your continued support of XGEN. 2021 was another record-breaking year for XGEN and one we're extremely proud of. We had record revenues of $48.3 million for the year, with $12.7 million coming in the fourth quarter. Our strong performance throughout the year was fueled by growth in our flagship advised CTD tests, including advised lupus, which set a record of over 128,000 tests delivered for the year and a record of over 34,000 tests delivered in the fourth quarter. From inception through 2021, we have delivered over 615,000 tests. We also achieved a record of 2,126 total ordering healthcare providers in the fourth quarter and a record of 739 adopters for our flagship Advise CTD and Advise Lupus test. We again saw a very high retention rate of 99% among adopting healthcare providers from the prior quarter. We believe this high retention rate and the continued increase in the number of ordering healthcare providers speaks volumes to the value our customers recognize in using Advise testing. I'm very proud of our team as these records continue to show our sustained success in delivering autoimmune testing solutions that help accelerate the historically slow and frustrating process of clinically diagnosing autoimmune disorders. I would like to point out that these record milestones were achieved in a year that saw various waves of COVID-19 outbreak that impacted patient flow, which resulted in diminished testing volume. The Omicron variant impact persisted through mid-Q1 2022, where we saw the worst January in the past three years in regards to volume. Since Omicron subsided in February in the United States, the sequential six-week total volume demand was an all-time record for advised CTD and advised lupus test. We continue to make progress on the reimbursement front and are happy to announce the signing of a covered-in-network agreement with with the national plan, WellCare Santine. This agreement adds over 22 million in-network lives. Adding payers continues to be a high priority for ExGen and brings our total in-network lives to over 91 million. Signing these contracts is immensely helpful to both patients and physicians. We look forward to continuing this momentum in 2022 as our payer dossier continues to strengthen and payers are currently not inundated with reviewing COVID tests. Turning now to our R&D efforts. A key strategic focus of ours is to drive multiple sources of innovation and strengthen our IP portfolio to solidify XGen as a premier autoimmune testing company. In doing so, we added a second platform to our testing portfolio with the addition of AdviseRadar. Advise Radar, which stands for Rheumatoid Arthritis Drug Response, will bring oncology-style precision medicine to rheumatology. We exclusively license worldwide IP rights from Queen Mary University of London for technologies that will utilize RNA gene expression testing through synovial tissue biopsies to predict patient response prior to the selection of commonly prescribed biological therapies. We expect this platform will significantly benefit both patients and payers. Approximately 2 million people in the United States currently suffer from RA and are prescribed a multitude of different high-cost therapeutics. Unfortunately, only about 20% of those patients reach a low disease activity state, which implies a waste of approximately $18 billion in therapeutic spending in the United States alone. We believe with our Advise Radar platform, rheumatologists will have the precision testing that will add clarity to their clinical evaluation of therapies. We are developing Advise Radar to reduce the trial and error of empirical therapeutic selection and the resulting odyssey that patients experience. We recently formed a new scientific advisory board comprised of top thought leaders in the RA field. We are targeting a clinical experience program for KOLs in late Q4. We believe this new platform is a perfect fit for XGen because it allows us to leverage our existing rheumatology infrastructure to address one of the largest therapeutic markets and unmet needs. Continuing with our pipeline, we are addressing another large market with unmet needs with our Advised Fibro Insight Test. We are happy to announce the fibro patient's enrollment in our better study is now complete. The study covers 10 sites and will take approximately a year to complete. Further, the AdviseMTX trial with CVS Aetna has officially launched. We look forward to providing you with additional updates on both topics throughout the year. Before I hand the call over to Kamal, I think it's important to note that we are delivering on our plan to own the Rheumatology Hilltop by executing across all verticals. Our growth strategy is to continue to execute commercially, expand our coverage of payers, and develop a robust pipeline. The mission of Exogen is extremely important, and our opportunities have never been greater.