Insight Molecular Diagnostics Inc. (IMDX) Earnings

Management highlights

- Regulatory Progress for Graft Assured DX * After three years of kitted product development, the company is in the late stages of FDA review for Graft Assured DX, having received an FDA additional information letter in July 2026 as a routine step in the Class 2 review process * The company has tripled study sample collection since the initial March submission to address FDA questions, and will hold an SIR meeting (similar to a Q-Sub process) with the FDA to align on submission requirements before submitting the final data package * The company still targets FDA marketing authorization for Graft Assured DX in late 2026, with the caveat that FDA review timing is not fully within company control * For European IVDR approval and UK self-certification, the regulatory process is progressing better than expected, with submission targeted for the second half of 2026 - Market Landscape & Commercial Preparation * Medicare's expanded Moldex LCD guidelines increased covered surveillance testing from 8 to 14 tests in the first three years post-kidney transplant, which strengthens the economic case for in-house DDC-FTNA testing and improves the market outlook * The company estimates it is approximately two years ahead of competitors in kitted product development for this assay * Strong head-to-head clinical data demonstrates equivalence to leading central laboratory assays, driving interest from over half of the top 10 U.S. transplant centers, which are engaged via the FDA study or company registry * The company is fully staffed to support material revenue growth, with prior investments made ahead of commercial launch; future investments will be tied to expected revenue growth - Scientific & Market Expansion * New clinical data demonstrates that DDC-FTNA testing can support management of antibody-mediated rejection therapy, expanding use beyond just ruling out biopsy * The Graft Assure platform is organ-agnostic; the company is currently developing testing for heart transplants, with a KOL call scheduled for August 17 to discuss this indication * The base total addressable market (TAM) for kidney transplant testing is $2 billion, based on a conservative 2 tests per year per patient; expanded testing frequency, therapy monitoring use cases, and additional organ indications will grow the TAM beyond this base figure - Q2 2026 Financial Performance * Core operating spending decreased from the Q4 2025 peak tied to FDA submission activity; adjusted EBITDA loss narrowed sequentially to $7.8 million * Cash burn in Q2 2026 was $10 million, which management expects to be the peak cash burn for the foreseeable future

Guidance

- Cash burn for the second half of 2026 is now expected to be approximately $8 million per quarter, an upward revision from the prior expectation of roughly $6 million per quarter; the increase reflects higher timing-related costs to complete FDA regulatory review, registry activities, and commercial launch preparation - FDA marketing authorization for Graft Assured DX is still targeted for the second half of 2026, maintained from prior guidance, despite the additional step of the SIR meeting with the FDA - European IVDR approval and UK self-certification for Graft Assured DX are still targeted for the second half of 2026, and management views the European regulatory process as easier and lower burden than initially expected - The base TAM for kidney transplant testing remains at $2 billion, with management confirming that expanded testing frequency, new use cases, and additional organ indications will grow the TAM incrementally from this base

Segment performance

Insight Molecular Diagnostics is still in the product development stage, with very limited current revenue. The only reported segment revenue is research use only kit revenue of $21,000 in the second quarter. Core operating spending decreased from the Q4 2025 peak, with a GAAP operating expense reduction and sequential narrowing of adjusted EBITDA loss to $7.8 million. No other product segments have reported commercial revenue ahead of the planned launch of Graft Assured DX.

Risks & headwinds

- FDA marketing authorization timing is not fully within the company's control, and authorization could slip into 2027, requiring operational adjustments to extend cash runway - Broad adoption of DDC-FTNA testing in Europe depends on successful achievement of regulatory approval, expanded market access, and local reimbursement, which are uncertain and currently remain early-stage - Pricing power may decline over time as competitors enter the market, even though management expects significant pricing power in the early launch period - Adoption of in-house testing depends on sustained favorable reimbursement policy from Medicare and private payers, and changes to policy could negatively impact demand

Analyst Q&A

• Q: The call out an upcoming SIR meeting with FDA. Why was this meeting scheduled, what is its focus, and if authorization slips into H1 2027, what operational levers can the company pull to extend cash runway?

  A: The SIR meeting is to align fully with FDA on how to respond to the agency's outstanding questions before the company submits its additional data package. If authorization slips to 2027, the primary lever is accelerating registry enrollment, which will generate near-term revenue from the company's existing reimbursable lab-based test at $2,753 per result to offset cash burn.

• Q: What is the purpose of the $21,000 in research use only kit revenue recorded this quarter, and what is the current status of the company's partnership with Bio-Rad, including potential expansion?

  A: The research use only kits are for ex-US customers who cannot access U.S.-based testing, and are used for local clinical validation. The company and Bio-Rad have a strong existing partnership, and both sides are motivated to negotiate an expanded collaboration following FDA authorization, with the opportunity to place instruments at transplant and core labs that aligns with both parties' strategic goals.

• Q: What is the nature of the FDA's outstanding questions for Graft Assured DX, and what is the latest update on IVDR submission for Europe?

  A: The FDA's questions are all routine and unsurprising, and are fully addressable with existing in-house data. The IVDR process has gone better than expected, with clear guidance from the notified body, no requirement for large additional clinical studies, and submission is still targeted for H2 2026. UK self-certification is even simpler than IVDR, and is also on track for H2 2026.

• Q: How does the pricing and economic model differ for large reference labs versus smaller transplant centers, and does the higher covered testing frequency increase the $2 billion base TAM?

  A: Volume discounts will be offered to large volume customers, but the company expects significant pricing power early on, as there are few current substitutes. Reimbursement portability and growing testing frequency strengthen pricing incentives for in-house adoption. The $2 billion base TAM assumes only 2 tests per patient per year, so any increase in average testing frequency from the new Medicare guidelines directly grows the total addressable market incrementally.