Lucid Diagnostics Inc. Q2 FY2024 earnings call

• Commercial execution: Revenue in Q2 2024 was $1 million, flat vs prior quarter, up ~500% annually; EsoGuard test volume was 3,147 tests, a 31% QoQ and 44% YoY increase; over 50 CYFT events held in the quarter, a 60% increase vs prior quarter; made progress in direct contracting targeting benefit brokers, third-party administrators, and self-insured entities; continued progress with revenue cycle management processes including prior authorization expansion, physician and professional society advocacy, and pricing holding near Medicare rate.
• Strategic accomplishments: Fully armed with complete body of outstanding clinical data; reported on NVET-BE clinical utility study with positive data and BE-1 clinical validation data showing EsoGuard sensitivity of 88% and negative predictive value of 99%; previously released data from Cleveland VA clinical validation study published in peer-reviewed journal; held productive meeting with CMS MolDX program focused on EsoGuard clinical data; American Foregut Society published formal statement advocating for commercial payer coverage of EsoGuard.
• Company background: Lucid is a commercial stage cancer prevention medical diagnostic company focused on early pre-cancer detection with EsoGuard esophageal DNA test and EsoCheck cell collection device; EsoGuard is first commercially available test for early detection of esophageal pre-cancer with unprecedented performance compared to other early detection tests.
• Commercial strategy: Multi-pronged commercial strategy with physical test centers in 23 cities; satellite Lucid test center model partnering with primary care physicians; physician practices building programs around EsoGuard; mobile test unit in Florida; large CYFT health fair events initially focused on firefighters but expanding; starting to get increased traction with larger health systems.

In the second quarter of 2024, Lucid Diagnostics had revenue of $1 million, which was flat compared to the prior quarter and up approximately 500% annually. EsoGuard test volume was 3,147 tests, representing a 31% increase on a quarterly basis and 44% annually, which is record EsoGuard quarterly test volume. CYFT events continued to thrive with over 50 high-volume health fair events held during the quarter, a 60% increase relative to the prior quarter. Revenue contribution details: The $1 million revenue for the quarter is the overall figure, with EsoGuard test volume and CYFT events contributing to the revenue mix.

No specific new forward-looking guidance statements beyond ongoing progress in coverage and revenue growth efforts. Continues to focus on driving broad coverage and reimbursement for EsoGuard to drive revenue growth, with plans to submit data in a dossier for Medicare coverage consideration once key clinical data is published.

Actual results may differ materially from forward-looking statements due to known and unknown risks and uncertainties. Factors that could cause actual results to differ are described in the disclaimer and in files to the Securities and Exchange Commission, including risks in Part I, Item 1A of Lucid’s most recent Annual Report on Form 10-K and subsequent updates in Quarterly Report on Form 10-Q and Form 8-K.

Q: Regarding the MolDX meeting, did you have the recent data, especially the clinical utility data to be presented in that pre-submission meeting? And when would be the next one where you would have another batch of data to show them? And is there a timeline in terms of final dossier submission in 2024 or do you think that may be pushed out to 2025?

A: The data reviewed during the pre-submission meeting included three clinical utility studies. Next step is to collect data, put it together in a dossier and submit for consideration. Gating item for submission is publication of ESOGUARD BE-1 data which is in preprint and under peer review. Expect to put final package together and submit once that data is published, with timeline expecting to do so this year but dependent on BE-1 data publication.

Q: Just looking at payment rate for in the quarter, obviously EsoGuard volume was up a fair amount sequentially. The payment rate was down. Maybe what was the contracted payment rate for the large CYFT event with the Fort Worth Fire Department? And was that recognized in this quarter?

A: The contracted amount was paid in advance and deferred revenue, and will be recognized in the third quarter as the event occurred in the third quarter.

Q: Just in terms of, I guess, the direct contracting engagement, what's planned for the balance of this year?

A: Have three full-time employees working on direct contracting. Engaging with employers directly and brokers. Expect some traditional CYFT events to result in pre-negotiated contracted payments and traction with brokers pitching EsoGuard as a covered benefit within packages, with activity starting to generate contractually guaranteed revenue over coming quarters.

Q: Just following up on the medically – tests that are deemed not medically necessary. What's the trajectory of that?

A: Out-of-network process where claims are submitted and seeking to get paid is different from direct contracting. Until medical policy coverage is available, percentage of claims denied initially based on medically unnecessary may go down but not dramatically. Efforts like having claims submitted with full medical histories and leveraging physician advocacy letters and society advocacy letters to turn around appeals, and improving prior authorization processes will help drive change over time.