Cardio Diagnostics Holdings, Inc. (CDIO) Earnings Call Transcript & Summary

Good afternoon, everyone, and thank you for joining us today. I am Dr. Meesha Dogan, CEO, Co-Founder and Director of Cardio Diagnostics. We truly appreciate your support of the company and the opportunity to share where we are, meaningful milestones we've accomplished and how we are leading the next frontier in precision cardiovascular medicine. We are at a pivotal moment in cardiovascular medicine. Despite decades of innovation, heart disease remains the leading cause of death worldwide. At the same time, advances in molecular biology and artificial intelligence are opening entirely new possibilities for how we assess, detect and manage disease. At Cardio Diagnostics, we've spent more than a decade building at the intersection of those 2 forces, precision molecular biology and AI. What started as a scientific vision has evolved into commercially available tests, a growing evidence base, reimbursement progress and expanding partnerships both domestically and internationally. Joining me today is Dr. Warren Hosseinion, Chairman of Cardio Diagnostics. We are excited to share how we are helping move cardiovascular care from reactive to more proactive and personalized and how we're positioning the company for long-term growth. We're energized by the opportunity ahead, and we appreciate you being part of the conversation. Before we begin, just a quick note. Today's presentation includes forward-looking statements that involve risks and uncertainties. We encourage you to review our SEC filings for more detail. With that, I will hand it off to Dr. Hosseinion for his remarks.

Thank you, Meesha. Good afternoon, everyone. Thank you for joining us today, and thank you for your continued interest in and support of Cardio Diagnostics. I am Dr. Warren Hosseinion, the Chairman of the Board, on behalf of the Board of Directors, I want to begin by expressing our appreciation to our shareholders, employees, partners and patients. Your confidence in our mission and long-term strategy is what enables us to continue advancing precision cardiovascular medicine powered by artificial intelligence. Cardiovascular disease remains the leading cause of death globally. Coronary artery disease often begins in the early 20s as tiny fatty streaks build up in the arteries. This silent process called atherosclerosis progresses slowly for decades before physical symptoms or heart problems appear. The unmet need for early accurate and personalized diagnostics is significant. I believe that Cardio Diagnostics is uniquely positioned at the intersection of epigenetics artificial intelligence and precision medicine. Our products are highly differentiated. As an example, our PrecisionCHD test shows higher sensitivity and specificity in detecting coronary heart disease compared to an exercise stress treadmill. Additionally, our test requires only a simple blood draw with no radiation or preparation required. This test produces actionable insights that can provide insights for personalized care with a focus on earlier detection and improved patient specific care. One of the questions we hear most frequently from investors is if the technology works and there is a clear clinical need, why does it take so long to generate meaningful revenue. This is a fair question. The short answer is that commercializing a medical diagnostic is fundamentally different from launching a conventional product. There are several important steps between developing a test and generating substantial recurring revenue. First, we must demonstrate that the test is clinically accurate, reliable and reproducible. Physicians, hospitals, laboratories and other health care providers are understandably demanding when it comes to diagnostic testing. A test that influences the patient's diagnosis or treatment has to meet a very high standard. Second, depending on the product and regulatory pathway, we have to navigate regulatory requirements. That process can take considerable time because we are not simply proving that our technology works in a lab. We are demonstrating that it performs consistently in real-world clinical settings and provide meaningful information to health care professionals. Third, there is the issue of reimbursement. In health care, having a product that a physician wants to use is not necessarily enough. We also need to establish an appropriate payment pathway. The company typically must first secure coverage from the Centers for Medicare and Medicaid Services or CMS and then from private payers. Private payers will want demonstration of cost effectiveness and economic value compared to the current standard of care. We may have to generate additional clinical and health economic evidence and demonstrate that using our tests ultimately saves money or improve patient outcomes or both. This process can take time. Fourth, once the test is commercially available, adoption does not happen overnight. We have to educate physicians, integrate the test into clinical workflows and demonstrate why our test provides value compared with existing approaches. Adoption accelerates when professional bodies and specialty medical societies recommend the tests and they are included in clinical guidelines. As you can see, there are many steps involved in this process, but each step builds on the previous one. The good news is that once those pieces are in place, the opportunity can become substantially larger and more predictable, a diagnostic test that becomes embedded in clinical practice and generates recurring utilization. As physicians become familiar with the test as more health care systems adopted, utilization can increase meaningfully. We want our investors to understand that the time required to commercialize the product is not a reflection of weakness in the underlying business. It is a reflection of the complexity and quality requirements of the health care market. We are taking the time necessary to establish a clinically validated, reimbursable and scalable diagnostics. Our objective is not simply to generate the first dollar of revenue. Our objective is to build a durable diagnostic franchise one with strong clinical evidence, physician adoption, reimbursement, repeat utilization and the potential to scale across the large patient population. This takes time. We believe that the work we are doing today is building the foundation for substantially greater commercial opportunity in the years ahead. For our investors, we asked you to look beyond the timing of the first revenues and focus on the milestones that demonstrate that we are moving through the commercialization process. Clinical validation, regulatory progress, reimbursement, initial customer adoption, utilization growth and ultimately, broad market penetration. Those are the indicators that will determine the long-term value of the company. So where are we now. Cardio Diagnostics obtains CPT codes for its test in early 2024. In late 2025, CMS set the final payment rates for our test, we are now working through the Medicare coverage process so our tests can be reimbursed. Achieving coverage will be another key milestone for the company. In summary, health care adoption is an inherently long process, often requiring a decade or more. As an example, Cologuard is an at-home epigenetics based stool test for colorectal cancer screening. The company went public in 2001, Cologuard was launched with nationwide marketing in mid-2014. In November 2025, Abbott Labs agreed to buy Exact Sciences including Cologuard for approximately $21 billion. I believe that Cardio Diagnostics differentiated technology platform provides a compelling foundation for long-term value creation. Innovation in health care is never easy, but the potential impact on patient outcomes could be profound. To our investors, we appreciate your patience and continued support as we continue building a company designed to transform cardiovascular diagnostics and deliver sustainable long-term value. With that, I will turn over the call back to Dr. Meesha Dogan, our CEO.

Thank you very much, Dr. Hosseinion for that impactful summary. I want to begin by introducing Cardio Diagnostics. Our mission as a company is rooted in innovation and key developments in precision medicine. We want to make cardiovascular disease prevention and early detection more accessible, more personalized and more precise. We envision a world where precision cardiovascular medicine powered by artificial intelligence and multimodal technologies, not just symptoms or presence of risk factors help guide risk assessment, early diagnosis and ongoing patient monitoring. And we believe we're building the tools to help move the industry in that direction where our solutions have the potential to become a routine part of patient care, similar to how lipid panels are used today. We currently offer what we believe are the first commercially available blood tests, leveraging epigenetics and AI for cardiovascular disease prevention and detection. Across Epi+Gen CHD and PrecisionCHD, we estimate a total addressable market exceeding $175 billion. These tests are commercially available, clinically validated and supported by a growing body of evidence. We've built a strong IP portfolio, made meaningful reimbursement progress and continue to expand both in the U.S. and internationally. Importantly, we see significant room to scale led by an experienced team with commercial, clinical, technical and scientific expertise. All the meaningful progress we have made on all fronts, technology, product, AI, medicine, commercial, reimbursement, evidence generation, IP and operations that we will cover throughout this presentation would not be possible without a strong and dedicated leadership team that brings together experience across all of these areas. The team does not only have a track record in these areas and consists of several serial entrepreneurs. But we've built Cardio Diagnostics from the ground up and are aligned around disciplined execution, shareholder value and long-term value creation. Cardiovascular disease remains the leading cause of death globally. And by 2035, which is less than 10 years away, nearly 1 in 2 of us are projected to have some form of cardiovascular disease. What's striking is that up to 80% of premature cardiovascular events may be preventable and yet the cost burden continues to rise. In the U.S. alone, total costs, which includes both direct and indirect costs is projected to approach $2 trillion by 2050. Compounding this challenge, there are only about 35,000 practicing cardiologists in the U.S. today, far short of the growing demand for cardiovascular care. That gap between preventability need and access is where we believe better clinical tools can make a meaningful difference. Heart disease impacts everyone, patients, physicians, health systems and financial stakeholders such as payers and employers. Nearly 1 in 3 deaths in the U.S. in 2023 was attributed to heart disease. Physicians are seeing heart disease patients every single day with about 4.7 million cardiovascular-related hospitalization reported annually. On the cost front, the theme is rising costs with both employers and payers facing the growing burden of costs associated with heart disease. This is not a niche issue. It's systemic and that creates opportunity for better risk stratification and earlier detection. Current standard clinical tools for cardiovascular disease risk assessment and diagnostics rely heavily on the presence of risk factors in [indiscernible] that have limited information on the personalized drivers of disease for each patient. Cardiovascular disease, including coronary heart disease is sometimes mistaken for a disease primarily driven by genetics. But that is not the case. Genetics explains less than 20% of cardiovascular vulnerability and our genetics does not change over time. But heart disease is not determined at birth. In fact, risk usually increases over time and is a function primarily of our lifestyle and environment. So what we eat, our stress levels, sleep, activity, et cetera. Over time, our lifestyle and environment drives molecular changes in our DNA, often silently. These molecular changes are akin to a light dimmer. They can increase or decrease dynamically with our ever-changing lifestyle and environment, and they influence our gene expression. This molecular change is called epigenetics and the specific one we measure is called DNA methylation. The dynamic nature of DNA methylation is powerful, because it provides an ongoing view of cardiovascular risk and disease unlike genetics alone, which is a single static snapshot. We pioneered a technology that combines both genetics and epigenetics to capture what we call an individual molecular fingerprint. Offering more personalized insights into cardiovascular risk and disease. The backbone of our test is our technology called the AI-driven multiomics engine. This engine has multiple elements that come together. First is patient data of the biomarkers we just covered, which are genetics and epigenetics. The second element, which is proprietary to Cardio Diagnostics is our AI algorithm that are used to not just identify predictive biomarkers but also used as part of our test to interpret the patient's unique biomarkers. The third element is our lab assay, specifically that we design and develop custom assays for our DNA methylation biomarkers, which is once again proprietary to Cardio Diagnostics. The ultimate result of our engine is our clinical tests that have a lab component using the assay and AI algorithms I just mentioned. This engine was only possible because of the expertise of our team and has been built and improved over 14-plus years to not only power our current product, but also as a platform foundation for future expansion and long-term value creation. In a moment, I'll walk through our IP portfolio in more detail. Beyond our current multiomic platform, which incorporates high-precision measurement, intervention sensitive changes and scalable implementation, we are expanding it to be multimodal and multiscale with enhanced precision monitoring and therapy response quantification. The platform we're building is a detection and monitoring platform that catches cardiovascular risk in disease earlier and with high precision, track how each patient's profile changes over time and can match patients to intervention. This expansion reflects our long-term vision to build and become the most advanced comprehensive precision cardiovascular medicine platform and to become the clear leader in the space, offering not just test but a continuously evolving picture of each patient's cardiovascular health. Our IP portfolio underpins this platform. We have patent families covering detecting predisposition to cardiovascular disease with patents already granted in 12 jurisdictions, including multiple granted patents in the U.S. and Australia, as well as pending applications covering predicting and monitoring cardiovascular disease, diabetes prediction monitoring, digital health care dashboard, the PrecisionCHD test itself, algorithms for determining mortality and in acute coronary syndrome. Beyond patents, our trade secrets and proprietary assays -- sorry, proprietary assets cover our AI platform, proprietary reagents, our DNA Bank and Databank, algorithms and copyrights. This robust and growing IP position is a meaningful foundation for long-term value creation. We currently offer 2 blood-based clinical tests. To our knowledge, both of these tests represent first-of-their-kind approaches in cardiovascular medicine. Epi+Gen CHD assesses 3-year risk of a coronary heart disease event including a heart attack and sudden death. PrecisionCHD is designed to help detect both obstructive and nonobstructive coronary heart disease and to provide patient-specific insights into their molecular drivers of disease. Both tests are radiation-free, highly accessible and do not require preparations such as fasting. Let's dive into each test a little further. First is Epi+Gen CHD. This risk assessment test is intended for adults 35 to 75 years old with no history of coronary heart disease. In peer-reviewed published studies, this has demonstrated higher sensitivity compared to commonly used risk calculators, specifically 2.4x more sensitive for women and 1.7x more sensitive for men and demonstrated favorable cost effectiveness to payers, including insurers or employers, we believe of up to $42,000 per quality adjusted life year. With our estimation of approximately 146 million eligible Americans, we see meaningful opportunity in prevention and early risk stratification. Now on to PrecisionCHD. In our view, PrecisionCHD represents a highly differentiated product in cardiovascular diagnostics. We believe that there isn't another blood test out there for cardiovascular disease with the capabilities of this test. In our last conference call in February, we highlighted some exciting preliminary data on PrecisionCHD related to detecting nonobstructive disease and mortality that we are continuing to build on. We look forward to sharing the data from those studies in upcoming conference calls. The PrecisionCHD test is intended for adults 35 to 80 years old as a diagnostic aid for the evaluation of the presence of coronary heart disease. In a peer-reviewed published study in the Journal of the American Heart Association, PrecisionCHD demonstrated high sensitivity and specificity. This test is about 1.3x more sensitive for women and 1.4x more sensitive for men compared to the average sensitivity of the stress test. And impressively, in a peer-reviewed economic study, we found that the use of this test as an initial assessment in 1 million lives for diagnosing coronary heart disease can result in a cost saving to payers, including insurers or employers we believe of approximately $113 million. We estimate that roughly 60 million Americans may be eligible for this test which highlights the scale of opportunity for this highly acceptable test that does not require any specialized infrastructure such as expensive imaging machines or facilities. A few things I would like to highlight further is that our test as I mentioned previously, are first of their kind for cardiovascular medicine. They are also not one and done. Because Epigenetics is dynamic, testing can be repeated over time. They're fast, convenient and avoid exposure to ionizing radiation. We believe that these tests fill gaps in the current cardiovascular care continuum and are scalable complements to existing cardiovascular testing pathways with the potential to save lives, improve outcomes and help reduce costs. Now let's turn to the evidence base supporting these tests. We continue to build a robust and growing evidence base for Epi+Gen CHD and PrecisionCHD. On the published side, we have completed rigorous clinical validation in partnership with leading health systems such as Intermountain Health generated economic evidence demonstrating cost effectiveness and cost savings and publish evidence demonstrating the tests utility to monitor treatment effectiveness work that has been peer reviewed in leading journals, such as the Journal of the American Heart Association. We also have several studies in progress. First, we are studying PrecisionCHD's ability to detect INOCA, or Ischemia with No Obstructive Coronary Arteries. Which is a condition that standard imaging often misses, particularly in women. We presented preliminary data on this at the American College of Cardiology Conference last year, and expect to complete the study within the next 3 to 6 months. Second, we're running a multimodal multiscale study combining imaging with PrecisionCHD for mortality prediction in acute coronary syndrome patients and preliminary data for this was presented at the American Heart Association Conference last year. We expect to complete this study in the next 3 to 6 months. Third, we're conducting a precision monitoring study using uncertainty quantification to demonstrate the robustness of the digital PCR technology we use in our tests in detecting methylation change over time, which is critical for understanding treatment effectiveness for patients. We expect to complete this study in 2027. Looking ahead, we have additional planned studies, including work on using PrecisionCHD to inform treatment and to monitor treatment effectiveness. Further clinical utility studies demonstrating how our tests can guide patient management and studies to further quantify the cost savings and return on investment associated with our test. This growing body of evidence is important as we pursue broader adoption, expand product use cases and pursue payer coverage. Now I'd like to pivot from the test themselves to how these tests are operationalized with scale. Our testing process is designed to be highly scalable. These tests are physician prescribed tests, and they can be prescribed via telemedicine or on-site with the telemedicine option being fully remote. Blood samples from patients can then be collected on-site or remotely at home, shipped to our lab, processed and results are returned to the ordering physician. This flexibility supports expansion across multiple care settings while increasing accessibility to our tests. Speaking about the lab that processes patient sample, we have begun in-house test processing through our new internal CLIA lab. Our CLIA survey found no deficiencies and we've since obtained state licenses in California, Maryland, Pennsylvania and Rhode Island. Our new CLIA lab supports increased testing capacity and automation and we expect approximately 30% initial cost of goods sold reduction with potential for further efficiencies as volume grows. Our turnaround time is approximately 7 to 10 business days from sample receipt enabling relatively rapid clinical insight, especially when compared to the current clinical wait times, which according to a survey by AMN Healthcare is about 33 days for a new cardiology appointment. Looking ahead, we plan to expand our research efforts for ongoing and future studies in precision monitoring of cardiovascular health and to leverage our labs infrastructure to expand our testing menu and diversify revenue. We view this vertical integration as a meaningful operational milestone, that not only helped lower cost and increased patient testing capacity, but also supports ongoing and future studies for evidence generation. We will discuss progress on reimbursement shortly. But if we use the final CMS gapfill rate of $854 per test and our estimate on the number of potentially eligible individual covered by Medicare or other insurance, we estimate a U.S. addressable market exceeding $175 billion. At scale, we are targeting a gross margin of approximately 40%, subject to reimbursement progress and continued operational efficiencies. In the U.S., our commercial strategy now focuses on 4 primary channels. The first is providers and health systems with a focus on targeting primary care physicians, preventive cardiologists and internist. As we work through broader reimbursement, the physicians we work with currently are those who primarily see self-paid patients. We are expanding reach to practices and communities via channel partners. Third is employers and union where the appeal of our evidence-based test includes the ability to offer them in various settings on-site, remotely and even via Heart Health Fair to increase engagement and utilization. And fourth, we're now pursuing potential partnerships with government department focused on improving the health of veterans, military members and American Indian and Alaska Native community. With our ongoing and growing commercial efforts across these 4 channels, we're seeing growth in our pipeline, customer base and interest in our tests. We continue to make progress on international expansion, starting with our partnership in India with Aimil Limited and Dr. Lal PathLabs. Aimil is introducing PrecisionCHD to their extensive health care network and Dr. Lal PathLabs with 290-plus clinical labs and 300-plus MD pathologists in their network will be offering PrecisionCHD. The inherent scalability of our tests and their ability to be run locally in local currency has been appealing to potential international partners, and we're in active discussions for additional international partnerships that could be realized in the near term. We are targeting potential partners in Asia, the Middle East and Africa. International expansion with the right partners provide access to large health care networks outside the U.S., a significant global market opportunity and a meaningful opportunity for the company to diversify revenue as we continue to build momentum in the U.S. market. In parallel to our commercial efforts gaining traction, both in the U.S. and internationally, we've continued to make meaningful progress on reimbursement. We secured CPT PLA codes for both tests back in January 2024. And in December 2025, we secured a favorable final CMS payment rate of $854 for each test. Since then, we have completed 2 more major milestones. In June 2026, we achieved in-network coverage with Atlas Healthcare Physicians beginning to cover our tests with prior authorization. And in July 2026, we established the capability to submit out-of-network claims. Two milestones remain in progress. We are pursuing Medicare coverage determination and necessary steps for our test to be reimbursed, and we are engaging commercial payers for potential pilot programs to demonstrate utility in their member population. Reimbursement remains a key focus area for the company and we're pleased with the recent milestones and ongoing progress, especially because the reimbursement journey in our health care system is long and complex. With that, thank you all for your time today and continued support. We are very excited for what is in store at Cardio Diagnostics for the remainder of the year and beyond. We are committed to building long-term value. Thank you again, and have a great rest of your day.