Insight Molecular Diagnostics Inc. (IMDX) Earnings Call Transcript & Summary

Hello. And welcome to the Annual Meeting of Stockholders of OncoCyte. Please note that today's meeting is being recorded. [Operator Instructions] It is now my pleasure to turn today's meeting over to Cavan Redmond, Chairman of the Board of Directors. Mr. Redmond, the floor is yours.

Thank you very much. Hello, everybody. And welcome to the 2020 Annual Meeting of Shareholders of OncoCyte Corporation. Due to the ongoing COVID-19 concerns, this year's meeting is being held as a hybrid meeting, meaning that in addition to holding the meeting at the company's offices for any shareholders wishing to attend the meeting in person, we've also made arrangements to hold the meeting online for those shareholders and participants who prefer to attend remotely. We really do appreciate your flexibility and understanding given the highly unusual circumstances we all face in 2020, and I look forward to welcoming you to next year's meeting in person. The OncoCyte team continues to stay focused on our mission because of the dedication of every member of the company, and I'd like to thank them for their continued dedication. Joining me specifically for today's meeting are: Ronnie Andrews, CEO and Director; Al Parker, Chief Operating Officer and Corporate Secretary; Mitch Levine, Chief Financial Officer; Andrew Arno, Director; Linda Griffith, Director; Alfred Kingsley, Director; Adi Mohanty, Director; Andrew Last, Director; [ Richard Scirocco ], Legal Counsel for the company; Bob Yedid, Managing Director of LifeSci Advisors; and [ Chris Hall ], Senior Relationship Manager from American Stock Transfer & Trust Company, the company's transfer agent. Scott Miller, Darwin Pangilinan and Brandon Yip will represent our independent officers, OUM and Co., are also present. Our OUM representatives will be available to answer questions from shareholders regarding our audited financial statements for the year ended December 31, 2019, and review our quarterly financial statements for the 3 months ended March 31, 2020. Following the formal business portion of the annual meeting, everyone attending today's meeting is invited to stay for a shareholders' update presented by our CEO, Ronnie Andrews. I will act as Chairman of the meeting today. Al Parker will act as Secretary of the meeting, and Mr. Hall will act as Inspector of Elections. He has previously taken the oath as the Inspector of Election. And I've been advised by Mr. Hall that a quorum is present, so the meeting is now called to order. The Secretary has delivered affidavit of mailing, establishing that the notice of this meeting was duly given. A copy of the notice of the meeting and the affidavit of mailing will be incorporated into the minutes. All holders of record of OncoCyte Corporation common stock at the close of business on May 12, 2020, are entitled to vote at the annual meeting. A certified list of shareholders has been available for examination at the company's offices for 10 days prior to this meeting and is available for inspection at this meeting. We now turn to the formal business of this meeting. The matters to be voted on at this meeting are listed in the company's proxy statement. We will address each of the proposals during the first part of the formal business and then open the floor to questions concerning any of those proposals. So please, reserve your questions until we have completed the reading of the proposals. The company has not received from any of its shareholders of any additional matters to be considered at today's meeting, and therefore, no other proposals, other than those listed in the company's proxy statement may be properly introduced by shareholders. [Operator Instructions] The next order of business is the description of the 3 proposals to be voted on today's meeting. The first proposal before the shareholders of the company is the election of directors to serve until the annual meeting in 2021 and until their successors are duly elected and qualified. The Board of Directors recommends the election of the following 6 persons as directors of the company: Ronald Andrews, Andrew Arno, Melinda Griffith, Alfred Kingsley; Andrew Last and Cavan Redmond. The Board of Directors recommends a vote for the approval of this proposal. The vote required to approve this proposal is the affirmative vote of the majority of shareholders represented and voting, provided that, that vote is also a majority of a quorum. The second proposal for the shareholders is the ratification of the selection of our independent registered public accountant. The Board proposes and recommends that shareholders ratify the selection of the firm OUM and Co. LLP to serve as our independent registered public accountant for the fiscal year December 31, 2020. The Board of Directors recommends a vote for the approval of this proposal. A vote required to approve this proposal is the affirmative vote of a majority of shareholders representing and voting providing that the vote is also a majority of the quorum. The third proposal before the shareholders is to approve an amendment -- the common stock amendment to our articles of incorporation that, if approved by our shareholders, will increase the number of authorized share of common stocks, no par value, to 150 million shares from the currently authorized number of 85 million shares. The Board of Directors recommends a vote for approval of common stock amendment proposal. The vote required to approve this is an affirmative vote of the majority of outstanding shares entitled to vote. We will not raise the fourth proposal, the adjournment proposal, as it appears not to be necessary given the proxies on hand. I will now open the floor to shareholders for questions pertaining to the proposals to be voted upon. [Operator Instructions] I will now wait for submission of questions. I now declare the polls open for voting. Shareholders who have voted by proxy do not need to vote again unless they wish to change their vote. If you have not already voted or you wish to change your vote, please raise your hand and we will provide you with a ballot, if attending in person. If attending online, please vote on the link provided. Online voting is simple: click the proxy -- click the Vote Proxy link on your screen, enter your control number. An electronic version of the proxy card will open, and you can make your selection to cast your votes there. [Voting]

Has everyone had an opportunity to vote or to cast their ballots? The polls are now closed. I have been previously advised by the Inspector of Election -- I've been previously advised that the Inspector of Election has completed the preliminary vote count. There were sufficient votes to: approve the election of all nominees for Director and to ratify the appointment of OUM and Co. to independent registered public accountant and to approve the common stock amendment proposal. The Inspector of Election will deliver a final report that will be included as part of the record of this meeting. The final voting results will be included in the company's current report to be filed with the Securities and Exchange Commission no later than June 23, 2020. This concludes the formal portion of today's meeting. And at this time, I declare the annual meeting of shareholders to be officially adjourned. On behalf of the OncoCyte Board of Directors, I want to thank all of you for attending today's meeting and for your continued support of the company. We look forward to seeing you at our annual meeting in 2021 in person. I would now like to invite our CEO, Ronnie Andrews, to provide an update regarding the company. Following Ronnie's presentation, we'll open the floor to questions and remarks from shareholders. [Operator Instructions] Before turning it over to Ronnie, I'd like to ask Bob from LifeSci Advisors to provide statements regarding forward-looking -- provide the statement regarding forward-looking statements contained in the presentation. And Bob will also facilitate any questions that may be submitted online. So Bob, I'll turn it over to you, and thank you, everybody.

Thanks, Cavan. I'd like to inform everyone attending the meeting, either in person or in line, that the corporate update about to be presented contains projections and forward-looking statements regarding future events. Any statements that are not historical facts, including, but not limited to, statements that contain words such as will, believes, plans, anticipates, expects, estimates and similar expressions are forward-looking statements. We encourage you to review the company's SEC filings, including without limitation, the company's Form 10-K and 10-Qs, which identify the specific risk factors that may cause actual results or events to differ materially from those described in these forward-looking statements. These factors may include, without limitation: risks inherent in the development or the commercialization of DetermaRx, DetermaDx, DetermaIO or other potential diagnostic tests; uncertainty in the results of clinical trials or regulatory approvals; the potential impact of COVID-19 on the company's financial and operational results, the capacity of OncoCyte's third-party supply blood sample analytic system to provide consistent and precise analytic results on a commercial scale; the need to obtain third-party reimbursement for patient use of any diagnostic test the company commercializes; our need and ability to obtain future capital and maintenance of IP rights. Therefore, actual results and outcomes may differ materially from what is expressed or implied by these forward-looking statements. The company expressly disclaims any intent or obligation to update these forward-looking statements except as otherwise may be required under applicable law. With those prepared remarks, it's my pleasure to turn the call over to Ronnie Andrews, OncoCyte's President and Chief Executive Officer. Ronnie?

Thank you, Bob, and welcome, everyone, to our Annual Shareholders' Meeting. It's a pleasure to be with you today and obviously, the current situation in our world requires that we do it in a very unique way. So hopefully, everyone can hear me okay and has access to the presentation that we posted on our website. It's a really amazing day to think that 1 year ago, when I stepped into this role that we were a very, very different company. And I -- when I decided to do this and step into the CEO role, I was very excited about the opportunity with the technology we had and certainly with the people that were here. I think the one thing that I underestimated when I stepped in was actually the commitment and the energy level of our employees at the time and certainly the team we've added around them. We have accomplished a lot in 12 months. And so this is one of the shareholder meetings where I'm very excited to walk you through what we've accomplished and how your company has progressed over the last 12 months and to share with you some of the critical things that we have ahead of us. But hopefully, you'll find them equally as exciting as we do. On the screen right now is our mission statement last year at the shareholders' meeting. We -- I presented an opportunity that we felt like we had going forward, where we're going to go. The mission statement has evolved over the time. But it's really important that our shareholders understand, there are a lot of companies that are in the molecular diagnostics arena oncology. Most of those companies are competing against a single endpoint, and that is what targeted therapy do I give a patient. What we understood coming into this, and we believe with the technology that OncoCyte had as a foundational technology is that we could answer a number of unmet questions today that were not being met by that single endpoint. And so today, I think you're going to see the fulfillment, at least of moving towards this mission, and just know that our single focus every day is how do we improve patient care and how do we improve the life of someone with cancer. So the highlights of the company. We're a proprietary molecular diagnostics company. We have our initial focus, as you'll see, is in lung cancer, but the beauty of our technology base is it can be pervasive across all solid tumors. And we'll speak a little bit of that today, more to come as you see the future work that comes from the research that we've been doing and certainly some of the collaborations with our partners. We have 3 major products we'll talk about today. We have DetermaRx, which is the foundational platform technology that we built the company around that's focused on nodule management. We have our DetermaRx, which as you -- as you know, has recently launched and we announced on Monday that we are now billing Medicare. So we are now a revenue-generating company, thanks to this really quite amazing acquisition. And we'll talk about DetermaIO. In January, we announced the acquisition of a company called Insight Genetics, a company that me and my team have been following for a number of years, and working with for a number of years. And I think you'll see that we've made incredible progress rapidly around their immuno-oncology panel, and we'll speak specifically to why it's unique in our industry, and that will be an important part of today's discussion. And hopefully, I can give you a very high level of understanding of why we're so excited about DetermaIO. One of the things I'm most blessed to say is we have an incredible employee team, and we are a team. There aren't many of us. One of the reasons we've been able to transverse the milestones throughout the COVID pandemic is because we are a small team. Everyone has to carry their weight. And we have an incredible group of experts, both on the science and business side with years of experience, that are able to take on sort of their function in the company and their role in the team, and they execute that with perfection. And the team comes around each one of those and helps them when they need that help, but we hold each other accountable to the milestones that we've given each other. And I've got a slide in a few seconds, it's a little overwhelming I want to put it together. It was like, wow, we did all that in a year, but it was really amazing. I'm really fortunate to have the leadership team, like I do with the experience they have. Al Parker is our COO. Al is an experienced pharma executive, and Al has incredible experience both on the legal and contracting side, but also on the business development side for us. Mitch Levine, who many of you have met, because he is the sort of our face to our investor group. Mitch has a great experience for years on the capital markets side. And then now, in his CFO role, he is really unique in what he does. He's been a great partner for me. My previous CEO roles, I did not have a CFO that had the capability to go and be on the front end and understand how we can bring money in that market with no ties to it during the progression of the company. So it allows us to be good stewards of the money that we do bring in and certainly allow us to raise money when we need it. Padma Sundar, who is actually with us here in the room today as well. Padma is a very powerful asset that we added to the company right about a year ago. Padma came from Roche and Guardant. Her experience at Guardant in the liquid biopsy world, putting together the marketing and market access for the 360 product they have has been really been invaluable to us in terms of helping us not make mistakes as we move towards getting reimbursement for our products. And so much confidence and so glad she's here. Lyndal Hesterberg. Lyndal is a veteran. He and I look at each other. We're small in town. We're the oldest members of the executive team, and we take a lot of pride in that because we are the oldest members. We've made all the mistakes we needed to make in our younger years and it helps us as we work through R&D projects and move forward. And then the final addition we announced not long ago, is Dr. Doug Ross. Doug is an MD PhD. He is a molecular pathologist trained at The Hutch. Spent time in Stanford, was early in the days of Pat Brown and Dave Botstein. If you recognize those names, they were the patent holders for the early expression arrays, and that went to Agilent in the early days of gene expression. And Doug has been with me for many, many years to several opportunities to bring to market microdiagnostics, both as FDA clear products and also as LDT. I would like to say that this leadership team combined has put together and brought to market over 50 assays through LDTs, the lab-developed test process that is available to us as a CLIA lab. And so we're very fortunate that we have that level of experience. It does create a lot of fun, a lot of debate at times behind the doors, about how we do things. But certainly that experience coalesces into success as we stayed on task with the key milestones for the company. On this slide, many of you have seen this because as I've been out talking about the strategy, it's been there -- it's been sort of the anchor for my discussions. And that is, in our world of oncology, there's a continuum of care that a patient goes through. I always joke that most people don't wake up in the morning sick and go see an oncologist, right? I have some paranoid family members back in Georgia that do that. But for the most part, you wake up, you're sick, you go to an internist. They don't like what they see, you go and get an image. There's something there. There's a biopsy. That biopsy goes to pathology. Pathology says it's cancer. Now there's a whole workup that has to go on. And then that patient finally meets for that moment of intimacy with their oncologists. That time frame is about 7 to 10 days typically. The challenge with that time frame is that it is very difficult to turn around these complicated molecular assays within that time frame. So many times, when a physician sits down with that patient, the oncologist for the first time, and I like to call it the moment of intimacy. You've ever been in those moments? I've been in those a few times with some family members, they're very, very challenging moments. And physicians having everything they need in a way that they can allow an education moment but also a comforting moment to that patient is really important. And so as you hear us go forward, you'll hear us talk a lot about the patient experience because our job is to deliver all this information at the point of that moment of intimacy. So at the moment that physician meets that patient for the first time, we won't then have everything they need to make a decision and make the right decision the first time. And so if you look at this cancer care continuum, you'll see that we have -- we are planning to stay mostly to the right side of this and answer the key questions that are there. However, the beauty of OncoCyte and our platform technology is we have a shot on the left side of this actually in the early phases of the diagnosis with a product called DetermaDx. And DetermaDx, many of you know this, is probably the original reason you invested in the company. It is a product that allows to tell someone that has a suspicious nodule whether they need a very serious procedure, which would be either a fine needle aspiration through the chest wall or a bronchoscope to go collect sample so that a diagnosis can be rendered. The second, if it is -- if they do need a biopsy and they get a biopsy in the early stage, the question is, all right, do I need adjuvant chemotherapy? Early-stage lung cancers today are basically cured by hot lights and cold steel surgery. It's cut out, and typically, those patients do not receive anything but surveillance post that. And the challenge with that, as we're going to talk about today, is many of those patients actually have metastatic disease that's undetected. They show up in a year or 2 with metastatic disease and the outcome is grave in lung cancer. Yes, there's the targeted therapy question. What targeted therapy do I give? I get asked this question a lot on the road, and I want to just pause here for a second and explain our position on this. Foundation Medicine, Guardant, Caris, Illumina, Thermo, PGDx, there are a number of companies that compete for this $2 billion market opportunity to deliver and answer what targeted therapy might I give the patient. We will play there. But for us, it's easy to play there because other people have commoditized this. There are kits available on the market. It will be easy for us on the course of the second half of this year to bring one of those kits up or to partner with the Thermo or the Illumina to bring up their emerging products, but the idea is we will have that answer for physicians when we're ready to complete the process. The real question, though, that's being asked in lung cancer today is, do I give immune therapy? And it has become a very critical question because the current biomarker that doctors used to say, "Is the patient eligible" is indiscriminate for nonresponders. So basically it tells you, you have a receptor on that cell that would respond normally to the drug. What we know is that's not all the physician needs to know to figure out whether that patient is going to respond. And what I'm going to talk to you about today briefly is about our new DetermaIO product, paper released last fall at SITC and then another paper recently at ASCO, one in lung and one in triple-negative breast. And we're going to hopefully let me leave today with enough hope, we believe, that we have something very unique. And our pharma engagements today and the energy around it from pharma is actually putting an exclamation point on our original belief that we have something very special. Then there's a question, is the therapy -- all right, I gave the patient a drug, is it working? These are 200 -- $400,000 and $200,000 drugs, is the patient responding to the drug, a very important decision for single-payer systems around the world. In the U.S., we have to go prove really powerfully that our monitoring test will tell a doc that patient is stop -- is not going to respond or stopping the response. The drug is becoming resistant. But in countries like Germany and Spain, in France and et cetera, in the Nordics, because of single-payer systems, they don't want to be paying $150,000 for a patient who's not responding with the drug. So unlike the U.S. model, where they wait until the end of the drug and then look at the image, and other payer models, they actually want to see early on is that patient responding. And the reason I spend some time on that is, we have the potential through some of our own products and some partner products to put together a really amazing offering in the monitoring world, and we will be pursuing that. But what I want you to understand is the U.S. opportunity is going to be a little bit more challenging from a data perspective than what we would see in ex U.S. So you probably will see us work in Europe and some of these other countries where the single payers are there already or see our single-payer systems there, and that will be how we go prove our theory out so we can get paid for it while we work on the U.S. opportunity. And then if you can tell if the drug's working, you more than likely, with a very similar technology, could create a surrogate technology that can identify from blood. Every year -- can you imagine twice a year, if you're a cancer survivor, you go to your physician, and they take a blood test and they tell you within an hour or 2, do you have a recurring tumor? And ultimately, we will get there. Our technology certainly allows us to go there. And so that's the order in which we're going to work down this thing. So right now, we are incredibly, we think, comprehensive in the early questions of lung cancer. Is my nodule need a biopsy? Yes. Is it early stage? Yes, DetermaRx. Is it Stage IIb or beyond? Yes. Then we need to look at the targeted potential and the IO potential, and that all needs to be done on a small amount of sample and it needs to be done within 7 to 10 days. And so I'm going to walk us through sort of an update on each one of these products. But before I do, I wanted to give our shareholders a progress update of what your company has been doing for the last year. And when I put this together, I have to be honest, I would try to take some things off because it was a busy slide and now I realize that's because we've done a lot. So this slide is indicative of an incredibly committed team that works on their expertise and executes extremely well and then coordinates and communicates back to each other when we need to. And so when I look at all we've been able to accomplish, especially given the pandemic, we've been pushing through, I'm really, really proud of our team. And it's something that I think our shareholders should be proud of as well. And I think the future of where the company is going is powerful because we can do more than one thing at a time. And there are a lot of companies that can only do one thing at a time. We understand that. It's -- and we believe in focus in terms of the marketing components. But in terms of all the components we need to do to build a product and get it to market, we are in a really, really powerful position as a team to execute seamlessly across the various pockets of activity. So what we are really building a team is a one lab resource for oncologists. They do not have to send the sample to 3 different labs, with 2 of the labs getting back in a day or 2 or 5 and then the one lab getting the molecular profile, getting back in 14 to 21 days. The idea here is they send us a sample, we can initiate all of the different questions that have to be answered upfront. We have our workflows aligned to deliver those data and then to create a synoptic report that can be delivered electronically to our clients. And so this is a very important point because there are a lot of single product companies in the proprietary content space that we compete in. Most of those companies have one product. And so their sales force doesn't get the efficiencies that our sales force can get. Our sales force, when they go and make the call on the thoracic surgeon and oncologist, they have a myriad of things to sell and they sell those as a package because it's that turnaround time of comprehensive information that really makes the patient moment within much more rich. So let me quickly give you an update on our products, and then we'll open the floor up for questions. So as you guys probably know, DetermaDx is a really powerful opportunity to save the health care system a significant amount of money, but more importantly, to take a patient who was already typically have a comorbidity and help them eliminate the need to go get a very, very challenging procedure. Lung biopsies are risky. These biopsies typically either take a fine needle and you go through the chest wall or you do a bronchoscope and you go down the trachea with the needle, they'll go in and get the biopsy. The biopsies themselves are $15,000 on average. And about 25% of the time, a patient that is getting the biopsy actually has an adverse event, either a pneumothorax or some infection. And those, as you might imagine, are costly because now that patient ends up in ICU and so for that 25% of the population, there's about a $50,000 add-on cost to manage the patient post the complication. So when you do the math, you can only imagine that the savings of telling about 80% of the population today, they get a biopsy, that they don't need a biopsy across all the health care systems is hundreds of millions of dollars a year. And so while our focal marketing strategy is not to focus necessarily on reduction of costs, it's important to know that payers are very interested in this product because they know and we know that there are a lot of procedures that get done that don't need to get done. I get asked a lot, "Well Ronnie, but you're taking money out of the pulmonologist pocket last fall." When Padma and I, when I first got here, I wanted to learn the pulmonology market. I didn't know it as well as I knew my world like oncology. And so we spent some time spending -- talking to a lot of pulmonologists. I kept hearing the same thing. Well we do not want to do that procedure if we don't have to. It's not that we don't make that much money, I'm not depending on the payers, $250 to $400 for the physician part, but the liability of doing something that patients and the potential litigation that could come from that liability is not something that you want to burden themselves with now. So there's a real interest in all stakeholders in this community to move it forward. And so we have a very powerful opportunity to change the paradigm of this early diagnostic modality in that instead of now seeing something on an image that you don't like and immediately calling and getting a biopsy, now when they see the image, they can draw blood. They can send it to our lab. We will process the information. We will get that back. We take our biomarkers. Let me back up because I get asked a lot of question on liquid biopsy and what happened last summer with the extraction. So I want to address that and because we've made so much progress since then. What we have to do is take the blood and remove the RNA from the blood. Once we get it out of the blood, we have to clean it up and prepare it for our analytical system to do the evaluation and interrogation of that RNA. And so that -- it's a 3-step process. It's extracting all the RNA then running the RNA across our biomarkers and then using that data, using our classifier to really sort these patients into 1 or 2 buckets. Either they need more surveillance or we need to get a biopsy. It is a very, very important assay that the market needs. We keep hearing great feedback on the importance of having this endpoint. You can see on this slide, it's not a small market either. So if you take the 500,000 patients that are target for our high-risk nodules, the market is at $1.75 million (sic) [ $1.75 billion ]. In our tests, we're actually going to be able to take all comers. And so as you look at all-comers and what does that mean? That means people that might fall off their bike and they got bruised ribs and they get an image and uh-oh, they see something, they're in a car accident, they come in. And each year, there's about 500,000 high-risk smoker CT scans, there's about 1 million or more incidental scheme. So the market for us is quite large. And so obviously, the opportunity for this test is really important. So where are we, Ronnie? Where is the data? Well, I'm excited to tell you that we committed at the beginning of this year that we would deliver the clinical validation and be ready to project the results and to announce the results by the end of Q2. We are on track to do that. We are still waiting. The management team here is blind into the results today. In our world of clinical trials, we have an honest broker that takes these data. They clean the data up, and they're the ones that own the data and then they reveal the data to the management team. We'll review that data most likely late next week and over the weekend. We are on track to announce the results of those data on the 29th to 30th. So I'm confident we're going to deliver those results, and I'm confident in the timing. And so I appreciate the opportunity to do that in a few weeks. We had wanted to do it before the shareholders' meeting, but we would have had to accelerate the process, and it didn't make sense given the time and energy and effort we put in to getting this product back on track and getting it to where we are today. So let's go to Rx. Rx was a very interesting acquisition we made last fall when I first got here. It's a company that we have followed for a number of years. Two physicians, really amazing thoracic surgeons out of UCSF. They noticed a very similar problem that breast cancer surgeons had seen in breast cancer but had solved in the 2006, '08 and '10. They had seen early-stage tumors that they thought were cured, when they did surgery, come back. And when they came back, they were nasty tumors. And so there's a company called Genomic Health that had developed a test called Oncotype DX. That Oncotype DX test was -- told physicians, early-stage breast cancers, if they were high risk, those women should get chemotherapy with antiestrogen therapy because that extended the life for that patient and basically mitigated the chance for recurring tumors. That company, as you might know, has done quite well. Our docs know that company well because they're in the Bay Area. And they set out a request by 2012 to say, and we were engaged with the company back then in my previous life. And their irony, if we can find that signature in breast cancer, we know a signature exists in lung cancer. And so they began their quest and their quest started in China. They used 1,000 patient study in China to both do the first training set and then the first validation set. They then came to California, to Kaiser and they did a 400-plus patient study at Kaiser. All those papers have been published in Lancet and some other really amazing magazines or journals. And then they set out to continue to prove their concept. They actually then turned around and did the responsible thing, which is something that we're proud they did. They actually went out and did a prospective study because that's how you really know that this is going to work. And in that prospective study, the results were so compelling that they were able to accelerate their product through the CMS process. And so here are the data, 40,000-plus lung cancer patients a year are early stage. We hope that will turn out to be more. The reason lung cancer is still the sort of the #1 killer of patients who get cancers because we don't have enough early-stage monitoring or surveillance or screening as we do in breast cancer. So that number in Europe is a bigger number. It's about 60,000, 65,000 in Europe. So they have more routine protocols for screening. But about 30% to 50%, depending on what region of the country you're in, these patients recur within a couple of years. And what does that mean? That means when we did surgery, we thought we cured a stage 1 tumor because pathology said it was stage 1. But what the pathologist didn't have access to was understanding were there molecular triggers that repeating in micrometastatic environment. What this test does is it looked at the molecular triggers that are turned on in a metastatic event. And it allows you to see that, that stage 1 patient is really not stage 1. That stage 1 patient is actually stage 3 or 4 patient, because they're already metastatic. And therefore, if you don't treat them aggressively, they will recur, and more than 50% of those that recur will die. And so our test is a really powerful test that in the prospective trial was shown to really create a very significant improvement and outcome. And here's how it worked. In their prospective trial, they took stage 1 to 2a patients. They had 2 arms. They had the low-risk arm, which didn't get treated, but get -- got watched and then they had the high-risk arm. One arm with the high-risk arm did not get treatment and was followed. The other arm got double platinum chemotherapy, about $12,000 standard chemotherapy. And you can see the data here, very compelling. Patients that did not get treated but were high-risk for our tests have about a 49% chance of a 5-year survival. I'm sorry -- yes, 49%, 5-year survival. If they got treated with chemotherapy, their survival went from 49% to 92%. So a profound improvement in survival. And that is what led CMS to get very excited about this. And so we were very fortunate last fall to make the acquisition right as they got their first round of positive coverage from MolDX. As you guys know, we made an announcement, I don't know, time has been flying fast, about 6 weeks ago that we received our final coverage decision effective June 13. And good news that is June 13 was on Saturday. So -- and then -- so the first day we could submit was the fourth day, which is Sunday. So as you guys know, we actually on the 15th, which was Monday, we announced that we have submitted our bill for payment. In the process of that, though, we have had private payers. We've submitted our bills to private payers. And thanks to the work of our team, we've been able to get paid by our private payers, and we've been paid at our list price. And so at least, we've been afforded the list price, if there's a payment -- a copayment from the patient, that the list price was accepted. And that doesn't mean we'll always get accepted at list price by all the payers. But that's a really good sign of the power of this test and the importance of this test to not only save lives but to reduce the cost. And you say, well, wait a minute, Ronnie, you're going to give them the chemo that they wouldn't have gotten. Yes, it's $12,000 worth of chemo. For the 50-plus percent of the people that don't get chemo and end up in late-stage disease, that's somewhere between $350,000 and $400,000 of cost to the insurance company to treat late-stage disease. So our job is to solve it early when it's effective and we can cure it early and then to eliminate that longer-term cost. And that's why our dossier -- the price dossier we submitted to CMS and certainly, the dossier that we've used with private payers has rendered some really nice outcomes. And finally, DetermaIO. DetermaIO is a very interesting product opportunity for us. This is a company that some of -- Doug, Dr. Ross and I have been following for a number of years. The company started in the world of lung with ALK. If you guys know the ALK, ALK test. They were one of the early discoverers of ALK, and they licensed that to QIAGEN. The company then pivoted to get into breast cancer. They licensed a 2,000-gene panel from University Vanderbilt. And then they synthesized that down to 101 gene, triple-negative breast cancer classified. So I'm going to spend a second on this because it's important. So I want you to just hang with me on this because I know it's hard when you're not in the room. But the reality is, triple-negative breast cancer today is the last bastion of discovery and solutions for women with breast cancer. If you're ER-positive, there's a drug for you. If you're PR-positive, there's a drug for you. If you're HER2-positive, there's a drug for you. If you're negative for all 3 of those, you're triple negative. That means there's no drug for you. And the challenge with triple-negative breast cancer is, it is a cancer that, unfortunately, overwhelms younger women typically. And so we do see it in late-stage or older women, but it is really -- and a lot more young women are starting to get triple negative. Why? I don't know the answer to that, but the reality is we are starting to see it. And so what this company set out to do is say, well, wait a minute. Under the triple-negative umbrella, which is a catch-all for all these tumors, there has to be therapy arms that make sense. And so their panel or subclassification panel led us in discovery that allowed us to see that there are indeed arms of treatment that will help those patients. There's a PARP arm, there is a taxane arm, there's a combination arm, antiestrogen arm, and there's an immune-modulated arm. And this is all discovered in partnership with our friends at MD Anderson. And what we saw about 3 years ago as a consultant of the company was interesting data that the immune-modulated arm that the people in that arm that would get -- they gave them immune therapy to see what happened, they had almost 100% response in that arm, which excited our investigator because he saw well, wait a minute, there's really something here. As you might imagine, MD Anderson is one of the sort of early frontier pioneers of immune therapy. So they had a lot of sample sets to look at and so [ Dr. Wayno ] there and our team at Insight, they decided to raise little money and move to see if they could really flesh out, if you will, the immuno-oncology opportunity. So they took the algorithm. They went to a sample set from the West clinic that was in lung. They ran the algorithm against that sample set and that sample set algorithm was incredibly profound. In fact, that sample set was run against the DetermaIO product, PD-L1, which is today's sort of entry-level product that everybody seems to get that puts everybody in; and tumor mutational burden, which is the number of mutations in a tumor. Biologically, that makes sense because it's got more tumor mutations and your immune system is active, it will find something with all the mutation. So it's kind of a -- just a common sense approach. Our test had a p-value of 0.001 versus PD-L1 at 0.2 and versus TMB at greater than 0.5. So you say, "Okay, Ronnie, what's all that fancy math?" 0.001 means that we almost had perfect precision at selecting nonresponders from sustained responders. And that becomes extremely important today because if you look at what's going on in our industry, today, there's a huge opportunity. I am still very fortunate and afforded the opportunity to be on one of the Boards at ASCO. And I hear this a lot from our colleagues at ASCO and that the community physicians are seeing the use of this drug, and they love the fact that PD-L1 puts everybody in. The problem is only about 45% of the people that get the drug actually respond to it. So now I'm giving a patient a $200,000 drug regimen that only 45% of the people respond to, yet 100% of the people are exposed to exacerbating their immune system, and we're seeing a surge of autoimmune diseases that are actually starting to form as a side effect of the drug use. And so we need a more discriminating marker. You can see the numbers here, there's about 800,000 eligible patients in 2020 for an immune therapy. If you read the analyst reports about the immune therapy world, I'll tell you that the therapeutic companies think they're somewhere between $100 billion and $150 billion market opportunity in the U.S. alone a year for the use of these drugs. These are game-changing drugs. They actually can cure patients, even late-stage patients because what they do is they teach your immune system to find that tumor and get rid of it. The challenge with the tests that are out there today is, PD-L1 is a receptor of the drug. So if it's on the surface of the cell, it tells you that patient probably will accept the drug. What they don't tell you is if the tumor has the ability to hide from that drug. And so if you think about tumor mutational burden, it's just how many neoantigens, how many tumor mutations are in there. And hopefully, if there's so many, then the drug will find it, and it will mean the immune system will find. Siddhartha Mukherjee wrote a book called The Emperor of All Maladies. If you haven't read it, it's a very amazing read about the history of cancer and where we are today. And in there, he has a great quote that, "Cancer cells are insidious copies of yourself that have one role and that's survival." Their job is to survive. What we know today that most companies haven't known and passed based on the work that we've done is that these tumors have hot genes, which are genes that are turning on the immune system. They have cold genes, which are genes that are telling the tissue -- I'm sorry, the field of injury that it's really -- it's a tissue repair opportunity, that's a different set of genes and a different set of cells. And then there's the -- you might imagine the immune suppression cells, which are also cold gene. So if you can imagine, brakes, you imagine an accelerator, you have genes that tell it to go and go bite the tumor and you have genes that tell it to stop, the tumor is not there. So what the other tests do is they look at either the immune activation genes, genes that are there that will tell the immune system to go after it. Or, they look at the receptor and say, "Hey, the receptor's there, the drug must work." Merck was brilliant because they picked that marker as their biomarker to get through the FDA, and that basically gets everyone into immune therapy. But what we know today that has really began to become aware -- an awareness in the industry is that it's the combination of knowledge of the suppressor genes, the activation genes and what we call the stromal environment. So the tumor microenvironment, what cells are present around that tumor are really important because what tumors do is, over time, they're fighting for survival. So when your immune system goes to start fighting, they immediately start trying to protect themselves from your immune system. So what they do is, the unique mechanisms that we don't really always know yet, they call on your body's immune suppression genes, they call on the fibroblasts, the cancer-associated fibroblasts and stromal cells to come around them and protect these cancer cells from your immune system being able to see it. And wherever you are in that continuum of knowledge of cold to hot determines how well your response is going to be. We have the only test in the industry today that's been validated. It's proprietary to us that identifies where a patient is on the continuum from cold gene to hot genes, cold tumor to hot tumor. So we can tell that the patient is going to be a full responder from our test. We can also tell if they're going to be a partial responder. If they're a partial responder, there are drugs now that are emerging in the market, IL-12 and things like that, that can help take a cold tumor or a tumor that's turning cold, and turn it back into a hot tumor. So the $150,000 of therapy that you are giving that patient that all of a sudden is not working, you can make it work again with the addition of this complementary therapeutic. This is a very powerful, emerging opportunity for the company. Since our data in -- came out at ASCO on the triple-negative IO, the inbound calls from pharma have been quite nice to see. And our team in Nashville, and I just got off a call this morning, is extremely active, fielding all the opportunities that we believe we have. And there's a lot more to come on this. But I wanted to use this opportunity, which because I haven't had this in front of all of our investor base before, to really talk about the importance of understanding the tumor microenvironment versus just understanding, is the receptor there or tumor or the immune activations, I mean, are genes there. Because if they're activated, theoretically, you should respond. But a lot of people who have activated genes don't respond, and this is why. It's the tissue field of injury and the microenvironment, that the ratio of cells that are telling the tumor -- or telling their body that it's time to repair the tissue versus it's still time to fight the disease. Makes sense? So our second half milestones. We had a great first half. We saw the checklist at the beginning. For Dx, we've got a -- really just finished the clinical validation and get the clinical utility studies going. So we're starting to get a lot of papers about this going forward. And to take the data we have to begin to engage CMS and to find out what the next steps are with the sort of the new team at CMS in terms of getting reimbursement. For Rx, we're in a great place. The test has launched. We had a really phenomenal response even through the pandemic to our test. Kudos to the marketing team, who had already been working on some training modalities that were virtual for us navigators, and we're able to pivot those. And with some of the spare time, the thoracic surgeons found themselves with, we end up with over 1,600 engagements that were virtual. We were able to onboard 26 new clients during the COVID crisis, which is really quite phenomenal itself. And so we want to announce seeing the revenue come once we're billing. We want to start seeing the cash come in the door. And we also want to continue to pursue the private payer market as well as now start to get ready to launch in Europe. Europe is a really good opportunity for us with this product. And because this test is built on a PCR platform that exists already in Europe, Thermo has over 3,000 of these in Europe, we'll be able to put these kits in play. And then finally, DetermaIO. We've got a lot of pharma studies ongoing. We've already closed a few. We haven't been able to announce those because the good thing about working with pharma is, they love to work with you, and it's good revenue. The bad thing is, they don't always let you use their name in the publications until -- I'm sorry, in press releases until you're ready to publish the data. But we'll continue to work on that. And then we want to start the studies. We have 71 patients now in lung. We have about 55 in breast cancer. We -- Padma and Dr. Ross spoke with CMS, and we're about 1 study short of having enough data to actually go back to CMS about potentially reimbursing our test, given the uncertainty of testing in the immuno-oncology market. So with that, I'm going to turn it over. I'd say thank you for your time. I know that was a long presentation, but we wanted to really give you guys a chance to understand the immuno-oncology opportunities since we really haven't had a chance to get in front of everybody yet. So I'll pause there, and we'll ask the operator to open it up for questions. Operator? Bob, are you on the line?

[Operator Instructions]

Ronnie, I am on the line, and we're going to monitor for the online questions as well.

Okay. Sorry, Rob -- Bob, I know it's hard when we're not together. So I couldn't see your face, so I wasn't sure if you were still there. Thank you.

Okay, thank you. Ronnie, I don't see any electronic questions yet.

Okay. Well, again, I appreciate everyone's attention today. We certainly thank you for the extended time. It was -- it's a pleasure to be in front of you and be able to share the success of your company and I'm really blessed to have such an amazing team, and we look forward to continue updates as we head into the second half of 2020. Thanks, everyone, and have a great day.

This concludes the meeting. You may now disconnect.