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

Good afternoon, and welcome to the Oncocyte KOL Event Series Part 1 on Transplant Rejection Testing. [Operator Instructions] As a reminder, this event is being recorded and a replay will be made available on the Oncocyte website following the conclusion of the event. I would now like to turn the call over to your host, Ronnie Andrews, President and Chief Executive Officer of Oncocyte. Please go ahead.

Thank you, Sara. Today, very excited to have our first KOL event to discuss our recent acquisition of Chronix and the Transplant Rejection market, that the IP that we acquired is going to avail us to. We are very fortunate today to have Dr. Michael Oellerich who will be joining us as our guest speaker today, along with Dr. Ekke Schutz, who is the former CEO of Chronix and is the scientific founder of lot of technology you'll hear about today. To kick it off, if we can go to the next slide, I'd like to just start by letting everyone know, we will be talking about forward-looking statements. I won't have to read these, but you guys see them frequently, but I did want to make a comment that you know that we will be doing that. The agenda today is, I'm just going to give a little framing for our investor base and for interested parties as to Oncocyte and who we are and why transplant has become important to us. And then I'm going to turn it over to Dr. Oellerich who will give you an overview of the transplant market. He is a chemical pathologist and a distinguished research professor at the Department of Clinical Pharmacology at the University Medical Center of George-August-University in Gottingen, Germany. He is a veteran of this industry. He has well over 400 publications, over 800 abstracts, he is extremely well-published. And his latest sort of focus for his last year is -- few years has been focused on transplant rejection and the important personalized immunosuppression therapy. And I think everyone knows a little bit about the transplant well, but I'm going to frame it, these 2 gentlemen, Dr. Oellerich and Dr. Schuetz will give you much more insight. But today, there is about 35,000 patients that receive a transplant in the United States per year, about 41,000 patients in Europe. There is a little over, close to 400,000 plus recipients living with a trans -- a new organ, a transplanted organ. But there is a huge waiting list as you might imagine. And so, this market is a very important market for the patients because these organs are -- will give them life, will give them hope for their future. Today, the market and through the years has evolved and that our knowledge of how to manage patient in immunosuppression to improve the outcome of the transplanted organ has improved greatly. But still, we lack specific biomarkers to achieve this personalized immunosuppression and reduced premature graft loss. And so today, the topic is going to be focused on testing that will allow us to identify very early in the cycle where you might start to see premature graft loss as well as Dr. Oellerich can identify ways, once we know that information, that help physicians better manage those patients. And so, without further ado, Dr. Oellerich, I'd like you to step up to the mic and take over. And again, thank you very much, Michael for joining us today.

Thank you, Ronnie Andrews for the kind introduction. I can only agree with what you said. And in my talk, I will give you now more details on donor derived cell-free DNA testing in organ transplantation. So I will address the following key issues: the need for biomarkers to monitor graft integrity and to personalize immunosuppression, the limitations of traditional approaches, the rationale for using dd-cfDNA as a biomarker, the clinical validity of this test and the benefits of dd-cfDNA testing and economic implications. So as Ronnie Andrews said before to set the stage, it is important to look at data from the US Transplant Registry. And as you see, about 30,000 recipients every year, the 300,000 living grafts recipients in the US, the huge waiting list. And due to the shortage of transplant kidneys, there are regretfully 5,000 to 10,000 premature deaths per year and the median waiting time is 4 years in Europe or even longer. And the incidence of acute rejection in the first year is on average about 10% to 20%. And so, there are several factors limiting long-term outcome: irreversible chronic allograft dysfunction, acute rejections, adverse effects of standard immunosuppression, nephrotoxicity, cardiovascular disease, opportunistic infection, malignancy, outcomes -- long-term outcomes remain sub-optimal, 10-year graft survival rates 50% to 60%. Therefore, biomarkers are needed, as Ronnie said earlier, to achieve personalized immunosuppression and reduce premature graft loss. And those are the limitations of traditional approaches of graft monitoring. Biopsies have a complication rate of 1%, inadequate specimens are further problem. Immunosuppressive drug monitoring indicates toxicity is a poor predictor of graft damage. Conventional [ biochemical ] mark is unreliable in kidney transplantation for instance. A significant degree of graft damage can already be present by the time a rise in creatinine is evident. Serum creatinine is not specific for allograft injury, it can increase due to exsiccation or the use of ACE inhibitors. Therefore, interventions may be too late to avoid graft injury or even loss. So there is a need for biomarkers providing clinically actionable information for the early detection or exclusion of acute or chronic rejection as clinical features are unreliable. Detection of asymptomatic graft injury, including subclinical rejection before irreversible damage occurs. Assessment of minimal necessary exposure to guide tapering and to prevent immune activation, detection of anti-immunosuppression achievement of personalized immunosuppression to reduce premature graft loss as I said earlier. And such tests must be practical, available at a reasonable turnaround time and cost. The rationale for using dd-cfDNA as a biomarker in organ transplantation is based on the fact that organ transplants and also genome transplants. And this opens up the possibility of CAL non-invasive monitoring for allograft injury. In case of graft cell death, nucleosomes are released into the bloodstream as cell-free DNA, and causes of graft injury include rejection, acute tubular necrosis, ischemia, trauma or infection. The test is not rejection-specific, mechanisms of cell-free DNA release include necrosis, leading to large fragments; apoptosis, leading into smaller fragments; and the half-life in circulation is short, less than 2 hours. Most importantly, dd-cfDNA release reflects graft injury itself, that is to say, the end organ effects of the alloimmune response. This is important to note. And this summarizes selected methods for dd-cfDNA determination. Our group developed droplet digital PCR using pre-selected steps, a very efficient and cost effective method. There are other methods, next generation shotgun, targeted sequencing in the qPCR. And here we see, the [ analytical ] validity of ddPCR and NGS methods to determine the dd-cfDNA fraction. For a limit of blank, limit of detection, lower limit of quantification and imprecision, the data are very similar. The dPCR, our method has a broader linear quantifiable range. This is in particular important in liver transplantation. And this slide shows the origin of blood and urinary dd-cfDNA after kidney transplantation. Donor-derived cell-free DNA is only a small fraction of total cell-free DNA in blood, and small cell-free DNA fragments from the blood and dd-cfDNA from the urinary tract appear also in urine that can also be measured, I'm sure of this later. The clinical validity of dd-cfDNA in transplantation has been documented in more than 50 studies and I will discuss some of these studies during my talk briefly. Early detection of rejection after heart transplantation at an actionable stage is very important. There is a lack of reliable non-invasive markers. Endomyocardial biopsy is the current standard, but it has various problems: sampling error, inter-observer variability of interpretation, low sensitivity to detect early rejection -- biopsy negative rejection up to 20% of patients, uncommon but potentially serious complications like myocardial perforation and dd-cfDNA complements histology findings and allows comprehensive monitory. And this shows you the first-year data from our prospective study in heart transplant patients. And you see on the right side, biopsy-proven acute rejection. Significantly higher results compared to negative biopsies in stable patients shown on the left side in green. And the increase was already seen up to 30 days prior to rejection. It's a very early test. This is the advantage and you can adapt therapy early. And then you see the negative predictive value, 97%. So the test is very useful to rule out rejections. This is similar to troponin. You are familiar with troponin and myocardia in fact. Also that test has a very high negative predictive value. This is extremely useful in clinical practice. And this shows you a clinical example from our study dd-cfDNA in a heart transplant recipient with clinically suspected rejection but a negative biopsy. What happens? In the first 30 days after transplantation, the patient developed arrhythmias. So the clinicians were very uncertain. You see in blue the ups and downs of the cyclosporine levels and then they decided for a biopsy. The biopsy was negative. They didn't trust the biopsy engaged steroids. If you look at dd-cfDNA at the bottom in red, it was always below at that time, the threshold, the red line. So the dd-cfDNA confirmed the negative biopsy and dd-cfDNA and many other such cases is useful to avoid unnecessary biopsies. And this -- the next case is dd-cfDNA's early determinations again shown in red at the bottom in heart transplant patients with late acute rejections. As creatinine increased, the transplant physicians decided to reduce cyclosporine, shown here in blue, below the therapeutic range. But this resulted in under immunosuppression. And if you look at the red line, it crossed the threshold. And on day 180, the value was already above and indicated immune activation. But the clinician ignored it, continued with their under immunosuppression, and of course, got a rejection grade 2. The rejection was treated. Then they added everolimus in yellow. Still under immunosuppression, the dd-cfDNA, as you see, kept rising already onto -- day [ 280 ], very high value. Physicians ignored, it continued and they got their second rejection. So all these rejections could have been avoided by better adaptation of the immunosuppressive treatment. And this shows you data from Baltimore, from a recent study, from [indiscernible]. And it shows dd-cfDNA in relation to acute rejection, antibody-mediated rejection grade 2. You'll see a substantial increase, 1.68 compared to the cut of a 0.25. With T-cell-mediated rejection increase was less expressed and with antibody-mediated rejection, we have an excellent diagnostic accuracy of 95%, the AUC-ROC. And this shows you data from our prospective multicenter trial in liver transplantation with ddPCR. And as you see, biopsy-proven acute rejection was associated with about 10-fold higher test results compared to stable phase patients and HCV patients that were rejection-free, showed also some increase, but below the cutoff. And the diagnostic accuracy, again very good, 97% better than that of the liver function tests. And overall, dd-cfDNA was superior in our study to liver function tests for [ BPAR ] detection. We now move on to kidney transplantation. And this slide shows dd-cfDNA in reference population. And you see here, data from various different studies that use different methods. But surprisingly, the median values were very close, mostly between 0.2% and 0.4%. So these tests measure the same thing. And this slide shows something about the diagnosis of antibody-mediated rejection in kidney transplant recipient. This is a very important field. Donor-specific HLA antibodies are a risk factor for ABMR and late graft loss. Under-immunosuppression favors DSA development and can be detected by dd-cfDNA. Antibody-mediated rejection is associated with 20% to 30% of allograft loss and there are various diagnostic options, histology, immunopathologic findings, and now also an mRNA tissue-based gene signature, the molecular microscope. And as a non-invasive test, dd-cfDNA is useful for the early ABMR detection, in particular in DSA positive patients, and early detection in particular of subclinical ABMR enabled adapted therapeutic interventions and may improve outcomes. Therefore, dd-cfDNA monitoring may decrease the risk for late allograft loss as it has the potential to identify unrecognized under-immunosuppression in kidney transplant patients at risk of the denovo DSA and chronic antibody-mediated rejection. In particular, recipients with high epitope mismatch burden, high immune competence or non-compliance. And this shows data from the US multicenter trial. And you see here that patients with chronic or acute active ABMR had on average 7-fold to 12-fold higher test results than patients with no rejection. Interestingly, mild TCMR was not well detected, and this has been confirmed in an independent study by [indiscernible]. And these false-negative TCMR results are presumably due to an insufficient detection of short fragments due to the use of relatively long amplicons in the employed tests. And in TCMR, there may be a more extensive dd-cfDNA fragment degradation, but this hypothesis has to be confirmed in further studies. Interestingly, [indiscernible] could show that the use of smaller size amplycons resulted in significantly higher test results shown here in red compared to the use of long amplycons. And they concluded and I fully agree, that smaller size amplycons are preferable to quantify dd-cfDNA. And this shows data from Sigdel from San Francisco. And interestingly Sigdel using NGS and small amplycons could detect as you see ABMR and TCMR Grade 2 equally well. So if you use the right amplycons the test works. And from the same study, we see here the diagnostic performance of dd-cfDNA and eGFR for detection of acute rejection, and we see that for diagnostic accuracy AUC-ROC sensitivity, specificity and predictive values. The results were much better for dd-cfDNA compared to eGFR. And now I come to absolute quantification by ddPCR, a method that has been developed by our Group, and absolute quantification has the advantage that it is not affected by changes in recipient cell-free DNA, for example, by infection. 90% of cell-free DNA in recipient plasma stems from white blood cells undergoing natural apoptosis. And this shows you the data from our prospective single center trial using ddPCR, our method, for quantification, absolute quantification. And we see that patients with biopsy proven acute rejection, TCMR as well as ABMR, had significantly higher values on average 82 compared to rejection-free patients with an average of 25. Also acute tubular necrosis showed an increase, and interestingly as to be expected, interstitial fibrosis and tubular atrophy did not show an increase above the cut-off. And we see that the diagnostic accuracy the AUC-ROC was with 83%, significantly better for absolute quantification compared to fractional determination with 73%. And this shows you urinary dd-cfDNA as a marker of kidney transplant injury. And again, the [ group ] from Sigdel showed that patients with acute rejection, TCMR and BK virus nephropathy had 10-fold higher test results compared to stable patients. And again, the advanced interstitial fibrosis did not show an increase similar to our study. And this takes us to serial determination of dd-cfDNA fraction in orange and absolute quantification in blue in an adolescent patient 3 to 6 years after kidney transplantation. The patient was transplanted because of secondary oxalate nephropathy and was DSA positive. And we see on the left-hand side, a combined biopsy proven ABMR/TCMR rejection. And this resulted in a very strong increase of fraction and absolute quantification. The patient was then switched to belatacept and sirolimus and we see a rapid decline of dd-cfDNA, the patient stabilized. But with the fractional determination, as you see in orange, there was much more variability due to changes in total cell-free DNA due to infection and other reasons. And as an example, it shows at a total cell-free DNA of 8,000, you see a massive drop, and at 3,000, an increase. But absolute quantification was not affected, it's much more reliable. Then the patient had 3 episodes of dd-cfDNA increase, and this was followed by a strong increase of serum creatinine and a loss of kidney function, unfortunately. So for monitoring this patient, dd-cfDNA has been very useful. And this shows you the variability of recipient in total cell-free DNA plasma levels in kidney transplant patients. The median recipient cell-free DNA in the first year is around 6,000. After 5 years, it goes down to 4,000. Total cell-free DNA increase is seen in cases of inflammatory illness, strong increases can be observed and a decrease due to leukopenia. And leukopenia and leukocytosis can cause false results, false positives and false negatives, for the dd-cfDNA fraction while absolute quantification is not affected, it is the better method, and we have just published a study on this. And this shows you increased dd-cfDNA fraction due to a decrease of total cell-free DNA during long-term surveillance. On the right-hand side, you see this increase and the increase has a disadvantage during long-term surveillance that the cut-off is not changed and this can cause false positive results, and again, absolute quantification is not affected, because it's not dependent on total cell-free DNA. And the decline of total cell-free DNA with time after kidney transplantation is presumably due to a decrease in apoptosis rate for white blood cells as immunosuppressant drug doses are tapered off. Calcineurin inhibitors like tacrolimus and cyclosporine seem to have a negative effect on cell stability. And this is a very important slide. It shows you the advantages of targeted ddPCR-based testing of dd-cfDNA with our TheraSure test. As I said earlier, absolute quantification with this test in addition to a fractional determination has the advantage that it is not affected by changes in recipient cell-free DNA and the threshold is not affected during long-term treatment. In addition, the test is very reliable for detection of TCMR and ABMR, and in the modified version, it can also be used for monitoring of donor lymphocyte macrochimerism in liver transplantations with graft-versus-host disease. And the short turnaround time of 1 to 2 days is another very important advantage if a decision is going to be made on this test. And another advantage is the reasonable cost compared to next-generation sequencing. And this makes the test useful for serial determination and also for surveillance, where you have to do serial determinations. And therefore, the development of clinical practice recommendations regarding monitoring frequency is important. We propose at the moment the following sample being scheduled, 1 and 2 weeks after transplantation monthly for 6 month, every 3 month thereafter. In case of suspected graft damage, this would be an indication test and 7 to 10 days after immunosuppressive dosage changes. No testing within 12 hours after tissue biopsy, because then you get wrong results due to the biopsy. And this slide summarizes the management costs of kidney transplant patients in the first year. A functioning kidney transplant costs about $19,000; failure with return to dialysis, up to $75,000; and failure with re-transplant, up to $100,000; and kidney biopsy comprehensive costs, up to $3,900. Compared to these costs, the costs for testing for surveillance, for example, are very low. And those are the stakeholders involved in delivering and receiving care in transplantation. There are, of course, the transplant patients whose care could be altered by the less invasive graft injury detection; clinicians who manage solid organ transplantation -- transplant patients; laboratory medicine specialists who analyze and interpret test results; hospital management, insurance companies, public payers, policy makers, who are involved in providing value-based healthcare, value in this context is defined as outcomes relative to costs. And this summarizes the benefits of dd-cfDNA testing in relation to outcome in transplantation. For patients, there are the following benefits. Detection or exclusion of graft injury or rejection, as I've shown, earlier transplant injury intervention, biopsy alternative, early diagnosis of subclinical antibody-mediated rejection, detection of under-immunosuppression, evaluation of infections complications of kidney allograft, and of course, personalized immunosuppression. And the benefits for transplant physicians are better personalized immunosuppression guidance. for example, during tapering, enhanced biopsy interpretation as I have shown, less trial and error changing of immunosuppression, less time dealing with complications, indication of response to rejection treatment, laboratory medicine specialists has increased involvement in molecular diagnostics regarding use and interpretation of tests. And hospital management, insurance companies, public payers and policy makers have expected cost savings due to a decreased burden for care-givers due to fewer re-transplantations or return to dialysis in kidney transplantation. And this slide summarizes the diagnostic performance from the literature of dd-cfDNA for detection of acute rejection. We see in kidney and heart transplantation an excellent AUC-ROC diagnostic accuracy, 81%. Good sensitivity, good specificity and a high negative predictive value of more than 90% making this test as an excellent rule-out test for rejection. So dd-cfDNA is a marker of graft injury. Where are we now? As I've shown, there is convincing clinical evidence on validity. The test detects rejection early at an actionable stage, reflects the severity of graft injury is useful to exclude graft injury, complements histology findings, helps avoid unnecessary biopsies, indicates response to rejection treatment and detects under-immunosuppression. Dd-cfDNA facilitates personalized immunosuppression and thereby shifts emphasis from reaction to prevention. And based on this convincing clinical validity, we have now coverage for dd-cfDNA routine testing by Medicare and Medicaid. Personalized immunosuppression has the potential to reduce premature graft loss as discussed by Ronnie Andrews in the introduction. But several markers and several parameters have to be taken into consideration, the clinical data, microbial screening, laboratory data like creatinine, immunological monitoring like DSA, perhaps also chemokines in the future, immunosuppressive drug monitoring, biopsy test results, perhaps also the molecular microscope from Halloran, and of course, now liquid biopsy. dd-cfDNA as a marker of graft injury, integration of all these data is necessary to achieve individualized transplant patient therapy and to improve outcomes. I hope to have shown the personalized diagnostics gains ground in transplantation but challenges remain. Thank you for your attention.

Thank you, Dr. Oellerich for a very, very thorough and very -- I really appreciate the final few slides for folks like me, that really put there all together and helped me understand how it's going to be practiced and utilized. So thank you very much for your time. I'd now like to introduce Dr. Ekke Schuetz. Dr. Schuetz is the -- he is the Head of Oncocyte GmbH. He also has over 30 years of experience in laboratory diagnostics. The last 20 years, he has been working very deeply in cell-free DNA Research. Dr. Schuetz has over 200 scientific publications and numerous patents and he is the inventor of the Digital PCR technology that we are using to go to market to identify, quantify donor derived cell-free DNA. So Dr. Schuetz, thank you again for joining us. So again, it's -- we know it's evening in Germany. So we appreciate you and Michael's time. And so I'm going to turn it over Ekke to you and I'll let you walk the team through the assay and then we'll open the call up for questions.

Ronnie, thank you very much for the kind introduction. So let me briefly run through the techniques of our assay and I'm just trying to move the slides. All right. So what I'm going to explain to you in the next couple of minutes is what's the difference between our assay and what you might have seen already. And so we are going to see the difference of the advantages and everything else. So that's the slide, you've seen already, so you know what it means. And so, let me briefly get to a simple point, which is given by the little graph on the lower left side of the slide here. So what's the advantages of using donor-derived cell-free DNA for monitoring? So what we know is that even if a transplant is in good health, there is always a little piece or a little fraction of donor-derived cell-free DNA circulating, which is more or less the background that we are seeing, if you're looking at a very healthy population of organ recipient, but as soon as damage occurs to the organ, the concentration of donor-derived cell-free DNA in the plasma of a patient is starting to rise, and it's going to rise even more when really severe damage like a full blown rejection occurs. So that's our chance. We can pick up the damage at a very, very early point. We don't need to wait until the rejection occurs. And Michael had explained it to you that in lot of cases, the serum creatinine is not rising as much as even if 50% of the organ is already damaged. So that's the basic difference here. And the second aspect also Michael has told you that as dd-cf or cell-free DNA has a very short half life. So what it means, it's a very dynamic parameter. If we are doing a treatment and the treatment works well, we are seeing that in a very, very short half life. So it's kind of useful for early detection, but also for monitoring is putative and therapeutic intervention working. So what were our design goals? So what we wanted to do is to design an assay that is really -- has a fast turnaround time. So it can provide actionable results. It doesn't have you that much if you're a clinician, if you're getting the result, that's like 3, 4, 5 days later then you ever -- you guys treated the patient are ready or not. In most cases, you will. It should be scalable for highest throughput and it should be cost effective because one of the major value propositions is do it serially, keep the patient under monitoring, so you are detecting whenever something goes wrong early enough. And the third point is that the limit of quantification needs to be sufficient for the specific medical needs, which means we don't need to ever limit off quantification at 0.1% or something like that. It's just -- we just need to be able to detect damage very sensitively. So let's briefly go over the history. So the occurrence of or the presence of donor-derived cell-free DNA was described way back in the late '90s by Dennis Lo and where he has shown that there is donor derived cell-free DNA present in the plasma of patients and he already a big time contemplated that that might be a useful tool for monitoring of transplantation patients. So it took quite a while until the first study was published by [ Snyder ] from Stanford. They've used mass sequencing and what the condition here is you need to have the donor material and genotype. So it all starts with a SNP as a usually area of domain recipient to detect if a single nucleotide polymorphism differs between recipient and donor. Then that's followed by mass sequencing of the plasma, and you just count the number of leads that are coming from the donor. And if you are looking through the math here, only about 10,000 of the [ EUR 30 million] we have used for their publication are useful. And from those 10,000, there are only about 20 that could be attributable to the donor. So it's about one in a million and you're throwing out a lot of leads here. It's extremely time-consuming. You need to do pre-genotyping than you are doing mass sequence cost you 1 or 2 days. Nowadays at that point in time when they did it, it was a week. And it's a highly costly technology. As I said, most of the information you've got is not useful. So what we did was more or less coming from a population genetics approach. We are using targets where we already know that they are highly heterogeneous in the human population. And what we did, we are using SNP that are really known to be highly heterozygous in all ethnicities. So it's -- we can use it in all ethnicities. And we are using digital PCR, which really reduces the cost a lot. So if you are thinking about what's going to happen, and that's just the population genetics approach here, the statistical chance to be different between donor and the recipient is about 12.5% if the donor is having both alleles as the same simplified as AA or BB and about 25% of the donor is homozygous, which means AA and the recipient and the donor has both alleles. Both is useful. So overall, about 37.5% of the target that we have collected are going to be informative compared to one in a million in a mass sequencing approach. So we -- in addition, we do not need to have genetic material from the donor, which is a huge problem because if you're thinking about a usual lab that would not have the donor material all the time. And then we are -- have added in '14 '15, the absolute quantification that Michael already showed you what the advantages are. And all of this is IP protected. So the difference is, we are having an extremely fast turnaround time, and we are also looking at costs that are way lower compared to the older technologies. So it will explain this population approach a little bit longer. The blue line shows you the minority frequency of SNPs that are in the international databases. And you see most of them, like over 80% are having a very, very low frequency, which means they are useless. You're never going to find them because the chance that they are going to be different between donor and recipient, which is the red line, is extremely low. So here you are seeing why this mass sequencing approach is so inefficient. Most of the polymorphism that we know having a pretty low minor analytic frequency, and that's what you're seeing because they are the overwhelming number. And if you are instead of using everything just target your assay to what's going to be mostly efficient and informative, it's really reducing the effort, the costs and that's why you can really do that within a day, more or less. The next thing I told you, it just needs to be sufficient for the needs you have. And this is what I'm showing you here. Digital PCR has the advantage that it is really the next level of precision for quantification in molecular biology. It has been described -- the principle has been described 10 years ago. I'm not going to go into very much details here, but the basic principle is you're diluting the samples, you're partitioning your reaction into containers that can be anywhere between 5,000 and 100,000. And so the goal is to have a single target in each container. And then you're just counting how often do you see a positive PCR reaction? So it's primarily counting, it's quantitative. And the calculation can then be done from the Poisson distribution, which is just a technical detail here. So what I need to -- what I want to understand everybody, you don't need any quantification standard. It's a primarily quantitative way of detecting numbers of molecules in a solution. The second advantage is, it has an intrinsic acquisition assessment. The standard deviation equals to the number of events you are seeing, which is a very important aspect. So whenever we are doing measurement, we can tell exactly what's the uncertainty of this measurement by just using this formula. And if you're looking at the right side, it just shows you the red -- red area is what we -- where we really need to add good precision because that's where the rational values are, they are around 0.3, 0.4. And if you are losing what we are doing right now, we are using 4 targets, and we are assuming that we have 20,000 copies as target input, which we are controlling. Then at -- the point where we really need to be at a good precision, we are having a CV of about 6%, which is really way better than we actually would need to be. So the basic principle of our assay is that in the first step, we are selecting from our targets, which are at this point in time, 40% to 60%, all at a very high [indiscernible] frequency. So the chance that they are going to be informative is roughly 50%. So the first step is just looking at the recipient and see at which of those 40% targets are we having the situation that for that very allele -- both types are the setting. So there must be AA or BB so that we can detect the donor which needs to deviate very clearly. So this -- usually based on statistics is going to give us 50% of the assays that we are testing that will be potentially informative. And as a second step, we need to find out, for which of these 50% has the donor -- the alternative allele. And in this case or what we are doing is, then we are going into digital PCR using the plasma and see what -- whenever the alternative earlier comes up, it has to become from the donor or in this case, the organ, whatever the transplanted organ is. Here we are going into the next step. So this needs to be only done one time. Whenever we are getting a patient new in, we have never seen that patient before, we need to do this one time -- from here, we are then defining the targets of SNPs where we are going to use it for all the consecutive assays that are coming in over time from the same donor-recipient combination. Sir, my control doesn't work anymore. Can you forward the slide, next slide?

Dr. Schuetz, what slide would you like to be on?

Yes, I cannot forward my slides anymore. It's showing me Slide 8. Yes, okay. Thank you, Sara. So from here, where we have defined the SNPs, we are going into what are we doing with each and every samples we are getting in. So we are actually doing 3 things. We are -- first, we are taking care of what is the fragmentation. Michael has explained to you that cell-free DNA overall is very, very much fragmented, but it's not always fragmented exactly the same for each and every patient. So in the first step, we are controlling for the fragmentation of the DNA in each and every sample. In addition, what is the second variability, it's the extraction of cell-free DNA. You extract DNA and your efficiency of extraction can be somewhere between 70% and 90% with the same extraction method on 2 different days or even within one day. So that's what we are doing. Also, we are using here an internal standard. I don't want to go into too much detail, but this is all done in digital PCR very simple, very easy. And then we are using our 4 assays that we have selected from, as I showed you at the earlier slide. And we are doing the percentage quantification of the cell-free DNA and we are using the other 2 assays that we have done here on this slide to calculate what is the true copy per ML plasma amount of the donor-derived cell-free DNA. So we are getting away from only the percentage values to a true value that what we can define -- what is the real copy number of kidney, heart, what have you, in ML of patient plasma. Next slide, please. So why are we doing this? No, you need to go one back, Sara. Why are we doing this? I mean the hypothesis behind the absolute donor-derived cell-free DNA value is, Michael touched it, donor-derived as a percent has really confounding variables. Changes in the host cell-free DNA, which is the denominator of the percentage value and that's mainly coming from the leukocytes of the patient will change the ddcf-DNA percentage without pointing to the transplant cell-free DNA true concentration. We know from the literature, it's well published, that numerous physiological and pathophysiological conditions result in such things. Even simple exercise, stress, infections, drugs, and several other reasons can really alter the cell-free DNA total amount and then you're getting the change in percentage. So what's the take-home message here is that the percentage can change even at the 2 same concentrations of the cell-free -- donor-derived cell-free DNA. So the organ spits out the constant same amount of DNA, so it's in the exactly same state, but the percentage will change by changes in what the host is contributing because that's the denominator. That can and will lead to clinical misleading results of percentage and together we have shown you a couple of examples. And so what the major point in long-term surveillance is that we are tapering the immunosuppressant drugs. So we really want to go down as much as possible to ameliorate the side effects of the immunosuppressive drugs and in particular, those cytosine inhibitors. So if we are changing the carcinoid inhibitors that should lead to a decrease in host total cfDNA based on their pharmacology. I've already mentioned it, they are all causing a certain apoptosis of leukocytes. So what's going to happen is, that the turnover of host cell-free DNA is high if the apoptosis rate is higher. So it's going to be high for us. The more you're tapering the immunosuppressive drugs, the apoptosis goes down, the turnover goes down, the total cell-free DNA is going to go down as well. And if patients are very stable, it should not alter anything. And here, I have used what Michael has shown you as a box plot and perhaps a little bit more in a clearer way. If you are looking in a group of clinical stable patients, and we have used over 300 patients for these calculations, and at each time point, there are between 50 -- 30 -- 70 to 135 single points, and all these patients are mainly on the tacrolimus. And the tacrolimus is tapered and starting at somewhere between 8 and 9 months and it's going down and down. So what we are seeing here is the course up to 5 years and it's pretty clear what's going to happen. The blue curve shows you that the total cell-free DNA goes down over time, constantly down over time, and the consequences on increase in donor-derived cell-free DNA as percentage. So the point here is the true concentration remains absolutely stable and that's the take-home message here. We are going to see falsely elevated percentage values in long-term patient. Next slide. So I'm not going to say much about this slide because Michael already presented it. So if you're looking at the overall performance of us versus others in the field, it's pretty much the same. We are adding absolute values which is I think the unique point here. And our upper limit of quantification is up to 99% or more percent, which is really needed for a liver transplant, because in rejection we have seen those up to 60%. So if you are having an upper limit of quantification around 16% or 20%, it's not going to be what you want. Next slide. I need to rush otherwise, we are going to -- so, our test has been published very well in a lot of publications over the last years. And next slide. So I can also go just briefly on that because Michael has shown that already. So what the really selling point is of cell-free DNA overall is extremely high negative predictive value that can be really used to rule out rejection so you can avoid unnecessary biopsies. Next slide. Our way of detecting cell-free donor-derived DNA is very well covered by patents in -- on both sides of the pond and we are very happy that we got our, I would say, key patent that is protecting the basic technology that we're using with targeted approach is now allowed in the US. So we are going to get that granted in the next 6 weeks I would say. Next slide is just, again, summarizing the value proposition here. So the safe donor-derived DNA can really facilitate personalized immunosuppression. The major advantage is that you can sensitively detect the injury before severe clinical manifestation, which gives you the chance to intervene before the full-blown rejection has occurred, and that will, at the end, really improve patient outcome. The same is true for drug minimization with which we are doing all the time, as I said earlier. And on the broadest scale, we can say that donor-derived cell-free DNA monitoring has really the potential to change clinical practice, can save cost and improve management of transplant patients as [indiscernible] shown you way better than I could do it in this short technical approach. Next slide. I thank everybody for their attention.

Thank you very much. Dr. Schuetz for the presentation. [Operator Instructions] So the first question comes from Bruce Jackson at Benchmark Company.

First off, it's really a tremendous bodywork, very impressive. You've made tremendous progress. Also I love your paper on the value proposition, which you published. It makes my job a lot easier. I guess, I want to know what's next in terms of making this more widely available to clinicians in Europe. So maybe you could talk for a few moments about clinical guidelines and just the general rollout in making this more available to physicians?

Yes. Let me start with the answer to the last question, Bruce, and then will let Dr. Oellerich answer sort of the clinical question. I've had that question online already as well. So for us, right now, it's a matter of validating, doing a final validation of the methodology we're going to use to democratize the assay. We have partnerships already in Northern Europe as Oncocyte that team had developed before we acquired them. We're going to pursue those relationships to begin to move the test into normal clinical practice in Europe, really, very soon in the fourth quarter. So we believe that the test is ready to go to market. Clearly, we have plenty of scientific papers to support that and obviously, with the LCD in the United States now being issued for this methodology, we feel like we're ready to go. So -- but in terms of clinical practice, Michael, maybe a few comments on your thoughts on where we are and how this complements what's being done today, but also how it differentiates and provides better information?

Yes. I have a question, why don't we get on the screen. What is all are doing? I see only the last slide from Ekke.

Dr. Oellerich, the audience is seeing you, in...

They are just seeing you. They'll see whoever is speaking. Yes.

Okay. So yes, the rollout, the implementation, this is a very important point and it will, of course, depend on reimbursement. We have made an application already to the German joint Charite GBA. They will get back to us in November. We have a number of excellent studies in particular with in Charite, Berlin, with Dusseldorf, with the Transplant Center in Hanover and there are various other centers that are very interesting. So from a clinical point of view, there is a lot of interest. And I think another good step in the future would be the development of kits. I just discussed it with the [indiscernible] to do such tests on site. This would be very attractive for the transplant centers to get even a shorter turnaround time. And so, also in these other countries, there is lot of interest, but I think it will now be very important to get this in the reimbursement, because otherwise the private patients, they get already reimbursement and we have a couple of those, but for the general population, we need to get it in the EBM and we are working on this, and I hope that during next year, early next year, there will be substantial progress, but Ekke may perhaps also comment on this.

Yes. I think we have gotten a lot of tailwinds here in Europe by the decision in the US that the payers are going to pay it. Europe is as you might know is way more conservative but we are really happy when we saw that. And as Michael said, we are -- of course because we are sitting in Germany so we have done our homework with the German organization and we are pretty hopeful that they are going to get it or get us into the system, but it's actually -- as you will, it's a forward-looking statement. So we are -- we have, I think done a pretty good job in explaining it. And so, that's actually our goal, just get the foot here on the ground in Germany and you know that Germany is very often taken the lead in New York. So we just need to have the first country to adopt the test and I think it's going to be way easier. And the other part, which I think is also very important what Michael mentioned, we are right now having extremely, I would say, positive reaction from the clinicians and especially our collaboration with the Charite, which is by the way, the biggest hospital in Europe as you might know, is really driving the reaction right now. And they have even started, that's to my knowledge, the first of these type of studies, interventional study using our test. It's...

Yes. Hey, Ekke, Bruce, If you don't mind, we had a question online that actually complements what you're asking. It basically, is the NGS approach available in Europe today? I know that the US -- the company is doing the next-gen sequencing approach in the US are both central lab companies. Are there central labs in Germany doing the next-gen sequencing approach or is this a wide-open market for our technology digital PCR?

Shall, I take on it, Ronnie?

Yes.

Okay. So I think we have seen that such NGS technologies are coming into the market and I'm not going into the point that they are most probably infringing our European patent but that's a different story. But the major problem is, the extremely high cost. What -- if you calculated what a lab in a hospital has in samples that you are expecting at each and every day, might be 3, 4, 5 samples. And if you distribute it all over Europe, you're coming to the point where the entire market is. But with -- with only 5 samples, you cannot run NGS at a price where you need to be. And so, that's why we have developed our test for this little PCR 1 test plus the lab exactly the same as 10 tests, and you can do it each and every day and that's what the clinical need is. You don't want to wait for a week until you have enough samples. So you can run your NGS test economically, you want to get the results at the same day. So that's actually -- we started -- when I was developing, I've started with NGS and as soon as I saw digital PCR coming on the market, I said, that's the way to go because you'll never get the price to point that the payors would -- at least here in Europe, would be willing to pay on the scale where you are going to monitor a patient over the entire time of the [indiscernible]. That's actually the big difference. And that is going to be very costly, and you need to get enough samples in the lab, which we are not getting if you want to democratize the...

Yes. May I say something, Ronnie?

Yes, of course.

So yes, I fully agree with Ekke. The main problem is, when liquid biopsy came up about 10 years ago, the idea was to replace biopsy. But this is, of course, not the main problem of our transplant physicians. So we have surveillance in for cost testing. And surveillance, as has been outlined our talks, is of course the main thing, CEL determinations that you cannot do by biopsy to this extent. And there's an interesting economic study from Pittsburgh that clearly says and they made all the calculations with outcome and so far, I send it also to Ekke. And they came to the conclusion that with these expensive NGS tests, you cannot be competitive because you cannot do them so often as required. So I think only tests with a reasonable cost like ddPCR can do such tests on a cost-effective way with respect to outcome, right? This is the thing. So surveillance is very important, and in particular cases, of course, clinically indicated tests. And I think in the future, the NGS, I'm very sorry to say, has not much chance in this because we are not going to replace biopsies. We are monitoring. We have developed a monitoring tool and only this will be able to change outcome.

Ross, I hate we comment here at your question, but we -- it was an important one to get out there. So thank you for having the courage to ask the first one. So...

Yes, by all means, happy to participate and pitch in. And if I could just get in a real quick one on the follow-up. So right now, the strategy in Europe is to go with an LDT. I believe that the lab that you're working with this [indiscernible] in Germany. So they're already running the test, I believe, on a digital PCR platform, probably [indiscernible], I'm guessing...

Yes.

Yes. Okay.

Yes. That's right.

So the short-term strategy is to find some new labs and then ultimately have a kit available. My question is with the transplant centers, I'm sure they tend to be the larger hospitals that are more sophisticated and already doing a lot of PCR, are there any impediments to them bringing the test in-house?

Yes, Bruce, we don't see that at all. I mean, I think we know that our job as we go to a kitted product is to make it very simple for the labs to run it. And so digital PCR was some automated extraction front ends -- could make for these larger centers -- should be something that we can bring to play very quickly and should be able to bring it to play through the regulatory process. Because, as you know, the IVDR regulations are pending for next summer. And so we're well aware of that. And so a lot of what we'll be doing is to simplify the workflow so that when we do take it through the regulatory process, that it becomes an easy-to-use instrument -- I'm sorry, easy-to-use assay on the instrument of choice. And to be candid, the idea then is to deploy that in hospitals around Europe.

Yes. I've talked to the [indiscernible]. They were very excited about this idea and they do not see any problem with such an implementation.

Bruce, thank you for the question. And Sara, I'm going to give it to you for the next one.

Thank you, Ronnie. The next question comes from Mark Massaro at BTIG.

Hey, guys. Can you hear me?

We can.

Yes, we can.

Thanks for a great presentation. A lot more slides than I expected today. So I guess of the -- over 5,000 samples, and I think with 600 patients, how much of this data is retrospective as opposed to like perspective in terms of the clinical trial work?

Shall I answer this?

Yes, please, Michael.

Yes, yes. Now you find a detailed summary of this in our recent nature paper. This is -- this could be very useful for you. And it also shows exactly in the table, and there's also a review by night. And these 2 reviews clearly show that the majority of studies, as just said by Ekke, are prospective nature, but there are also some re-prospective studies. But the majority of studies and our studies are prospective. And as I said, there are more than 50 documented studies now. The main thing is what we now do to get some utility studies, interventional studies is what we do with the [indiscernible]. This will be an important add on. But I think the basic facts are already there.

Okay. I think I heard in one of the presentations that [indiscernible] have 2 issued patents -- enrolled actually, I believe 2 patents pending perhaps. I think I heard perhaps these patents could be granted in the next 6 weeks or so. Can you just provide a little more granularity around the IP estate? And then related to that, I think -- do you believe that the incumbent, which is CareDx -- do you think there's any overlap whatsoever with your IP and theirs?

Yes, let me start. Let me start Ekke and then you can kind of go into the details. Mark, we don't see the overlap based on what we assume will be issued. Our work is all in PCR. And so their work is all in next-gen sequencing. So we think there's a good separation of the 2 technology bases there. But we have yet to see the final issuance from the patent office. So we'll have to wait and see what they actually issue from what we submitted. EkKe, any deeper comments to that?

No, I can. First of all, we are having our letter of allowance where all the claims are already defined. So it's just now a procedural step, right? So it's going to be issued -- exactly it is in the matter of allowance I'm talking about the U.S. side, right? For Europe, both the basic IP and the quantification is granted already. The quantification is also granted in the U.S. already. So the last piece of the puzzle was that -- one that we are -- just got allowed 2 weeks ago or 10 days ago. And so as Ronnie said, it's going to give us everything we need for digital PCR and around our concept of using population genetically selected SNPs. So I think we are pretty fine at that stage. And as you might know that CareDx, because you mentioned them, they are using exactly our approach. And they are using next-gen sequencing as a readout, which -- as I said, that was my first attempt. And then as soon as I saw digital PCR coming, I switched over for the reasons I've laid out. It's just not really something that you can reasonably do if you do not want to do it in a central lab. And you might have seen what CareDx has done there, they have tried to get their kits into Europe, it didn't really work out. And now they are trying to establish a central lab. But it's more or less showing the problem. And I think -- Mike and I have spoken a lot to our transplant centers here in Germany. And it's pretty clear if they are getting something into their hands that they can do in their lab for a reasonable cost they're going to take.

Yes. Can you guys speak to the -- I'm U.S.-based, a lot of the investors that I talk to are U.S.-based. I don't have a really good outlook on what the German Austrian, Swiss markets, French markets look like. I think everyone agrees that we shouldn't be biasing people on a repeat monitoring basis. But can you just speak to what is actually being done today? Is there a non-invasive blood-based option in the European market? How penetrated is that market? How common is it relative to biopsies? And can you just add a little more granularity around your plan to launch in a more broad way in Europe?

Do you want to take it or shall I?

I can only -- I can make a short remark.

Yes, please.

In Europe and in Germany, we usually do not do protocol biopsies, surveillance biopsies only for a specific clinical trials. So most of the biopsies are for-cause, also clinically indicated biopsies. And non-invasive tests as dd-cfDNA so far have not been very successful. There are a few things that you may know based on micro arrays and so forth, but not successful, also the transplant center in in-house, and they said they don't use it. And these other tests like Troponin, BNP, and so forth, they are not very reliable. And there is not much. I mean you have creatinine in kidney, you have pulmonary function tests in lung transplantation, liver function tests in liver, I showed all the shortcomings, you have echocardiography in heart transplantation, so there is nothing in competition. I mean dd-cfDNA for surveillance and for-cause is, I think -- this is a new thing and it has great potential, and that's why the clinicians are interested in it. If they have said -- but they need some experience. The main thing is you have -- what we do is give them the opportunity to test. We do some of these tests sort of free of charge, so that they just get experience with it, right? This is extremely important for the adoption.

Yes, let me just add. I think, Mark, you were going to kind of where we want to go. We -- any time you're going to try to penetrate the market with a new monitoring application, I remember back in my younger years when I was the steward of the HIV viral load work for Roche, and remember, out of the gate, it was really a lot of medical education as to how to use it? The logarithmic changes? What do they mean? When did we recast the therapeutic protocols? When do we just follow it more closely to protocols? And so we're kind of in that early phase again here with this in terms of in Europe, at least. And so our plan is to go to market with our partner lab. But as Michael and Ekke have said, the goal is to ultimately kit this. And when we kit it and we democratize it, if I can lean on my HIV viral load experience, when we democratize HV viral load in the U.S. out of 4 labs and got it into 100 labs, we started to see incredible uptake in utility because it was local, easy to use, same day turnaround time. A lot of it was quantitative. So longitudinal follow-up was easy. A lot of the same things attributes that this test has. We have a precedent, at least we think, in a market in a different area, obviously, but certainly something that we can follow. So our path to market is kits. We know where the targeted centers are in the United States that we think have the -- I'm sorry, in Europe that have the volume that we want to penetrate. And so we are -- that's the progress. In the U.S., Mark, which I'm sure is your next question, is where do we go there? And I think the message there is that we are still looking for a partner in the U.S. We have several folks that we are talking to that are viable opportunities for us. Our goal is not to build a full complete sales force and go compete in this space, it would deter us from our cancer focus. But we -- because of the power of this technology, we have had a significant interest from those folks in the world of transplant already in the HLA world as well as folks in the platform world. So we're interested in those partnerships to help us expand this. So all right, Thomas, I apologize. I saw you come up. Sara, I think you teed up Thomas Flaten from -- for the next question.

Yes. Thomas, you may unmute your line now.

Great. Just a follow-up on your comment there, Ronnie, about the U.S. Would that be kitted, or would it be LDT, or are you open to either outcome?

Yes. I think we'll have a natural progression, Thomas, now. We're a little further long on our thinking. I think the natural progression will be to bring it up as an LDT in our Nashville lab. It sits in Palmetto's payer district, so that we could actually bill Palmetto. We want to partner with some key academic centers that are doing a number of transplants, so that we can get the clinical trial started for the FDA submission. So we expect all that to happen. I suspect much like the world of democratize molecular testing in other disease areas that will always have a reference lab/LDT business, but our goal will be to democratize to the larger centers who have the volume to run it in-house and provide that same day turnaround time, which in our market research has really proven to be the main reason for people to take up a test of any type in the molecular space for monitoring, and that is they want to provide same day turnaround time while the patient is on site, getting all their other blood work done, and Michael and Ekke had mentioned, they want to have that result before they walk out [ on that ] day and know that, that organ is safe and healthy, and that's important to the physicians and those patients, and we think we can provide that.

So just to follow up on that, actually, the question I wanted to lead with was Dr. Schuetz on your Slide #8, which have the setup for establishing the baseline, what's the turnaround time on that? I'm assuming it's the serial monitoring, that's a 1-day turnaround. How long does it take to get an individual patient set up in the system, so to speak?

Ekke, let me start with how we're going to do it and then you can talk about the actual assay. Thomas, what we're going to do is we're going to -- the process we'll go through is to do the genotyping once. You only have to do it one time. And so the idea will be as the patient for the centers that we partner with, as the patient shows up to get their HLA and the other workup, we'll work up the genotype, so that when it's time for the first test to be run for monitoring, they already have the custom kit either on site or well in the LET world, we'll have it identified here, and we'll be able to run for them. But the goal will be ultimately to do the genotyping either in a central location or have a single assay on their location that can do both the genotyping and then with an algorithm sort out the 4 targets that are specific to that patient. So the goal is to make it -- to hit the easy button in the United States, at least for these transplant centers. Ekke, sorry, but I know we're working on that workflow here in Nashville now, and I'm close to it. So...

Just I can add on that, Thomas. So usually, what we are doing is if we are getting this first contact sample, we are telling people it's going to take us another day. So instead of one day, we are having another day. But I can also tell you that in certain emergency cases, we got it done in one day. So if the sample is in the lab 7:00 in the morning, then the result can be out at 5:00 in the afternoon. But that's more or less based on why our people are really extremely experienced, so that they can even get it done in one day.

Got it. And then final question, the rule-out aspect of this test makes a lot of sense, right, you don't want to misunderstand finding or something you might be seeing. I was more curious about the rule-in aspect. So if you want to understand if there is really something approaching a danger signal, because this is -- at least as I'm understanding of patient specific, are there particular data or value cut-offs that would indicate a certain degree of damage? Because you don't -- might not know where the peak is, but you don't know where you are between baseline at peak. I'm just trying to understand that a little bit better.

Great question, Thomas. Michael, can you add some color to that?

Yes. I think this question is very important. It has several aspects. Of course, rule-in is, of course, also important, the lower positive predictive value is due to the question on how many rejections are integrated in the study and so forth. Is this the pre-test incidents, right? But we have cut-off and thresholds and we see that also these people from CareDx now in newer publications use more our cut-off at 0.5 in kidney transplantation. So values above the cut-off show that there is graft injury. Graft injury itself, as I said, this is the charm of the test. It is -- it's likely the Troponin. It is specific for the damage of the graft tissue. And then you need, of course, the additional parameters that I have showed -- shown to identify, is there any other reason for graft damage, or is it a rejection? But you have, of course, the additional clinical data. But now the other interesting challenge is the sub-clinical rejection. For the sub-clinical rejection, we just finalized the study that's now -- has now been submitted with handover in liver transplantation. It clearly showed that for the sub-clinical rejection, you have a lower cut-off, let's say, of 6 instead of 10. And then it is important, in addition to the threshold to look at longitudinal changes. This is extremely important. Is there a change over time, always in the same direction? And if this is the case and suspicion for sub-clinical rejection, you can early adapt immunosuppression. I just had a case yesterday, it's a very interesting case, a small child where they are all worried. And we have followed this. And we could clearly see once they decreased the immunosuppression because an infection, this went up, not above the cut-off, but above the sub-clinical rejection cut-off. So they changed then the immunosuppression, everything was fine. So what we need is clinical practice recommendations for sampling interpretation. And of course, in the future, we will have combinations with the molecular microscope and perhaps chemokines. So it is a very exciting development. But this -- we have cut offs at this was your question for graft damage. And we have, of course, also a feeling what a severe damage would be what a subclinical change would be.

Thank you.. Sara, thanks, Thomas for that question, who's next.

Thanks for the question. So the last question comes from Mike Matson from Needham.

Okay. It's not letting to start. Can you guys hear me?

Yes, we can hear you.

Let me start the video for some reason. But I guess my first question would really be -- here we go.

There we go. Here you go. Yes.

I guess my first question would be, is it possible that there would be any adverse immune reactions during the transplant rejection that does not result in graft injury, and therefore, would not be detected, especially in the early stages of the rejection?

No. I think it's even the other way around. Newer studies indicate from -- if you remember my talk that sometimes up to 3 months before the rejection, we see a rise of the dd-cfDNA. And this rise of dd-cfDNA presumably due to immune activation can also trigger inflammation, and this is very important. You see an increase. You don't have a rejection yet, but the dd-cfDNA may stimulate the immune system and contribute to the full blown rejection. And at that time, early, if you react and adapt therapy, you can probably avoid the full-blown rejection. And -- but if you have an alloimmune response, as I showed you in this one slide, that is an ABMR or TCMR and if you use the right test you will also see the graph damage. Only if you use wrong amplicons probably, then you may not detect TCMR very well, as I've shown you, but with our test and with Sigdel's test in San Francisco, you can detect TCMR very well. If the test -- but test is not like test. The test has to be optimized, and this is also a continuous challenge.

Okay. Got it. And then just in terms of the testing intervals, maybe you can talk about that, how frequently are the patients tested. I apologize if you said that earlier on, I joined a little bit late. But does that testing interval ever change if the patient goes 6 months or 12 months without detecting any rejection? Would you be able to test a longer interval or something like that?

Yes, it is a question of the surveillance strategy. As I said, with the test that is available at a reasonable cost, you can do these test intervals that I have described, because sometimes things may happen without clinical indication. And so if you have surveillance tests, you may find out, in particular, during tapering or a very important landmark is the first year after transplantation. And the problem is if you have a subclinical rejection and start tapering, you will drive the patient automatically in a rejection. And that is why it is so important to have these additional tests and you cannot do this with protocol biopsies. The idea in the US is -- and many centers do so to have this protocol biopsy one year after transplantation. But this may not be necessary if you do this surveillance with a noninvasive test. And then if you, of course, have a subclinical rejection or then you can do a biopsy in addition to verify this. But this is also then a question of time and experience how often you will then need an additional biopsy. This is -- we will see. It is a question of experience.

Okay.

Mike, we have shown on the slide. So we think that in the first year, we are doing way more testing like up to 7 to 10. And then after a year, the patient is pretty stable, then we think it should be done quarterly for the reason that Michael just said, if you want to detect something early, then we think a quarter -- quarterly interval is sufficient if the patient tends to be more complicated. You might even do it in 2 months intervals of every source. So it's also the clinical course is also playing a role, but as a general rule of thumb, we are calculating with or after a year and up to 10 in the first year.

And Michael, in the -- as you know, in the US, the LCD actually was fairly prescripted by the different organ types of how many tests per year, and it's not each, but the first year was obviously more frequently and in the second year by the third year, they all equal out to once a quarter, which is what that actually say.

Right. In the first year, you have many TCMRs, right?

Yes.

And the TCMRs, in general are less dangerous, but nevertheless, you want to treat them in most cases. And the other problem is that we did not discuss is the balance, balancing the risk of rejection and infection. The question is in transplantation, how I divert in transportation for 40 years now. How low can you go? If you go too high, you have this net for toxicity and all this. If you go too low, you have infection that can be fatal. And we get samples from patients also heart transplant patients that are worrying they are with their tacrolimus there's 5 and 6. If it is higher, they have the side effects they say, Michael, how low can I go? Then we do our test and see cell-free DNA, okay, so you can go with a 5, right? But this balance and this is personalization and personalized immunosuppression. This is for the future, very important. It's not only rejection detection. It is to find the best way of treatment also in the minimization. This is a challenge. One of the major challenges also to improve outcome, long-term outcome.

Real quick. Sara, I was going to say, I know we want to close up. I did have one quick question that allow me to summarize and close out the call for everyone. I know it's gone a little longer than we had planned, but these are terrific questions, and we don't want to not answer for the folks that have stayed online and going with us. The question that came in over the Internet question was, can you describe the advantages of our product versus the competition and the cost position versus the competition. So let me sort of summarize our -- what we believe the TheraSure product brings to the market, and I'll close out with those comments. Dr. Schuetz has worked, as he said most of his career now on simplifying a way along with Dr. Oellerich and other experts, just find a way to monitor longitudinally small changes in the cell-free DNA in blood so that you can identify an onset of a rejection, just by the sheer nature of the complexity of transplanted organs and the immune system's response to that, having something that's sensitive and the ability has the ability to be longitudinal and be run frequently to look for these early indications of rejection become essential for long-term patient management. And so as we think about the competitive advantages that our product will have, they're really simple. One, it's quantitative, which allows us to longitudinally follow the patient and to provide quantitative information over time to physicians. Second, it can be kitted and put into a lab, so you can give same-day turnaround time of very important results. So you know that day if, in fact, there has been a change in the situation for the organ and for the patient. Third, we do have cost advantages. Obviously, next-gen sequencing as Ekke had so accurately talked about is time-consuming. It requires a lot of blood and to be bought. It's very expensive. So by being able to reduce this to digital PCR and democratize it to the kids, not only can we reduce the cost of it, we can also allow in the United States since reimbursement already exist, we can also share the economics of the test between the kit company, us and the actual transplant center so that they'll benefit from all the patient benefits as well as have an economic benefit for running the test. And so, for us, we're very excited about the opportunity in transplant. We are continuing, as I said, to look for the right partner to go to market as a distribution partner, and we'll continue to update our investor base and any of those that are interested as we go forward. But we appreciate your time today. Dr. Oellerich, we can't say thank you enough for the work that you've done over the years as well as the time that you've given us and the help that you provide at Oncocyte. Ekke, thank you very much. And just so glad to have you part of the Oncocyte team. So thanks, everyone, for your time today. Very effective explanation of the technology. And hopefully, you got your questions answered about how we're going to go to market, and we'll look forward to further updates as we go through the fall.

Thank you, Ronnie for an excellent meeting and the audience for the excellent questions, and I hope that we can continue this.

Thank you, everyone. This concludes today's call. You may now disconnect your line.