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

Good afternoon, and welcome to the OncoCyte Business Update Call. [Operator Instructions] It is important to management that they address as many questions as possible. In an effort to make sure we have enough time to do so, please submit any questions you may have towards the beginning of the meeting, by using the Q&A text box at the bottom of the webcast player or by e-mailing your questions to questions at lifesciadvisors.com. As a reminder, this webinar is being recorded, and a replay will be made available on the OncoCyte website following the conclusion of the event. I'd now like to turn the call over to your host, Ronnie Andrews, President and CEO of OncoCyte. Please go ahead, Ronnie.

Tara, thank you, and thanks, everyone, for joining today. As mentioned on, we're out traveling in the summer and the fall meeting with investors and different groups at different meetings. It became apparent that many of you had questions about a lot of the announcements we're making, how they fit strategically in the overall vision of the company. And as we got to the fall, it was important for us, we felt, to have a day where we aren't talking about earnings, but we're talking about strategy and the overall product portfolio that we put together here at OncoCyte, especially given what we believe is ahead of us in 2022 with a very important year of product launches and milestones that we'll be talking about today. So today's goal is really just to have a little fireside chat to walk you through the original strategy, how we've done against that strategy, kind of make sense of what products fit where and also talk a little bit today about our newest opportunity in transplant. And then the goal is to get this back talked on in about 20 minutes and really open it up for Q&A. It's really about answering your questions today. We want to make sure that every shareholder that is out there has a chance to ask the questions and get the answers that make them understand and help them know what we're doing and why what we're doing matters across the portfolio. So Tara, if you want to go to the next slide. Obviously, we are going to be making forward-looking statements today. So I want to make sure that we declare that upfront, and it frees us to answer questions in a forward-looking manner regarding strategy and execution. Next slide, please. 2.5 years ago, as I was -- I sat on the Board, and we were at an inflection point in the company, where we had a single product that had significant risk to it, and we were trying to find a way as a company to mitigate that risk. We -- given the long history I've had in the industry, we started to look at some unanswered questions that still existed in cancer that we felt like, with the advent of technologies that allowed us to look at RNA and really use RNA with DNA to make better decisions or help physicians make better decisions, it became obvious there were assets out there that had technology had tests that were -- had made it through the points of sort of the clinical process to mitigate some of the risk, of clinical risk and mitigate reimbursement risk, mitigate technical risk, et cetera. And we felt like as a Board that putting some of those companies together under the OncoCyte brand would be the right thing to do. The board asked me to step in and take over the CEO role, which I was happy to do in July of 2019. And we began the process of acquiring technologies that we believe can answer key questions that were not being answered by large genomic profiling. And keep in mind, my history, Dr. Ross' history, Dr. Seitz's history, all is in large-scale genomic profiling. We all believe, I think, coming out of the genome project that, that large-scale genomic profiling will solve all the problems we had in oncology. And what we really did with the large DNA profiling is create a lot more questions. It's the why this mutation curds in this person, does it go to that person? Why does this targeted therapy work in this person and not work in that person? And so the quest to answer those questions let us into the world of RNA. And so we have been working for and consulting for companies that had RNA panels that were far along in their development cycle that we believe acquiring them would allow us to rapidly build a menu that could answer these key questions. And so if you look at the slide, the best compliment I've had over the fall was one of our investors said, "Ronnie you can show me this slide for 2.5 years", and that's right, because this is the strategy we laid out 2.5 years ago. We've been very methodically going after this to execute the strategy. 2019 and 2021, we're all about putting it together, getting the development done, getting these products ready for market. And the exciting part of today's meeting is to talk about all these products now are ready to be in market, which we'll talk about those launches for 2022 in a little bit. So the first question was should I give adjuvant chemo? Early-stage cancers today get surgery, but don't really get a lot more than that. It's a watchful waiting. And we knew that a significant number of patients didn't do well. They recurred, and those patients had a very short 5-year life expectancy. We identified those patients using an RNA panel. We launched that product as DetermaRx. And that product is already in a [ sure ] 18 months since launch in a pandemic, we've still been able to save over 600 lives and give people meaningful information that helps them make a decision about chemo that can extend their life expectancy significantly. The other question that we knew was challenging for the industry from a pure large-scale genomic perspective is, should I give immune therapy? I think in the early days, we felt like tumor mutational burden, or TMB, would be a winner. And I think what we now know and looking back retrospectively, it is a great prognostic tool and is important in the mix, but it's not precision enough to give you an idea of whether that patient will or will not respond. And so the industry acquit us to a test called PD-L1, and that's the test that pharma has used. That test also is quite subjective. It has challenges in terms of its predictability. And we wanted to do better and we knew we could do better. And thus, having worked with a company called Insight Genetics in Nashville, Tennessee, we knew that there was a product out there that had the ability to identify patients that would and would not respond with precision. And so we made that acquisition in January of 2020. And we were able to put these 2 products into play, and that really put us in the market in terms of moving towards treatment decision answers. We added DetermaTx, which we'll talk about today, is on the horizon. DetermaTx is a product that is today somewhat me-too in the world, given that large-scale genomics for targeted drugs is out there. There's companies like Foundation Medicine, Caris, [indiscernible], et cetera, that have a product that answered this question. But it was clear in our market research that if we were going to have a precision to DetermaIO immune therapy selector, we should complement it with a targeted selection panel because that's how medicine is practiced. And this does, that treatment decision menu does give us the one-stop shop. And then, of course, the patient monitoring. We know that a majority of these patients don't have durable response. And so because of that, we felt it was important to follow on with a monitoring assay that could identify very early in the therapy cycle, whether the disease was progressing or not so that we could move treatment to a new protocol and therefore, hopefully, find the right protocol for the patient sooner than it happens today and then ultimately use that technology to do a recurrence monitoring asset. And so next slide, please. So all this fits into a clinical cycle, which is described by this slide. And today, as we put the vision together 2.5 years ago, our goal was to make cancer a chronic disease. And we know watching other deadly diseases, especially in my world, I was very fortunate in my younger years to meet the charge in HIV viral load monitoring and helped take HIV and AIDS to a more like a chronic disorder, and that came by having diagnostics to genotype the virus upfront and then monitoring tools to monitor the efficacy of therapy and change therapy at the point we knew it wasn't working. And that was how we moved HIV from that deadly disease to a chronic disorder. And so we passionately believe we can do cancer -- trade cancer the same way and take it to the same end point, which is a chronic disorder. And you can see how our products lay out across this patient journey. If it's adjuvant therapy and we can get a tumor resected, then you want -- it's early. We want to run Rx to see if chemo is important to save the patient's life. From that, we'll run. When Mx is ready for market, we'll look for minimal residual disease. We did surgery. Now as their disease still left in the blood, that's MRD, that's Minimal Residual Disease, that's the utility of that. And there's MRD test on the market today that are coming out to look at that exact question. Once we see the tumor move beyond early stage, now we have to make a bigger decision. Do we give a targeted drug? Or do we give an immune drug? Or do we do a combination of both? And so this is where IO and Tx fits so nicely. Today, there is either the large genomic panel that tries to answer the targeted question. And there's really nothing other than PD-L1 to try and answer the IO question. And so what we have today and what we have launched is an EAP, and we'll talk more about that, and we can give you some color commentary on the early adopter program and how that works later. But the idea here is that IO and Tx in combination within a very short turnout time in serving precious tissue give a physician, a treating physician everything they need to know about that patient in the tumor micro environment at the point when the treatment decision needs to be made the first time. And so within 10 days, we hope to get this information back, and that's well within the window of when physicians meet with patients and tumor boards happen for this very critical decision. But as I said earlier, once we get these drugs, the reality is only about 30% to 35% of the time do we see a durable response. And so because of that, it's important to monitor these patients. You can't just say, "All right, we gave them a drug, 6 months later, we'll do an image and see if it works," or even do imaging along the way because at the molecular level, you can see changes that are happening before it happens in image. And so the idea here was to identify a blood-only methodology that did not require tumor to do a large genome to get to a custom panel, like you do with MRD, We wanted to do it in blood-only because you don't always have surgical resections at this point in time in the patient's journey. In fact, I would argue the majority of the time at this point in the patient journey, there is no -- there's not surgery. These are neoadjuvant patients, which means we're giving them drug to shrink the tumor so we can do surgery later or their late-stage salvage treatment where we're not going to do surgery at all. And so given both of those patient types, you need something that is blood opening. Of course, CNI is a blood-only assay, you run it periodically and by the second cycle of therapy, we can give a very predictive understanding of if the disease is progressing or not. And of course, if it's progressing, you then go back and you look through IO and Tx and other means at the micro level with large-scale genomic testing then. What are the resistant triggers that are causing the tumor, either to escape using its escape mechanism or is there resistance to the drug itself. So ultimately, we want to get this patient all the way to the right into molecular mission, and that is our goal. Once we get into molecular remission, that's where our DetermaCh -- I'm sorry, DetermaMx product will come in and Mx will allow us to monitor that patient over in the out years to see if indeed that patient's tumor is coming back. And so was important for us, I think, today to lay this out. Because when you think about why we're doing and how these products fit together, this is the ultimate map of how they fit together. And ultimately, this is how OncoCyte will emerge to manage cancer to a chronic disorder. Next slide, please. So in order to do that, we have to have precision in both areas of treatment decision and in monitoring. And so again, high level, this is the complete treatment menu offering. It's a one lab solution. We answer all the key treatment decisions. Important, though, the technologies that we've chosen for each 1 of these assays uses minimal tissue. Why is that important? Because traditionally, especially in these later-stage patients, we may get a biopsy. It may be long. It will be a fine needle biopsy. In some of the other tumor types, you might get a full 4. But the reality is there's not typically a lot of tumor to do large-scale testing on. And so for us, it was very important that we not stop, we've not compromised until we found technologies and build tests on those technologies that allow us to minimize the use of tissue, so pathologists can do their job that they have to do at the beginning for diagnosis, and we can do our job to complement them and give them the important information that allows them to make precision-oriented decisions around what therapies to give. Again, 2 of these tests, DetermaRx and DetermaIO, are proprietary to OncoCyte. DetermaIO has been extremely well vetted today. As you've seen over the announcements over the last year, we now have over 1,000 patients that have been studied across multiple tumor types. So we are very excited about where DetermaIO is going. We are planning on a pan-cancer approach. We'll talk more about how that works as we get to Q&A. And we do believe we'll have an industry-leading turnaround time. The reason I believe we can do that is because the team that we have in operations, and especially now with Gisela Paulsen join us and COO, we'll be able to -- we believe recreate what we did in our previous lives at another company, where we, at that point in time, had the best around time in the industry. And we believe those processes and that technology advancement will allow us to continue to do that. Then we move to the monitoring. And so next slide, please. So in the monitoring space, we made a very important acquisition in April, and we acquired a company called Chronix Biomedical. Chronix is a company out in Germany. Dr. Seitz was the founder of that company. And obviously, now is on as our CTO and important part of our C-suite important part of our team going forward. In this area, it really is about is the therapy working? We talked about DetermaCNI. It's blood-only. So it's a beautiful application for that question. But in that process, we also bought some patents that Dr. Seitz had filed around digital PCR and looking for small [indiscernible] changes in various signal in blood. And that allows us to at least have a backbone for potentially delivering a product on the backs of that patent state called DetermaMx. Our goal is to start that development in Mx and begin to push that forward late in '22. Obviously, we've got a lot to do in '22. So our initial focus will be on getting the products that are ready for market to market, and these others will continue to develop as the development teams move from development into market launch, we'll be able to move those development teams back and begin some of this important work. The bottom line is the combined TAMs that we're entering, these are very large markets. And the combined TAM for both therapy, therapeutic treatment decision is somewhere around 5 -- nearly $5 billion in the U.S. and EU. And you can see here, the patient monitoring somewhere between 7 and 10. And obviously, those are not our numbers. We take those numbers from various analysts who cover the space. But the goal is for us to emerge as a one-stop shop with a complete continuum of a test that can allow physicians to get the answers they need for the questions they still have when they need those questions and when they those answered. So next slide, please. Sorry, Tara, next slide, please. So what we want to do is to kind of put it in perspective for everyone. One of the questions we get on the road a lot is, "Wow, you've got a lot going on. How do you get -- how do you guys, you're such a small company gotten so much done?" And I'll tell you, it's only 3 things. One, it's the testimony to the mission that we're on and the belief in that mission that our employees have. And they're dedicated. They're extremely hard working and have made tremendous personal sacrifice throughout the pandemic to continue our product road map and continue to push it towards what we believe will be our breakout year in 2022. The second thing is we have world-class program management. So every project has an owner, and we manage those projects on a monthly basis in ebb and flow of the resourcing required. And thirdly, it's really a testimony to the investors who have come behind us and supported us to make sure we had the funding we needed to move all these things forward in a concurrent fashion. Here, you'll see the milestones for next year, and we wanted to make sure these were available to you as an investor. We're going to put them obviously on our website. This is our scorecard for next year. So for Rx, it's pretty simple. We want to get the registry up and going and enrolled, and we want to sell a lot next year. The pandemic, we hope, is finally going to wind down. Our sales reps will be able to engage, and that will be important, very important for us as we enter 2022. The IO and Tx, it's all about full market launch, and it's all about market adoption. We won't have reimbursement for both of these tests throughout the year. So it's really going to be about market adoption and making sure we have the right key opinion leaders in the right accounts, ordering and reordering DetermaIO, DetermaTx. So that when we do get reimbursement, we already have a run rate of revenue that's ready to kick in, and that's really important for us as it has been for other pioneering companies in this industry like Genomic Health, like Clarient, like Foundation Medicine, et cetera, who really got ahead of reimbursement by making sure there was adoption in utility in their assays. And so that will be really, really big for us. Also for DetermaIO and Tx, really important. We believe we're poised and ready to move to the kitting process. So we need a platform agreement with a global platform company. So that will be a very important milestone for us next year because that's how we'll execute our global strategy to get DetermaIO into the hands of folks in Europe who we know are very eager to see it. Clinical validation DetermaCNI, we've got work to do to take the data that Ekky and his team in Europe have already created and tech transfer that here in the U.S. and establish a study path here that leaves us to CMS. So much like we did with DetermaIO in 2020 and 2021, we'll be entering that same phase of market development and paper publications for DetermaCNI as we enter 2022. And then finally, but certainly not least, we are going to launch our transplant business. Our milestones are really to finalize the LDT. We want to obviously submit the LDT for LCD approval. I think you guys have heard me speak enough to know that CMS has already given a blanket local coverage decision out of the Palmetto Group in the Southeast for transplant for digital PCR. So our work is to go and prove that we are equal to the technology that was approved for that LCD. We think we'll be -- we will be definitely because they cited our papers in the LCD. So we have a lot of confidence that we know what we're doing there and we'll be able to drive that. And then ultimately, we need to close a platform relationship because, as you'll see, our goal ultimately is to kit the product. So these are the milestones. We want to encourage you to kind of keep before you next year. These are the key things that we're going to be doing. We'll be reporting on throughout the year, and it will help you keep these things in content. Next slide, please. Next slide. So now we're going to talk real quick about the transplant opportunity, and then we'll open the floor for question. So Tara, if you can just one more slide. So folks, the transplant market is a very, very unique and interesting opportunity. You can see the transplant number of transplants per year. You can see the number of living recipients. You might think about our business as a monitoring business, much like an HIV viral load, where we're going to be testing patients sequentially or longitudinally over time. And that leads to -- at the current reimbursement values for heart and kidney, that leads to about a $2 billion U.S. market. And so we're very excited about getting into this market. We know there are competitors. They're great companies that are here, but we believe we have a unique opportunity. So Tara, next slide, please. So our goal for the road map is really next year to introduce the company into the transplant market with oncology companies. So we need to start establishing our presence there. We are the only company that has a test for liver transplants, and those transplants are a very prominent transplant -- transplant in the United States. So we'll start that and we'll launch in that. We'll focus on that, but we'll also add heart and kidney as the time and opportunity presents itself. Once we get that done in '22, the goal is going to be to establish these partnerships with transplant centers and then ultimately move those centers into our clinical trial phase so that we'll be putting instruments in there and we'll be putting kits on those instruments. And when those -- we'll finish the clinical trial and then ultimately, the FDA will give us a clearance for kits. And we'll transition these accounts to an instrument and a kit, and that will afford them the attributes that they deem are important. If you can go to the next slide, we'll spend some time on that. So our transplant assay is extremely well published. TheraSure has been validated in well over 20 publications. These are not small publications. These are all very prominent journals, peer-reviewed journals. And so you can see here that we have 4 major patents, and we're the only company today with a product indication in liver, which we believe is a very important organ that really needs our test to help patients with that organ to get the best outlook. Next slide, please. And so our go-to-market strategy is pretty simple. Phase I is EU launch. So we have a partner, Amedes, in Europe. We're obviously looking for a partner in Southern Europe. We hope to find that partner in the first half of '22, and we are going to be filing for reimbursement and choose in EU countries. We already have a headstart, thanks to Ekky and his team in Germany. In the U.S., transfer the LDT in Germany to Nashville, which is underway; launched the LDT in the first half; apply for reimbursement and established the clinical trial network. What we'll do is start the clinical trial, and we'll begin to engage sites in the second half of next year with the idea to complete the clinical trial phase by Q1 of '23 and hopefully submit the FDA dossier in the first half of '23 as well as submit for the new regulatory approval in Europe, which is called IVDR, And then obviously, once the kit is launched, we'll expand the market presence by beginning to place a footprint of instruments across the market. Next slide, please. So let's go to the 2022 outlook. Again, we want to share with you our thoughts on where we're going and what all is going to happen next year, so you can keep things in context as announcements happen and you see us move forward. So next slide, please, Tara. So this is the product development time line. We get asked a lot of questions about where we are in certain time lines. And so what I'm going to do is put a slide together to give everyone an idea of the various phases of getting a product like we make to market. This slide will obviously be on our website afterwards, and you can kind of spend some time with it. You can see the term Rx is already at revenue stage and on the market. You can see the term IO. We are in the EAP launch phase, which is way a market development phase. And we will be submitting the reimbursement dossier by beginning of Q2 2022. You can see DetermaTx is in its clinical validation. It is a predicate market. So what does that mean? There's other tests out there already with this indication, and there's already reimbursement for these types of tests. So for us, we want to get IO in the market as -- in that cadence and then follow with Tx. And so Tx can catch up very rapidly once we launch it in terms of when it gets reimbursed. We do think that Tx -- between IO and Tx be the first test out there to get reimbursed of those 2. Obviously, DetermaCNI is launched in the EU as an RUO product, and we'll be bringing it here and starting this market development in the U.S. in the second half of 2022, with [ tech ] transfer in the first half and then again, hopefully, in the second half with some studies and trials. And of course, TheraSure, we mentioned already. Our goal is to really rapidly bring this product to market. So if you think about 2022, Tara, if we go to the next slide. This slide is really our anticipated revenue initiation phase. And so you'll see here we put this slide together. We took the previous slide. We looked at our fund development time line, and we started to say, "All right, here's when we think given what we know today about CMS and how it works, this is when we expect to start seeing revenue from these products." So we're going to launch these products as we talked earlier, pre revenue. But once we get the LCD approved and pricing is given, we'll then move and we'll be able to start recognizing revenues on these products. So real important. Rx obviously, is already on the market, but we just got the Burning Rock, as you saw, a milestone that. So expecting Burning Rock to bring the test up and launch it in the January time frame for China. Obviously, when that happens, we'll be getting -- receiving a royalty trail for the work that Burning Rock will be doing in China. You can see TheraSure. We expect to have reimbursement for kidney and heart in the second half of '22 as well as we expect to have DetermaTx reimbursement in the U.S. in the second half of '22. And then in the first half of '23, we'll see the reimbursement for IO. We'll submit that, as you saw in the previous slide, in the first half of '22. So given the current CMS cycle, we expect to have revenue generation out of that in early -- or in the first half of 2023. And then you can, see we'll launch clinical trial launches, and CNI will actually be in the market and hopefully generating some kind of a trial revenue by the first half of 2023. So I think the important thing to note, if you go to the next slide, Tara, is that -- and the important -- I thought part of it today was to really just have a discussion with investors about what we came here to do 2.5 years ago and actually what we've been able to do. I mean 2019 and 2020 was really all about acquiring the technology platforms, getting the tests and integrating the companies, getting through the clinical development phases and poising it ready for market. '21 was to launch DetermaRx, which we did, and then continue the development of the portfolio as well as acquire and get us into liquid-based technology, which we were able to do. All of that got done despite the pandemic. And so here we sit in '22 ready to do an important important part of our mission, that's drive market demand. Next year is all about driving market demand for all of our products. We'll be launching 3 products across oncology and transplant. And it's important next year that we begin to drive market demand as well as submit on time for reimbursement. And then we want to aggressively go after a platform partnership because global expansion to DetermaIO is extremely important as is our ability to get a transplant. And then obviously, '23 is all about exponential revenue growth. So '23 and beyond, we expect to see the final culmination of all the work that's gone on from office site team and the investment that's been made in OncoCyte to date. And this is something we've been working for since the beginning. And I'm just proud to say that the team has done a lot over the last 2.5 years. We've made major progress across every product over that time. And despite the market swirl, we believe that we've never been in a better position to go and achieve the market value and the revenue ramp that we had expected from the beginning when we started the strategy before now. We knew '22 is a coming out year for these products in '23 once everything is reimbursed, will be the the revenue benefit of all that hard work. So thank you for your time. I'm going to ask Tara to let us move to Q&A now, and we'll take questions. And I encourage you to ask whatever question you feel that you didn't get answered during the presentation. So Tara, you want to take it over from here?

Yes. Thank you, Ronnie. [Operator Instructions] And to our analysts, we now invite you to join Zoom. Please hold for a brief moment while we pull for questions.

Tara, why you hold for questions and take down the slide. I want to introduce my team that's here with me today. So first, I'd like to introduce Gisela Paulsen. Gisela's our newest member of the team and a great addition. Gisela is our COO. I'm going across the top of my screen. So Ekkehard Schuetz. Since Dr. Schuetz, our Chief Technology Officer and also the GM of our European GMBH business. And Padma Sundar, of course, is our Chief Commercial Officer. And Mitch Levine is our Chief Financial Officer. And last, but certainly not least is Dr. Doug Ross, who is our Chief Science Officer and Acting Chief Medical Officer. So you've got what I like to call the dream team on the call today, and I'm going to hopefully not have to say much more. We're going to try to let your questions go to the appropriate expert and get you what you need to feel good about where OncoCyte's headed in 2022.

Thanks, Ronnie. So our first question comes from Mark Massaro from BTIG.

Guys, can you hear me?

We can.

Great. Well, thanks for that nice presentation. lots going on. I guess the first one is cut and dry. Have you heard anything from NCCN with respect to DetermaRx?

We have, Mark. I'm going to let Doug answer that. He was on point for that. So Dr. Ross, do you want to give me update?

Yes. So in fact, the NCCN did update the non-small cell lung cancer guidelines last week. And unfortunately, we were not part of the very small group that have got the nod and was included in the NCCN guidelines. I'd be insincere to say we weren't disappointed because we believe in the test. We believe that we're actually improving outcomes for patients, for the folks that use the test. It was an early submission. I'll remind you that the definitive paper came out in June, and the committee met in July. So the amount of awareness of the test and so forth amongst the community was probably modest at the time. And so we were hopeful because we think it is an incredibly important application that really does improve lives. But we're continuing to produce data. I think as Ron has been clear, we're doing a registry that's going to add to the database around it. The amount of awareness now -- since that publications come out, the amount of awareness about the test is really, and to Padma's credit with all the commercial effort that's gone behind it, people now know about it. And so although we were disappointed and not included, we still think it's very important. And with the added data, the added awareness will also be submitting to other guideline organizations that are on a different cadence and so forth. So yes, we did hear, but we're not discouraged by it.

And Mark, you know -- I think you know as well as anyone that pioneering predecessors, companies like Genomic Health and the Foundation those guys, I mean they paved the way for us. So it took them 3 or 4 cycles to get that NCCN. We're still hopeful it won't take us 3 or 4 cycles because of the awareness that they created, but we're disappointed, but we're not going to be deterred from growing a business so...

So Mark, like other companies, we are continuing to grow Rx volumes, and we'll continue to grow that. And to Doug's point, there are other respected guidelines that we can pursue long specific guidelines even so that avenue. And as this greater awareness, thanks to the registry, which is a multi-center registry that will give us another shot on goal to go back with more third-party data, if you will.

Excellent. Thanks for that update. Sorry to hear you didn't get in. I guess maybe for Doug. Can you maybe expand a little bit on the other data development for Rx? Because now I think as people try to think about getting into NCCN next year. And just remind us, I believe NCCN meets annually. So is it right to think that by July 2022, you'll be eligible for inclusion again? And do you think you'll have additional data or publications to submit to NCCN that would potentially warrant inclusion next year?

Yes. So I think that there's really a couple of things that go into NCCN. I don't know if you know much about the process, but it's a kind of a group dynamic. There's a large number of folks that meet. They have a large number of stuff in front of them. And so the gist of getting into NCCN guidelines is to have somebody who's really carrying your ball as well as to have enough awareness in the community that it's not new to people that this is something that they feel like patients should have access to. As I said, our key publication, the 250-patient paper, that showed that high-risk patients when they're identified as high risk and they take adjuvant chemotherapy have a less than 5% recurrence rate. And those folks that choose not to take adjuvant chemotherapy in that study had about a 30% to 40% recurrence rate. That's the impactful paper that really just came out in the weeks before that. And so we are continuing to generate data. Unfortunately, there's not cohorts that we can do retrospectively to do that. Those cohorts are over 20 years old, and the RNA is not available for them. So the registry that Padma's been driving has really exposed the test and the value of the test, both the thought leaders and especially to the large networks of community oncologists who are struggling with the decision as to whether or not they treat with adjuvant chemotherapy. So I think a combination of that paper now being out, it's been talked about at meetings and the amount of awareness that we've driven both amongst sought leaders and in the community through the registry, hopefully, will put us up to that, as well as the dynamic is different as some of these other -- as Padma mentioned, ASCO has respected guidelines, the European guidelines that are respected and the feedback that we're getting is that people want access to the test. And that drives the momentum that hopefully will go and get included.

Yes. Sorry, Doug, these paper -- our initial papers were a single site. And obviously, one of the things we wanted to do was add multisite. So that registry gets us the multiple site data as well. So more to come on all that, but good question. And obviously, we're not there. We know the test is saving people's lives. So we're not going to slow down in our efforts so.

Okay. On the new product launches, I think on the Q3 call, you talked about launches of CNI and Tx in Q1.

Right.

Today, you talked about first half. I'm just trying to gauge if there's any change since your Q3 call or if we're -- if this is really just a function of semantics.

Yes. It's a function of semantics. I mean we framed first half, second half internally because we're trying, as you might imagine, we're juggling multiple priorities, Mark. And 1 of the beauties of Gisela joining is we now have someone who is acutely adept at bringing multiple products through and making sure they stay on track from their experience at both at Genentech as well as the Genomic Health. And so what we want to do is we have to make decisions, like, for instance, we made a decision standup transplant on the same team that was transferring tech-transfer CNI. So we had to pick one. So transplant to precedent. As soon as that LDT is up and going, CNI will come in and we'll get the tech transfer. So we still expect we can get it all done in Q1 of next year, by the end of Q1.

Okay. Moving to DetermaTx. I believe that you've chosen a panel from a large tools company, [ 500-gene ] tissue panel. My understanding is that -- you talked about it. Therapy selection panels are widely broadly reimbursed. Remind me what's proprietary to DetermaTx relative to what is already being reimbursed by that panel provider. And walk me through why you need to secure your own reimbursement when it -- when frankly, my understanding is that panel is already reimbursed.

Yes. It's really semantics, Mark. You're absolutely right, and our panel will fit under the current LCD that's written. But Padma is our market access expert. And Padma, you want to add some color commentary on what we have to do to check the box.

Yes. It's very simple. It's already covered under the LCD. So what we need to do is show concordance against an already approved test, and then we get paid. That's the only step we need to do. So no studies. And what is a standard step, which is called tech assessment.

Yes. If I could just step in and just address the differentiator. So the key clinical problem here for non-small cell lung cancer is in late-stage lung cancer, you get a tiny, tiny specimen. And so we've selected a technology that's incredibly efficient for delivering both the targeting information, what you call the standard type information of a targeting test as well as enough to deliver the immuno-oncology to DetermaIO information. And so as well as candidly, we hired 1 of the best guys in the business that has some proprietary tricks. And so our QNS rate is going to be much lower. I strongly believe that. So it is differentiated, but it's in -- it's behind the screen. It's not in the content that's on the test, which most tests are complete at this point.

Excellent. One more question for me, and I'll hop back in the queue. I believe it was Palmetto MolDX came out with a final LCD -- an umbrella LCD for MRD testing, which I believe it was in November last month. It's -- I believe it goes live December 26. I guess -- and one of the tests included is the Natera Signatera IO test. Can you just walk me through your -- how you're thinking about whether or not you think you can get your IO test to fall into that umbrella LCD? And then when will you know that? What steps are you taking to see if that's the right path?

Yes, let me frame it, and then Padma, I think, you -- if you, Doug, want to add some color commentary. First, we are very excited to see that at that point also, because I think it gives us an idea of what we've got to do to prove DetermaCNI as an effective monitoring tool of therapeutic efficacy. And so it did give us a framework, Mark, which we are glad to have because as we bring CNI to the U.S., it will help us. Ekke is way ahead of us in the U.S. We've now got over 1,400 patients under study across multiple tumor types in Europe for DetermaCNI. So that work will produce papers that we hope to have out of the fall. And so -- but I'll let Padma kind of chime in on the actual tactical execution of getting to a point where we can actually submit.

So one thing I would like to clarify is, although the LCD is labeled MRD, it is important to know that it covers much more than MRD. It covers monitoring. So it is possible for a test to get -- to take advantage of that LCD by being a monitoring test. You don't have to be an MRD test. And that's where CNI is well positioned to be under the blanket LCD. So what do we need to do? Since that blanket LCD came out, we've done an assessment of the studies that we have. We do have 1 immunotherapy study, and we have several others that are ongoing in Europe, which we are able to sort of modify in short order to make sure that those end points are the exact endpoints that the LCD is looking for. So Ekke and the team are driving those studies out of Europe. And we believe that with the published study, we already have an immunotherapy monitoring plus those additional studies that are ongoing now, we'll be in a good position to take advantage of that LCD.

Bob, any questions from the Internet that we should entertain before we...

We do have a few questions here. First one is, why are you moving -- this is with regards to DetermaIO. Why are you moving forward with an early access program strategy? And also what are the benefits of doing that?

Okay. Padma, I'm going to put you on the spot. I mean, I think it's a commercial tactic that we both employed through our career, and that is to get a small sort of subset of key opinion leader and friends of the company to kick the tires, if you will, to make sure we establish protocols, workflows and touch all the basis from a compliance perspective in the lab world. But from a commercial perspective, Padma, why don't you add some color to the importance of the EAP before full market launch?

Yes, I'd like to say, I mean, this is my seventh product launch, and this has always been very effective, launching via an EAP. So it accomplishes 2 things. One is as we've talked about it, this is a tissue-based test, and this is a test that needs to be turned around rapidly. So what the EAP allows us to do with friendly customers, we've selected 7 who already are users of the test because they have experience with DetermaRx to make sure that we 100% beat, meet expectations in terms of how little tissue we need and how fast we can turn it around. We are targeting 3 to 5 business days from the day sample is received. So that's the number one. Second is we validated the test in 4 different cancers now. And in my experience, when you let oncologists have access to the test, they find additional use cases that the company could have not thought of because they are the ones in front of the patients and they find use cases for the test, and that's exactly what happened in my prior life. So for those reasons, we are doing it as an EAP. But of course, once we have DetermaTx and we have that complete one-stop solution, every plan is to go national and make it accessible to all oncologists who want to use the test.

Okay. That's great. Thanks, Padma. The other question maybe is more of a financial one. This is from a investor at American portfolio, which is basically, he believes that there is rumors about a potential dilution of the company's stock. And I guess, Mitch really goes to is the plan -- is the company planning right now on basically issuing additional shares.

Thanks, Bob. No, we don't have any plan to raise additional capital at this price. At the end of the third quarter, we had about $43 million in cash, our cash burn was higher in Q3 as we ramped trials and hired personnel to execute. We expect that, that was our high watermark in cash burden and think that we have ample cash at this business at this point.

That's great.

It's important for shareholders to remember that we have revenue streams. We have certain licensing agreements. We have other ways to create that are non-dilutive, and we pursue those every day. And we don't typically make a big deal about those, but Mitch has done a really good job of making sure that the balance sheet stays healthy. And we have the money we need to execute and obviously, pushing towards reimbursement and revenue is the ultimate goal and the thing that's on our mind every day so that we eliminate the fear of dilution by selling more and more product.

Great. Okay. Good. I think I'm going to turn it back to Tara.

Our next question comes from Mike Matson from Needham.

Can you guys hear me?

Yes, we can.

So I wanted to follow up on the cash question that you just answered. So it looks like you're burning about $9 million to $10 million a quarter in the current year of 2021. You have about $45 million or so of cash into the third quarter. Just given that you are expanding your kind of initiatives that you're pursuing here with TheraSure and whatnot, is there any reason to believe that, that burn rate would increase meaningfully?

Go ahead, Mitch. Please go ahead.

Yes. No, Mike, I think the idea is that TheraSure is an asset that has value. We don't believe that asset has been even calculated into the current stock value. And so -- and we know there's a lot of people in the partners -- potential partners that are interested in that asset in terms of partnership, and there's different ways that partnership can go. And certainly, we think there are ways to get TheraSure funded and get that business up and going. That would be minimal dilution to shareholders given the partners are at the table. I can't say a lot more than that. But our goal, obviously, is to make sure that we get TheraSure to market in that revenue. That's our fastest path with significant revenue right now is in transplant until IO is through the reimbursement phase. And so for us, we're acutely aware of that. And the good news is, given the U.S. patent offices, acknowledgment of our patent estate in the fall and given the fact that the LCD already exists for digital PCR and on method was cited, we're fairly bullish on our ability to bring this up and to start generating revenue. It's a very concentrated market, as you know. So there's about -- I think, I heard the other day, there's [ 80 ] accounts, I think, that make up about 85% of the total volume. And obviously, many of those accounts would be very interested in having liver because those are the large liver centers. And today, there's no solution for liver. So we think our strategy will reap some benefits and obviously, more to come as we get through first quarter. But that's the plan, is to leverage that asset and drive as much value from that asset as we can while concurrently, we go to market and get these oncologies, amazing oncology tests into the market and obviously creating volume. So when they get reimbursed, you get this not just a slow takeoff of revenue. You actually get this sort of hockey stick that happens because we've got multiple tests that are now already seeing volume and now have reimbursement, so...

Okay. Great. And that's actually a good lead into my next question, which is -- and I know the purpose of this call is not to give guidance for 2022 or anything like that. And I know you don't even really give any kind of revenue targets, but it does look like consensus has around $17 million or so, give or take, of revenue for next year. It looks like it's pretty back half weighted to the second half of the year, roughly $5 million in the first half, which isn't all that different from the run rate you've kind of been on, but then that increases to about $11 million in the second half. Just given your slide there, it looks like you're expecting revenue to start from DetermaTx and TheraSure sort of mid-year? Is that right? And just how do you feel -- without giving specific ranges, how do you feel about kind of where things are modeled? I mean my takeaway is that the numbers might be a little on the high side, but I don't know if you can comment on that at all, but...

Yes. Let me say this, and Mitch is in the room to kick me in the shin, so -- but I'll say it since we have such a large room of investors. Our -- those numbers -- our numbers next year are really predicated on execution of bringing these tests up and getting the LCD file on submission and getting approval for Tx and for transplant. They both -- in the world, I see today and probably not talk a lot about this in the world we see today, we certainly believe that second half of 2022 is viable for transplant reimbursement approval as well as Tx. If those happen on time, then -- and the good news is, as we get into the year, we'll be able to comment more and more, Mike, on where we'll end up. Right now, we're assuming based on our knowledge of Medicare and where they've been in the past, that sort of, if you will, our swag is to when that's going to happen is real. So -- but we'll know more as we meet with them in the first quarter and see where they are in backlog, et cetera. So -- but right now, it's too hard to comment on that number, whether it's too high or too low until we know if we're going to have the transplant and Tx reimbursement.

Okay. I understand. And then I want to ask one about just given the update on Burning Rock, the recent update, maybe you can comment on your latest thoughts around kind of the launch of DetermaRx in China. What's happening from a COVID perspective over there? Is that -- are you going to see similar kind of limitations to what's -- to adoption that's happened here because of COVID?

Mitch has been a point and done a terrific job with relationship. I'll answer the high-level market question and let Mitch talk a little more specific about Burning Rock. We do see, obviously, the pandemic has hit China as well. And what we're hearing or what I'm hearing at least from colleagues that are operating in that market is it's similar to what's going on here. However, just because of the sheer number of people with early-stage lung cancer in China, I think that the Burning Rock has a nice footprint. They have a very great reputation. And it's very -- we believe that they'll be in the market in Q1, and they'll be generating revenue from that test. There was about, I think, Mitch, they said about 100,000 served market opportunities a year right now based on their knowledge. So if they get out there and get going after it, we should see royalty payments from them throughout the year. So Mitch, anything specific to the relationship and what they've heard from Burning Rock?

Thanks, Ronnie. So you're right, they have about 100,000 total addressable market there. They believe they had 60 -- Burning Rock had 60 salespeople. They've already begun commercialization and they're getting a lot of attention. And so we've been able to do our full tech transfer. They have everything in their position to satisfy the tech transfer. We pushed out 1 of the milestones a couple of months just in the spirit of the collaboration with Burning Rock and all systems go there. They're very enthusiastic about their prospects with DetermaRx.

Bob, any...

Yes, we have -- we do have some other questions from the -- coming in from the Internet from investors. One of the questions is they're asking about CNI, how that might be differentiated from other recurrence monitoring tests.

Yes. Doug, I think you obviously have a really good handle and so does Ekke. Ekke, are you -- I don't see Ekke, but he may not be on my screen. Ekke, if you're on, why don't you take that question, maybe give some insight as to your -- oh, there he is, vision behind CNI and a little bit about how you see it fitting in compared to MRD.

Yes, I think -- thank you. One main differentiator that we have with CNI is that we don't need any tumor tissue. So it's really something that we can do from blood sample. We can, which is kind of in here in the technology that we are using here. And we are -- really have focused on the monitoring aspect of treatment, not that much on MRD. So I think the major differentiator here is really that we are pretty confident that it's a test -- that we can well use for therapy pre-monitoring of advanced cancers. To look at, at the question, does the therapy really work? And in that point, we are having a pretty high predictive value to detect that therapy is going to fail. So that's more or less what the differentiation is against other tests that are more focused on MRD rather than direct therapy monitoring.

Yes. A real thing to frame, Ekke, as you and I looked at this market together is that the time to first result, your time to really know something is at the second cycle of treatment for CNI, the term CNI versus a few weeks later for MRD because it takes time to get the large panel completed and then the custom panel developed and then validated in the lab, et cetera, et cetera. I think the other thing for investors to note too is that as Doug so appropriately has educated me about adjuvant versus neoadjuvant versus late stage is that -- and Doug, you can comment on this is that MRD is really for resected tumor and to monitor it if we get all the tumor. And that's not what we're looking at for CNI. We're actually looking at a different measurement, which allows us to do -- to run patients that have either had surgery or also patients that haven't had surgery. And the vast majority of the stage 3 to 4 patients, Doug, don't get -- they don't get surgery first. They get a neoadjuvant. They're shrinking in then. So maybe a little comment about that and how we believe we can really provide more testing for more patients.

Yes. I mean all the excitement in the market has been on the MRD application. Can you find any circulating tumor DNA after you take the tumor out? That's really quite different than what we're trying to do. The therapeutic monitoring application that CNI is really perfectly suited for is you have a lot of tumor load, you may or may not be able to get a hold of the tumor sample. And you want to ask the question in the first couple of cycles of therapy, is it working? And so the advantage of the CNI test is that it integrates information all the way across the genome into an index that says, "Hey, the tumor is either getting worse or it's getting better." And it's exactly the appropriate test for that application. And it's not MRD, which is where all the noise has been. It's a very different clinical application and a very important clinical application that hasn't been adequately addressed yet. So that's how I see the difference.

Great, Doug. I'm going to turn it back to Tara, because I know we have some other analysts here with some questions.

Thanks, Bob. Our next question comes from Bruce Jackson from Benchmark.

I have a question about DetermaIO. Ronnie, you did a very nice job of going through the history of tumor mutational burden and PD-L1 testing and how DetermaIO has overcome a lot of the limitations of those tests. A question about the future. There's a number -- there are a number of companies working on new discovery platforms with Proteomics. And I wanted to know how you think DetermaIO is going to hold up in the future marketplace when some of these platforms get out of discovery and into the clinic. And if there are any like opportunities to you -- for you to work with those platforms? Or if you might -- where do you think DetermaIO is going to fit into the future market?

That's a great question, Bruce. I'm going to let Doug take you through the deep science, but I'm going to answer that last question. As you know, we're always out there looking. We're always doing surveyance of what technologies are out there. Is there anything that could complement this? Some of our European colleagues and our investigators in Europe are working on things like special recognition and things like that. And so those things are years away, but as they become tools that amplify and create more fidelity for DetermaIO, we'd certainly try to adopt those. But right now, given how we produce 2,000 genes to this 27-gene classifier, we actually have relevant RNAs from the key components of tissue microenvironment. And Doug, maybe as you think about the competition and you think -- and you're on the front lines with all these investigators, what are they so excited about? And why do we think we have longevity with DetermaIO?

Yes. I mean -- so I first want to break Proteomics into 2 fractions. There's folks that are looking for signatures in blood that has the challenge. It's very removed from the tumor tissue where all the action is. And so I think those -- from a point of view of prediction are long ways from market. But what is interesting, at least scientifically interesting, is folks that are doing complex image analysis of tumor tissue and identifying all the different cell types that are in there and trying to do perhaps single-cell genomics and things of that sort. That is really cool science, and I love it. I love to read it, but it's very challenging to practically translate that into a clinical diagnostic. A clinical diagnostic has to be a good classifier, and it's all dependent upon the sampling of the tumor, [ sycastic-sampling ] problems. And if you're looking at the spatial distribution of cells in a complex tumor, you require a tremendous amount of training data to get that right. So I think those platforms have a challenge getting to market. We've already shown that DetermaIO is really a spectacular classifier, and pathologists and classification is key here, and that classification serves it well, which is why we've gotten such great results as we go from tumor type to tumor type. So there will be competition, but I like the way we've approached this better than the spatial Proteomics approach. I think those are interesting, but challenging to get to market.

And then just a quick follow-up question. Would you care to answer the guess as to how many years of a head start you have with those products?

Yes, absolutely. I mean, Ronnie would probably answer that as well. But we've got a large number of studies under our belt in 4 different tumor types. It's the same algorithm, the same threshold. That's what surprises the thought leaders that we talk to. That's not true for PD-L1. It's not true for TMB. It exactly is not true for counting CD8 cells in the tissue. So we have a lot of data. It's coming to market. We've got fought leaders behind us. I'm enthusiastic and optimistic. Ronnie?

I'm going to be more bad. This is usually -- Doug is usually my counterbalance, but I'm going to be is, listen, Bruce. I actually think one of the things, as a sort of a David and Goliath most of my career and haven't slain that giant a few times already, you never discount the potential competitors ability, right? So that means we have to respect and we have to constantly look at, which I know Doug does and I do and Ekke. Having Ekke on board now is really exceptional because he's in Europe. And a lot of these technologies are on the front line. He sure has a little softer regulatory approach than we do in the United States. So a lot of things get to market faster in Europe than they do in the United States. And so having Ekke there as a forward scout allows us as well. Plus Ekke, his historical prowess has been in blood-based rare events and being able to identify rare events in blood and across transplant and cancer. So I feel like we know what's out there, and I feel like that we're at least 2 to 3 years ahead of everyone, just given the clinical path that they've got to get through to establish enough data to support the types of claims that we already have. So I don't want to be cocky, but I do think we have a nice head start in the world of tissue micro. Tara, are there any more analysts that would like to ask questions?

Yes. We have Thomas Flaten from Lake Street.

One for Padma. As you think about IO and Tx launching and some of the early successes with IO in the early access program, how should we be thinking about the scaling of the commercial organization, particularly the sales forces we look over the course of '22?

Can I go, Ronnie? Yes. So obviously, the reps that we have now that are 10, we always intended for them to not just sell Rx, but to sell IO because they are calling on the same call point, the lung oncologists. And in the community clinics, they have easy access to the other tumor types. Right now, to support the EAP launch, we are thinking of we're going to be adding 3 salespeople in 3 states where we have the highest total addressable market. And then going into the national launch along with Tx, we'll make additional headcount in the sales team. So we expect to end the year with about 20 reps.

Got it. And Ronnie, I hope I didn't mishear you. In the very end of your prepared comments, you mentioned the importance of a global IO launch. I think I heard that right. Can you just frame up for us a little bit the -- the distribution of the very expensive therapies is obviously very skewed by wealth of countries. So could you maybe give us a sense of when you say global launch, I'm assuming that's a smaller number of countries than there are out there. Can you just help us kind of think about that opportunity a little bit?

Absolutely, yes. When we speak of rest of world or global, we actually think and we think of 3 sort of buckets. We think of sort of the countries in Europe, I'd like to call the FIGUS countries, which is France, Italy, Germany, U.K. and Spain, and they are typically the ones that get out first. Particularly have a lot of success in my career in Germany first. In Italy, they seem to be progressive. They're very thoughtful about the value-based medicine they practiced. And you might imagine a lot of our tests save a lot of money from drugs that are overused. And so as you might imagine, IO. And so there's a very big difference in Europe where there's value-based where we don't want to get the drug of us, unless we know it's going to work versus the U.S., let's give it everybody and hope it works. And so right now, I think you've seen the numbers that I see, $125 billion spend in immunotherapy, 2025, $70 billion has predicted having no impact on the patient. So Europe is ahead of that game, and so we know some countries are interested more from a health economics perspective. And so Germany is being one of those. And with Ekke and his network there, we hope to get there quickly. We can't serve Europe with a lab, and we've learned the hard way. I learned the hard way at Clarient. I think my [indiscernible] learned hard way at Foundation Medicine. I've been my friends at Genomic health in the hardway. It's very difficult to build a lab and run it from a central country in Europe. You also build lab in every country. So our fastest path to future Europe, we believe, is a kit on a platform that already has a solid installed base. And so that's the goal, and that's what we've been working.

And just one final one. In 1 of your earlier slides, Ronnie, talking about Rx, IO and Tx, one of the selling features, so to speak, of your approach is the need to have a relatively small amount of tissue. If you think about an earlier stage adjuvant patient, there might be a significant time lag between when they need to be rechallenged with a new drug, for example. To what extent are there changes in the tumor that would invalidate earlier results that you might have run at the time where the tumor, the tumor microenvironment has changed to such a point that you would need to rerun on new tissue?

You know what, Tom, that's a very powerful and important question that the industry has yet to acknowledge. And I'll give you my opinion, but Dr. Ross and Dr. Schuetz chime in as in these. As from my role at ASCO, and I hear a lot that people are afraid to rebiopsy patients. They don't need to. It's the same tumor, but that's just not what's happening in the real life of molecular profile. And I would argue that over time, as therapy is given and fails, that rebiopsy when you can, it's not always -- you can't always do biopsy. But if you can -- and then getting a fresh biopsy always gives us the best chance at treating the actual tumor that's taking the patient to a bad place at that moment. And Doug, any comments? Ekke, any comments? Or my comment, I don't want to practice medicine because I'm not smart enough to do that, but that's what I see from -- and hear from my colleagues. So Doug?

Just a quick comment that some of our data is from metastatic sites and from biopsies taken late during the course, and it holds up. So that's very promising. And the rationale behind that is that, in fact, we're classifying the biology of the tumor and it's really the -- its effect on the tumor microenvironment around that. And that's a function of the tumor that doesn't change, unless it becomes resistant as it's seen immunotherapy before. So I'm optimistic that it will be good.

But the combination, Thomas, of IO and CNI, without a doubt, will be effective game changer. We'll be able to see does -- is the disease progressing if it is, then there's probably this more transition in play. The tumor is trying to escape. And you might want to think of another therapeutic approach that's a little more aggressive than a monotherapy, maybe it's a combo ,maybe it's chemo, maybe it's a target. But that's all playing itself out in the pharma community. And the beauty is we have a test that's robust enough to cross all this decision. Okay, Tara, let's let Bob. Bob, any other e-mail questions that we should answer.

Yes. Definitely, we have a couple here. First one was from Ben Turdich, Ben asked you, how do you plan to establish DetermaIO as clinical necessary and reimbursable in a world where PD-L1 is already established as the companion diagnostics for IO? And does basically DetermaIO need to subplant PD-L1. And what sort of evidence might it take over time?

Great question. You know what I'm going to do? I mean if it's okay, it might take a little longer, but it's an important question, and we're going to tag team it. So I know we have 3 different sort of trajectories of answers here. So let me start by saying that we know that there are many PD-L1 patients who do not get chemo because PD-L1 is less than 1% or less than 50%. We also know that PD-L1, it complements IO. And so together, the 2 in most of the studies we looked at are way better than PD-L1 by itself. And so with that sort of foundation, maybe, Doug, you could talk a little bit about the clinical strategy we employed a year ago to get the data where it is today and what we'll be doing in terms of proof of -- or the differentiator between our test in PD-L1 as we look at '22 in studies we'll be doing them. And then we'll let Padma talk about sort of the commercial approach to getting what I like to call over enforce and market growth. So Doug?

Yes. So I should say that we've actually had a conversation with MolDx, the group that manages CMS reimbursement. And very clearly, what they want to see is in fact that DetermaIO is offering more information than PD-L1 alone. And in every study we've done, it is. And so that will be the data that we'll be taking to CMS. And from a clinical point of view, you can think about it as let's take lung cancer, for instance. Patients are asking the question, do I want immune therapy alone? Do I want immune therapy with chemotherapy? And these are sick folks, during the course of their disease, they're having a hard time tolerating this stuff. And so biological information that tells you whether or not that tumor is likely to respond to immune therapy alone is the critical question for starting to manage do I use chemotherapy with immune therapy. And the study that we're doing in Canada is on monotherapy-treated patients. So it's designed to inform that question. So we think we've got a strategy that makes this incremental information that's useful to physicians.

Padma, a little bit about sort of market demand building.

Yes. So there's -- yes, I'll just add to what Doug says that we don't need to replace PD-L1. That's number one. The second is the market, including the oncologists and the pharma companies understand the limitations of PD-L1. So there is every need for a test that is incremental because PD-L1 is not good enough to either identify all the responders or pick up all the nonresponders. So our strategy very much is based on the data that's being generated head-to-head against PD-L1, offer it to the market as an incremental biomarker. In fact, they're also offering PD-L1 testing. So when the sample comes in, our lab will do PD-L1 testing. Our lab will do DetermaIO testing. And combined, the result will be more informative than PD-L1 alone. And CMS is the same thing. They will require incremental utility, and that's what we are hoping to demonstrate first and long. But certainly, we'll get to a point where we've demonstrated it in so many cancers that the pan-cancer coverage becomes possible, because if you show it over and over again, up to 5 cancers that you're incremental over PD-1, then you get the pan-cancer coverage. And we are continuing to look at small and big pharma companies because they can -- even though they're using PD-L1, they are well aware that it's not a sufficient biomarker. So there is that path also that we are pursuing.

The chemo-sparing, Padma, we talked a lot about that space. But we've had conversations and have a lot of excitement in some of our key opinion leader meetings and Ad Board meetings where, today, patients might get chemo because they're below the 50% cutoff for PD-L1, but doctors don't want to get chemo if they don't have to. So we can give them confidence that this patient is going to have a solid response without chemo. That's informative and something that they're welcoming. And I heard even 1 physician say, "I need it today because I have a patient like that today." So I think there's demand out there, Bob. And I think we can create more demand around that. Ultimately, our goal is to make it standard of care some, but that gives 1 step at a time to get there, so...

Okay. Great. The other question we had is, again, from 1 of the investors is, it is COVID, and the pandemic situation out there basically causing a delay that's preventing more usage of your tests as you're getting them out there into the marketplace.

Without a doubt, I mean, I think we all have been fairly company in our space had been affected by the pandemic. I think those of us in the early-stage cancer, which we are with own stage long, have been even more affected because surgeries stopped in key areas of the world, our key areas in the United States. And they stopped for a couple of reasons. One, they were short staffed. So they needed staff out of the surgical suites to go down and to be part of the ER teams. They needed ventilators for the all-alone meeting population that people were put on ventilators. And to be honest, there's just a fear. There's this fear. I don't want to go to a hospital because I don't want to get COVID. And so Stage 1 patients sooner believe they're elected. What we know is it's dangerous to call them that, but we saw a definite slowdown in different surges over the last 2 years. Obviously, we're in a current situation. We're counting that in between. We expect, hopefully, with all the vaccinations that are happening that we'll start to see, and we have started to see surgical suites open back up as reflected, as I said at the earnings call in our September-October numbers, so...

Great handing back to Tara.

Thanks Bob. We have a follow-up question from Mark Massaro from BTIG.

I guess this might be for Padma. But when we think about 2022, one of the gating factors is reimbursement, right? And so I wanted to just kind of get a sense for -- like on the transplant side, CareDx is out with -- I think it's [ 2,841 ] on kidney. Heart, I think, its is in the 3,000 range. How should we think about the reimbursement rate given that you have a PCR-based transplant? Do you expect it to be equal to the CareDx rate or perhaps less?

Yes. Let me start. Padma, I think you can pile on because you were just with them. But the LCD that was written in April and published in April cited Digital PCR at those same values. And so we believe that it should be independent of technologies, the value of the information. But Padma, you just had the phone call with them, and I think we came out of a feel pretty confident.

Yes, we did have a pre-meeting with MolDx. So number one, we feel pretty confident with the data we have that it meets the LCD requirement. Second, we -- to Ronnie's point, we are not expecting a lower reimbursement than out there because it's not based on the cost of the technology. It's based on whether you're achieving the same level of performance. So -- and the third thing is they will allow a submission either as we get the data on a combined submission across all organs. So that's good. So we'll be able to put in a package together across all organs. So those are all good guidance that we received on that pre-call.

And actually, if you don't mind commenting, I think they mentioned that we have data in Europe. And the direct question was, can we use the data? Ekke, your thoughts on the answer there as to that data and how it will be used for CMS. Is Ekke on mute?

Okay. Of course, that was a question that we explicitly asked them and they were completely in agreement that these data are even we have collected the data in Europe, they are all published in sighting in the U.S. and the American [indiscernible]. And so that was normally disagreement. It's just a matter that the standard of care in the U.S. and in Germany is not really different between the countries in terms of transplantation. So there was something interesting to show. But the bottom line was they are happy and willing to accept what we have already published. So being said that all our validation studies can go directly into the submission.

Thanks, Ekke.

Just a quick final question for me. Thanks for indulging me here. Maybe for Doug. I appreciate your comments about how the market really understands MRD, but MRD is actually a very specific time point. CNI can be used for folks who have had surgery or have not had surgery. I guess, how do you size the different market? In other words, do you think CNI is a bigger market opportunity than the MRD time point? Can you just speak to the size of the market?

I'll start that because I can get over my screen a lot further than the docs will, but I actually think that for sure because we just -- a sheer number of patients that don't get surgery, but still need to be monitored is much larger. And I also think that because -- Ekke, why don't you comment, I mean we've got data from targeted therapy, immune therapy and chemotherapy. So Ekke, I think your belief in your work you've done so far is really it's agnostic to the therapy, maybe just more color.

I think it might be -- there's no simple or simple answer to that because it's really dependent on disease type. I mean we have a lot of cancers where we are really getting to a point that the patient can be treated curatively, which actually is more or less with the condition to even look for MRD, right? So if patients are in an advanced stage are metastatic, there's usually not any intent for curative treatment. So that's where we are positioning our therapy monitoring. So it's -- and it's quite different from what MRD does. We're just looking for minimal residual disease in the situation that you thought you are going to treat the patient curatively. So that's 2 different life stages of diseases we are talking about. And the size of this is actually different from cancer to cancers. In some cancers, we are -- you'll be having a good chance of a joint of treatment in 50% of the cases or even more if we are now talking about, for instance, colorectal cancer, which has really become a pretty well treatable disease. In other cancers, we are just not there. So we are usually seeing patients at a point that they are either advanced to advance even to be surgically treated or already metastatic. So it's not really something I would say it's competing with each other. It's 2 different clinical stages we are approaching here.

But why don't we -- because we are going to create a test call DetermaMx is just that. They really have 2 utilities, and you want to have test for both of those questions. Padma, I see you anxious to add over that.

Just the market numbers, right? So even if you say it's just for advanced cancer patients, right? So there are about 1 million, if my number is right, patients diagnosed with advanced cancer annually in the U.S. alone. And then these types of tests are not used at one time point. So you're talking about a baseline plus 2 tests. So that's 3 usages, and that's why the market is even bigger than treatment selection. It's not a single-use test.

Bob, any further question?

Yes. One more question from the Internet, and that is asking about, you talked about both DetermaIO and also DetermaTx. And those being used basically combined and sort of what is the expected turnaround time for IO, DetermaIO and DetermaTx? And also, how does that compare to the industry standards?

Yes. This is on. And it's an operational question, and we haven't heard from, Gisela I'd love for you to take that question and with the experience from both Genomic Health and also now here. And so why don't you take that question for us?

Yes. Thank you, Bob. So as Padma told you that the volume and demand we're going to drive in 2022 is really going to allow us to optimize our processes, both from a turnaround standpoint, as well as, as Doug mentioned, in terms of needing a smaller tissue sample. And the beauty of IO and Tx in combination is that you can run those on 1 sample set. So our turnaround time targets for IO is 3 to 5 business days and for Tx is in the 7 to 10 days. And we believe that, that is competitive or even better than some of our competitors. And our goal is always to optimize that, so we can really serve the patients as quickly as possible.

Great. I think that's it in terms of the questions that we have from investors.

Tara, I'll ask you. Is there any more analyst questions?

No. That's it. I think we're good for closing remarks.

Yes. Thank you. Well, listen, folks, we really appreciate the time today. We know -- we knew it could be a long call, and that was on purpose. I think the goal was that we wanted to make sure we leave 2021 with a clear understanding of where OncoCyte is. Why we're always so excited on our earnings calls, as I think you can see with today's presentation and the answers to the questions that we are really at that pivotal inflection point for OncoCyte. And we're very excited about where we are. We've got a great team to execute it. And we're just appreciative of your support with pushing of the investment. And certainly, we'll continue to have questions and answer sessions throughout the year in 2022. But at least I encourage each of you to go to the website, pull down the presentation from today. And you've got the milestone road map of what to look for, for each product area. So as we make announcements, you can keep it in context and see that we're making progress towards the goals we talked about today. So I'd like to thank my team. It's just -- it's a blessing to work with such amazing, brilliant, but also extremely experienced and talented folks who actually like to be together and like to work together. So it's really been great. It's easy to lead this group. And so we'll look forward to more opportunities to see investors as well on the road in future months. So thank you, guys, and thanks, Bob and Tara, for a great call.

Good. Thanks very much, everyone, for being on the call from the management team, and thanks to the investors and analysts as well.