Lucid Diagnostics Inc. (LUCD) Earnings Call Transcript & Summary

Good morning, everyone. I'm Lishan Aklog, I am Chairman and CEO of Lucid Diagnostics, welcome to our very first Investor Day. We're very excited about that. So thank you all who are here for joining and those of you who are joining us on the webinar. We're looking forward to what I hope will be a very informative day. Our goal really today is to provide you with a much more comprehensive overview of Lucid than we can normally do our earnings calls and banking conferences and other venues, and we'll cover all aspects of our business from our groundbreaking technology to our path to realizing what we think is a massive commercial opportunity. So we have a full agenda today. So I'll ask Shaun O'Neill, our President and COO, to take us through what the agenda is for today.

Yes. Thanks, Lishan. I think the timing for this first Lucid Investor Day is perfect. When I look into fiscal year '24, I want to use the word transformative, right? We've been laying the groundwork for everything we've been doing over the last couple of years. And I think by bringing the group of individuals here that you see, not just on this board, and I'll talk through it in a minute, but also a lot of our executive team. Feel free to ask questions. We'll have a meet and greet after this, I apologize for those on the webinar, but come in and go forth. So Dr. Aklog going is to kick this off with really the story of Lucid, right, where we came from, where we're going, I like to say who we are, who we were, where we're going and how we get there. Following that, unfortunately, Stan couldn't make it. But fortunately, for us, Stan did have time to record a video. And so for those of you who don't know who Stan is, Stan is the Vice Chairman of the Lucid Board. He's also the founder of 2 very important diagnostic companies: One is Cytyc. You may know this now as Hologic. They founded or at least created the ThinPrep device for Pap test and also a little known company, Exact Sciences, who invented Cologuard. So Stan will talk to us about the parallels of his experience in the diagnostics space over the last 30 years and what we're doing here today at Lucid. Next, we have Dr. Philip Woodworth. Dr. Woodworth is a general surgeon who spends most of his time in the Fort area right now, doing a lot of minimally invasive robotic surgery out of Denver, Colorado. And he traveled here last night to speak to us about his perspective as a surgeon with this disease state. I'll jump up next. We'll talk about that when I get there. And then finally, we'll bring Lishan up right before lunch, one more time to talk about really EsoGuard as an assay, that it's great, and this is why -- and probably give thanks to a lot of the people in the room, including our Chief Scientific Officer, Dr. Suman Verma. We'll take a quick break. We will have food in the back. There's some tables to stand around, I apologize in advance for the setup. We wanted to go theater style. David, we can talk about that later. When we get back from lunch, we have Dr. Seper Dezfoli. So Dr. Dezfoli is a gastroenterologist, who is a board-certified gastroenterologist from Southern California, and he's going to talk about EsoGuard within his 4 walls and how he collaborates with us as Lucid Diagnostics as a company and our diagnostic for him and his patients. We'll finish that off then with our CFO, Dennis McGrath, who will come up and talk about our pathway to profitability. What it looks like as I mentioned earlier, into '24 as we transform this organization into one that's not just focused on driving procedure value and we'll talk about that in my talk, but also revenue as well. Then we're going to finish up with 2 quick fireside chats, one with some of our executive leaders led by Dr. Lishan Aklog. So Dr. Suman Verma, our Chief Scientific Officer; Dr. Deepika Lakhani, our Chief Regulatory and Quality Officer; Dr. Victoria Lee, our Chief Medical Officer; and then finally, Natalie Carfora, our VP of Market Access. And then our final fireside chat will be with our expert physician. So Dr. Dezfoli, Seper thanks in advance, Dr. Philip Woodworth and our very own Dr. Brian DeGuzman. So I'll pause there. Lishan, I'll hand it back over to you, you kind of talk through it.

All right. Thanks, Shaun. Go to the next slide here. So my job, as Shaun said, is to introduce you to the Lucid story, the how and why we got started and how we built what we have and where we're going. So let me just start with some numbers. Let's start with the number 40. Before we're done for the day today, approximately 40 Americans will receive some tragic news, what is effectively a near death sentence. And their stories will generally be pretty similar, some of them middle age, maybe a bit elderly, 5, maybe 10, 20 years of chronic heartburn that's well managed on over-the-counter medications. Otherwise, pretty healthy and active except maybe a bit of obesity, but a lot of us have that. These 40 Americans woke up very nervous this morning about their upper endoscopy procedure that was scheduled for today and the schedule to evaluate some recent weight loss, maybe some swallowing problems and/or some fatigue. Then sort of like a punch in the gut, the tragic news from the endoscopist, somebody like the 2 doctors we have here today came back and reported esophageal cancer. The prognosis, terrible, really, a near death sentence. Within one year of today, 10 of them will be dead. After 5 years, only 8, approximately will be -- will still be alive. So according to the American Cancer Society, this year, 2023, about 21,000 people got the similar news, this tragic news. So what if cancer could be prevented. You might think that's sort of an odd thing to say. We bat the word cancer prevention around a lot, use it quite liberally. We sort of use it interchangeably with early cancer detection. But early cancer detection programs like mammography for breast cancer, low dose CT scanning for lung cancer, even PSA checks for prostate cancer, they've successfully prevented deaths from these cancers, and maybe PSA is a bit controversial on that, but none of these are cancer prevention, right? You get cancer and you pick it up early, and it has an impact on your outcomes. Despite decades of scientific research and technological development, there are really only 2 cancers that we can truly prevent through early pre-cancer detection. And as you'll hear in a bit, our Vice Chairman, Stan Lapidus played a central role in both of these. Pap testing does prevent cervical cancer, not just cervical cancer deaths. Colonoscopy prevents colon cancer, we pick up polyps. And stool DNA testing can pick up about half of the more advanced precancers. All 5 of these programs have been operational for decades. We know that they do save lives, but there really haven't been really no new early cancer detection programs in ages, really. Cologuard came around in the early 2000s, but other than that, these are really relics of the '80s and '90s. There really actually are 3 high-value targets for such new initiatives for early cancer detection or cancer prevention: Pancreatic cancer, esophageal cancer and liver cancer. I call these the deadly 3. I was actually surprised by this statistic, I showed -- I told Brian DeGuzman about this before we started. If you add up these 3, the most -- the 3 cancers with the highest mortality rates, you can see there, 13%, 22%, and 22% survival at 5 years. So this very similar prognosis to what we have with esophageal cancer. The total number of deaths from these 3 cancers is actually higher than the number of deaths from breast cancer and colon cancer in a given year. That's because we actually have appropriate early detection tools for those cancers and we don't for these. So even though we think about these maybe as less common and they're not really -- we don't hear about them as much because we don't actually have anything we historically we've been able to do, patients get diagnosed and then 80%, 90% of them dying within 5 years. The other similar statistics amongst these 3, on the deadly 3 here is that picking them up in the early stage, Stage 1 or Stage 2 doesn't really accomplish a whole lot. So you can see here less than 50% will survive even if they're picked up in Stage 1. So the notion that you can actually have an impact on cancer deaths from early cancer detection doesn't apply here. It applies for breast. It applies for colon. If you pick up somebody in Stage 1 breast cancer or colon cancer, they actually do have very high survival rates from that. The treatments are appropriate, but not for these 3. So in order to have an impact on survival, we need to prevent cancer for these 3. And the only way you can prevent cancer, given that if you pick it up at Stage 1, that's not really a victory, as to have pre-cancer detection. Although there's active research in early detection of pancreatic cancer, there are a few companies out there that are working on that, I'm sure some of the analysts in the room have seen them as well as liver cancer, there are variety of liver cancer programs for early detection liver cancer. I'm not aware of any science or work on detection of pre-cancer for liver or pancreas. So as you saw from the -- as you see from this slide, even if we have a pancreatic test that can pick up pancreatic cancer or liver cancer, we're not going to really have much of an impact because half the patients are going to be dead even if you pick them up at Stage 1. So thanks to what I really consider one of the biggest scientific breakthroughs in cancer prevention in recent memory, esophageal precancer can now be detected. That means that esophageal cancer actually can be prevented. And not to be overly dramatic here, but this is a big deal. I mean we don't talk about this enough that what we historically do is early cancer detection. We pick it up at Stage 1, You get your chemo, you get your surgery. If you have -- if you're fortunate to have one of the cancers where that's applicable, you have a 90% chance of surviving in 5 years. But we can do that for esophageal cancer. Those 20,000 patients who get diagnosed a year, the 40 people who are going to be diagnosed with this near death sentence today, we can prevent it in them. That's our mission. That's why Lucid exists. So let's talk a little bit about our routes. Lucid was founded in 2018, to commercialize a scientific and technological breakthrough that was developed by a brilliant team of scientists and physicians here, led by one of the leading cancer genetics, Dr. Sandy Markowitz at Case Western Reserve University, Kyle's alma mater. Their work was funded by the National Cancer Institute and their collaborators including many of the world's leading experts on esophageal disease from the Mayo Clinic. You can see coauthors on this paper include people from the Mayo Clinic, Johns Hopkins, UNC, and this Sentinel 2018 manuscript, which I'll talk about in a little more detail in my later talk this morning, reported really outstanding results from a multicenter study on this groundbreaking molecular diagnostic test to detect even the earliest stage of esophageal precancer on cells collected non-endoscopically in a minimally invasive way in a physician's office. Again, not to be overly dramatic, but no molecular diagnostic test of any type has been able to detect any type of precancer at this early stage and any report that I'm aware of. And this is a test that's now commercialized as EsoGuard and we've done 10,000 to 15,000 of these over the last few years. So who are we today? Over the past 5 years, Lucid has made enormous progress on all fronts to bring us to where we are today. I believe we're a strong company. We have a solid foundation with real potential to be a great company with high values in the future. We have a high-margin asset with a massive market opportunity in EsoGuard. As Shaun will talk about in quite a bit more detail, we have a well-honed multifaceted commercial strategy. We have a world-class leadership team, many of whom are here today, and you'll meet later during the fireside chats and a world-class Board. You'll hear from our Vice Chairman in a bit. We have an operationally excellent multidisciplinary field and laboratory team that we're really proud of. And we have a real deep bench of committed and passionate physician ambassadors who you will see, who will be talking to us later today as well. Let's talk a little bit about the market opportunity. A couple of additional numbers, 30 million. There are 30 million patients in this country who are at risk for esophageal precancer and are already recommended by guidelines for precancer testing, $1,938, actually should be add $0.01, that's our Medicare payment rate. So we have an official rate. We've had that since 2021. And that price just around $2,000 or a hair less than that has actually held up quite well in our engagements with private payers. So that's approximately $60 billion market -- total addressable market opportunity, which we believe is real. And then finally, we have a 90% gross margin, and I'll talk about -- and Dennis will talk in a bit more detail on how that's held up.

Lishan...

Yes, please.

30 million would be 1 in every or 11 or 12 Americans are at risk. How do you determine that?

Yes. Shaun is going to talk a bit more about the risk profile, but I'm glad you -- Anthony, you reminded me this, to point that out. That's actually the most conservative number, right? So the guidelines, there's the ACG guidelines, there's the AGA guidelines. They have some differences within them. Some are a little bit more liberal, some are more conservative. This is based on the American College of Gastroenterology guidelines, with -- only limited to those over 50. So it's a 50-year-old who has 2 other risk factors and heartburn. That's how many people there are, 30 million of them. And that number actually doubled with the last update of the guidelines because the guidelines used to equivocate about women. The thing -- maybe -- women have as much risk of having precancer, but they have a lower risk of progressing to cancer. So the guidelines have previously sort of equivocated about that, they don't anymore. So if you're a woman with heartburn and you have 3 other risk factors: obesity, smoking, family history, et cetera, then you qualify to be tested. So that's a real number as simple as that. Thanks. Okay. So I'm going to move on here. What have we done and what's there left to do? So it's little busy here, but I just -- we've done a lot. So I'll go through them individually. On the commercial side, our sales and marketing process, as Shaun will show you, is locked down. We know exactly how to talk to physicians. We know how to secure adoption. We know how to drive test volume. We're driving test volume with an increasing productivity rate by our sales team. And there's no mystery about that anymore. And Shaun will explain to you this quite sophisticated approach that our sales team takes. We have a lockdown patient acquisition strategy, and it's been designed and has been implemented. It's multipronged, as you'll see, you'll see a bunch of acronyms, alphabets, Lucid test centers, satellite Lucid Test Centers, mobile Lucid Test Centers, Check Your Food tube events. All of that is really humming and operating like a well-oiled machine right now. Our strategy with regard to how do we get these cells so they can be tested, that's also been worked out. It's optimized. We use our own clinicians, our own nurse practitioners, our device administrators as much as possible. We have rigorous ways we train them, and confirm that they're -- we monitor them to make sure they have good outcomes. We have metrics to track them. And we have now a 99% success rate at getting cells and getting sufficient of them completing the procedure. So that's worked out. There's no further mystery there. It's just about continuing to implement that. In the laboratory, same thing. We acquired our own CLIA-CAP Laboratory about a year coming on 2 years ago, and we successfully transferred the EsoGuard assay from the commercial lab that we had been working with, and that you'll hear from Dr. Verma, as Shaun mentioned, but the performance of the EsoGuard assay and our efficiency in performing that has been optimized. We reported a 2.0 version of the assay recently that work -- that continued to improve on that. Our QNS rates, which is the quantity nonsufficient rate, so the percentage of patients who don't have enough DNA in their cell sample, is now less than 5%, which is a great number. And the efficiency of the assay has improved to the point where we can reliably turn these around in less than 10 days, usually closer to 7 days. We've also been working on the gross margin, and we've optimized the assay costs and the work -- some of the work that was done in and the efficiency of the assay has yielded benefits with regard to the cost of performing the assay as well as the cost of the device itself of the EsoCheck cell collection device, we've moved that to a high-volume manufacturer and gotten that cost down. And we've hit -- we're now hitting our current volumes, our target gross margin of 90%. Two other buckets, clinical evidence and on reimbursement, I'll talk about this in my talk later this morning. But we have now -- we've really expanded our clinical validity evidence base beyond the original paper that was published that Sentinel paper that was published in 2018. And that data, as I'll show you, shows unprecedented detection rates for precancer, early precancer as well as precancer as a whole. As you may have seen in our press release yesterday, we finally have a solid base of clinical utility data. You don't know how happy that makes me because we've been waiting for that for a while. So we reported on 3 peer-reviewed papers that were published in peer-reviewed journals on clinical utility, and they all met their endpoint with near perfect concordance between the performance, the result of the test and the impact on medical decision-making by physicians. So look, we'll continue to expand our clinical evidence space, compared to where we were 6 months, 9 months ago, we now have a real solid substantial base of evidence both on clinical validity and utility. I'll dive into that a little bit more later as to what those 2 mean. And then finally, on reimbursement. We're making progress there as well. Our revenue cycle management process and infrastructure has been upgraded, and many of you have already heard us talking about that. We're very happy. We've had dramatic improvements in how our claims are being processed through the commercial payers and just getting paid, getting paid on -- getting allowed claims, getting those claims to actually work their way through the system and getting paid for those. So that we really have the infrastructure locked down for that as well. And our market access team, as we reported in the press release, I think, about 6 weeks ago, we strengthened our team. We have a new VP of Market Access, who you will meet a bit later, and a VP of Employer Markets, who's actually wondering -- who's in the back of the room, will be available for chatting as well. So all of those green items, we've locked down. We're down to the last mile. Now look, this is the hardest last step. I'm not minimizing it, but all of the other elements are solidly in place. And so the 2 areas that we need to establish our medical policy coverage. So we're in network, we have in-network coverage with commercial payers as well as with Medicare to leverage our clinical utility data, which is now sort of fresh off the press, to drive medical policy coverage, including pilot programs such as coverage with evidence development, so-called CED programs and otherwise. So that's one major initiative. What are we doing now? That's what we're focused on really as much as anything. And the second area is direct contracting, which Shaun will talk about as well. That's an alternative path where instead of going through the traditional payer pathway and getting paid by submitting a claim and getting paid on claims, we have initiated a very aggressive push into direct contracting, where we are looking to drive direct contracting with self-insured employers and entities to offer the EsoGuard test as a benefit within their health and wellness program. So that's a direct contractual relationship with self-employed entities. We've announced we had our first contract. Those patients were being tested as we speak this quarter, that will drive revenue. And we've -- as I mentioned, we've hired a new VP of Employer Markets to help really drive that business and push hard in that. Yes.

Of the 30 million addressable market, do you know what is the pre-Medicare and...

Yes, good question. So the split on Medicare versus Medicaid. The -- based just on our experience in terms of the referral patterns that we have today, we're running at about 15% to 18% Medicare and the rest are private pay. That may go up over time, if you look at the epidemiology of the esophageal precancer. So about 85% commercial payers and about 15% Medicare. And that may go up, as I said, depending on the -- because the epidemiology would suggest there is the representation of the older population is a bit higher than that. But based on current referral patterns, that's how it looks. Okay. So that's it. That's our last 2 -- those are the last 2 boxes. And hopefully, next year, we'll have this and we'll be able to turn those green as well. Okay, I'm going to move on to our next treat. Hopefully, you'll find as Shaun mentioned, Stan Lapidus is not able to make it in person, but he recorded a short video which I think will tee up here in a second, where he contemplates his lifetime of preventing cancer and its perspective on Lucid's opportunity. As Shaun mentioned, Stan is the Vice Chairman and Lead Independent Director of Lucid Diagnostics, he's bio is in the program, you can read it, and he'll expand on his professional journey in the video. Suffice it to say that he's medical diagnostic pioneer, as Sean mentioned, he founded 2 of the most successful early cancer detection companies in history. And you could argue that he's done more to prevent cancer deaths than any single individual really in this country. I recently read somewhere that his ThinPrep Pap test, the way he developed how to do Pap testing for cervical cancer that they're reaching nearly 1 billion women who've been tested with that. So the impact has been significant. So let's go ahead and tee up Stan's video.

Good day, ladies and gentlemen. I'm Stan Lapidus. I'm an inventor, engineer, entrepreneur. I've been involved in early cancer detection now since the mid-1980s. So I became involved in 1988 with the idea of automating the Pap smear by using machine vision. My background itself is in imaging science. And my team and I worked for a couple of years, we got better all the time but never good enough and really quite out of desperation as the money was running low, I invented what became the ThinPrep Pap smear. So this is a better way of making a Pap slide, a Pap test. It puts cells in a single layer without overlying mucus and blood, making diagnosis easier and ultimately, more accurate. The result of the psychic ThinPrep was the milestones were: invention in 1988, approval by the FDA in 1995, and in 2007, it was successfully sold for over $6 billion to Hologic. For me, the greatest moments were in 2012, when the ThinPrep prototypes wound up -- the 2 ThinPrep prototypes wound up at the Smithsonian Museum. And paper started to come out in that decade of showing a reduction in mortality attributable to ThinPrep, a profound reduction in mortality attributable to ThinPrep. The next company I founded, Exact Sciences, which makes the Cologuard test, was a spin-out from Cytyc. The idea arose from if we can do look at cervical cells, what are other epidemiologically important cancers for which early detection makes a difference. Lung cancer is the most deadly largely confined to smokers. And at the time, there was no evidence that early detection saves lives. Since then, that evidence has been developed. We focused on colorectal cancer, colorectal cancer has a long premalignant phase called as manifest in polyps and adenomatous polyps, removing polyps is curative. It prevents the patient from being diagnosed with cancer. So cervical cancer has its dysplastic stages, colorectal cancer has polyps, esophageal cancer has Barrett's esophagus, a precancerous condition that exists for a long time before full-blown cancer develops. So the modern paradigm of cancer, which begins with Papanicolaou, almost 100 years ago is fine premalignant lesions, you prevent cancer. Early detection saves lives. While Papanicolaou focused on cervical cancer, we've seen in prostate cancer, we've seen in colorectal cancer, we've seen in breast cancer that early detection does save lives. And that if cancer is itself full-blown, if it's early stage, the outcomes are better. Alas that's not so true in esophageal cancer, but our focus is therefore on Barrett's esophagus. I was introduced to what became Lucid in 2018 by Sandy Markowitz, who is one of the scientific founders of the company. He mentioned to me that he and his colleagues had just published a paper on detection of Barrett's esophagus, the work consisted of a collection device, a novel collection device and a novel assay. Lishan reached out to me as the work progressed in 2020, and I was very excited from the get-go. To me, the parallels between cervical, colorectal and esophageal cancer were very clear. This is a cancer, especially for which early detection saves lives. There are guidelines for screening high-risk individuals with esophageal cancer. Those guidelines are largely ignored. The results are tragic. Shortly after meeting Lishan, I did the test myself at a lab at the company's facility in Phoenix, and it really did go down very easily. It was easy to swallow, one doesn't feel anything on the way up and the test was over very quickly. I'm excited about the company because of its potential for reducing mortality from esophageal cancer by finding premalignant lesions, my mantra, my professional mantra has always been focus on problems that are big, large markets that are clinically important and for which the company has IP that is broad and defensible. That really -- Lishan and I bonded over those concepts. So let me talk a little bit about parallels that I see between Cytyc, Exact and Lucid. Each company is focused on detecting premalignant lesions. That's the best place to intervene, to prevent cancer to enable therapies that are curative. The curative therapies can only be applied if early detection has taken place. One of the things that's true about all companies in the early detection business is that it takes time to invent a test, to analytically validate a test to prove out the test performance in the intended use population in clinical trials and to establish utility, which means do doctors behave differently or are there better outcomes. In this sense, Lucid is just like Cytyc and Exact. The road is long, but the benefits are great. I'd like to spend a moment talking about liquid biopsies. And in full disclosure, I'm a Chairman of a company called Mercy BioAnalytics, which is a liquid biopsy company. But I think the greatest potential for liquid biopsies may be in detecting early cancers, not precancers because when premalignant lesions are small their connection to the circulation is very tenuous. Results to date have been not good for stages 1 and 2, and quite dismal for premalignant lesions, direct sampling, whether it's sampling the cervix through a brush, whether it's collecting a stool sample to sample the colon or whether it's using the little device that Lucid has are direct methods that certainly shows strong results for premalignant lesions, whether blood will ever achieve that is unknowable, but I am confident it won't be anytime soon. I'd like to talk for a moment about the things that in my mind, make Lucid unique. First of all, as we discussed, its technology, its collection device is an intimate contact with the affected area. That's super important for detecting premalignant lesions. Beyond that, speaking as a Board member, the culture of the company is very mission-driven. The literacy broadly in the company about cancer, about molecular methods for detection of cancer, about the epidemiology of cancer are widely known. Team is incredibly hard working and are men and women whom I simply admire. Lucid's value proposition is very clear. It's early detection saves lives, finding premalignant tissue before invasion takes place is the difference between life and death.

Okay. We'll keep moving here. Real quick. I apologize to Philip following -- I was concerned about following him, but following Stan is really tough. So just a few things. As I mentioned, Dr. Woodworth comes to us from Denver, Colorado, at least the Denver, Colorado area. His partner is actually Reggie Bell. Reggie is the founder, along with Kate Freeman of the American Foregut Society, to say that Dr. Woodworth plays an important role in innovative robotic surgery is an understatement. And he continues to with him in his practice, innovate that into Foregut disease. So thanks again, Dr. Woodworth for being here.

Thank you very much. Okay. Cool. Good morning, all. I'm Philip Woodworth, general surgeon, fancy plumber. I don't know anything about investing, but I know good ideas when I see them. So I worked at the Institute of Esophageal and Reflux Surgery in Denver, Colorado, in minimally invasive robotic surgery, and we work out of Sky Ridge Medical Center in the robot department they have developed for us there. We focus as a partnership on the treatment of foregut disease, reflux disease. Truly, we do research. We do company evaluations, product development and care for patients every single day. And we even have a therapy dog, if you stop by and see, Siena. So we're not really just a local practice. We are truly in international, I refer to us as a Quaternary practice. So even when the University of Colorado has patients that they can't figure out, they call us to treat the patients and take care of them. So I like to have objectives during the talk, so I'm not just up here telling stories, but I hope at the end of my little spiel here, you understand a little bit about reflux disease, esophageal cancer. You understand the issues with the development of the disease and identifying it and subsequent treatments, as well as identify opportunities to improve the algorithm that we're currently using and to know the value that EsoGuard does provide to our patients, okay? So what is reflux disease or GERD? Well, it's a foregut disease. And foregut disease exists from the element of the mouth down through the esophagus, to the second portion of the small intestine. And the most common disease affecting the foregut is gastroesophageal reflux disease or GERD. And GERD is a digestive disorder where stomach acids inappropriately elevate out of the stomach and move up into the esophagus or higher, all right? Key to understanding this is that everybody has a little bit of natural reflux. So it only becomes a disease when this reflux becomes impactful on your daily life. It begins to impact it in a negative way. All right. Does anybody in the audience have reflux, anybody willing to share? Yes. Okay. Yes, it sucks. Pretty bad. I'll tell you a story later, but classic symptoms, heartburn, regurgitation or food coming up, problem swallowing as the reflux gets worse, the esophagus gets raw, starts to peristals inappropriately. People will just say, maybe I don't have heartburn but I kind of feel queasy or indigestion and chest pain, drives a lot of people to the emergency room, especially if you get older into the cardiac concern years, a lot of patients will show up in the emergency room with complaints and say, "Oh, I think I'm having a heart attack." No, it's just bad acid reflux, too much chili. Worrisome symptoms are unexpected weight loss, blood actually in your saliva or severe problems swallowing food where it's getting stuck and not going down. These are times that we start to think about the presence of esophageal cancer. The unfortunate aspect of this is that this is usually a late sign. It means that cancer has progressed, and I'll tell you a little bit more about why that's a problem. So again, a quick anatomy lesson. The esophagus, the foregut comes from the mouth, down to the second portion of small intestine, a blow-up section. Here's the lower esophageal sphincter where the esophagus and the stomach meet and there's another sphincter at the other end, but this is where we're going to focus on talking about for reflux disease. So basically, there are 2 key elements. There's a couple of things, with 2 key elements that have to do with forming this barrier are, number one, the lower esophageal sphincter, a muscle area at the bottom of your esophagus and a diaphragmatic pinch, a pinch where the esophagus is augmented -- the LES mechanism is augmented by the esophageal pinch if you ever heard. Grandma has a hiatal hernia or anything like that. We're talking about a loss of the pinch in those kinds of situations. All right. So reflux is a valve disease. It's an anatomic problem. It's not a chemical imbalance. It's not an emotional state. It's a failure of a mechanical system. So it's important to remember that. So when the LES valve works, food and liquids will come down in the stomach and stay in the stomach so that when you swallow, things will come down. The valve mechanism here will close and what is supposed to stay in the stomach, stays in the stomach. When you have a reflux disease, the valve has failed, allowing gastric contents to reflux back into the esophagus and that's where you'll develop those symptoms that I mentioned earlier, the heartburn, the indigestion, the chest pain. You can see the effervescence of the acid. Okay. So again, normal reflex on the left or the right, excuse me. So where is reflux disease? Where do we find it and counter it? We've already seen in this room, it's prevalent probably in 40% of you all. But I'm going to tell you it's everywhere, okay? And I didn't have to go to a lecture or do any special epidemiologic studies like they did here out of Barcelona, where they said, "Hey, in this formal study, 18% to 30% of Americans suffer from reflux disease." I didn't need that, because my prior job before coming to Denver was in Northwest Arkansas, Bentonville. And does anybody know what's in Bentonville? World headquarters of Walmart. And so you don't have to go to business school to understand business when you live in Northwest Arkansas. You just have to either fish, hunt or play golf because everybody there knows what they're doing. Because Walmart, I'll tell you doesn't do anything without carefully considering what it's up to. So if you go into the one of storage, you'll find milk at the very back. It's so that they force you to walk through their store, get the milk where they sell under price and then you fill up your cart on the way back. But as you approach the cash register, their profit margin increases exponentially as you get closer and closer. And when I know that they placed everything in their stores to maximize profits, I know that there's a good market when you bump into this guy at the checkout line. Where are the cable guy? He's at every single Walmart checkout line because when you've got those pork rinds and those Cheetos, you're going to need something for a little bit later. So that's your market analysis there. Okay. So what do we do in the managed reflux disease that I told you is everywhere? Well, we're not. We're really not, honestly. I mean I'm a physician. I take pride of my work, but I can tell you we're failing at this as a medical community. So we do have algorithms. We have a plan it's all written down, there's the plan. The problem is it's complicated. You got to go here, you've got to go there. You got to see different specialists. It's really difficult to navigate. So it's not an ideal. It's not -- there's no Fahrvergnugen in it. There's no joy in progressing through it. Most of the patients direct care themselves. They show up at a pharmacy, they walk down the aisle, they pick one of their favorite flavors of antacids or medications, and they treat themselves. Lots of different options here. Even the formerly prescriptive proton pump inhibitors are now available over the counter. They're stronger. They're better, more effective than Tums, but people still walk around with Tums in their pockets. But once a year visit to your family physician, they're really concerned talking to you about your weight. They're worried about your blood pressure. They're worried about your diabetes. So when you say I've got a little bit of heartburn, they're like, lifestyle modifications, don't drink alcohol, no caffeine, no chocolate, don't eat late, sleep sitting up, lose weight and always quit smoking. I mean that's -- there's no fun in that, especially as we approach the holiday season. Or they try to refer you to a gastroenterologist, and that's really, really hard. I don't know if you've ever tried to get an appointment to a dermatologist or a gastroenterologist. It's like, I'll get to Mars before I get there. So that's complicated. So what do they end up doing? Write a prescription. That's easy, all right? They failed the lifestyle modification, so just write a prescription. That will get done, and they'll go out there and they'll pick it up. And they're writing a lot of prescriptions. I'm telling you, billions of dollars are spent every year trying to manage this disease without ever really evaluating it. So we're not really fixing anything. We're really just doing better living through chemistry. As I said, reflux disease is a valve problem. And all we're doing is we're masking it. There's a hole in the bucket, and we've changed the color of the water leaking out of the bucket. That's all we're doing presently. So again, medications don't stop the reflux. It's a valve problem. Even though there's just ash coming out of the volcano, it's not lava, it's still erupting. So think about it that way, the regurgitation of gastric contents are continuing. And mind you that we've altered the chemistry of what we're refluxing. Our bodies weren't supposed to be exposed to altered chemical states that are coming from the stomach so we're modifying those. American Gastrointestinal Association said, half of the patients are getting no relief from the medications or the treatment plans that they're doing and their own data says almost half of them are unhappy with their current treatment. So there's a real sense of expectation. There's an unmet need out there in terms of treating this. There's an opportunity, as I would like to see it to really intervene and take care of patients. Remember, medications no matter what we're doing now does not stop the progression to esophageal cancer. I told you, we're not fixing the valve. We're only changing the color of the reflux state, we're going from lava to ash. So we start off, which is symptoms, we progress to low-grade changes of Barrett's esophagus as we heard about in the previous speakers' comments. Those changes become more threatening until we end up in esophageal cancer. So that's the progression to cancer, start off from symptoms all the way to cancer. The progression of cancer starts off small and then just like any other cancer as it grows, it invades deeper and deeper through the layers of the tissue. What makes the esophagus unique and very troublesome is the fact that it lacks a protective lining or exterior coating called the serosa, so the cancer does not meet a natural barrier like it would in the colon, for example, where it hits an edge and has to figure out how to navigate this. It can just walk straight on through and that's why we see the rapid progression of this disease if we don't catch it early. You're going to see this slide all over again. This is true. We are just failing at treating cancer. 1970s, started increasing. It's kind of floating around, something happened and it changed. So cancer deaths that I just updated this last week, 5-year survival is around 22% out of all those patients identified with cancer. 5-year survival, you're probably going to die if you get this disease. Compare that to breast, look at this, 91% survival rate. We are doing really, really, really well with breast. So winning the battle against cancer is not impossible. We just must be doing something wrong. So the increase of esophageal cancer seems to parallel the introduction of medications. And some people think that the medications may be at play. That we don't have any direct evidence. But it seems awfully strange that once we start playing with the chemistry of the stomach, esophageal cancer, esophageal cancer rates suddenly went up. I told my daughter all the time, "Life's a book shelf." If you put one thing on the one end of the bookshelf, you got to ask yourself what's falling off the other side. So why worry about this. And again, the medications that we're using to treat this are not fixing the actual problem. We're just masking the problem. All right. We're not doing the screen, we need to. You're going to see numbers all over the place. But the key thing here is that if we've got this many patients, 46 million patients that we're identifying as potentially needing some sort of screening and we start following the guidelines, we're still only screening a fraction of that, less than 1 million. Again, there are too few gastroenterologists. There's too few opportunities to do screening. So this isn't working. And this has been our mantra. We've been trying to do this for decades. So remember, this is our mechanism of handling esophageal cancer detecting it, and those rates just keep going up. So we're failing. In fact, Jeff Peters, Cleveland Clinic, I love this. That's why I quoted it. "Our current approach to the prevention and management of gastroesophageal reflux disease and therefore, cancer is an abstract failure." We are failing at this disease, unlike anything else." So a quick story. All right. I call this season check and the heartburn chef. So everybody is busy nowadays and has a busy job and there's this young entrepreneurial chef in Denver, in his 40s, he's starting up his second restaurant, lifelong reflux disease, horrible, to the point now where he's walking around popping tums and he can't really taste the food he's preparing. A friend of his says, "Hey, there's this Lucid Testing Center, why don't you go get checked?" And he says, "I don't have time to take off a day to go get checked for this. I've got all these other things I've got to do during the day. I can't take off one day from my business." And he said, "No, you can pop in, get the test done and you go back to work, no anesthesia, anything." So he does it. Lo and behold, the test comes out positive for DNA methylation, suggesting that he has Barrett's esophagus, a precancerous lesion. Gets an upper endoscopy. Oh, yes, he's got precancerous changes in his distal esophagus. So he gets referred to me. I do an operation for him, turn off his reflux. He puts away the tums. He's back at work. He's more productive, sleeping better, now opening his third restaurant down the street from our hospital. I'm hoping to get some French fries for free. Yes?

How common is it that the observable symptoms of precancer are, are they treatable, after having diagnosed it with the EsoGuard? Does it -- how often do the symptoms relay that it's too late to treat it?

So how often do the reflux symptoms mean that it's too late to treat the reflux disease? So it's never too late to really treat the reflux disease. At least, as a surgeon, I always think, so is the cancer. So from the late symptoms, that's difficult to say. The -- I don't think you can directly quantify a symptom to a survival rate. It's going to be directly based on the pathologic findings. The depth of invasion is more accurate way. The canary in the coal mine, I can't tell you how many passages are flooded with carbon monoxide gas. So if the canary dies, you don't know the extent of it. Does that make sense? I'm trying to come up with an example. I don't have a great answer for you on that.

Okay. Yes. You said you turned off DNA methylation. So yet Barrett's esophagus [indiscernible], how did you turn that off and did you fix these esophageal sphincters in [indiscernible]?

Yes. Okay. So we don't turn off the methylation. So the question is, did we turn off methylation or repair the methylation by fixing the sphincter? The answer is, the methylation is not something that we directly as surgeons fix, but do know that our cells are constantly modifying. They're being surveyed and correct. So methylation is a variable state. It's like the weather. It will be hot one day and cold one day. So now if I turn off the stimuli for methylation of the DNA with reflux surgery, then yes, I do can provide an opportunity for even regression in certain patients of their pre-cancer state, I'll show you a procedure that has been shown to have regression. So a little bit off topic, though, is what I find exciting about this is if I have an opportunity to identify somebody at an early stage in their reflux disease, and intervene at that early moment, then my ability to not only stop their reflux disease, preserve but offer them an opportunity to preserve esophageal function, meaning long-standing reflux disease can lead to dysfunction trouble swallowing. So I can preserve that and offer them an opportunity in certain patients with short segment Barrett's to actually regress them back to normal tissue. So prevent cancer, reverse the risk factors for cancer. Okay. Anything else? All right. He's happy. I'm hoping to get something out of it. All right. So what about the future? Okay. So I already told you that patients are everywhere. We don't really have to look at them. This is just the beach out of the Jersey shore. Study that came out last month says that our current problem with reflux disease and cancer is not only going to continue to increase in the United States, but worldwide. The projections in China and India alone are profound. So this is not a market that's going away. It's getting bigger. We've got new drugs coming, and we're beginning just to hit the U.S. market. So there's going to be new treatment algorithms. There are going to be new ideas about how we manage this. And so there's going to be a new interest. You're going to see advertisements on TV. So as public interest and education grows, people are going to be saying, "Hey, what else can I do about my reflux disease?" Sleeve gastrectomy's, 150,000 done last year in the United States, about 0.5 million done worldwide. When I remove this section of the stomach I make this, the pressure in this area since it's a smaller volume, higher and increase pressure in the stomach here causes increased reflux. So I'm anticipating in the next decade to suddenly see a spike in esophageal cancer related to sleeve gastrectomy. It's coming, it's coming for sure. This showed up in my door, I'm over 50. So I get AARP delivered to my house now. And this was literally in the thing that came out last week, I took a picture of it. But the awareness about reflux disease is increasing among people, the longer that we're living increases the opportunity to develop this disease process again. So again, I'm looking for a way to intervene early. So progression cancer, again, starting off with symptoms, moving through changes to cancer. Our window of opportunity is to find patients that currently aren't getting endoscopies and screen them here so that we can intervene and prevent cancer. If we prevent the progression to cancer, we've initiated a cure without performing surgery for the cancer itself. EsoCheck, it's a great thing. It's very simple and easy to do. It's easy for physicians to refer patients for the EsoCheck. Now they can -- it's just like writing a prescription, they can write a referral to this. They can do it in their office. They can go to a Lucid Testing Center or they can go to a van that pulls up, at a fair, and treats firemen at their annual ball. This is the Lucid Testing Center in Lone Tree, Colorado. You walk in, there's a nurse practitioner. They provide you a very thorough evaluation and then perform the test, and then you can go out and have lunch. Pretty nice. At our Heartburn Institute, we've instituted the call to our center. We take a history, we get an x-ray of them and we send them to Lucid. That is our model. We want to know. Once we -- our goal is to identify DNA methylation. So once we identify that, we've got a positive test. Patient now knows. Now they're engaged. We can collect these patients and then we can hold on to them. We enroll them into our heartburn treatment center, evaluate them fully. And then more importantly, we continue to follow them. So now they're engaged in our health care system and attached to the hospital. Diagnostic endoscopy, no longer screening endoscopy. Now we're doing Medicare, Medicaid, private insurance, private payer funded diagnostic screening, well focused. And again, if we identify these patients early and before they build cancer, we can avoid using knife to operate on them. Hospitals like this, heartburn is an easy, easy, easy business for them to get into. It's not a lot of overhead but it drives a lot of revenue because it brings cases to the hospital. It activates their pathology department, engages their endoscopy department as well as radiology and other services. ER now has a place to offload those patients with atypical chest pain. This is a very low-cost, easy entry, prevalent disease process for health care systems to enter. And it makes me happier because identifying patients and engaging them gets them closer to me being operating on them currently, we're operating on just 0.1% of the population that has reflux disease, probably in the realm of 10% to 20% of those patients actually need an operation. Not everybody needs it, but we're not doing it. This is the Link's device. This has been the device that is associated clearly with regression of early Barrett's when used. Okay. Remember, surgery stops reflux. We reestablished that barrier. This is Beaver Lake in Arkansas. All right. Let me wrap this up. So what do we want? We want to parade. I'm serious. We we're in New York, you guys got the Valley of Heroes outside of the Canyon of Heroes out there, tickertape parades. We want to have a parade. Because when we celebrate, we recognize that we've had success, and we gather in Coney Island in Brooklyn, this October, tens of thousands of women showed up to march in their support for breast cancer, 4 million women are living today in the United States as breast cancer survivors. The American Cancer Society said since 1989 when they began aggressive screening, they've reduced mortality for breast cancer by 49%. We don't have any marches, Coney Island is empty. Esophageal cancer, you get it, you're going to die. It's 1 of big 3. So I would like to see us get to the point where we're back a few years from now talking about the parade we're having in Coney Island just like the breast cancer one. And I think Lucid is leading the way in getting us there because they're providing us hope. Thank you. Yes, yes, sir?

Other than GERD...

Say again?

Other than GERD, what are significant causes of esophageal reflux disease?

Excellent question. So what are the causes of esophageal reflux disease? Largely genetic. Our bodies are programmed with an esophageal sphincter at the bottom that will naturally shrink with age. In some people it shrinks very quickly, others very slowly. When it reaches a certain length that fails, some people have stretched connective tissues. And if you have a deficiency or stretch your connective tissues, you're more likely to develop a hernia. So if you had an inguinal hernia or an umbilical hernia, you can know that -- man, maybe I'm more likely. If you ask grandma and grandpa, if they've got heartburn, you're probably at increased risk. Similar things that are more commonly associated with it other than genetic factors are smoking and obesity because they affect connective tissue or increase the intra-abdominal pressure which forces things up.

So practically anything in the stomach, walls of the stomach?

Technically, yes. Any other questions? Yes, sir.

You made a statement that I felt was provocative about how some of these therapies likely creating incidence of cancer, certainly interesting absolutely possible. Is there any -- have you read literature, or any data to support that type of thing?

So yes, this is a point of contention. If we had a smoking gun, you would see these products off -- well, what you'd see is litigation. People would begin, sued right and left. And you're beginning to see some of that. We do know that altering the chemistry in the stomach like decreasing the acidity, changes the -- I'm going to be careful here, changes the molecular shape of the chemical compounds. And the bile salts that are there go from being a normal, we've developed and evolved to tolerate them into a precancerous form. So if you're having bile reflux, I know that, that's precancerous, also reducing stomach acid has been associated with development of certain bacterial overgrowth, predisposition to developing C. difficile colitis. But I'll tell you this. It doesn't really matter if there's any fact to any of this. Because Dow Chemical company went bankrupt over the presence of -- their development of silicone breast implants. They were sued into bankruptcy because silicone was causing all these things. So that was the perception. It turns out what do we use today in breast reconstruction, we use silicone breast implants. But the fact that there is concern out there has led to an opportunity that people are reconsidering their treatment of the own disease, the AARP article put out says hey, maybe I should not just take a medication and forget about this. Maybe I should actually do something about this, and having an opportunity that does not require you to get a driver, have anesthesia and spend half a day or a full day going to a center to get tested is the opportunity that I see Lucid is stepping into. Because if you're in Fort Morgan, Colorado, you're going to have to wait once a month for the gastroenterologist to come. But your primary care doctor could give you EsoCheck. You send it off and they run EsoGuard and check for DNA methylation. That's awesome.

But how do we get the primary care physicians to engage to understand, right? Because that's why their primary care, a little bit of everything [indiscernible] not that...

One thing, if you don't mind, I think part of the question was, are there other things that cause esophageal cancer. And I think maybe it's worth elaborating on the fact that at least adenocarcinoma, we think is reflux even if there's some.

So 2 different types of esophageal cancer. The classic one that grandparents and their parents used to have, which was related directly to smoking and alcohol, midesophageal related to squamous cells. Adenocarcinoma, which is from a different cell line is reflux related. We really don't know that it's related to anything else. The only precursor to development of esophageal cancer, adenocarcinoma is reflux, which leads to Barrett's, which leads to cancer. And that's where testing patients because right now, we're failing. Just understand this, we're feeling. We're offering an opportunity to intervene and change the algorithm, change the dynamic where we're testing people earlier, catching them, getting them involved evaluated, getting them enrolled and in some cases, getting them a treatment that will reverse it. Yes, sir?

Physiologically, has anyone experiment or like [indiscernible] medical device that could see you...

Yes. Yes, we are. Come visit us in Denver. We'll show you what we're doing. Look, the interest in this is profound. A few years ago, the American Foregut Society was formed. It was meant to bring gastroenterologists and surgeons together to address this issue. And the membership went from being 13 to 1,000 rapidly because everybody realizes that we're failing here. And this is really cool. And I'll tell you why it's really cool. So I do operations that cure people of cancer, and they're happy. The patients are happy. I do an operation that cures patients of their reflux disease, and they love me. Why? Cancer is this esoteric thing that's killing me. Heartburn is literally killing me every single day. I've had soldiers when I was stationed in Korea, come up and give me hugs on post and literally say things like, sir, I'm no longer praying that the North Korean shoot me while on patrol at night. Yes. So this is profound.

In the [indiscernible], are there other cancers in that can be related to esophageal and that you get colorectal, you're more likely to have esophageal?

Well, you're talking about genetic predisposition?

I mean you can see the data is [Technical Difficulty] exists, but...

I'm not aware...

If you have a family history of Barrett's but not -- we don't know of any links to other...

Genetic testing...

Answers, yes...

Not like the [ BRCA ] family, where the ovarian, the breast are all related or the MEN syndrome or we just don't know because we haven't figured it out yet. I propose to you that over this next coming years, just like the introduction of antibiotics to our system as we begin to understand the influence of the gut biome and how important it is in our overall health. We're going to look back and think we were using leaches and blood letting before any of that. And so to my point about altering gut chemistry is that we really don't know what we're doing. I'll tell you that if you take sterile mice when they're born, they have no bacteria in their gut. And if you take those newborns and you put them off into a family of mice that are obese and a family of mice of normal weight, you bring those 2 mice back together and you feed them the same diet, the one that lived with the obese family will get obese and the one that lived with the thin family will stay thin even though you're giving them the same diet, and it's related to the gut biome. So anyways, yes, sir?

Have you seen this, EsoCheck, used more -- in all the patients with GERD or only for higher risk of patients?

Can you repeat that one more time?

Are you seeing this EsoCheck used on all patients with GERD, so as a screening tool to all patients with GERD or all the high-risk patients?

So the question is where do I see EsoCheck use? Who do I see it used in? I see it used in everyone. All women get mammograms. All women get Pap smears. Why wouldn't we just do a simple test to check? I mean, we've proven beyond it out that we can intervene and stop cervical cancer, a horrible disease, by checking for it. And we don't ask questions. We just get Pap smear, I'm speaking -- my wife would tell me...

On that a little bit. So right now, there's different -- think of them as concentric circles. There's the most conservative guidelines are not to screen people who just have GERD, but to screen people who have symptomatic heartburn and 3 out of 6 risk factors, and Shaun will go over those in a second. There is some interest in expanding beyond that. One of the societies, the AGA says, you don't actually have to have GERD. It's a risk factor, but it's not everybody with GERD. It's you have certain risk factors that put you in a position where your chances of having that precancer are 7%, 10%, not 1% or 2%. So you want to have a population that is somewhat enriched in that. And if you just sort of do it in everybody with GERD, you're unlikely to have an outcome. There is an effort, and one of our colleagues, Dr. Shah, who I showed there, is doing a really interesting study at Case Western, where they're taking patients who have risk factors but have no symptoms. And the reason that's interesting is about 40% of people who you document to have reflex and actually, the valve problems that he mentioned have literally no symptom, not just because they're on PPIs, they just have no symptoms, but they're still at risk for developing precancer in cancer. And so he's doing a study right now. We have some preliminary results from that really look interesting, where they take people who are undergoing colonoscopy and they count their risk factors. They say they don't have GERD, and they do an EsoGuard test on them, and they're getting 5%, 6%, 7% of those people who actually have the precancer even in the absence of GERD. But that's sort of exploratory for these like concentric circles, right now, our focus -- if we could just get people who have the most conservative guidelines of ACG and get them tested, we would be saving thousands and thousands of lives. So that's our primary focus right now.

Remember, making -- writing those guidelines is like creating sausage. You really don't want to see how it's done because they're not always making decisions in our best interest. They're making decisions based on financial expectations to the system. And so -- if I'm talking to somebody that could be my mom or grandma I'm going to offer them the best care and the best option for them. And I'm up here because I believe in this and I preach to it.

Okay. Moving on. Thanks, Philip. I warned you earlier, I think I've seen Philip gave a lot of talks for a lot of industry and he's done a lot of stuff for us. And I think his passion for patients and innovations is really contagious. That's what it is. We're going to change gears just a little bit. We're going to talk about realizing EsoGuard's commercial opportunity. By design, you're going to see a bunch of similar slides. So when I get questions from Anthony or Mike, I think we're going to dig a little bit further into this. Who are these people are and how are we getting to them? What is that process? And so the first one, I'd be remiss not to put up, is the standard slide of the rise of esophageal adenocarcinoma in the U.S. over the last 4 decades, which is a staggering over 500%. And before I go any further, I'm just going to tell a quick personal story. And I told myself, I'm going to keep this a bridge because I think it's important, but I have personal experience with esophageal cancer. As a matter of fact, in 2007, I lost a really close family member to it. He was a larger guy. We're from Buffalo. So if you guys know [ bad ] blue, sometimes [ bad ] blue, white chicken wings. And it wasn't until the symptoms that Philip described, and that he lost a lot of weight out of nowhere. He was having trouble swallowing and they couldn't figure it out for months. I remember that it took -- because they'll check every place except for the upper GI tract first. And fortunately, we have a good cancer center there at Roswell. He was diagnosed with Stage 3 and Stage 4 esophageal cancer that also moved into his stomach. That required, as Philip described, surgical resection of your esophagus. As we say here, number one, Check Your Food Tube, we can't live without that. And so the story actually kind of begun and ended here, his dying wish was to get his kids to a mets scan. And so we did. We rented a van. It was my uncle Mike. My other uncle Mike came. Just so you know, my dad's name is Mike, my middle name is Mike. There's a lot of Mikes floating around the O’Neill. And we drove them down here. And it was my first time driving the city and I tell the story. I hit every cone I saw. I figured out that Uptown was north, Downtown was south. And we stayed at the Marriott Marquis, which everyone here knows that. We try to stay away from that area as much as possible. He was ultimately too sick to get to the game. We got his kids there. They had really nice seats. I didn't, but they had a good time. And after we dropped them off, I said, good bye and I loved you, and I didn't get a call almost a day later and I didn't pick it up because I knew what it was. And so we had 3 years from that date. So I lived through them. I saw it. And there was no more light beer, there was no more chicken wings. There was TPN and ice cubes. And so when I talk about what's going on here and I talked about our commercial process and what this great team is doing in the field, I'm talking about it from a place of knowing. So let's talk real quick about the opportunity. And I think, Anthony, to your point, let's kind of dig into who these people are, right? So there's almost 340 million people in the U.S. these days. And we know that as many as one in 5, have heartburn, right? There is an important step that we didn't talk about yet though, which is almost 40% of individuals that are diagnosed with esophageal adenocarcinoma were asymptomatic. They had no symptoms to begin with. So that's important for us to talk about for the future here. So that leaves us with about 46 million addressable patients with heartburn. But let's just kind of pause there and talk real quick about who these guidelines are because we keep talking about this. As a company, we follow around 5 U.S. and EU Society national guidelines, right, that all define who this patient population is. And in the U.S., we have 2 we look at. We have the American College of Gastroenterology as well as the AGA clinical practice update, who not only defined who these patients are, and we'll talk about it in this next slide, but they say that the use of non-endoscopic testing, they even use a picture of EsoCheck in their documentation, is on par with the current gold standard, which is upper endoscopy. Now I will sit here and argue that the gold standard is not endoscopy. You heard Philip say it is a failed screening tool. Maybe it's the bronze standard, but we're right on par with that. The ACG itself, which is the strictest of the guidelines, says those individuals with GERD, right? So your precursor is GERD no matter what, plus 3 of these risk factors are all things that we know and understand, male, sex, you're over the age of 50, you're white race, you have central obesity, you're a smoker, past or present, or you have a genetic predisposition. So there is a [indiscernible] pieces. Any combination of those 3 plus heartburn means you should be getting screened. We unfortunately know that about 95% don't. They actually never make it past Rite Aid, Walgreens and CVS, and the few that do hardly make it to their primary care. And so when we look at that market, that's the totally addressable right here market, here today, which is 30 million people, men and women that meet those risk factors. Now it's important for us to understand this number as it is for Lucid in 2023, but Lucid in '24, '25, 2030, in the future, with all the work that the GI societies will continue to do, honestly, with diagnostics like ours, further identifying these patients, these disease states and cures, this number is probably just going to rise. And to Dr. Woodworth's comment, as a brother, as a father, as a son to someone, they're going to do what's best for their patients. So we have guidelines and they're just that, they're recommendations in terms of who we should treat. So as Lishan mentioned earlier, if we look at our total addressable market, our TAM, it's pretty aggressively large, almost $60 billion, but it's true. We have a really easily 30 million patients that we can address. And I think what's important here is that for a company our size, a company in our space, in diagnostics in general, us making an impact, even a smaller part of this number is a major revenue bump for us. And most importantly, we're going to affect a lot of patients extremely positively. So I'm going to change gears a little bit, and we're going to talk about the patient journey, but I'm going to talk about it in a few different ways. The first we're going to talk about, what is the ideal patient journey? What should actually happen? We know we have societies that define who these patients are. And we know that a few of these patients, probably a lot of us actually are in this room. We also know that right now, they're not being screened. What should happen is these high-risk patients should be referred to a specialist, Dr. Dezfoli will be up here after lunch to talk about not only EsoGuard in his 4 walls, but how he manages this disease and his patients as well. They should get an endoscopy. They should get pinch biopsy. Maybe there's an argument that there should be additional confirmatory diagnostics in there that include AI, that include DNA, that include biomarkers, and that those should go to either a pathologist or a lab like ours for confirmatory diagnosis and then they're managed accordingly, right? If they have cancer, they're treated. EMR, surgical resection, whatever that may be. If they have pre-cancer, we know we have proven technologies to eradicate that disease. And they can be surveilled and treated at the same time. This is our ideal patient path. This is the reality. We skip this entire piece. So I guess, right here, we could have put, like I said, Rite Aid, Walgreens and CVS, that we know who these patients are, us ourselves ignore those symptoms and we go get [indiscernible] When we do make it to the primary care, they put us on long-term PPIs or proton pump inhibitors, right? These provide symptom relief. As a matter of fact, they do a really good job, right? And so I don't need to show back up to my primary care because I take my pills every day and then I go home. But as we've heard from our expert, Dr. Woodworth here, that these don't stop disease process. That's not going to stop you from getting cancer. There's a lot of good clinical data to support the fact that these patients still get disease and we need to find them. And so here's the reality of what happens. High-risk patients get ignored. They end up like uncle Mike, late-stage cancer. And now it requires what surgical resection and not a good life. Now we can change the paradigm. Now we introduce a triage tool like EsoGuard, where we have a well-defined population. We know where these patients are, right? I look at it as 3 buckets. The largest bucket we know is, third time I said it, Rite Aid, Walgreens and CVS in the U.S., maybe [ Duane Reed ] down here. And if we can get to those patients through a direct-to-consumer, right, where we talk about heartburn causing cancer, that they have a better shot at making it to their primary care at least and maybe even a specialist. That second bucket is, in fact, your primary care physician, right? Where we know we have tens of millions of patients that get on long-term, chronic prescriptive PPIs every year. And that's about as far as they go. The smallest bucket is our specialists. We have 2 in here today, actually, we probably have like 5, but I'm talking about Dr. Dezfoli and Dr.Woodworth who see these patients. Not a lot of [indiscernible]. I can tell you as a patient, I had an upper and lower earlier this year. I was having GI issues. We joked about it, but when I called, it was in February and they say, we can get you an opportunity in October. October -- and so I didn't call it any favors, but I did call scheduling every morning until they found me an opening, and I got in there a couple of weeks later. But that was me pushing, right? That's not the normal patient. Most of these get on PPIs and they go home and that's it. Now we have an opportunity with a non-endoscopic test like EsoGuard, with a highly accurate molecular diagnostic that identifies changes at a molecular level in these biomarkers that are known to be associated with these disease states, not just cancer, but as Lishan mentioned, precancer. And it is critical. It's existential that in the esophagus, we identify things early. If we identify them early, they can be treated. If we don't, it is a highly deadly disease. And so now the paradigm is, not only to identify high-risk patients, but we work with where the patients are. We can [indiscernible] and direct-to-consumer now. We can certainly partner with our primary carers to educate them on this, and they're very familiar with cancer prevention, at least the term prevention as they know it. because they offer Pap testing. They refer to OB/GYN. They refer out for colonoscopy, they refer from mammography, the list kind of goes on. And so when you show up with that first slide, that there's been a 500%, almost 700% increase in this disease, and we have a 2-minute office-based test. I can tell you that they listen. That's great. We don't have a problem there. But I'm going to talk more about that commercial process and how we impact not only just patient education, but also provider education. And so now I'm just going to real quick, kind of run through this. We have our high-risk patients, they do offer EsoGuard. Those positive patients move on to confirmatory endoscopy, where with pinch biopsy, with known molecular diagnostics, we can confirmatory diagnose that disease, early patients are then treated in those patients without disease go on with their life. The only reason we can do this and the only reason we want any type of screening diagnostic for a well-defined patient popularly is only as good as the proven technologies to eradicate it. And this is what we have here. We know with RF and cryoablation that these patients go on and live healthy life. If they go through surveillance, they go through treatment, sometimes multiple that are fairly benign that they do really well. And so not only do we have EsoGuard, we have treatment options as well, and we have other confirmatory diagnostics. So let's talk a little bit about the actual revenue opportunity, right? We have a room full of investors, of analysts and actually a lot of clinicians as well. And part of what we're doing as an organization is to increase shareholder wealth, right? That's our job. And so how are we getting there? The last couple of years, we've been laying the groundwork. We've been laying the groundwork for the commercial organization and operations. We've been certainly laying the groundwork for clinical research, and we can't do anything, but thank Dr. Lee and her great team for getting all that done for us. So let's kind of walk through this. I mean there's 2 paths here. And these are parallel by the way. Let's first talk about a term patient acquisition, how are we acquiring these patients? So on this left-hand side here from your right, it depends how you look at it, we start with the clinician itself. They might sound silly, but we go in and we do education. We talk about disease state, epidemiology and our 2-minute office-based test, and they then go and educate their patients, right? We educate them on risk factors. Most primary carers aren't familiar with GI society guidelines, but they'll abide by them. They understand that. They're the specialists. And when we do that, there are multiple ways in which we can offer EsoCheck as a service for esophageal cell collection. The first is in our Lucid Test Centers, right? We have multiple Lucid tests in and around the U.S. brick-and-mortar places where patients can be referred much like you'd see at LabCorp, [indiscernible] blood draws. The second, we'll talk about a little bit further is the idea of satellite testing, where we can go in and provide this service with our clinical team to these providers themselves. And in Florida, we actually have a mobile test unit that serves other purposes as well. We've also been doing, as you heard from January, these health fare type events, which we call Check Your Food Tube precancer screening events, where we work with first responders, specifically firefighters, where we can go out and we can do education, we can do screening. We can work with local providers and we can screen a large group of these people at one single time. And we have one way to a revenue opportunity here, right? And that's through traditional claim submission, where we collect insurance information, we process the DNA and we send that to the payer. And by doing that right now, we're a little bit begging for forgiveness, right, because up until now, we haven't had the top discussions about medical policy change, we'll talk about that in later slides. But let's go over to this next one, right, where the patient acquisition looks a little bit different, where we can contract directly with the corporate entity, a union, a municipality, any type of business where they can offer this as a covered benefit. Again, going back to press releases from earlier this year. We started this process with an automotive group in San Antonio, Texas, where they saw the need. As a matter of fact, they unfortunately went through a bunch of cancer diagnosis. And when we talked to them about this, they were really excited, not only were they excited, but we did a health care for their employees and they were even more excited. We were able to contract with them directly, right? And there's really only one way at that point to grab the DNA. And it goes back to all the hard work that this team has been doing to coordinate, to organize our CYFT events because now we can apply that directly to the corporate entities as well. So all this direct contracting that we're doing, we're going to leverage the existing process that we have led by Martin Sasaki and his team, to drive additional revenue opportunities. That's either through a traditional claims submission process like we see over here or directly contracting with that corporate entity. So talking about the actual operations themselves, right? We've acquired these patients, how do we screen them. We do have Lucid Test Centers. Second time you've seen a slide up here with these. I always think of white, clean, Freddie, right? Patients walk in, they meet our nurse practitioners, our clinical specialists. We do additional education, if possible, and we deliver EsoCheck. We administer that for esophageal cell collection. The next is this idea of satellite testing. So I had the state of Arizona up here. Some might argue it looks like Nevada. That's not for argument, it's Arizona. And we have our Lucid Test Centers in the general Phoenix area, right? But most patients will only drive around 20 to 40 minutes, unless you're going to a specialist like Dr. Woodworth, in which case, they will take patients from all over the world. And so what we're able to do is use the Lucid Test Centers as our home base. That's where we work from. And we're able to go out and do satellite testing, hour -- 2, 3, 4 hours away, where we build relationships with providers, we educate them on all the things I described, risk factors, epidemiology, even treatment, and then we set up days, and we go out there and we offer this as a service. So we're offering not only education to these individuals but a service to them as well, which is the esophageal cell collection. In Florida, we have a van that drives around. Obviously, clearly, this support some type of marketing purpose, but it also hits on some compliance issues as well. So there are creative things that we can do. And I can tell you that the prescribers, clinicians that we work with in Florida love this thing because we get the park in their parking lot, they get to talk to their patients about it, and it goes back to the practice of medicine and the business of medicine, which is educating patients, getting them treated, but also this is what they do for a living. So going back to the uncle Mike story. So the one thing I didn't talk about is my uncle Mike was a firefighter. As a matter of fact, my dad is as well. So where we are in Buffalo, there's probably 600 full-time firefighters and probably 3,000 in the surrounding areas. My dad is still active. He's 67 years old. He probably shouldn't be, but that's neither here or there. And I hate to admit until I got this photo, until January, when we have the opportunity to screen the San Antonio Fire Department, where we did almost 500 people in 2 weekends, that we ever do a Google search to identify the fact that firefighter specifically are at a much greater risk of esophageal cancer. Now firefighters know that they're at risk for a lot of cancers. They think about, well, at least we think on mesothelioma and lung cancer because they're around carcinogens all day. But the clinical research doesn't show that the carcinogens are causing cancer in this specific group of individuals. As a matter of fact, what it's doing is it's causing heartburn, and we know that heartburn causes cancer. So not only is there an increase in risk, there's an increase in mortality as well. And so I'm proud of what our team has done this year, not just operationalizing what we're doing but positively affecting these first responders lives. And this is a large pool of patients that we can continue to, and we're just getting started. So here's our CYFT events, right? And as I mentioned, not only do we offer education but we work with local providers. We work with primary care to do education. We use this as a jumping off point. We work with gastroenterologists, who are going to get referred these positive patients. Same thing with foregut surgeons who may be referred to patients for treatment like that up for GERD. Our team shows up on site, we stay organized. In some cases, we work with our telehealth partner to provide clinical oversight while we're on site here. And if anyone's ever seen these pictures, right, they used to be white boxes, they're blue now. Every single one of those boxes is a patient, right? So if you're on social media, when you see all these boxes, that means we just had a really good day. So I try not to use the term marketing when I think about what we do around here. I like to use the word education, how do we affect and educate our partners, those providers, those clinicians. And first and foremost, I have to thank the team because without the team that we have, led by John Romano, led by Martin Sasaki, we wouldn't be anywhere. This is a picture from our national training meeting earlier this year. This is a mix of our sales reps, our clinical teams, some accountants, our laboratory team getting together for 3 days of education and obviously a little bit of fun, and I did not win this Bocce tournament. But that's the first and foremost thing we had say. The second thing we have to think is, John and his team for being so organized. We were defined and were prescribed in everything that we do in the field. We think about 3 things out there: first is people, second is process and third is performance. We bring people in, we train them, we get them out in the field. And it happens really quick. And we have a lot of tools. It's extremely sophisticated what we do. We know what to do and we know how to do it. This is not a problem for us right now. And then obviously, we have to thank Freddie. For those of you who haven't met Freddie, are walking, talking [ stenophagous ]. You should. Get on YouTube. He serves a really important purpose, right? Freddie goes around and tells people to check their food tube. He educates them on the fact that heartburn causes cancer. And it's very effective. We've seen it through direct-to-consumer. We see it every day in our physician offices, right? So we have a problem here. The problem is out of sight, out of mind. If we walk into a primary care office who needs 28 hours in a day to do their job. And we talk to them about heartburn causing cancer and EsoGuard. I promise you because we do it all the time. They're like, this is great. We're going to do this. But you know what happens when we leave or they want to forget. But we don't let them. They end up with banners. They end up with posters. They end up with patients reading this stuff. And again, when I think about sophisticated marketing campaigns, but more importantly, educational campaigns, we do it well. And I'll tell you a quick story about patient by the name of Scott, that was out of -- was it Idaho, I could be wrong there, Idaho. Scott saw one of the posters in the previous slide. It was Freddie and there's bubbles all around them with risk factors. And he goes, doc, I think I have like all of these things. I should get checked. And the doctor said, you know what you do, you should. And they administered EsoCheck right then and there. EsoCheck a few weeks later came back positive. He got referred to a local GI, right? And so the process worked. We had a change in medical decision-making. And by the way, the gentleman who prescribed the test wasn't his allergist, believe it or not in his office. So prescribed the test, he got the test done, it was positive. He gets immediately referred to a GI. His local GI says, from what I see in the biopsies that I took, it looks like you have disease. It looks like you have dysplasia actually. And so the next part happened, medical decision making change. I'm going to refer you to a specialist. As a matter of fact, he went all the way to Salt Lake City, and he saw specialists there. And not only was he diagnosed, but he's been treated. So here's a situation where it wasn't just a physician, but the patient themselves seeing your educational material and prescribing based on a conversation with their provider. This slide for me speaks volumes to what I've just talked about. The fact that we know how to do this. We've been doing it on a quarter-by-quarter basis. But ultimately, I'm going to get the question, I might get it right now, Shaun, Lishan, why don't we have Super Bowl commercials yet? How do we ramp this up? And I'm here to tell you we don't have to. We're not there yet. We're not even half on the pedal. Maybe we're 1/4 in eighth. This data is important for us in our market access process. I think it's probably my next slide. It's about having claims data -- claims submissions. Without having claims data, we have no seat at the table, right? But by having claims data and more importantly, the clinical evidence that Lishan is going to talk about, clinical validity, clinical utility, analytical validity, that our test is actually working. That combination is important. That's what we've been doing here. But I used the term transformative earlier, right? That fiscal year '24 is a transformative year for us. And what that means it's our job now to meet revenue with the same ramp here by doing drug contracting, by taking the base level clinical research that we have in going to payers and starting to work on medical policy change. So let's talk about that real quick, and then I'll get going here. I do have a little bit of a superpower. I was trying to catch up. I can tend to talk pretty fast. You guys haven't figured it out. I had a lot to say. But fortunately, this is a webcast. So we can record it, you can slow it down. You guys can get back to what I was saying. So market access is this fancy term that everything has to do with our ability to submit claims to payers and how we collect those monies, right? And so what does that actually look like? You have your traditional claims process. We talked about this a moment ago. And then we have our direct contracting, right? So I'll start the other way first. Direct contracting, and we have Jim Fricchione here who just started, 30 years experience in doing just that, contracting directly with employers. Talking about this as being a covered benefit in creative ways. Where we can go and contract, do carve-out policies so that these employer groups can offer to their employees this cancer screening, right? We're hearing more and more about this, we're not the only ones out there. We're the only ones doing precancer detection, and we're the only ones with -- and Lishan will talk about it next, the ability to direct -- to identify precancer at such a high level of sensitivity. But let's talk a little bit about our traditional claims submission process and where we're winning and where we're going, right? There's really 2 pieces in my mind. There's the operational piece which is your revenue cycle management. That's general claims submission, right? That's taking those denies and getting them in appeals. That's potentially using prior authorization. This is just being operationally efficient. This is where we're winning right now and we'll continue to. It's just going to keep getting better. But as we're moving forward here, I mean, as you have people like Natalie up here later talking about market access, where we're moving towards is leveraging all the clinical and ongoing clinical research that we have with payers, right? Our commercial payers as well as with CMS. The next question always comes up. What's going on here? We started this process back in 2019. We went through the CLFS process, and we worked through the AMA to get a CPT code for EsoGuard, 0114U, right? Thinking about market access, you get your coding, you got your payment and you got your coverage. So we got our code. The next thing we did is we went -- we submitted our payment dossier to MolDX. For those that don't know who MolDX is, Palmetto GBA is a Medicare-approved contract throughout South Carolina. They are contracted directly with CMS to do all the heavy legwork, right? They're the MD and PhDs like Suman over here, that run their own labs, understand the sophistication of tests and they set payment rates and they set coverage policies. So the next was payment. We got our payment. $1,938.01, and I'll never forget that $0.01 because we worked hard for that one. And now we're already working on the third piece was just coverage, right? I mentioned it. We'll mention it again later. We have a base level of data, analytical validity, which is how does your test work in the intended population. Clinical utility, are we changing medical decisions our prescribers prescribing this test, how they're getting those patients to the specialist. And then finally, analytical validity is what's happening in -- Suman and Martin's lab actually happening. And so yes, I'm here to tell you the time is now. probably in the first half of this year, we'll start engaging not just with private payers with MolDX again. So that's all I got. But before I go, I'm going to say thank you again. I want to say thank you to everyone in this room especially those who traveled here today to hear our story. We try to get to put together a nice agenda for you. We wanted to be more inclusive of everything that's happening in our organization. So you understand the hard work that's going into it because it's not always easy, but I tell you, we wake up every day and do it. And so as I walk off the stage, I want to introduce you to some of the gentlemen at the Anaheim Fire Department who recently went through a Check Your Food Tube precancer screening event, and they're going to tell you their experience. [Presentation]

Okay. So how's everyone doing? We -- hopefully, you found we had firefighters, we've had Dr. Woodworth. It's actually funnier than I had realized that it's been a while since I've talked about. And hopefully, Shaun has given you a sense of sort of the energy and the activity and all of the cool things that are going on. So I get the opportunity to be kind of the nerd here and tell you about data. Because at the end of the day, both -- this is a physician-founded company, and we need to emphasize -- you'll see on the panel that we have 5 or 10 physicians in this company. And at the end of the day, for us to be successful, we have to be rigorous. It has to be data driven, both for -- ultimately for physician adoption for guidelines for and ultimately for working with payers as well. And we take that very, very seriously. I hinted at this earlier, if you kind of wind the clock back, not that long ago. Maybe many of you have been with us for several years, maybe 6 or 7 months ago, we were leveraging one study -- one clinical validity study, which was that original science translational medicine paper. And one of the little secrets about that is that actually only about 90 of those 400 patients actually had their sample collected with EsoCheck. So that's a bit of a testament as to sort of what the unmet need here is that we never really have had problems with getting physicians to actually respond to these educational activities that Shaun mentioned, even though a lot of times in other opportunities where you're trying to sell technologies. It's always like show me more data, show me more data. We just don't get that and we didn't even get that back when we were just leveraging that original paper. But the good news is that we really had an avalanche of data that's come our way in the clinical evidence space. So hopefully, the sort of the nerdish story that I can tell you now going through a bit of this data is that we now have a really substantial foundation of the various types of data that we need in order to continue working on physician adoption, continuing our efforts with regard to payment and coverage and guidelines and so forth. So I'm going to go over those. Hopefully, I'll go over them fairly quickly because I think I'm between you guys at lunch. So Shaun already hinted at this, and those in the know, talk about AV, CD and CU are sort of the buzzwords. And what do those mean? They mean 3 different areas, 3 different pillars of our evidence base for a diagnostic test. As Shaun mentioned, AV is analytical validity, and that's what Dr. Verma and Martin who runs our laboratory. That's what they do. And we don't really spend a lot of time on AV because -- not because we don't appreciate the hard work that they do. This is confirming that the test works, if the limit of detection is correct. They do it on cell lines. They are all these things that we have to do to confirm that the actual mechanics of performing the test is working. And the reason we don't really spend a lot of time talking about it is because we're a clear lab in order for us to be able to do the test, we actually have to check the AV box at all times and subject to audits and so forth. So that's buttoned up. So the fact that we're a CLIA lab, we've got a fantastic team. We'll talk a little bit in the -- on the fireside chat about a lot of the progress that we've made in that, that's -- we have that locked down. So we're really on to the Cs, the CV and the CU. Clinical validity is -- does -- and Stan mentioned that in his video. Does the test actually perform ultimately in the intended use population, the patients that are intended to be tested. And those are really numbers you've probably heard of sensitivity, specificity, sometimes we actually like couching it as negative predictive value, positive predictive value and so forth. So how does the performance? How does EsoGuard perform? That's different than clinical utility, clinical utility is something that actually -- me as a physician, I wasn't really that aware of until I got into the industry and I think my physician colleagues would agree, but this is where the payers are really focused, right? Because you want to know, as Shaun and others have mentioned, that if you do this test and from their perspective, if I pay for this test that it has an impact that it actually -- it has an impact initially on medical decision-making, so that a positive result goes down this pathway and negative result goes down this pathway and your -- the result of your test was what determined whether you go down that pathway. And you can push a bit further and demonstrate -- is there compliance with the patient? Are there certain outcomes that you can highlight. But at the very beginning, clinical utility is pretty straightforward in a test like ours. And that's sort of the linchpin of our conversations and the work Natalie does with our payers. So AV, CV, CU. I'm going to start with CV. This is at the heart of does our test work. And the answer is it does. And we actually now have a substantial amount of CV data. Some of them are company-sponsored tests, some of them are tests that are initiated by the investigators. You can see the STM paper. That was that original paper that we sort of leverage for many of the early years of the company. I'm going to talk about the BETRNet study in a bit. This is a study that I referred to earlier in the side comment where they're doing -- using EsoGuard in patients who don't even have symptomatic or patients who are just showing up for colonoscopy. So that's recruiting. I'm not going to report on that. We do have some interim data from the Cleveland VA that we've incorporated in a pooled analysis. So lots of activity here, a lot of good data. Two of them are locked down, BE, the STM paper and BETRNet, which I'll talk about in a bit. So this is the STM paper, the one that was published in 2018 by the investigators at Case Western, and for those of you who look at these things, I think the analysts do, that's got really nice areas under the curve, 90% sensitivity, 90% specificity. They were able to replicate that in patients who had the cell collection device, used for the sampling of the data. So this is what launched the company, and this is really at the foundation of our clinical validity performance. A couple of things about this is, one, as I mentioned, only 86 of the patients who had their test then had it with the balloon. I have worked well in that group, but it wasn't the entire population of 400 patients. The other thing about this test because it was the first time they were using this humans, they didn't do it exactly the way we do it now where we take it at room temperature. We put it in our little vial at room temperature, it gets transported by room temperature. These samples are taken in frozen immediately and then sitting there frozen, the DNA is preserved for that period of time. So until our next study, which I'll show here, we didn't have sort of fundamental confirmation that this test can give you the same kinds of results in more real-world use where the sample is preserved at room temperature. So that's where the BETRNet study comes in. We reported about this in the mid-summer. This is a multicenter study that came out of the BETRNet consortium. This is a national cancer consortium. You can see a variety of prestigious institutions that contributed patients to the study, the principal investigator was Dr. Scharf at Case Western, this is a case control study. So patients either are selected who have -- who are normal, who are known to not have any of the conditions along the spectrum of precancer to cancer. So controls as well as patients in each of the buckets. Early-stage precancer, Barrett's Esophagus, short and long segment and moving all the way to cancer. So this enrolled 365 patients, at the end, 242 were evaluable. And this study is a real-world use example. So this is the first study where they tested the EsoGuard test that using 100% of the samples were collected with the EsoCheck device, unlike in the previous study, and the samples were sent to the laboratory in our little room temperature preservative and run from there as opposed to being used frozen samples. So this has been posted on the PAVmed index preprint server. You can actually read it, and it's been submitted, is currently under review at the American Journal of Gastroenterology. So what are the results here? The results were excellent. And I've used the term unprecedented. I'm not generally someone to be to use hyperbolic terms. But hopefully, if you pay attention to the slide, you'll understand why we're so excited about these results and how they truly are unprecedented in the history of molecular diagnostics for the diagnostic cancer and precancer. So cancer, precancer, early precancer and overall sensitivity for detecting these abnormalities, right? In this condition, precancer is what Dr. Woodworth talked about, it's Barrett's Esophagus, right? So all the conditions from the earlier stage of Barrett's Esophagus, all the way through high-grade dysplasia. The early precancer are the non-dysplastic, so those are at the very earliest period of time, the biologic abnormalities there are going to be lower. There's not going to be quite as much methylation. It's hard to pick up biologic changes. These are not mutations or other sort of complex advanced genetic changes. And then obviously, cancer are people who have the full-blown -- who've been diagnosed full-blown. Again, this is a case control study, so it's comparing head-to-head. Our test is comparing head-to-head EsoGuard compared to endoscopy. So -- and these are pooled -- this is pooled data from BETRNet as well as the STM paper. So we do really well in cancer. So I put them side by side here not as a direct comparison, but just to say what are we -- what do we expect when we use Cologuard. What are we expecting with regard to sensitivities and negative predictive values? What are people getting excited about with regard to liquid biopsy tests for colon cancer, let's say, with the Guardant test. So obviously, it's not head-to-head. They're different cancers. It's just meant to sort of establish a baseline of what's good, what do we consider good in this area. So on cancer, we're doing great. It's 96% sensitivity. And I will say that the sensitivity since Dr. Verma and Martin and our team took over the laboratory so since we took over the running of the test since -- from the third-party contractor, we've had 100% sensitivity in cancer. We haven't missed any. So the 4% that were missed were in the original STM paper. Precancer, this is the part that's unprecedented, right? So we have mid- to high 80s sensitivity for a precancer. Cologuard has about a 42% sensitivity for advanced adenoma. So the late-stage colon precancers. It's a little bit better in their most recent Cologuard 2.0, it's about just under 50%, but it's still nowhere near the 80% number that we're getting. Now again, we have to get that, as I mentioned at the beginning, and we've reiterated to have an impact in this cancer, we have to pick it up at the precancer. So thank God, we're able to pick it up at these unprecedented levels. What about early precancers has anyone ever been able to pick up an early precancer at the earliest stage before you get these changes called dysplasia or high-grade dysplasia? The answer is no. So Cologuard does not -- Cologuard cannot pick up a regular polyp. When you get a colonoscopy, you're primarily getting it for nondysplastic polyps and they plug the polyp out and you end up finding you don't have to get a colonoscopy for 10 years. So it's 0 for Cologuard. How are the liquid biopsy test doing? Not very good. The overall sensitivity for Guardant, for colon cancer is 83%, but most of that Stage III and Stage IV, for Stage I cancer, they're getting -- only getting 55% sensitivity. Hardly any advanced adenomas, of course, as Stan mentioned, you don't -- you're not going to pick up early precancer lesion in the blood. So I think it's fair to say these are unprecedented results. They are the results we need in order to have the impact that I mentioned at the beginning. These kinds of tests will often use, not sensitivity and specificity, but we'll use negative and positive predictive value because those numbers depend on the prevalence. If you have a low prevalence versus a high prevalence, the sensitivity and specificity are sort of the intrinsic performance of the test as opposed to how it's going to perform in real life. And with a screening test, you want to have a negative predictive value of as close to 100% as possible. So we're at -- estimated at about 99%. That means a false negative rate of about 1%, we don't want to have any false negatives. But in this particular condition, there's 2 reasons why a false negative rate of 1% is actually fine. And the reason is that, as I said, we're hitting pretty much 100% on the cancers. So that 1% are people who have precancer, right? And more importantly, those are people who would otherwise not have gotten anything, right? We've already said that only 5% of patients who are at risk for having these conditions ever get any kind of testing. So this is not like, let's say, Cologuard saying that, okay, this patient has about a 70% chance of getting a colonoscopy, if they have a false negative Cologuard, then they will likely not get the colonoscopy, they're not getting the gold standard in that setting. So we're already happy with the 99%. And by the way, that's the normal standard anyway. And then on the positive predictive value, it's about 30%. And that's the advantage of testing for a precancer, again, this is getting a little bit in the weeds here, but stick with me. Does anyone have any idea what the positive predictive value of a Cologuard test is for -- Mark, you nailed it, 4%, right? So only -- so 96% of positive Cologuard tests are -- have a negative colonoscopy or they pick up in advanced adenoma. So a 30% positive predictive value means about a 70% false positive rate, which sounds high, but in a screening environment, you want to have a very high, very low false negative, right? You don't want to miss anybody but you want to have your positive rates to be at least higher than what it is in the population. So we're talking typically these are like 7% to 10%. So you have a threefold improvement in the -- in what you're picking up. That's really important from an economic point of view because if you didn't do this test, you'd have a 90% to 95% false positive rate. So we're getting the false positive rates down, that means less endoscopies. That means it gives us the opportunity to have a really good health care economic discussion with the payers. So that's clinical validity. I did mention that we do -- those are both case control studies. We are starting to get that sort of holy grail that Stan mentioned in his video, of clinical validity testing in the intended use population. So the case control, we already know that these patients have certain diseases or their controls. This is sort of in the while. These are patients who have risk factors and they're getting screened. So we have our study, the Lucid BE1 study, in the Cleveland VA study, both of which we're testing patients in a screening environment. We have a couple of other ones that are working their way through. Again, so far, so good. Sensitivity is looking really good as we combine these 2 to get our sample size a little bit bigger. So sensitivity overall of about 99%, negative predictive value of 99%. Positive predictive value is going to go down a little bit because these are kind of a lower risk population. Typically, if somebody has already gotten to endoscopy, they're more likely to have advanced disease. But so far, really early here, but so far so good with regard to kind of the definitive data that we're ultimately going to need. And then let's just talk briefly about clinical utility. As I said, clinical utility is really important, but this data is kind of boring, and I'll explain to you in a second why. What's great about this is that we actually have clinical utility data, which, as I said, we didn't have 6 months ago. So that's fantastic, it allows Natalie to do her job and for us to have meaningful conversations with payers. So we have 4 studies. 3 of them have published peer-reviewed publications, as we mentioned yesterday. So there's the original San Antonio Firefighter group that was in February, where we tested 400 patients. That was a retrospective analysis. And we have 2 prospective studies. One is the CLU study, that was a multicenter study that was targeting to enroll 500 patients. We've rolled about 535 -- we have -- the peer review publications on about half of those patients, that enrollment is complete, and we'll publish on the full data set when we get a little bit further on. We have these 2 registries which are going to ongo -- they're going to sort of continue to enroll. We've enrolled about 641 patients. And again, about half of those patients have been reported in a peer review publication. The reason I said this is boring, as I mentioned already what clinical utility is for this test. It's very straightforward. That's not true. And the analysts in the room will attest to the fact that there are other diagnostic tests, were defining clinical utility is a lot harder than it is here, at least at the medical decision-making level. Again, positive test, you get an endoscopy, negative test, you don't. That's really at the fundamental level at the highest level, what we're looking at here, the impact of medical decision-making. And there's really no point of showing the data because the data is essentially 100% concordance. So in all 3 of the published studies, 100% of the patients who had a positive EsoGuard test were appropriately referred for a confirmatory endoscopy, great. That's one part of the limb. On the other side, the patients who are negative, 98% across these 3 studies were not referred to an endoscopy. There were a couple here and there, and those were generally people who referred for endoscopy, but not really for a screening endoscopy. They can -- they sort of complained they had other symptoms, they had pain or trouble swallowing or some other reason why it was appropriate. And that's perfectly fine and acceptable in this environment. So that's that. So we have these studies. We're armed with them. We're going to continue to dig further. So there are other levels of clinical utility that you can get into. So for example, the CLU study collecting data on the patient got their referral, but did they go? So what's the -- at a patient compliance level, do they actually get the endoscopy? So we'll have that data coming up. The registries are really exciting because we're pushing those even further down. So we know whether they got an endoscopy and we'll get the result of the endoscopy and we'll be able to provide some correlation of positive. So there'll be further data that will come out of this. But really, a great start with regard to our market access efforts with regard to clinical utility. And that is it. Any questions? Yes? Page 6. Yes.

I see cancer, see precancer say earlier, I understand the drop from 96 to 89, but what I don't understand is for precancer to early precancer [indiscernible]...

That's within the statistics, I mean the fact is I would consider them the same. We don't lose our sensitivity in going from a late-stage precancer with dysplasia to an early stage free cancer. And the reason we don't is we think biologically that what happens with these patients is they first -- and the first biologic abnormality they get is actually the methylation. So it starts there and then it works its way. It hangs around in these other patients moving forward.

That answers the question for Dr. Woodworth?

Woodworth, yes.

Indicated he doesn't -- he thinks EsoGuard should be given to everybody and that alone is...

Yes. No, I think we'll get there. I didn't mean to sort of make a point to sort of squat that enthusiasm because I share it, okay? But we have to -- but we're introducing a new technology here. We have a variety of stakeholders and payers and so forth that are not going to have this necessarily the same level of enthusiasm that some of our physician ambassadors do. So I think we'll get there. And as I said, the one study that I mentioned, I'll reiterate it again, it's a very exciting study at Case Western, where they take patients who don't have GERD, who show up for a colonoscopy and they check the 3 boxes. Do you have -- are you 50? Are you white? Male? Boom, you get it, okay? You get the test even whether you have GERD or not. And they're picking up only a few percentage point lower incidence of pre-cancer in that population than in those with GERD. So we'll get there. We'll get there.

I believe this, that clearly indicates...

Yes. I agree. Any other questions? All right. Thanks. I think it's lunchtime, right? Good. Thanks, everybody. We'll regroup in 30 minutes. [Break]

Hey guys. We're going to try and move on to the next section and introduce Dr. Seper shortly. So if people could take their seats, I appreciate it. Thank you.

All right. Let's get the second half started here. So a quick introduction. We'll probably move through the afternoon pretty quick. We have Dr. Dezfoli coming up followed by our CFO, Dennis McGrath, and then we have these 2 fireside chats, which made a lot more sense when we were in the Gordon Reading Room because there was a fire place there. So really, they're panel discussions. So let's bring up Dr. Seper or Sep Dezfoli. Sep is a board-certified gastroenterologist from Southern California. He works for Prestige GI. He met our team, how long has it been now? About 2 years ago. Yes. And he really -- I think, since day 1, understood what we were trying to do. And I can tell you from my experience, almost 5.5 years now, working with GIs, that's not always the case, right? Most of the time, GIs want to think, are you taking my scopes away? How does this fit into my practice and they say, one thing to us all the time, which is I'm just going to scope them, but it's pretty easy for us to articulate that as you've seen in other slides, they're not seeing these patients. And so what we've asked Dr. Dezfoli to do today is come up and talk about what it's like within his 4 walls as a community GI. And more importantly, talk about how he interfaces with Lucid because I can tell you the one thing that I see is I see a partner here. I see not just a clinician but someone that's been working with us for a few years now to spread the word about this important diagnostic. So thanks for having, Seper.

Thank you for having me. Okay. So speaking of acid reflux, I get the pleasure of speaking to you guys right after lunch. So I feel like I should have brought samples of Omeprazole or Prilosec just started to talk with it. So thank you for the introduction, Shaun. As you mentioned, I'm a gastroenterologist, I'm in a community-based practice. And I represent -- those of us who are at the front line of the diseases you heard about this morning, whether it's acid reflux, Barrett's esophagus, I'm going to talk a little bit about Barrett's esophagus with dysplasia and what that means, and of course, esophageal cancer. So today, I'm going to talk about a little bit about the disease state. I think Dr. Woodworth did great job of explaining acid reflux and Barrett's and esophagus cancer. I'm going to talk about why patients even get it in the first place and why it's important. And kind of what I say to patients so they can understand what's going on in their body. I'm just going to talk about the unmet need and how exactly EsoGuard essentially fills that need, especially for our patients and in my practice. And then finally, as Shaun mentioned, I'm going to talk about how I interface with Lucid and with EsoGuard and how it really has changed completely the way I deliver health care. And more importantly or just as importantly, how it's made me even more busy as a clinician, which is great for me and my patients. So we saw this slide earlier. This is the disease state. I'm going to go into a little bit more detail about it so we can get an understanding as to why it's so important to have a new tool to screen for precancer lesions. So we understand acid flux, Dr. Woodworth really explained that well for us. And we know that acid reflux is one of the main risk factors for what we call Barrett's esophagus. What is Barrett's esophagus? The scientific turn forward is intestinal metaplasia. Intestinal metaplasia is essentially when 1 cell line changes into another cell line. So in this case, what's happening is that the esophagus cells are turning into stomach cells. Why are they doing it? They're doing it because we're not supposed to have acid in the esophagus as Dr. Woodworth explained to you guys. So stomach cells are naturally created in a way to withstand the pressures of acidity. So if you think about it in our human body, there's one area that is very high acidity. And we all know that acid burns, it's caustic, it causes badness. So our stomach has to be designed in a way to withstand that pressure. So stomach cells are very unique when it comes to that. Esophagus cells are completely different. They look different. They cannot withstand those pressures of acidity. So you can imagine if someone continues to have acid reflux year after year after year, the esophagus is going to get damaged but it gets smart. Those cells actually start morphing. They start changing themselves to look and become essentially stomach cells. So the esophagus cells think they're doing something good. They're going to kind of a self-protection mode, a self-preservation mode. The problem in human biology is we do not like it when cells have a mind of their own. We do not like in when cells change. And so that first change of mimicking a stomach cell is called metaplasia, more commonly known as Barrett's esophagus, Barrett's esophagus is a precancer condition and that's illustrated in the second slide right here. So what we didn't talk about a little bit earlier today and I'm going to expand on is the term dysplasia. So we know that Barrett's esophagus is a precancer condition. It can turn into cancer, which is over here. There's an intermediate step, however. So from Barrett's esophagus, we can get Barrett's esophagus with dysplasia. Dysplasia is not just the mimicking of the cell, not just changing from one cell type to another. It's when you actually are getting molecular changes now within those cells, that's bad news bears is what I always say to my patients because your risk of getting esophagus cancer here, while it's high -- it's still overall low but it is high to multiple magnitudes compared to average risk patients. When you get to this point here and have dysplasia, your risk of getting esophagus cancer jumps significantly. This is scary. These are the patients that we need to send and do go do additional interventions. And we alluded to that earlier. It's ablating them, burning them is what we call it, and sometimes actually cutting out the tissue in that area to definitively remove it. That's how scary this is because these are the patients who will really go on to this really rapidly. So this is why it's so important that we catch patients here. And really, this has revolutionized the way that we practice GI because we have not had a way to, in a minimally invasive way, capture patients here. Once we capture them here, we know everything to do to prevent them from going over here. We have all the tools. That's what I'm proud to say in the GI world, we have the evidence. We have the management tools. We have the meds and how Dr. Woodworth explained to you, we have the surgeries that can definitively prevent you from going from here to here or from here to here. So 2 years ago, when someone walked into my office and said, we have the technology and minimally invasive way to identify patients here, it was a no-brainer. I said, great. If I can find out my patients and who has this, I take care of the rest. I already got all the tools, once I know they're here, they will never get cancer. And in fact, in my career, I have never diagnosed esophagus cancer in any patient who have diagnosed appropriately with Barrett's esophagus. Why? Because we can prevent it. However, I have diagnosed esophagus cancer in patients. And almost always, it's in patients who are never told they had Barrett's. That's unfortunate, and that's what we're here to prevent. Here's the statistic. You already saw at once. So 733% increase over the past 4 decades. We're doing something wrong or we were doing something wrong, I should say. So it doesn't really make sense. I just explained to you guys that we have an identifiable risk factor for esophagus cancer. I also finished telling you that we have the tools to prevent esophagus cancer when Barrett's is identified. So then why would we have a 733% increase, there's only one answer. We're not identifying Barrett's. We're not identifying it in the right patients. We're not identifying the right risk factors and we didn't have the tools to screen and identify Barrett's. That's the unmet need, which has now been filled. Some more statistics before we start talking about the test. So we know the 733% increase. These are the reasons why -- as I explained why this is happening. We're not screening patients. We're not identifying them. We don't understand the risk factors. And more importantly, we didn't have the tools to really screen them in a minimally invasive way. As Dr. Woodworth explained to you guys, this is a very bad outcome. So we have a cancer that when we diagnose it has a very high morbidity, very high mortality, 80% of patients die within 5 years. All of these patients were preventable had they had been diagnosed with Barrett's. And as I mentioned, I can't stress this enough. We know how to prevent cancer as long as the Barrett's is diagnosed. We just have to diagnose the Barrett's. So we have EsoGuard, we're going to compare it to the Pap smear over here. So I can confidently affirm and attest to the fact that the advent of EsoGuard is a complete milestone in the GI field. It is basically the same as the advent of the Pap smear. We heard the other physicians earlier talking about that. Cervical cancer has a precancerous lesion that is identifiable. Once that identifiable precancerous lesion is identified, we have the tools to prevent cervical cancer. That's why Pap smears are so -- sorry about that. So common because 30, 40 -- actually, probably about 50 years ago, we were having the same discussion then. We were saying, we know what the identifiable precancerous lesion is for in cervical cancer but our cervical cancers are on the rise, what's the misconnect here? And the misconnect then was that we didn't have a way to identify those precancerous cells but then there was the advent of the Pap smear. It was then refined. We have the thin prep and you know the rest of that story. And so we're now at the beginning of this milestone. So it has completely changed what we do in GI. A little bit about the test itself and the applicability and my own experience with it in the office. First of all, it's a swallowable balloon, it's inflatable. It starts here in the deflated state. The patient swallows it. It's connected to a catheter. After they swallow it, it goes into the stomach. Past that [indiscernible] that Dr. Woodworth was telling you guys about between the esophagus and the stomach. Once it's inside the stomach, it's inflated. After it's inflated, it's pulled back and it stops right at that valve. As it's pulled through the valve, it will collect cells through the chevrons that are around the balloon. Once it's inside the esophagus and the cells have been collected, it's deflated and they're withdrawn, door-to-door in my experience, 5 minutes. Mouth to outside 1 minute. So we have nurse practitioners that come to my office. They're very well trained. I always tell patients what to expect. I say you have a really well-trained nurse practitioner that just basically does this all day every day. It goes down like butter comes down within 1 minute, and you get a potentially life-saving test done for you. Once we get those results, if it's a positive test, we will schedule you for an endoscopy. And so the nice thing, and I'll talk to you more about this in a second, is that we have a testing center inside my office. So it's a very streamlined process. I identify patients who need the test, we order it, nurse practitioner comes to our office, does it. And then we look at the results a few weeks later, and they get endoscopy, if it's positive. So as I mentioned, this is a milestone. I can attest to that. I can affirm it. Up until now in the world of GI, we have been diagnosing multiple cancers and unfortunately, very bad ones. If you think about it, we have esophagus cancer, liver cancer, stomach cancer, pancreatic cancer, biliary cancer, including gallbladder, colon cancer and in rare circumstances, small intestinal cancer. And for the clinicians in the room, they will agree with me that they're all terrible. And up until 2 years ago, I was only able to screen for one of them, very sad statistic. And we put all of our energy into that, colon cancer screening, colon cancer screening, which is great. You can now see the outcome when it comes to it. If I went back to that slide, you would see that the numbers for colon cancer have plateaued, beautiful. We're doing a great job of it. But what about all the other terrible cancers. It's really hard when I have to diagnose someone with pancreatic cancer. I will tell you, almost exclusively, it's someone not old. It's middle aged for some reason, children, no symptoms, sometimes often with symptoms. When they have symptoms, that's when you know it's bad because it's usually stage 3, stage 4. They have a very bad prognosis. Esophagus cancer, same thing. So finally, we have a way to identify the known precancer lesion and literally put in what we need to put in place to prevent that. What are those things that I do, medicines, so proton pump inhibitors is what we give patients. We have proven data that shows that proton pump inhibitors decrease the rate of progression from those steps that I showed you earlier and we do endoscopy surveillance. So for those of you who've had colonoscopies, I don't know someone who've had it, you know that if you've had a polyp, then your doctor will tell you, return in x amount of years, because you have shown and declared yourself as somebody who has polyps and is high risk for developing colon cancer. So you need to go into a surveillance program and get your colonoscopy at x amount of years. We do the exact same thing for patients who are Barrett's. They have to get colon endoscopies rather between 1, 3 and 5 years, depending on where they are on the surveillance program. But essentially, we know what prevents the esophagus cancer development. It's the starting of medications and getting the appropriate endoscopies and the appropriate time intervals. And as long as patients get those 2 things, they will not get esophagus cancer. And as I mentioned, I've never had a patient in mind who had Barrett's go on to get esophagus cancer. So the point is to diagnose them with Barrett's. So our role as clinicians within Lucid and with EsoGuard. So as I mentioned, there's multiple ways, I am part of this network, which is great. It just exemplifies the support and the infrastructure in Lucid and with EsoGuard. So it all started 2 years ago when a representative came to my office and talked to me about EsoCheck and EsoGuard, that was the day where it was a no-brainer for me. I said, yes, I'm all about preventive care, as you spend a lot of time talking to my patients about prevention. So when they said that there's a way to now identify Barrett's, I said, this is revolutionary because up until now, I only had 1 tool. That tool is endoscopy. And endoscopy, I can only do in a certain subset of my patients. I knew that I was practicing a type of medicine that had a huge population of patients that I was overlooking, not because I wanted to but because we didn't have the tool. So a lovely lady walked in. Her name is Erica. She came in, she talked to me about EsoGuard, and I immediately clicked and I said, "Yes, this is what GI has required". And ever since then, I've been using it to test my patients who I otherwise would not be doing endoscopy on but have risk for Barrett's esophagus. So of course, the first way that I'm part of the community is by implementing the test and having my patients get the test. Support. So I have huge support from this company. I've actually never really seen this much support from 1 company trying to really support my practice, support my patients, support my staff. I'm very busy. We're all very busy. So if I had to sit there and educate my medical assistance, educate my patients, schedule patients, figure out access to the test, I wouldn't have enough hours in a day. Lucid does it all for me. So their reps are incredible. I've never met an unhappy, nonproductive, non-helpful rep. The reps are incredible. I text them, they get me what I need. Literally a few weeks ago, I texted our local rep and I said, "I need the paperwork in Spanish, the little pamphlet that we have with Freddie on them. I said, "Do you have this in Spanish." She texted me back within 10 minutes, "I'm going to deliver them tomorrow." Tomorrow, we have Spanish-speaking pamphlets in my office. So the staff support is really great, getting results. We talk to the reps to help us get results. When we want to get access to figure out coverage and things like that incredible support. So implementing it, it makes this easier when you have this type of support within the company. I'm fortunate enough and privileged enough to be a speaker on a speaker bureau for EsoGuard. I have loved it because first of all, I hope you can sense my passion and my voice when it comes to this test, and how it changes my practice. But I love sending the message on to my colleagues. And I have to say, as I do different programs, and I talk to colleagues, peers that are gastroenterologists, peers who are internists and family practitioners. And others who are mid-level nurse practitioners and PAs, the reception has been incredible. It really has been like it was for me a no-brainer, like, yes, this has been an unmet need that finally, we have a tool on. Sometimes when it comes to the world of GI, I have to explain a little bit more as to why it's not as we were -- Shaun was talking about earlier, like taking away from our scopes, and I'm going to present a case at the end of today's presentation that exemplifies why it doesn't actually take away from our scopes. And in fact, it actually adds to my scopes in my business. So that's been a little bit of a challenge. But once you talked about the technology and talked about the data, it speaks for itself and the reception has been overall great. And then finally is testing. So the test is great if you have it but you need access to it, right? And so in the short amount of 2 years, I've really seen the growth when it comes to access. Every time I travel to another city to give a talk, I always ask, I said, I always ask the local representative, does the practice I'm going to go talk to, do they even have a testing center? And 100% they said, "Oh yes, we already have a testing center set up for them". So I'm one of those testing centers in my community. So we have practitioners come to my office, and we do testing there, which makes it really streamlined. But in other communities, there's actual satellite clinics that patients can go to. The bottom line is that they've really created this network and really looked at the geography to make sure that; one, patients who want to test can get the test and two, that it's easy for them to do it. It's already fast test. So let's make them at least not have to drive an hour or 2 hours to go get the test and it's all streamlined that way. So that's my network when it comes to Lucid and putting this all together has really allowed me to deliver better health care. I really elevated my practice, and as I mentioned earlier, it's made me even more busy. Sometimes that's a drawback, but it's maybe even more busy than it was before, but it's all for a good cause and for health care. So as promised, I wanted to explain or go over a case series. I think this is the really, I call it, a poster child for EsoGuard and how on the front lines, it really changes our practice and how it's changed my practice. So here, we have a patient who came to see me simply for colon cancer screening. That's why he came in, young man, really no medical history, no family history. Chief complaint, I'm here because my doctor told me I need to get a colonoscopy for my colon cancer screening. So as usual, what I do is I go through risk factors for my patients. So I go through a review systems and I talk to them about these things. Some of those things I elicit from a patient. Some of those things are demographic information that I can easily get from the chart, age, gender, weight, et cetera. So I went through it and he did mention that he gets occasional reflux. But if Dr. Woodworth would be with me, he would also agree that the type of reflux he was describing was not pathologic. So it was that type of reflux that we would expect, once in a blue moon after a spicing meal, after pizza. And in GI, we don't really consider that GERD. We call it -- consider that regular acid reflux because of dietary and very minimal. So he did not have we would call GERD. However, he had 3 other risk factors. The guidelines were presented to you earlier today, and one of those guidelines is put forth by the AGA. The AGA says, and this is really remarkable that they've actually changed their stance, is that GERD does not have to be a prerequisite risk factor. It is one of the several risk factors for GERD. And as long as the patient has 3 or more of those risk factors, they are at risk for Barrett's, and we may consider screening them. You can screen them with all of the tools we had. And Shaun was saying that they even showed a little capsule for the ACG guidelines. So AGA also discusses EsoCheck as well, too. And so it's an appropriate way to screen those patients. So back to our patient. Male, white, obese. That's it, 3 risk factors. So at the end of the talk, when I talk to them as colon cancer screening and colonoscopy, I said to him, you also have 3 risk factors for another condition, it's a precancer condition in your esophagus. So you need to get screened for that, too. first and foremost, I will say he was very appreciative, and I get that very often. Patients love it when they come in for one thing and they're educated and informed that they're at risk for something else, especially silent disease. So it builds a bond between me and the patient that becomes stronger. It adds to my credibility and I now taking into care of them. I'm not just looking at tunnel vision. I know you came in for one thing and that's the only thing I'm going to think about today. They know that I'm thinking about them as a whole. It's been they're very appreciative. So he went on -- sorry about that. So he went on to get the EsoGuard. He did EsoGuard and sure enough, it came back positive. Came back positive, I called the patient. I call the patient I said, you know that swallowing test that you did, it was positive. He asked me, what does that mean? I said, right now, we know that the test is picking up on some sort of changes in your esophagus. We don't know what it means exactly. We need to confirm it. What are we confirming with an endoscopy. So we schedule you for a colonoscopy next month. We're also going to do an endoscopy at the same time. So this is a patient that went from getting 1 procedure with me to now getting 2 procedures with me. He accepted and we moved on. I did an endoscopy shortly after. Visually, I saw Barrett's. So when I welcome up that morning, I told them that test that we saw that was positive, I think it does signify this condition called Barrett's, but we have to wait for biopsies to come back and to confirm it, and I'll call you when I get those results. But I will tell you that visually, I think you have this condition. We got the biopsy results back, he had Barrett's esophagus. So I've already had the discussion with them, and I've already met him -- with him in the office. We had a post-procedure follow-up a few weeks ago. I explained to him what Barrett's is. I explained to him everything. I explained to you guys in the beginning in the presentation. I talked to him about his risk, I calmed him. I let him know that while he has a higher risk than other people. Overall, it's a low risk, and as long as he takes the right medicine and does the right endoscopies at right intervals, there's no reason I will ever allow him to get esophagus cancer, and I say that with conviction when I tell my patients is that as long as they continue to follow up and they take their medications, it puts them at ease. The patient was started on a medication, and he's going to get another endoscopy by me in 1 year. So this entire presentation -- case presentation completely exemplifies why we're here today. We identified a patient simply based off of risk factors that, in this case, had nothing to do with reflux but didn't change the fact that he had Barrett's. We ordered the test, it was positive, and we changed the medical decision here. Not only did it get into new diagnosis, one that's silent but has significant implications, but he's now going to start into a protocol with medications and endoscopies. From me as a clinician, I feel fulfilled. I really truly feel like we prevented a death, a potential death. As a gastroenterologist, I would say, I don't think I save lives. I think there are other more important doctors than me that actually save lives day to day. But at least I can say that I probably prevented a potential death by doing that and the patient did the right thing by doing the test as well, too. Incidentally, I should say, this case is very interesting because if you look here on that endoscopy, I diagnosed 2 other silent conditions with significant implication. The patient at H pylori, it's an infection. It's known as -- it's a Class 1 carcinogen. So much like HPV, which is a virus that we know causes cervical cancer, throat cancer, rectal cancer. H pylori is a Class 1 carcinogen. It's an infection we get when we're children. It usually sits in your stomach, about 20% of the population has it and it's generally silent in most patients. However, it can cause ulcers and cancer. So it's silent until it's no longer silent. So we identified that in the stomach. He is currently getting the treatment to eradicate that. Again, another potentially life-saving diagnosis. He also had a tumor in the lining of the stomach. These were completely incidental. And I don't want to stand here and say that EsoGuard identified these, we know it doesn't do these but it is interesting to know the domino effect that this had here. And this patient truly did save their own life by doing EsoGuard and agreeing to do it based on for those risk factors. So without EsoGuard, this patient would have been left with multiple silent undiagnosed diseases and come back later in life, either with trouble swallowing food with stomach cancer or other kinds of bad things. And he had not gone EsoGuard, he would have never found those very 2 severe conditions. So that ends my presentation. Hopefully, I was able to kind of illustrate how I use EsoGuard and how it's really changed my practice as a gastroenterologist, kind of at the front line of this. I think that there's a misconception about it taking away procedures. Here I already showed you a patient who actually added to my procedures. I asked my office manager just yesterday to give me a rundown of the number of tests we did in the last 6 weeks. In the last 6 weeks, we did 17 tests in my office, 7 were positive for EsoGuard. That's just above 40% positivity rate. Those are 7 patients that I am now going to do endoscopies on that otherwise would not have gone endoscopy by me. So it doesn't take away from our procedures. It adds to my procedures. But the more important message here is that it's adding to -- it's enhancing my health care and what I'm delivering, identifying patients who had an otherwise silent condition and otherwise would not have been identified because they weren't an candidate to get an endoscopy and then we're later identifying them and putting them in the right treatment protocols and the right surveillance programs. So that was a great case to come to have a few weeks ago. I thought it would be perfect to share today. And so that's my network and my connection to Lucid and thank you for your time.

Any questions for Dr. Seper Dezfoli?

Yes, sir.

Do you just answer the question I was going to ask about, 17 in the last how weeks?

6. And there's more that we had done. We just don't have the results back. So those are 17 that we tested in the last 6, maybe 8 weeks, don't hold me to the weeks. It's about 2 months. Those are 70 patients that got to test and I have the results to review. There's actually about 6 others that are tested, and we still don't have the results yet because they were tested just recently.

Have you had a chance to talk to other GIs about this test? And what are you hearing as things that people are excited about nor what you've just described? And what are some of the objections you're also hearing?

Yes. So as I mentioned earlier, I'm very privileged to be part of the speaker bureau, so which allows me to really get on the community and talk to health care professionals. I talked to a lot of colleagues who are gastroenterologists. At first, a lot of them sometimes don't know about the technology. So they're in the same boat that I was at 2 years ago, where they know that they have a huge population of patients that are at risk for Barrett's and they have nothing -- no tools to screen them. So they get very happy. The same thing that I got when Erica came to my office those 2 years ago, they said, "Great, that's awesome. That's an unmet need, that's now filled that I can use". I do sometimes get some challenges. I say, well -- a common quote is well, I'm going to scope them many ways. So why wouldn't I just continue scoping them? And to that, I -- I remind gastroenterologists that we don't always scope them many ways. You just saw an example of one where I didn't -- I wouldn't have scoped and it would have been inappropriate actually to scope this patient. We wouldn't scope somebody simply just because they're obese, white and male. They would have to have symptoms -- of some sort of symptoms, trouble swallowing food, et cetera, alarm symptoms, we call them. So we aren't just scoping everybody. There's a huge subset of patients that are walking through the doors that have risk for Barrett's, and those risks have already been outlined and 30 million of patients are at risk that don't need standard of care to scope them. So what I do is I let the gastroenterologist know that, no, I remind them of those patients, casually remind them of what those patients I wouldn't have otherwise got scoped, and let them know that finally, we have a tool to screen those patients. I also talked to them about my anecdotal evidence as well, too. So those numbers, 17 tested, 7 being positive, speak for themselves. Any other questions?

No other questions.

Thanks for having me.

Great. Thank you so much. Great talk. I must say that you warm my heart when you talked about our team and the -- obviously, a lot of our -- a lot of the leaders of our team are in the back there, and we really do take a lot of pride in how our field team, both our sales team and our clinicians interact with patients and the practitioners. So that really does won our heart.

Okay. So we're going to move on. We've done a lot about -- you guys are now experts. You can probably get your medical degrees on the esophageal disease. You understand elements of the test. But at the end of the day, we're a commercial company, right? And we're commercial company. We're a public company, and we have an obligation to identify a pathway as Dennis will talk about here in a minute to profitability. And we think we do have a real credible path to get there based on a lot of the milestones that we've had in the last 6 months. So I'll hand it over to Dennis, who's our Chief Financial Officer.

Thanks, Lishan. So we've called this the pathway to profitability, an illustrative example. And we'll go through a couple of illustrative examples. Our goal is to understand how the strategic and tactical things undertaken by both the commercial team, the market access team, coupled with the ever-increasing pristine clinical data and our efficient lab operations influence financial outcomes. Going talk about test count growth, reimbursement, both policy and collections, gross margins, OpEx, cash flow breakeven is one of the important things we're going to focus in on. Hope to deliver on that promise by providing some illustrative examples of the interplay of all of those inputs by viewing the different scenarios that can demonstrate the beauty of the financial leverage that can be extracted as we deliver upon the key deliverables. Program note, none of this is intended to provide specific guidance of any of the above inputs. However, there should be plenty of color for you to have confidence in building your own financial models and be able to monitor the actual performance against our achievements in your own forecast. So with that, let's go to the next slide. So let's dig into the third quarter numbers to start with. Having a baseline understanding of the numbers in the third quarter gives us the opportunity to see how we move forward from that. So first off, you'll recognize the growth chart of the number of tests, and in the last quarter, we did just under 2,600 tests that yielded recognized revenue of $783,000. And you'll remember on a GAAP basis, we recognized revenue on collections. So let's dig into that -- those piece parts. First, a reminder of our 2 price points, our suggested price point, actual price point is just under $2,500 for our test. If you look at the Medicare rate, there's a delta between the Medicare rate and our ASP of $561, most of my presentation here today will be benchmarked against the Medicare rate. We'll look at how the test volume changed and do a gross to net on both dollars and actual tests. So in the quarter, [ 25, 75 ], we did have pending reimbursement, about 30% of those tests. You can see 73, we are awaiting an adjudication, leaving the claims that were adjudicated of just under [ 2018, 03 ]. We know out of that group. About 61% of those adjudicated claims were initially denied and these were denied before any of the appeal process. So there's still hope for those to actually turn into cash through the appeals process. We'll talk a little bit about that. Out of that 703 is the remainder. That's an allowable amount, about 39% of that. And that allowable amount was [ $1863 ] so just under the Medicare rate, which is really good news in that most of our tests are out of network and the payment rate or the amount the insurance companies are saying to us, we should get paid is just under that rate. So if you multiply the [ 703 ] by that [ $1,863 ], you get $1.3 million. Let's look to see how that translates into the dollar amounts. So the pro forma revenue using the Medicare rate in [ $1,938 ], times of 2,600 tests yields just under $5 million of submitted claims for the quarter. We know that about $1.5 million were still pending decision, which left about $3.5 million that the claims were adjudicated. If you look at the denial rate, again, pre appeal, that was $2 million of that, resulting in a little bit of a delta between the Medicare rate and the actual allowable amount, that's that $53,000 to adjust that. And the 1310 ties into the amount previously. So out of that, you got 783 that was actually paid and another 527 that we are awaiting payment, that's the roll forward between the 2. Let's look at CapEx so that we understand how we play with some of these inputs, how that changes over time. So in the third quarter, here's the various buckets of our P&L. You've got cost of revenue and your gross margin and in your R&D includes your clinical research. The non-GAAP loss was $9.2 million. These are all non-GAAP numbers. So we took out the stock-based compensation. We took out D&A. These are actual proxies for cash in each of those buckets. We know out of the cost of goods sold, I made this point in our earnings call that if we look at the delta between test count in second quarter and test count in the third quarter and we look at the change in dollar amount of cost and revenue, it validates the model. We've talked about the margins for the next patient in the door at being 90%. It's the consumption of the lab supplies that are direct cost related to delivery of that test. And the last quarter proved that out. The delta and increased cost of revenue above the breakeven represented around 10% of the cost. If we look further at the non-GAAP loss of what you can see here of [ $9,251 ], [ $2.2 million ] of that is the management services agreement. You can see the piece parts of how that splits in the various buckets. And as you know that for a large portion of the last year, PAVmed has been accepting the ability to take stock instead of cash. So when you reconcile that out, you've got a $7 million kind of cash loss and the third quarter burn rate from direct operations was $6.3 million. If I look at the 9 months of this year, and you look at and you can tie it right into the cash flow from operations in our SEC reports, the average burn rate per quarter is around $7 million. So the ability to get to cash flow breakeven is what we do about that $7 million and what happens to that over time with the various inputs. So we're going to explore 4 different models here, right? The 4 illustrations we'll explore. The first one is going to look at the impact of reimbursement by itself. We're going to isolate reimbursement. So that model will have a flat test count, will have flat OpEx and see what happens purely by the changes in reimbursement over time. Everything we do is tied now to those changes. The tactical things that we will ramp up will be dictated by how reimbursement collection rates increase. And then we'll look and explore examples of putting the other inputs into motion. We'll look at a conservative growth rate. We'll look at a steady growth rate. You'll remember in the third quarter, our test sequential growth was 17% and we'll look at that. There's no sense stepping on the gas pedal without getting paid. So as we get paid at increasing levels, we will drive test count even higher. And the last model, we'll look at more of a dynamic approach to where all of these things get put into motion. So the first one, I'll call the static model. As you can see from the assumptions here, if we put this in place here. The top left, test counts flat. OpEx is flat. We're going to look at reimbursement and by reimbursement, I mean, realization or collection percentages. These are not covered lives, and that's intentional, which I'll show you on the next slide. We should be able to increase our collections as reimbursement policy gets further along as our commercial teams begin to hunt in those areas where we have better reimbursement. So always the realization rate should be higher than the covered lives. So in the modeling that we're doing here to show the impact of reimbursement, we've kept test count flat, OpEx flat. We progressively showed collections or realization from where we're at in the third quarter of 16%, targeting 90% a little over 2 years out from now. So you've got 5 quarters between now and the end of '25, you can see the line in between, we're going to focus on end of next year, beginning of the first quarter in terms of where cash flow breakeven is by these various assumptions. So I will stipulate that it won't be a straight line. As you can indicate. See here, these will be many more quick lines. I've added a line here that shows you that as the covered lives change, we will probably have greater realization and collections. Collections will improve with appeals. Collections will improve with the claims submission, Quadax is doing a fantastic job. We previewed the fourth quarter at our last earnings call by indicating that the fourth quarter, the first 6 weeks were about 33% higher than the collection rate in the previous quarter and the third quarter. So the key takeaway here is reimbursement timing, both the timing of cash collections and the timing of medical policies is not fully predictable. So that's why I say these are illustrative examples. It will become clear as we move forward in terms of the impact. However, clinical data, claims history and appeals persistence favors continued progress on the reimbursement side. And as you've seen here so far today, and we'll learn even more through the panel discussions, these are progressing on a regular basis. So if I layer in the test count, the OpEx and the collection rate, realization rate, as you see here, this is what you start to see. You see net revenue will increase purely because we're collecting more of the existing tests, flat test counts, greater realization, the net revenue will increase and the non-GAAP loss will be in parallel with that. It has to be. If you look at this model, purely by just the change in realization without increases in test count, you get almost a 50% reduction in your OpEx. It's somewhat intuitive but the fact of the matter, if we just make progress on the reimbursement side, we can cut our net -- GAAP net -- or non-GAAP loss by nearly 50%. So let's look at 2 interrelated examples here. They're interrelated because we look at the last quarter's growth rate, and that was 17% sequentially. And we're going to -- we can toggle that growth rate based upon the collections in covered lives. First one, we're going to have a more conservative approach. We'll arbitrarily pick that at 50% of the growth rate and then we'll look at that at the steady growth rate of the third quarter. So what you see in this example, with the assumptions you see up above is the gross revenue should increase. It should increase parallel with the test count, it should increase at around 8.5%. The net revenue, you can see that the gap between the 2 as it exists today starts to narrow. And that's because you have growing test count, you have the realization or the collection rate improving over time. And those 2 ultimately should be pretty close. What happens to the rest of the model if OpEx being flat, the non-GAAP loss, you can see it should parallel pretty much where the net revenue is with OpEx. Now remember, the OpEx in the second and third quarter were flat quarter-to-quarter, and we kind of previewed that for the fourth quarter that should stay pretty much the same. We have a lot of control over the operating expenses, and that will expense increase will be dictated by how collection and realization changes over time. So what are the key things to understand here. Modest quarterly test volume growth, 50% of what we realized in the third quarter, illustrates breakeven cash flow somewhere at the end of the second quarter, and that's an 8.5% growth rate. When you look at the cumulative burn rate over that period of time, factoring all of these inputs into it, that's a 5-quarter or 7-quarter period of time, it's about a $27 million burn rate. Pro forma cash at the end of the third quarter, you'll recall, with the $5 million we realized in additional financing in early part of October is $29 million. So sufficient cash to cash flow breakeven in this illustration with controlled growth. Let's see how that changes now where we speed up the test growth consistent with the third quarter. And as you look at that model, that illustration, these are the various piece parts of it. You look at the end of the next year, and this model will put you at cash flow breakeven. Again, steady OpEx. You've got increasing test count at just the third quarter rate. You've got realization increasing over time because of improvements in our collection rate. The cumulative burn rate in this model is $21 million. Again, pro forma cash being $29 million, puts us in that time frame. What's the test volume, what's the realization rate at that point in time? That would be roughly 6,000 tests per quarter to get there at a 65% collection rate. Obviously, these are difficult to predict, particularly as the realization rate in the covered lives will change over time and you can toggle them up. As the realization rate goes up, the test count to get the breakeven obviously goes down. So let's look at a more dynamic approach to this by stepping on the gas pedal, right? There's the same model, the assumptions we'll start to make investments in sales and marketing. The CapEx -- or the OpEx will change as reimbursement, both covered lives on policy and collections when realization improve. You look at test counts that are growing. The -- this projects pretty much slower during the first half of '24 and an accelerated process and really stepping on the gas, putting fuel in the fire in 2025. You can see I illustrate the realization rate as being much more choppy. When you look at where we're going to start to make investments, the increase in sales headcount. You can see it's identified to that inflection point. Our goal will be to start to add to the resources in anticipation of that change. That change is going to be influenced by a number of catalysts, largely from the different strategies we're employing from commercialization and those that are dependent upon reimbursement and collection from third-party independent insurance companies. We look at it a little bit further when we'll increase in marketing spend. You look at that in this illustration as you have a change in the actual realization, there's no sense spending money on advertising -- a direct-to-patient advertising campaign until you have assurance that you're going to get paid. In this model, I plug it in here in the early part of 2025 to start accelerating growth. And what you have is you have a cash flow breakeven again at the end of 2024, you have a burn -- cumulative burn rate for those 5 quarters, around $23 million. Pro forma cash is $29 million. The point is the range in the period of time we get the cash flow breakeven and all of those various inputs, it's a fairly narrow range. We're going to be reactive to those changes. We've demonstrated that physicians will order the test. We know how to toggle up the spend to increase the speed of test count. It makes sense for us to react to that when the collection rate is improving. And we know the collection rate is influenced favorably by clinical utility data, which is now peer-reviewed and published, the appeals process as well as claims history, which we have substantive claims history. I think that's it. Thank you.

The Non-GAAP loss another way [indiscernible] on that EBITDA.

It's a little bit more than that because EBITDA would just be kind of D&A. It also includes stock-based compensation, which contributes to that, right? It's a proxy for cash. You're absolutely correct. So -- and it lines up because if you look at that illustration I had on the P&L, on the opening slide, it was roughly $7 million. And when you look at the average burn rate for the first 3 quarters, it's just around $7 million per quarter. Yes, correct. Mike?

Yes. What are you assuming for timing of Medicare coverage on that and then the OpEx, I mean, how much of your OpEx is really variable and sales positions and things like that? Is there something in there that if your sales go up and [ scaling ] to some of your revenue?

Yes, there is a component of the sales folks that is tied to test count going up. So the reason that I didn't indicate particular timing in terms of when Medicare is. And remember, Medicare as Lishan said earlier, is around 15% of our overall test count volume. It's largely coming from non-Medicare beneficiaries. So the model is not as dependent on Medicare as it might be. And the whole reimbursement, whether it's Medicare or the private pay is completely unpredictable. It's fully unpredictable. So we made assumptions based upon the actual collection of cash realization, but the covered lives, when you go back to that 1 slide is a pretty slow growth during 2024 and then the inflection points, which are towards the tail end of '24.

Maybe I could point something out that you might -- maybe we should emphasize is that we're not -- you didn't include anywhere in there any success with regard to our direct contracting, and you can sort of maybe explain a little bit how that's going to contribute this quarter. And so that's sort of a bit of frosting if we can, as we expect, get some traction on direct contracting.

So you'll remember that our direct contracting [indiscernible] is the example that we pointed to in the last recent quarter is where we are doing testing on behalf of certain companies where they are essentially self-insuring, they're dictating to their administrative service provider of blues in this case. What's going to get paid, and they contract directly with us. So in that particular case, there is not the subjectivity of what the realization of payment is. In fact, in that case, it will go against the norm of our revenue recognition because payments guaranteed and payment is probable from those sorts of customers we can recognize revenue on a regular GAAP basis, meaning we send the invoice, deliver the test report, we can recognize revenue at the point that the test report is delivered. We don't have to wait until we actually collect upon that for the direct contracting. Those elements contribute to increased realization as we move forward.

[indiscernible]

I would normally give you an answer, if it's just you and me, but I have an expert here. So Shaun, do you want to just talk about the appeals process?

So I think it's important for a company our size, excuse me, in our stage to own the appeals process. The appeals process is about medical justification. It's about having our internal clinicians, we have a group of them here talking to medical directors on a peer-to-peer basis about a specific patient. I'll let you know as well, too, that during our cell collection process and our TRF, our test requisition form. We actually have risk factors built in. And so we know every patient that comes in hits those 3 or 4 and that information is sent along with that claims data. So before they even deny that, they have a chance to review it and on that level of appeal. And by the way, every commercial payer has different levels of appeal that go all the way to an ALG or an administrative law judge, in which we can take these things. And so the answer is yes, we own that process.

Why do you win some and lose some?

Yes, that's a great question. There are other variables here. So let's talk about how we would lose certain things. Patient has a very high deductible. They didn't use any of that and they pushed it all on the patient that year, right? That's not necessarily a loss. It just means now we try to collect from the patient. And as an early-stage company, we're trying to do that as little as possible, right? We don't want to put the financial burden on the patient when possible. We want to put it on the insurance company where we believe it belongs in the long term.

Great. Thank you. [ Gregg ].

Can you comment about this [indiscernible]

We're going to talk about them coming up. [ Gregg ], anything else? Just checking. This is coming off.

To give you a chance to meet, as I said previously, we're very proud of our team in the field, but we're also really proud of the senior executive team that we've built over the last -- particularly over the last 18 months ago in all of the critical areas that we've been talking about since this morning. So let me just first introduce everybody. I'm not going to go into deep bios. You can see if you can read the like the 3 font in your head out there. We have full bios on everybody. So I'll mostly just focus on people's roles. So I'll start with Natalie Carfora here, who is our VP of Market Access. She just joined us, which is hard to believe in August, given how much -- as you'll hear when we when we talk how much activity we've been generating, and she's fortunate enough that she showed up at just the right time where we went from essentially no clinical utility data, which is sort of her currency that she needs to be able to engage with payers to having a nice foundation for that. Next is Dr. Suman Verma, who is our Chief Scientific Officer. She spends her time in our laboratory in Lake Forest, along with Martin Sasaki over there, who does the operations on the clinical side. So she's the scientist. She's the one who knows everything EsoGuard. I try to pretend I know a little bit. I go to these research meetings and I use a little bit of my cobwebs in my -- from medical training about it, but her team is unbelievable and they've done things even with regard to this most recent advance in the assay that others have failed to do. And so we have an incredible research team that's continually looking to improve the assay and make it more efficient, make it more -- that make the cost of goods lower and then have Martin team, who was also just incredibly efficient at getting things and we'll talk about that in a little bit. Next, we have Deepika Lakhani. She is our Chief Regulatory and Quality Officer. She spent many years at FDA, knows everybody there, can pick up the phone, can give us a lot of back channel chatter on all things FDA. And as you know, there -- although EsoGuard is a laboratory developed test, we still operate in the -- under the umbrella of what may or may not be increased FDA regulation. We will hopefully have a little bit of chance to talk about that. We're extremely fortunate to have somebody who is who has her level of experience and access to folks with regard to our regulatory matters. At the very end there is Dr. Victoria Lee. She's our Chief Medical Officer. I think, Shaun, at least 3 or 4 times is already sort of given kudos to Dr. Lee because as you -- as I said, we went from hardly any clinical evidence beyond the original STM paper to a substantial amount. And that's because we now have a functioning clinical research operation that can get those studies done and get them done at a high level of quality and a high level of efficiency. And we really do have to thank her and her team for that. So with that, let's start with Dr. Verma. As we mentioned, and this is a little bit of opportunity for us to brag and for you to brag about your team. As Shaun mentioned, we took over the laboratory in February of 2022. So we'll be at our 2-year anniversary. We acquired the CLIA Laboratory. We have our own space in Lake Forest, a really beautiful -- a beautiful space. And it was just around the time a couple of months before she started. And the assay has just really blossomed in our hands. I mentioned actually one little data point earlier where I pointed out that our sensitivity in our hands in the last 2 years with regard to esophageal cancer has been 100%. And so all of that is a reflection of Dr. Verma and her team. So maybe you could tell us and tell our audience here, maybe get a little bit into some of the nitty gritty of all the specific things that we've been able to improve on the assay over those years and how it's had an impact on our outcomes.

Yes. Thank you. I think as Lishan said about the team. I'm really proud, I think, sitting here and talking about how much of an improvement on the EsoGuard test we have done. And one of the improvement that I would talk and brag about is -- and Lishan talked about is QNS rate. QNS when we talk about, it's a quantity not sufficient. That's an acronym for it. It means when a patient gets tested and we collect a sample by EsoCheck. The cells come to the lab and we extract DNA from it. If we don't get enough DNA to test the sample, the sample does get right away that we do not have enough DNA. We can't test it, either repeat the sample. So that's a high percentage of patients before we acquired were getting at that point that about 15% or so that patients were not having enough DNA. Once we acquired, now it's been more than a year, we are below 5% in that QNS rate. We improved on -- significantly on the process of DNA extraction, how we are collecting, how we are improving because that's very first step. If we do not have enough DNA, we cannot proceed with the test. And I proudly state that we've been maintaining that less than 5% for over a year now. So that's a very [indiscernible]. Second test, I think, in terms of the test efficiency of operations, it is key that when we acquired the test, it was an academic test, which you can perform very, very well. But when you bring the test into a commercial settings, you need throughput, you need efficiency, you need fast turnaround time. And all those things need to be improved for the commercialization purposes. And that's what our team has done a phenomenal job on. We went on improving the processes that has allowed us to test samples in a high throughput. And Lishan very briefly mentioned about our turnaround time being less than 10 days, which initially was about 2 to 3 weeks when we acquired. We have brought that to successfully within majority of the time, 7 days test. And so thanks to Martin's team, who is efficiently processing these samples in the lab, and to the research team who has improved on the processes, improved on the throughput of the test where we have brought on the instrumentations that are able to increase throughput and reduce the cost because now we don't have to spend that much time. Our labor time has reduced, our cost of goods have reduced. So not only improved the operational throughput and efficiency, but also reduced the cost. And the last one that I would say very recently that we have done a press release on that EsoGuard 2.0 that we are very proud of. because this is something that previously our academic lab from where we acquired the test was unable to do, and our team has been able to achieve to do a multiplex testing of the genes, both the genes that we are testing. Because it has a significant operational impact -- robustness impact that we are able to test the same samples in 3 times. We have enough DNA to produce even more robust results, more confidence on the results. And also operationally more efficient and reduce the cost. So I'm very proud to say that we have been able to achieve something that even Dr. Markowitz's lab was not able to achieve and within a very short period of time. I think these all improvements just are testament to the commitment, the hard work and the talent that this team has to overall provide a high-quality test to our patients. So with that, I think I'm very proud, and I would -- we will continue to make these improvements and bring further costs down and operational efficiency for high-throughput testing. And one of the very immediate improvement will be actually going to a higher throughput sequencer, and we actually are, as I speak, is getting installed in our lab right now, the high-throughput instrument and that will be -- will go -- which will bring even cost further down.

Great. Go ahead, Anthony.

So just to summarize, the QNS, quantity not sufficient, has been brought down from about 15% to less than 5% [indiscernible]. Is that probably the best you can do, not necessarily what you could do, but is there anything else in the actual balloon that could be used to make sure we had enough of...

There is probably -- let me just maybe quickly. There is probably some biologic limit beyond which you can't get that number again. There were -- if you look at the BETRNet publications, there were sites that had 20% to 25% QNS rate. So it is a substantial lowering. Could we get down to 3% or 4%? Maybe, but we're probably reaching certain fundamental aspects of patients who have a so-called patulous GE junction, where their GE junction is not tight and used, don't make enough contact in a variety of anatomical issues. So my guess is that since it's been quite stable, and we have really, really high technical success rate. So we know that the procedure is being done properly in terms of being able to complete it. that we're probably butting up against the biologic limit.

Absolutely. Just a bit -- give a little bit more split on that less than 5%. When I look at that less than 5%, there is about 2% of the samples that we get almost 0, which shows it's anatomic where patients -- the balloon is not making a contact, and I think those are very hard to improve. 1% or so, which are just below enough, so 1% to 2%, which are just below the DNA cutoff, where we could bring the test further down, but you wouldn't have the confidence. We want a very robust test. We have sampled enough cells. There is not enough cells to be confident on the results and about less than 1%, where there are technical failures in the lab or sample got -- tube got broken or anything like related to lab processes or something that can happen, which is very, very less, less than 1%. But this is still unheard of less than 5% QNS rate. Usually 10% is a cut off for CLIA labs. So we are actually very proud of this.

[indiscernible] the cost you have brought down. You brought down the cost -- just the 90% gross margin you're talking about, is that a target that you hope to get to...

We're there on a next test basis. So if you take the total, the incremental cost, the variable cost of each test and the cost of EsoCheck device, which we still do a little bit of double sourcing and so forth, so we didn't even get that down on an average base a little bit further. That number is now below low enough that we can comfortably say that we've hit that 90% even at these volumes. Yes that does, obviously, include the fixed cost. This is on a strictly marginal basis, next test it. Sorry, go ahead, [ Gregg ]?

You said you're installing the technology that will scale it out, where are you now [indiscernible]

So with the MiSeq instrument, which is the sequencer instrument right now, we are able to do about hundred samples a week that we are running, and it will take us directly to more than 400 samples a week. So 4x increase right away.

And the cost is actually reasonable. They have trade-ins and so forth, Illumina works with you. So we were actually quite -- I was pleasantly surprised how that we're able to upgrade the throughput to the NextSeq with only a modest...

What would it take to increase that again...

We have plenty of capacity right now. We don't -- we're not going to be butting up against. The reason why -- one of the reasons why we needed to go to this is the spikes, right? Because we learned that quickly when we did our first firefighter event when suddenly Martin and his team just got 400 samples in a matter of a couple of days. And to their credit, they banged it out and got it done. But so we need to be able to have capacity to handle the peaks, which we will with this -- with the higher throughput device, but on a total test volume basis, on a yearly basis, we have plenty of plenty of room and the same amount of manufacturing side as well. We have plenty of. We're not going to be butting up against that. Okay. Great. So let's move on to Natalie. So Natalie, you're a yellow check person on my list. Did you notice that? I've already checked Sumen. Sumen's portfolio has been green, right, because the lab is kicking butts. So you're 1 of the last 2 yellows. So I'm going to ask you about -- really to [ Gregg's ] question, the near-term opportunities that you're working on with regard to some creative approaches with on medical policy and our really well-defined population such as [ CED ] and other, so.

So first, I want to highlight that our opportunities and our discussions with payers are driven by the work that the clinical team has done in generating peer-reviewed published evidence around our clinical validity and clinical utility. So it's really exciting that we have this robust level of evidence to bring to them now and moving into the new year. A couple of near-term opportunities that we're leveraging are: one, our recently executed agreement with the Blue Cross Blue Shield Association in order to leverage that to get access to Blue's payers in order to educate them. We're really going to be focusing on our peer-reviewed published evidence across clinical utility and clinical validity as well as our guidelines inclusion in these national societal guidelines. And then in some states, about 14 states that have biomarker legislation, leveraging that legislation and how it supports both the utilization and coverage of innovative testing like ours. So that's one near-term opportunity. A second opportunity, which is what [ Gregg ] asked about was piloting, which is our focus on partnering with payers to validate the clinical utility of EsoGuard within their own membership to use this data in combination with our peer-reviewed published literature, our guidelines, our provider utilization and our successful prior authorization and appeals success record all of that together to inform a broader positive policy decision. For some payers, this is going to be through a formalized structure called Coverage with Evidence Development. And with others, it will be through an informal structure. It really depends on the payer. Each is very unique and operationalized differently. But so when we say pilot, we can be using that interchangeable with coverage with evidence development.

That's great. So we'll look forward to that being a green check box at our next event next year. Really excited about that. And I'm going to go to Deepika. So I saw some nods in the room when I talked about -- among our analysts over here when I talked about the fact that even as a laboratory developed test, we still operate under the possibility of increasing FDA oversight of our laboratory developed tests. As I mentioned, obviously, we're extremely proud to have you. I'll do a quick anecdote when the -- some of you know about this FDA proposed rule to phase out their enforcement discretion with laboratory developed tests, and Deepika will talk about that a bit. But when I saw it for the first time, I -- you read the title, it looks kind of scary and I just quickly got on the phone and started making phone calls to people in D.C. that I need to figure out what's going on. What I should have done is just calmed down and ask Deepika to look at it over the weekend then we had our ELT meeting on that Monday and realized that actually we're in good shape, and we're -- and we feel really good about it and as she'll explain a bit of a positive. So without taking too much of your thunder way, maybe you can tell us a little bit about what your perspective is on this proposed rule and how we're positioned with EsoGuard to handle if it comes to fruition.

FDA very recently has proposed a rule that LDTs may not be eligible for enforcement discretion as historically has been the case with such tests. How does that impact us? So Lucid, as a company, is already operating under the highest regulatory standards because we have an FDA-cleared device, which is a cell collection device, EsoCheck. So we are not starting from ground 0 just because we have a new EsoGuard that's now going to get regulated. Our quality management system in place. So we have the umbrella setup for many years actually. We have been inspected. So we are very well placed to bring EsoGuard into the same umbrella of quality management system. Now if this rule were to pass in the near future, there's another aspect of this, which is -- so we have the quality system figured out, now we also have to do a regulatory submission. What would a regulatory submission entail? It's basically the data that we are already collecting. It's the clinical validity and the analytical validity that the team is very aggressively and phenomenally collecting and the data that you're seeing today looks great. So this gets compiled into a dossier and gets submitted to the FDA. This is what the process is going to look like and FDA has given multiple years to actually go in a step-wise approach. First, the quality system would get implemented, and we would have at least 3 years from the passing of the rule to submit our dossier with all the data that we have been collecting. So we are in great shape if this rule were to pass already because of our existing QMS, our quality management system. Having said that, I do want to be very cognizant of the fact that we have been able to address the unmet clinical need because of the LDT. So if this was not existent this would not be looking like this because we would have to start from the highest regulatory authority and then bring the product to market. So we have all this great data, thanks to the LDT and the regulations that we have been operating under. But now if we go under the strict regulatory network, we pretty much have the data to submit in the time frame they would allocate to us. So another aspect of this would be that if we do go under the regulatory framework of the FDA's end of enforcement discretion, it would give us kind of a competitive edge because we have all these systems in place, the standards in place. Many companies may not have this who are our competitors. So from that perspective, I think I feel pretty comfortable about the journey we are on from regulatory and quality perspective.

Yes. And one just -- maybe a little bit of additional color. So I'm on the -- I'm happy to serve on the board of AdvaMed Trade Association. So I get a little bit of visibility as to what the thinking is as the action DC last week. And one of the points that Deepika made about even -- or even sort of sectors or stakeholders that are pushing hard for this, acknowledge that LDTs have been a pathway for innovation, just like us that their concerns are more about sort of backdooring competitive tests and so forth. And so every construct that I've heard with regard to how this would play out, does take that into consideration, the notion that you can't simply shut off the pipeline for innovation. And then there would have to be some consideration. There's lots of other factors like FDA does not -- doesn't even have 5% of the resources to do this and so forth. There's a lot of details that will need to be hatched out. But as Deepika says, we feel really confident in our position. Okay. So let's move on to Victoria, Dr. Lee. Look, I just -- I would love for you to give the audience here perspective on sort of the inner workings of our clinical research operation because it's awesome. The ability of your team to have sort of just really professionalized and generated high-level data, high-quality data has been great. So maybe you could give a little bit of a flavor of what that looks like and the work that goes into that.

Happy to do so. So this Ties back into something that Lishan has already mentioned, which is a lot of credit needs to be given to my teams. And I say teams in plural because we have our clinical research team who has done a fantastic job in regards to start-up execution and beginning closeout of some of these studies that have provided data for Natalie's team to engage with payers. But there's another team that also plays a critical role, which is our clinical services team, who now participate very actively in our PREVENT Registries. So we are very fortunate to have teams of very talented individuals, hard-working individuals who are able to contribute in multiple ways to collecting this real world utility data. As for our clinical research team, again, I must say I'm very fortunate because they bring a lot of operational expertise to the company. And as many of you guys, if you're familiar with clinical trials are aware, it's really the operational element that can make or break the efficiency in which you start up, execute, collect data and then be able to close out these trials so that you have clean data to present in a usable fashion. And our team brings not just expertise in clinical trials with medical devices, but also with diagnostic tests and this puts us in a very good position. We're very well equipped to continue with ongoing studies in the future. And then the most exciting thing is that as we are forward thinking about these clinical trials that will continue to launch and execute upon. One of the things that we're excited to do is engage with payers, potentially in these pilot programs, to make sure that the data we collect going forward is something that will be directly applicable to these positive policies.

Great. And hopefully, you get a sense of the intersectionality here because what you don't normally, at least in my prior life, wouldn't have thought of a clinical research operation. That's about just sort of the data evidence that whatever your product works. But here's a good example. Not only do we need to have sort of clinical utility data that we generate ourselves, there's an opportunity for Victoria's work to intersect very tightly with Natalie's. Because many of these pilot programs are effectively sort of custom -- clinical trials for clinical utility for that particular payer. And so because we have a highly efficient and effective operation, we can sort of snap our fingers and say, okay, great, what does this thing look like? Let's get a protocol in place. Let's get rolling with this particular payer on a pilot program. So hopefully, you get a sense of how the team -- how things are working with team work. Okay. I think we're tight on time, but we're going to do just a rapid fire sort of [indiscernible]. I think Shaun wrote this. I'm not going to take any credit for this, which is each of you. Why don't we go in the opposite direction, what are you most excited about for Lucid in this coming calendar year 2024?

I think I touched on it before, but I'm really excited to now tie our clinical research strategy with our ongoing engagement with payers and have really clear direction as we move forward with collecting additional data.

Great. Deepika?

I think it's the ability to impact patients' lives that I'm seeing, and it's an opportunity to -- for me to actually be at bedside, although I'm a regulatory person and a quality person that touches me the most for this since I've been on the journey with Lishan and the team. So that for me is very exciting. The ability to touch so many lives in the future.

Great. Suman?

For me, I think I'm very excited for the year 2024, where we will be able to test thousands of samples given the volumes we are seeing with the quarter and hear many more stories like the story that we've heard from Dr. Dezfoli today that makes my heart fill that our test is making impact in real world.

I can assure you that, that segment from the two of them is up and down from people in finance to people in the lab, people who don't have direct, necessarily intersections with what we do that sentiment that we're waking up every morning and doing something that's powerful is quite consistent.

And I'm really excited to take all of their pieces together and package it in our engagement with payers because we have the provider utilization. We have all this new evidence. We have guidelines. And so it's really going to be an exciting time, a busy time in 2024.

That's exactly right. Busy is a good way to close this at. All right. Yes, please.

[indiscernible] as you said, each payer is different, is there an internal goal or goal you can share. How many payers -- commercial payers you would like to have [indiscernible] of what you think is reasonable based on resources available?

I think the main thing is how many payers can we engage with, and we can set a goal towards that because each payer's process is very different. And even just getting through the protocol design, contracting, that is also variable. So I think we have really ambitious goals of how many payers we can engage with at the start of the year because then from that, it's a trickle-down effect to get to how many will ultimately end up with a potential pilot or positive policy at some point.

So she's not dodging the question like Dennis. Like Dennis would normally do because I think that's actually the right answer, which is that this is like sales, right? This is -- it's all about -- you have to build a pipeline, you have to work things through, some take longer, some take shorter. Some have higher bars and so forth. And that's really, at the end of the day, what we're talking about is to throw out a wide net, build a pipeline and get -- tailor whatever an individual payer needs with regard to the type of data that they need. So we can just start -- one of the things that Dennis mentioned was that this is the commercial side is blocking and tackling. It's incremental as opposed to kind of the binary side of CMS, and that's what you're seeing here, and it will cut down to the pipeline. All right. I'm getting the let's go. So I think -- any other question, I am going to excuse my executive team here, and we're going to swap them out for 3 -- 2 surgeons and a gastroenterologist. Thank you. Appreciate it.

Thank you.

Okay. So you guys have met our two guests here, our two ambassadors, Dr. Woodworth and Dr. Dezfoli. Brian deGuzman is on the far right there. He's my longtime colleague. He's a cofounder with me of PAVmed, also a cardiothoracic surgeon, and so we are going to talk about really maybe try to flesh out some of the incredible anecdotes and insights that you guys provided us. And I thought I would start with a question for all three of you, which I think Dr. Dezfoli sort of really spent a fair amount of time on this, which is that we've had guidelines. Now I think we're at 15 years or so since the first BE screening guidelines came out something in that range. We know who this population is. We know exactly what we need to do that. I think you did a great job of emphasizing that. So maybe you could just flesh out a little bit more about how you see the landscape from this period of 10 or 15 years where we kind of knew what we needed to do, but it wasn't getting done to rapidly moving into a situation that's more akin to what we see in other cancers and utilizing this technology appropriately. Why don't go ahead and start?

So I think the statistics really speak for themselves. We've understood what causes Barrett's esophagus. We know that Barrett's esophagus with the pathogenesis is towards the esophagus cancer. And yet, as you saw the statistics that we presented, the rise of esophagus cancer over the last multiple decades. So obviously, we're missing something here. So it all goes down to those risk factors. I think one of the issues in the past has been that clinicians really get hung up on acid reflux and it being this prerequisite risk factor for Barrett's esophagus. So we've been dismissing all the patients who don't really have symptomatic acid reflux and really missing them. As you saw from the case I presented, the patient didn't really qualify for having acid reflux as a diagnosis. And so that's a patient who potentially would have been dismissed had we thought about him by thinking of acid reflux as a prerequisite once. So I think in the coming years, we really have to pay attention to these new guidelines, especially the ones that have been set forth by the AGA and also recognize that there are other risk factors. Now some of those risk factors are those that give you risk for acid reflux, such as obesity, things like that. But if we start removing that as a prerequisite, I think we're going to approach this better and capture more patients I think we also have to consider the fact that we have -- I was talking to Shaun about this earlier, we have really great medications on the market right now. A lot of patients are self-treating themselves for acid reflux so they don't really know to even express that concern to their doctors. So it's up to us as clinicians to look at their medication history to really extract that information from the patient. So I think to answer your question, I think what we really need to start doing is as clinicians the onus is really now on us to kind of, first of all, change the paradigm as to how we're approaching risk factors for Barrett's, but also understand how to extract information we need to understand where those risk factors are and if our patient is at risk. And once we understand that is only when we can start really ramping up the testing and getting these patients identified.

Yes. It's great that we have such a good partnership with the GI and the foregut surgery community because that's not always the case. So a lot of times a new technology is coming into supplant a technology that's sort of a bread-and-butter test. And I think my understanding is that Cologuard had to sort of effectively do an end-around, most gastroenterologists during their period to ramp up. And it's just much nicer that we have the ability to have a partnership. So maybe -- I don't know if you'd like to elaborate a little bit on that and how it relates to sort of the changing landscape for BE screening.

Yes. So what I think is really interesting is that Lucid and EsoCheck and EsoGuard are providing something that hasn't been available before, and that's access to the health care system. So previously, a patient was required to get any sort of cancer screening by going and seeing an interventional gastroenterologist. When I say it -- use the word interventional, I mean you have a procedure that actually requires a patient to get anesthesia and then be tested in that manner. This really opens up the opportunity for patients to go get evaluated at a much earlier stage, and therefore -- or thereby allow them to receive a more accurate diagnosis. So if I show up and I say, look, I've got symptoms, I'm concerned. I've got family history, whatever the reason, and I can have an EsoCheck done and then run the EsoGuard, I can find out if I need to undergo for the screening. So now I can isolate my opportunity to receive directed care and just move myself into more of a diagnostic role and then move myself into a health care system that is flushed with new technologies that are doing nothing but to improve things. So once I have my diagnostic endoscopy and I get a biopsy, and it's positive for Barrett's, now I can get a 5-year predictive value for progression with Castle Biosciences TissueCypher. So Lucid fits into this chain. And then once you've decided to have surgery, you can go in -- like the LINX procedure from Johnson & Johnson that I had. It's all building this palette of colors that are creating rainbow for an opportunity for patients to get care earlier and thereby break the pattern that we've been in, break the mold where we haven't been successful with what we're doing because we're [ losing an interphase ] actually a net positive impact like we saw with breast cancer starting in the late 1980s.

That's great, I have a followup for you Brian later. But I want to actually, you guys remind me one thing that's not on my list that I wanted to ask you about, which is the capacity of esophagologist, right? So foregut specialists. We have believe it's 10,000, 15,000 GIs in this country, but a small fraction of them and surgeons actually have expertise and interest and capacity to handle esophageal disease. And I've heard it come up several times that even if we had the sort of the impetus to do as many screening endoscopies as we could, that there just isn't the capacity to do that. So maybe you might talk a little bit about how that folds into how having a noninvasive test can help address this effectively workforce a shortage in doing that, if you agree with that?

Yes, certainly. I mean, right now, I'm looking at my own practice and I'm already right now trying to recruit another part-time physician just to -- not even to see new patients for me, but just to scope patients that are on my own backlog. So that exemplifies the time. We don't have enough hours in the day to try to take care of all of these patients and then balance our families and et cetera. So yes, I think that EsoGuard perfectly fits into that. So right now, when I see patients, I'm very careful as to how to risk stratify them and think of their pretest probability. And I'm very quick to give them an EsoGuard if I think that they're on the border of risk -- they're at risk, but they're at the border. So they don't necessarily have to get in endoscopy. And if they do, they're going to be waiting 2, 3, 4 months. So EsoGuard is a perfect solution for that, at least when it comes to my practice.

Taking the opportunity to allow physicians and health care workers to operate at their peak level at the area that they have the most knowledge is ideal, especially in an environment where there's limited access to experts such as Sep here. So if I can isolate those individuals at highest risk for having a precancerous condition and funnel those patients to Sep and his colleagues, then I'm going to get a higher return on my investment whereas right now, we're just taking, oh, you're over 50, you've got time, we'll go ahead and do that endoscopy. Let's let a nurse practitioner or another mid-level run the test, do the assessments and then keep Sep where he needs to be, which is in the endoscopy lab or myself in the operating room performing what we know how to do that others don't know how to do.

And just to piggyback off of that. One, strategy we have in my office is that I get patients who are being booked directly for colonoscopy. These are patients who are low risk and otherwise don't really need to have a face-to-face meeting with me prior to them getting their average risk colon cancer screening. So what we do in my office is that my staff is trained to look at those patients' demographics especially their gender, their race, their weight, et cetera. If they identify them as having three or more risk factors for Barrett's, they call the patient, they book them for an EsoGuard prior to me getting the colonoscopy done. If that EsoGuard is positive, they then convert that colonoscopy to an endoscopy, colonoscopy. So what this does for my capacity and from my efficiency is that it decreases that extra step of it and having to come and see me because that's information that if I were to take time out of my schedule to do a consultation, it's easy demographic information that I would be doing no different than my medical assistant who can just do it on the phone. And so it spares the patient of having to come in, take a day off of work. It spares me of having to clog up my clinic schedule. They can just go directly to the procedure, and I can get it done if it's positive.

It's a great anecdote. And you just remind me one other thing, which is that -- sorry, train of thought here, which is that you -- I think you described an experience that we expect, which is that because the positive predictive value of our test is higher than the 7% to 10% kind of baseline rate that you'd expect in screening endoscopy, that your yield from our endoscopies are going to be higher. So you said you're doing more endoscopies and presumably a higher percentage of them end up going down the -- you end up finding Barrett's and they end up going for surveillance. Is that...

So my volume, I'm already trying to think about the future now in the next -- as I develop and evolve my practice. So more and more patients that are having positive EsoGuard and then not only in the short term, does that add to my practice and my volume because they get an automatic endoscopy. But as you mentioned, if they have a positive biopsy, then that's a lifelong patient. And so that's a patient who is going to routinely see me in the clinic, so I can make sure that they're on the medication that's supposed to prevent them from progressing the dysplasia, that's called chemo prevention. And then they're also going to get surveillance endoscopies. Because of that, what I was saying earlier about that special bond that we get with the patient because the patient sees that -- I don't want to say thinking outside the box, I don't really consider this outside the box, I'm just thinking about more advanced modern medicine. They really strengthen the bond with that I have with them. So my patients that I've seen 5 years ago have stuck with me. So I anticipate that that's going to stay going forward. So my business and my practice is this going to get larger and larger.

And there's one other element of that, which is it's great for you and your practice and your colleagues. That's great. We like that. It's great for the patients because if you can have a patient who goes into an endoscopy with a 30% chance of having a positive versus 7% that's great as well. But it is also a sort of hint that this always a clinical utility aspect of this. So showing that our test yields higher -- generates higher yields from endoscopies and more positives from endoscopy is generally considered another sort of measure of clinical utility. That happens in other in other areas as well. So that's -- we think that's going to be helpful for a lot of them.

Yes, definitely, I'm looking at my data right now, and I'm seeing that we are correctly selecting the patients based on the results that we're getting. We're correctly identifying the patients and getting the expected numbers that we should.

Brian, maybe you could -- you spent a lot of time on the road and helping with peer-to-peer and engaging even broader population of primary care physicians and GIs and foregut surgeons and so forth. Maybe give the audience a bit of a flavor of some of the dynamics. And we've obviously had two super stars here who are passionate ambassadors for what we're doing, but I think our sense is that the broader community is also embracing this quite well.

Yes, the -- I mean, you guys have heard the story. I think maybe some of you for -- from a scientific and from a clinical perspective for the first time, but it's a compelling story. And I've -- I grew up in the surgeon's household. My father was a thoracic surgeon. He did thousands of esophagectomies. Lishan and I did probably hundreds of them in training and I think one of the things I just wanted to get out there that I don't think either of you guys touched on is those patients not only have a very poor survival, but those operations are incredibly difficult. They're fraught with complications and they are just not a rosy picture of medical care. So anything we can do to avoid that is really kind of a life-changing thing for the patients, but also for us as providers. For me and Lishan to formerly have been cardiac surgeons where we could do two operations a day, now we're doing thousands of tests and potentially saving thousands of lives every year is absolutely incredible for us as practitioners. But the story that we have here is a test that is incredibly accurate. It's incredibly robust. It's a patient population that is currently not being screened that can have a tremendous impact on thousands and thousands of lives. The delta between patients with Barrett's esophagus with dysplasia with a 90% chance of cure from a very simple procedure versus the 21,000 patients a year that the second that you transform from dysplastic to cancer with almost a certain death rate is a huge delta. And when you talk about this very simple concept and the very simple test that's easy to do, some of you have probably undergone the test. I've done it dozens of times in demonstrations. It's very simple. When you talk about those elements with primary care providers, nurse practitioners, the nurse practitioner that took care of the San Antonio Firefighter, that's how the whole firefighter and check your food tube process got started. It's a very compelling story. It's very easy to understand. It's very relatable and everybody has these patients. There are so many patients that all of these providers see every day in their practice. I just recently gave a talk at a nurse practitioners meeting -- a national meeting for continuing education within the nurse practitioner societies. And after the talk, I had at least 10 nurse practitioners approach me afterwards. I have a patient, I have a family member. I have somebody that needs to be screened that this would be perfect for. So -- and so far, there are -- I just -- I looked at the list yesterday of all the providers around the country, individual providers that have ordered the test, it's more than 800 providers now. So it's an incredibly compelling test. It's an incredibly compelling story and there's just not a way at least from a clinical perspective to say, oh, I don't really want to do that. It really just comes down to, how we can effectively get it into their workflow, how can we assist them in facilitating use in their practices. So the easier answer is, it's easy to talk to them. And it's very simple to create champions similar to these guys.

I wanted to add on to that. The implications are profound. I hate to keep going back to that same story, but the case, if you think about it as a physician and as a clinician, we are obligated to prevent disease if we have the tools to do so. our patients are ignorant to that many of the times. It's our obligation to educate them and inform them that they have a risk for something, and there is a tool available. So I agree with you, we are obligated to use the test if we identify the patient as having risk. In that case presentation I gave you, I did a colonoscopy on that individual. I probably removed a few polyps. So you can say that we prevented them from getting colon cancer yet had he not been diagnosed with Barrett's appropriately, he could have easily just shown up in my door 10 years from now with esophagus cancer. So that would have defeated the purpose, right? So I'm preventing colon cancer, but meanwhile, he has a silent disease that's going to kill him anyways. So I felt the sense of obligation to do the EsoGuard on him because we now have the tool. 3, 4 years ago, I wouldn't have had the tool, and we just had to accept that, just like how we've accepted currently for pancreatic cancer, liver cancer and hopefully, the paradigm shifts when it comes to those as well. But as long as I have the tool and the patient has risk, I'm obligated to do it.

Okay, we're going to wrap up. We have two more things, but I wanted to -- Anthony mentioned, I think, about what are the obstacles for primary care physicians and so forth -- and I think at the beginning, I think on my checklist, I sort of pointed out that we don't have obstacles anymore. We've actually figured it out. We can go to physicians. GI don't see -- are not threatened. Surgeons will engage with us. And as Brian mentioned, we go to meetings where there are hundreds of nurse practitioners or other primary care physicians and it's just not an obstacle. It's just right now, we're just trying to keep things at a steady pace so that we can start getting some wins on the reimbursement side. And then when we do decide to put our foot on the pedal, we just do not -- we don't feel we're going to have any meaningful obstacles with regard to physician adoption. I just wanted to point that. So I have two quite things. One of them, I wasn't -- they may -- I was wondering if you could -- I don't want to be morbid, okay, but I would like to sort of build a little bit on what Brian had started on because all cancer is bad. We don't want to get into sort of like, which is you get -- breast cancer is terrible. You have to go chemo and sometimes radiation and there's also complications associated with that. Colectomies after -- they're all bad, okay? But I would like to give the audience a bit of a flavor, again, with maybe being -- with the risk of being a bit morbid, but sort of following up a little bit on what Brian said, you do esophagectomies with a robot, but still, these patients are getting chemo. They're getting radiation there. They had leaks. They end up back in the hospital and so forth. And so the experience of 80% of these people who die within the first 5 years, even the ones who survive out to 5 years, the suffering that we're seeking to mitigate here is profound and you have a front row seat to that but maybe you could give a little bit of a flavor of that with the...

So what we're trying to prevent is death. And then we're trying to prevent esophagectomy. And removing the esophagus is not an easy thing. It's not like going in and having a hernia repair or even a breast biopsy where you remove a section of the breast. You readjust the anatomy. And so now you have no protection against any sort of reflux. You take out the esophagus, you create a tube either from the stomach or from the colon. You bring it up, perform an anastomosis somewhere up higher in the chest through the neck. So your life is forever altered. You become absolutely cognizant to how you eat, when you eat and what you eat because you are not a regular person anymore. So your existence has been changed. I think the morbidity of the operations, and of course, esophageal cancer itself are profound. But you touched on something that I think is even more profound that Lucid and EsoGuard offer the patient sense an opportunity to exit a state of ignorance. You're going to now be able to empower a patient with the knowledge of their condition and their status. One of the things that -- I was talking to some people earlier that I found most profound when I started really reexamining how we discussed Barrett's esophagus, a precancerous condition is. Once you identify somebody with a precancerous state, their mental perception of what's going on around them in the world changes. And I think it's only fair as clinicians that we offer people true assessments of their life and what's going on. And never before have we had something that's so novel, so simple and so widely accessible as this test that could profoundly prevent a death, morbid operation or the distress of everyday reflux I've experienced daily.

You are such an upbeat guy, you were able to tell that without [indiscernible] of being morbid. Shaun has given me to wrap it up, and I'm going to do one more to Sep -- Dr. Dezfoli here. I don't think we spent enough time talking about the fact. So look, we said we have a great test. We can pick up this precancerous condition. We can do surveillance on those who have the earlier -- nondysplastic earlier Barrett's. But an extremely important part of the -- why we're -- why this has the ability to be a successful or detection program has to do with the fact that we can treat dysplasia with a very effective ablation procedure endoscopically with the opportunity to cure these patients. Not just of the dysplastic disease, but of the underlying Barrett's altogether. So if that part did not exist, then the whole kind of -- this would be a bit of a house of cards, the whole thing would collapse. You're picking up something early. We know this in other situations, picking up a cancer early, even in precancerous stage doesn't necessarily change outcomes unless you can intervene at some point in time and basically direct the pathway in another direction. So I don't think we gave enough credit and enough insight into how powerful endoscopic elation procedure is in sort of closing the -- closing the loop on a successful making this a successful early detection program. So maybe you could just flesh that out a little bit as we close.

Yes. So if you remember the slide that had the 3 layers of progression towards esophagus cancer, I can confidently say that as long as a patient is identified at any of the two middle ones, that being Barrett's without dysplasia or Barrett's with dysplasia, I can confidently say that a majority, if not all, of those patients can be prevented to move on to esophagus cancer with the tools and the medications that we have. So if they have Barrett's without dysplasia, the standard of care would be to put them on medication and to do surveillance programs with endoscopy, as I mentioned earlier, and for patients, to your point, who actually do develop dysplasia, those patients are referred. They go to interventional gastroenterologists, and they do ablation therapies, resections called EMR, they have multiple tools that work very effectively. So even though they go -- move into even higher risk, they can still be stopped. And so yes, I think again, it just drives the point home is prevention, prevention and identifying them prior to them getting esophagus cancer.

So the patient you showed had nondysplastic, so he ended up in a surveillance. Patient that Shaun talked about from Idaho had high-grade dysplasia, so like one little final step before going to esophageal cancer. The guy saw allergists to check the box on the sheet. That guy was found to have high-grade dysplasia. So he was literally like one step away from having a terrible disease. And he ended up going to Utah to get ablation. I think it took 4 or 5 sessions to do so as they went in and basically used the Medtronic Barrett's device. I assume to destroy the abnormal cells. And he'll need some monitoring but we can consider him cured and that we've eliminated his risk of cancer.

And if you think about that case, had EsoGuard been available probably, I would say, 7 or 8 years ago, one can argue that if he had done the EsoGuard 7 or 8 years ago, he probably would have been caught prior to him developing dysplasia and he would not have had to go through even more invasive procedures. Luckily, we're catching -- we caught this patient that Shaun spoke about prior to them getting esophagus cancer, but this is the step now. So there are patients who are living now without dysplasia and we can catch them now and not let them even get to that stage where they have to go get more procedures, invasive procedures and such high intense on surveillance. Great. I think Shaun's is going to bang the gong if we don't wrap it up here. So let me just open it up for any last minute questions from the audience. We are going to move back to the room where you had, right, where we had registration. And I think there's wine and coffee and snacks, and we'll all be around for -- to answer any other questions. So if there aren't any other questions, I want to thank you, guys, I mean, everyone hung out for the full 4 hours. And thank you very much. Appreciate it.