Lumos Diagnostics Holdings Limited ($LDX)

Good morning, everyone, and welcome to the Lumos Diagnostics U.S. Commercialization Investor Briefing. My name is George Kopsiaftis, and I'll be your moderator this morning. Joining us from Lumos Diagnostics today, we have Doug Ward, Managing Director and CEO; got Paul Kase, Chief Commercial Officer; and Tommy Hall, the Director of U.S. Sales. And joining us from PHASE Scientific is Bob Gergen, Vice President of Commercial Operations. I believe you're all in the U.S. today, so I wish you all a good evening.

Thank you, George. Appreciate it.

Thanks, George.

So today, the team has quite a bit to cover, and willing to keep the presentation to around 30 to 40 minutes, allowing for questions with a target of finishing around 11:30 a.m. [Operator Instructions] As a sidenote, given we are expecting a lot of questions today, I will be prioritizing those questions relating to today's topic. And today's presentation will be lodged or has been lodged with the ASX this morning, and a recording of the briefing will be made available on the Lumos website once ready. And with that, I'd like to hand it over to Doug to get us underway.

All right. Thank you very much, George. Great to have Bob, Tommy and Paul on this call with me today to give you this commercial update. Next slide, please, Paul. Next slide, again, Paul. Okay. So we have 4 or 5 slides here just to give you a brief overview of the company, and the reason that I'm doing that is we've seen a significant change in terms of the shareholders that now own the stock of Lumos and just wanted to make sure that we gave you a few minutes about, okay, who are we? For me, the most significant thing here is that Lumos is an IVD diagnostic company, really focused on the point of care, which means, right, at the patient and the physician and actually, what we're trying to do is change the practice of medicine by delivering real information in real time to the physician and the patient. Next slide, Paul. So people know this. This is our Board here. I kind of bifurcate to the left is the Board and to the right are a couple of our key leaders on the team, really, it's the below information that I want to stress here. Listen, you have a lot of commercial diagnostic experience here. People who have actually brought to market either highly differentiated tests or the first in their class and have made markets, right, made diagnostic markets. So I feel comfortable that at the helm here, we have great experience to make FebriDx a reality and making that an everyday product in the U.S. here to help patients. Next slide, Paul. So the key problem statement, if you will, is that for a patient that goes in wondering what's going on here. I have some kind of infection, have a fever, sniffling nose, watery eyes, feeling lethargic and so forth, they go in and see a doctor, but unfortunately, for the doctor, right, those symptoms are true for both. Patients that have a bacterial infection or a nonbacterial infection, right, or viral infection. And it's very challenging for the physician to decide, okay, what do they have? What's causing this problem. And today, a lot of the physicians will run a flu or a COVID test on patients, but many do not as well. So then they prescribe the antibiotics to people who should not have it. And really 40% of people with acute respiratory infection, are getting antibiotics and they shouldn't. And ultimately, that is also -- that overprescribing is generating significant resistance to the antibiotics that we have out there. Next slide, Paul. So this is the fabulous solution to the problem, right? Once again, so for me, this is -- you get a few of these in your lifetime, a product that really, really is different that will change how medicine is practiced. And quite frankly, you're building a market when you bring this product to market. So this is our solution, FebriDx, right? It's a quick finger prick assay. 10 minutes plus you're going to get a result and that result is really going to tell you, do you have a bacterial infection or a viral infection. And it's going to be a great aid to physicians to just make that decision about who should get antibiotics. Next slide. This just kind of sets up why this is such a big opportunity. The key takeaway here is it's a bigger than a $1 billion market that we're going to build, okay? So right now, you can look at these are the CLIA-waived environment, and you kinf of see that on the left there. And you see the 2 primary areas that we're really focused on, right, urgent cares and primary care. And on the right-hand side, you can see how many locations that represents, 14,000 urgent care sites. That's represented by about 400 or less ownership groups. So it's a pretty, if you will, the ownership group is pretty concentrated. And then the primary care solution, 160,000 primary care locations in the U.S. So Bob and team are going to talk about, well, how are we going to like get to these folks and get them interested in using FebriDx going forward. Next slide. Okay. One of the key things that we put out a piece -- a press release recently. And in that, we talked about having 100-plus current sites that are using FebriDx. And one of the other qualifiers we put on there was a description of how many flu tests they have. Let me give you some rationale because there was a little bit of confusion around that. We think of this market as the acute respiratory infection market. But as you can see here, there's a lot of causative agents that drive that infection. Flu is one of them, but it's such an easy, easy thing to track, and it's done by the CDC, and it's done weekly right? And we also have access to data that allows us to put this into our CRM system by site and so forth. So going forward, we're still after the 80 million visits a year for ARI. No doubt about that. That is the market opportunity. But for tracking purposes and trying to give the market and our investors the opportunity to understand the scale of the type of customers that are ordering we're going to start to provide people with how many flu tests did they do the year before. And you can kind of put down in the lower right, you can kind of see I'm just using the average of this range of 20% of ARIs are actually influenza positive test, okay? So that just gives you an idea then so that when we're talking about 100 sites that do 100,000 or 200,000 flu test that then translates to almost 1 million type of ARIs in being looked at probably in that account. So I just wanted to let people know that this is a new indicator that we're going to give to our investors and the people in our PR, next slide. And then the last thing, this is my last slide is just -- the other thing I want to represent is, hey, this is a very seasonal product for you guys in Australia, you're probably now getting into your flu season, right, It's the exact opposite. For us, June is one of our very lowest months, right? July and August are actually even lower. But you can kind of see here the shape of this, right, where the ramp is really from November through to the end of March, okay? Think of it like that. So the team will talk about what are we doing on these low months, right, of getting prepared to meet that demand at these high -- very high and moderate seasonal months here for flu. So with that, I'll turn it over to Paul. Next slide.

Thanks, Doug. In fact, it's a pleasure to be with all of you and provide this update. And before I actually move to the next slide, I did want to just focus on one thing around this infection rate slide, and that is it turns out getting our CLIA waiver grant at the end of March was a blessing. Now don't get me wrong, I would have been happy to get the FDA CLIA waiver grant in December. But at the rate of activity and how busy are -- those customers are, it's very hard to introduce a novel product, a new test into a practice that is seeing that much influenza activity. So -- because it's hard for them to adopt it correctly, it's hard for them to even give you their time. But by getting the CLIA waiver grant at the end of March, one, and which we'll discuss in the future slides, the activities lined up perfectly with what we had with distribution and conferences. But also it gives us the time to approach an account and have them adopt it, have them get trained on it, implement it and scale it appropriately, and they have time to do it in the months, as you can see on the far left with July, August, September, it gives us the time to get those folks on board and then wait for the utilization to occur. So it turned out actually great. It all gives us a chance to solidify our ecosystem. and I'll get to that here. The -- really proud of this slide, okay? So when I think of how to accelerate commercial adoption, I think, of these 4 categories, okay, obviously, on the top left with Lumos, we're the manufacturer of the product. We have the IP. We're driving marketing. In fact, we're at the last stages of selecting a marketing agency. That's got a very robust, very comprehensive campaign to increase awareness of FebriDx. If you ask me what we're missing in the U.S. right now, it's not resources necessarily which I'm going to talk to you here. It's actually the doctors and the physicians and the nurses in our space. We need them to hear about the product. We need to get to them. So marketing agency is going to help us with that. We're also looking at overall strategic direction and obviously, regulatory oversight in the U.S. And then as Bob will speak to more on the PHASE, our national exclusive distribution agreement with PHASE, where the PHASE team and the Lumos teams, our field personnel are focusing on Tier 1 and Tier 2 accounts, of which Tommy is going to refer to in an upcoming slide. Just as importantly, PHASE has done an incredible job of setting up subdistributor networks with very large distributors, Henry Schein, McKesson, NDC. Those are over 2,000 reps that I'm pleased to report have been trained, they've been educated and they are running with the product as we speak. Furthermore, Bob, I'll sing your praises here, they put on MTMC. MTMC is a contract sales organization, 120 sales reps in the field focusing on hospital and primary care, they've been trained. They have a box of FebriDx under their arms and they cover the entire country. And so now you take that partnership and to the bottom left with AcuityMD. This partnership is pivotal. And I'd say, well, extremely valuable. This is where our claims data comes from. This is -- when I say claims data, a doctor performs a diagnostic test, they submit a claim to the insurance company. It is captured in this third-party data. It's not just FebriDx data. It's influenza data. It's RSV. It's Strep A. And so we have access to all of it. We've also, by prioritizing the pipeline for patient volume and payer mix, it gives us a data, but we made the decision, and we just got trained in putting our CRM, right? That is our funnel management, our sales lead management system within Acuity. So now we have distributor sales going into Acuity. We have claims data within there, and we could prioritize and target effectively which clinic is using FebriDx and which provider within that clinic is putting in claims for FebriDx. And conversely, which ones aren't, so we can target appropriately. Finally, prospectus. And prospectus, if you hear prospectus, you think reimbursement. They've done a fantastic job, really health care economics are absolutely paramount to the success of FebriDx. They immediately are participating in the on-boarding of a new customer. They've done a fantastic job. And so there's already a confidence with the new customers that are coming on board and adopting FebriDx that they're going to have someone to hold their hand to make sure that their revenue is going to come through and that the claims are going to be filed correctly. And that if they get a denial, prospectus as a team will help them with that appeal and to make sure that, that revenue continues to come through. So you put it all together, and I couldn't be any more pleased with this ecosystem, and it's already working, which is incredible news. I'll tell myself on the next slide here...

Paul.

Yes Bob?

I'd like to add something, if you don't mind? Yes, so really, the combination of the AcuityMD data-driven targeting, if you will, and prospectus reimbursement support. That significantly reduces in my experience, 2 of the biggest barriers to diagnostic adoption, and that's really finding the right customer and getting paid. So this is really, really, really important. I just want to underscore that.

Yes. Thanks, Bob. So I believe I've discussed this slide before, but there's 3 pillars to a commercial adoption of a novel test, and they're absolutely critical. So on the left side, you have the clinical benefit. And that is, let's just zoom right in, it's a test that is the only point-of-care CLIA-waived diagnostic rapid test that can tell you whether a patient's bacterial or nonbacterial. More importantly, it's a 99% negative predicted value. What does that mean? That means it is ruling out a 99% of bacterial infection. So what does that mean? Well, that is an unmet need. That is a solution that's absolutely providing an unmet need and patients who are asking for the antibiotics, now there's some satisfaction. Now there's basically an appreciation of why they're not getting to antibiotic. And FebriDx alone sits and provides that result. It obviously supports antibiotic stewardship as well. If you move over to the second, this is what I was talking about economics, and Bob, what you were referring to, care follows cash in the U.S. It is what it is, okay? I'm not saying that's a good thing. But the fact is if a product is not reimbursed and it could be -- it could solve multiple unmet needs. It's not going to scale. It's not going to grow. Luckily, based on our experience. And Bob, I'm glad you brought through in your comment there because you and I launched influenza 25 years ago with Quidel and we got ahead of this with FebriDx because we learned. We established a PLA code at $41.38 for FebriDx, way ahead of the CLIA waiver grant. We jumped in. I say we, Tommy did a fantastic job of jumping in with the Medicare account contractors, administrative contractors, recognizing FebriDx in every state. We also have our private payer coverage conversations going on, thanks to prospectus, again, critical there. And it's a win-win, win-win. Lumos, PHASE, distribution and physicians are currently winning from a standpoint of sustainable margins. And finally, operational efficiency is that third pillar because if you can't -- if you don't have a test that's easy to perform, if you don't have a test that isn't going to fit into a workflow, if you have a test that's going to change physician behavior dramatically, you're going to have way too many roadblocks. And I'm happy to say, instrument-free, 0 capital equipment, less than 1 minute hands-on time. Just after 10 minutes to a result, so the patient is still in the office in the exam room, one finger stick of whole blood. And and you're not changing physician behavior, you're basically looking at it and then it goes back to AcuityMD, they -- we could track the physicians that believe in Rapids that they're using influenza tests. And those folks, this test is perfect for because they already see the power of a rapid diagnostic test in the U.S. And finally, before I turn it over to Tommy, your best indicator of operational efficiency is when a customer like WellStreet goes from a pilot and then expands to 43 sites. Tommy will talk more detail about WellStreet but that alone is the competition showing FebriDx is working, operationally, it's being effective and the outcomes are what that particular customer, among others, are seeing. So I'll keep the great energy and the positive updates going here as I turn it over to Tommy.

All right. Thank you, Paul. Next slide. So as Paul has alluded to, Doug has mentioned in there, we all know what FebriDx is. We've got a great product on our hands. It's the only one of its kind out there. It's novel. It's really groundbreaking and meeting an unmet need of the next great epidemic, everybody agrees in antibiotic resistance. But when it comes to having that great product, you still got to go out there and sell it. And the commercialization strategy, the sales strategy we put together is Sales 101. And Bob, myself, Paul, the sales teams we put together at PHASE, the sales teams we put together within Lumos, we've got years of understanding this strategy of understanding the sales technique and how to get the job done. And so we've already proven this once again with this -- with FebriDx and how we're moving along and just will continue to do so. And Paul, let's go to the next slide where we get a little bit more of the nuts and bolts of it. So when you look at the commercialization strategy, it's really broken down into 3 separate strategies. So first, you've got push, push is just selling. Push is focusing your sales resources on your accounts prioritizing those Tier 1, those Tier 2 high-value accounts is what we're doing and getting in there and just selling FebriDx within these accounts. Through PHASE, we have built an unbelievable sub-distribution network and contract sales team with MTMC that we use to help us as well in this strategy. And then obviously, with what we've done at WellStreet, we created this incredible playbook, this implementation strategy where when we go to other accounts. When we go to other large networks of urgent cares, we're able to go in there and have the strategy, have the playbook in hand of what we did at WellStreet and what was successful. And sure, it's going to vary by account. We're going to have to adapt as we go. But the overall nuts and bolts of what is success and what defines success has already been put together, and we can use that as we're out there selling. And then you look at pull and pull is quite honestly, just customers reaching out to us. And here just in the past few days, I've had several of our Tier 1 and Tier 2 accounts reach out directly to us, because they're hearing about FebriDx, the awareness and the demand has now been created post CLIA waiver, whether it's at trade shows, whether it's over social media, whether it's marketing campaigns, whether it's hearing through webinars from KOLs to speak about FebriDx. They're hearing about this. They're realizing this great test that is out there that they need within their facilities. So they're actively, proactively reaching out to us. And the greatest part about this, as Paul touched on, we haven't even really started spending in our promotion yet. We have not brought our marketing company yet that's really going to drive this pull strategy. And it's already being very effective, and we are already getting flooded with calls and reach outs from high priority targets reaching out to us. And then at the end of the day, it's all good to sell and to be closing these accounts and driving adoption, but we've got to have some way to measure it and some way to track it. And that's where the things that Paul mentioned as far as Acuity and our CRM through Acuity the claims data we're getting through Acuity where we can see which centers are using and we can even drill down to the physicians and the providers within those facilities to see who is ordering FebriDx. The reports that we're getting through our sub distribution network that allows us to follow up with these accounts to make sure everything is in place, make sure everything is -- everyone is properly trained. There's no questions. There's no hurdles that need to be tackled. So we've got all that data, all that input coming to us where we can proactively adjust on the fly, and we can take care of these customers and really understand what's going and improve the actual adoption that is happening. And most importantly with this too, as Paul alluded to, when we look at reimbursement, the ability to use prospectus and their reporting and their knowledge and their guidance throughout this to help get to where we're getting all of these claims paid. And everybody is getting reimbursed on every test. And to be doing this now through these slow months in these non-influenza season months. It's allowing us to get claims built up, get that traction to where we hit influenza season, reimbursement is running at full speed. Accounts are up and ready to go, and we're really benefiting and running smoothly from all the hard work that's been done up to that point. Paul, next slide. Market concentration matters. Look, this is all about hyper focus, and this is where we are. We're very focused as 2 companies together here with PHASE and Lumos, and our sales teams are focused on those top 100 accounts, what we call Tier 1 and Tier 2 accounts. And as you can see here, the top 100 parent entities in the U.S. within the urgent care market, make up almost 50% of the total urgent cares in the U.S. So a little over 5,700 urgent care sites are made up by just the top 100 parent entities. And so when we look at this, we said, "All right, this is where our focus needs to be as PHASE and Lumos. This is where we're going to drill down and where we're going to go after because this is where we can really move the needle and make a difference here in the adoption of FebriDx. All the other urgent cares, all those other 300,000 CLIA-waived sites throughout the U.S. That's where we use our sub-distribution network. That's where we use the Henry Schein, the McKessons, the NDC partners. That's where we use our MTMC reps. All of those reps, all of those distribution reps that Paul mentioned earlier, that's where we send them to go help with all those other accounts. But us as a sales organization and our sales teams that we be built here at PHASE and Lumos, we are hyper focused on these top 100 accounts in our Tier 1 and 2 accounts. Paul, next slide, please. And this just gives a great snapshot here. This is the top 50 of those Tier 1. And you can see there, they represent a little over 4,500 total urgent care sites in the U.S. ranging from a little over 400 sites when you look at an AFC to 35 sites. 62% of these top 50 urgent care groups are hospital affiliated. They represent with our corporate offices, 23 different states. When you look at where their actual facilities are, would probably come pretty close to covering 50 states. And then again, what we're in this for, It's acute respiratory infections. That's the #1 reason that patients are coming into these urgent care centers in these groups. And so again, the push, pull method of sales, it's all something we know to do. It's all something we've done for years. We're very good at and we partnered that with taking our sales organizations within PHASE and Lumos and we're really hyper-focused on these Tier 1 and 2 accounts. That is where we can move the needle. That is where we can move the needle very fast. And then we use our other network of reps out there to continue to do what they do with the remaining accounts. Next slide there, Paul. All right. And Bob, I will swing it over to you now for a little commercial traction.

Thank you, Tommy. I appreciate it. I want to thank Doug and Paul and Tommy and the Lumos Group for inviting me. I'm excited. I am VP of Commercial Operations at PHASE Scientific. And as they mentioned, we are the exclusive distributor of FebriDx. And I've been in the point-of-care space for 30 years, 25 of it in 3 different states at Quidel and QuidelOrtho, worked with Paul. We've launched a few products and I can honestly -- and exceeded, did very well, but I can honestly say that FebriDx is one of the most exciting products I've ever been involved with. It's rare to find a technology that solves this clinical problem, easy to use, it's reimbursable and adds up to being able to be skilled quickly. So that's why my team is energized about why we're here and where we headed. And I personally believe and this is not hyperbole, this is the chance of a lifetime for us, for everyone here, for all of the United States, for health care in general to be able to differentiate between a bacterial and nonbacterial infection with one drop of whole blood at the point of care and CLIA-waived is astonishing. And so again, hats off to Lumos team, but super excited to be on the call today. Next slide. So since receiving the waiver, as Paul mentioned, on March 27, we've been focused on getting FebriDx into the market. So as quickly as possible, and we're seeing encouraging results. And the timing couldn't have been any perfect. So we get waiver on the 27th, we're at the Henry Schein National Meeting that day, the world blows up in a positive way. Oh my God, FebriDx is now CLIA-waived. And then for the next several weeks, we attend the Henry Schein, obviously, the McKesson, NDC, MTMC National Conferences, as well as the Urgent Care National Conference. So the relationships that we're building with those organizations gives us access to thousands of urgent care and physician office customers across the country. That's pretty exciting. Also, we've expanded the WellStreet rollout to 44 locations, surpassed 100 live sites in total thus far. And so what's exciting is that all this is happening, as Paul had mentioned, before respiratory season. So the peak in the U.S. in Q4, Q1, so Q3, Q4 and Q1 of '27, in the U.S. market is ours to take, if you will. Next slide. So here's us in action. So these meetings are about creating awareness, confidence and demand be simple. We introduced FebriDx to large sales organizations, over 2,000 reps. That again call on our targets. The targets Tommy talked about every day, urgent care, primary care, student health, et cetera. And the picture in the middle is Dr. Brian Bobb of WellStreet, who's a huge supporter of the product reinforcing clinical value of FebriDx with his colleagues in the urgent care arena. And again, these early efforts here that we're talking about are helping lay the foundation for broader growth heading into the respiratory season. So it's all about planning to execute during that time of year. The one thing I would say thus far, it's anecdotal, but Paul and I, we've been in this space a long time, well, we all have. And I've had unsolicited several VP and higher-level folks in distribution tell me that they think this is the most exciting product they've seen in their careers. There's been more noise in a positive way. There's been more excitement and more optimism that they have seen in a very long time. So the distribution community gets it. We've had end-use customers tell us that this is an amazing solution to a problem that they've had for a very long time, and it's really exciting and really nowhere in the sort of medical food chain does anybody pushed back and said, "Well, this doesn't make any sense to me. It makes sense to everyone, but they just haven't heard about the concept yet. So now we're getting that out. It's pretty great. Next slide. Okay. So momentum. So we're seeing momentum because FebriDx delivers it's clinical value, sort of operationally, clinically and financially, right? So clinically, it helps provide and distinguish bacteria from nonbacterial infection. We know that, right? Operationally, it's simple to use, CLIA-waived, it's instrument free, and it fits easily into the workflow. And then financially, of course, people are getting paid on, and that's only going to get better. But again, today, across 18 states, we have 100 sites using the product, and that's an important sign of market adoption to me, right? It's beginning to take hold, and we can begin scaling this in a meaningful way. Let's see one more slide, I believe, for me, reimbursement. Thanks, Paul. So one of the biggest questions with any new diagnostic is where the reimbursement will support adoption. So far, the answer is yes to us. So we're seeing claims paid rates above 90%, and we now have Medicare recognition across the U.S. regions, eliminating most major barriers that often slow adoption. Prior -- excuse me, private payer reimbursement has also been encouraging with average payments above the current Medicare rate from our data. So at the end of the day, providers, they need confidence that using a new test makes both clinical and financial sense. Reimbursement results we're seeing today give us optimism confidence that FebriDx can scale successfully over the long term. And again, we had reimbursement challenges with Quidel launching flu. And we're -- as Paul said, we learned from our mistakes, and we're much further ahead than we were before, and again, cared us all cash. So great care, get reimbursed for it. There's enough money there in the food chain for everyone to make things work for them. So yes, so I think I'll hand it back to Tommy, right?

Yes. So yes, thank you, Bob. Good stuff. WellStreet. So everybody is familiar with WellStreet. I'm actually on the road now and doing a little road tour through Georgia through all their sites. And I can tell you, the response with the expansion into the new sites has been unbelievably positive. So much so that as I'm in these sites talking with these providers, talking with the nurses about their experiences that they've launched here the last month. I have to stop them and say, "Well, what's a negative. You got to give me a negative. You got to tell me something that's not going well with the test. Every site that I walk in every provider I talk to, not only is the test performing well, is it fitting perfectly into their workflow. They're just blown away that they now have a product like this and a test like this. And we started at the one site that was moderately complex here in Fayetteville, Georgia to implement it into the workflow, to work with it to see how it would fit within WellStreet before we got CLIA waiver knowing that we would then expand to the 44 total sites and then go to full expansion. And so we were able to prove its value, get it in the hands of the providers, fit it into the workflow within the one site. And then upon CLIA waiver, as you know, go from expansion to there to a full other site within the Georgia area to the 7 remaining sites within the district of the one site we had already started with and then into the entire market up in Michigan, which is 28 total sites. WellStreet has full intention to make FebriDx a standing order to where every ARI that walks in the door. When they go into that room and they sit down with the nurse, and the nurse is asking the questions of why are you in today and taking their blood pressure and their temperature. When they have an upper respiratory or lower respiratory symptom or ARI symptom. They give them that FebriDx. And so before the provider even walks in that room, they know, hey, in room 2, I've got a bacterial infection. In room 3, I've got a nonbacterial infection. So they know the pathway that they're going down before they even see that patient for the first time. And WellStreet, while it's a small sample size, and they told me this, it's extremely promising, and I only expect to see the same data as we expand into these other sites. But they already have seen a reduction in antibiotic prescribing within the one site that's been running since September and a reduction in the time it takes to get a patient in the door and out the door. To them, that is an automatic home run win-win right off the bat. You're providing better patient care and you're making your clinics, 165 of them run much more efficiently and getting more patients in and out your doors. And so they couldn't be more thrilled with how things are going. It's working exactly how we knew it would and how they thought it would. And now, as I said before, we've got a playbook from WellStreet. And now we've got that playbook to go run and use as we implement this insights all across the U.S. and other big large organizations like those Tier 1, Tier 2 accounts that we were talking about earlier that are similar to WellStreet. And so Paul, next slide there, please. And Doug is back on deck. But before I give it to Doug, I got to get my last little limelight here, I guess. As I've been out on the road here, 2 things, and I called my wife the other night to tell her about this, and she was just amazed as I was. But -- and talking with the provider late last week, again, how are things going? What are you liking about the test? Where are you seeing it provide the most value? The provider told me, I had an interesting case. I had a patient come in had some upper respiratory symptoms, but it wasn't really fitting flu, not fitting COVID. There were some other things going on with that patient. So we gave them the FebriDx, and it came back bacterial, bacterial positive. And so based on their clinical acumen and just not running any other test, but just with what was going on with the patient, they said, you know what, based on this bacterial result, we're going to admit you. They sent them to the ER fast forward 24 hours, and that patient ended up culture had grown E. coli. That patient had E.coli. And the provider looked at me, dead in my face and saying, I'm not saying it did this, but FebriDx could have saved that patient's life. So I was blown away. And we all know about the antibiotic stewardship side of FebriDx. We all know about what's going to help in prescribing antibiotics and helping patient care from that standpoint. But to hear stories like that, it just -- it made it all worthwhile for me. It justified everything that we've been putting in over the past 6 years getting this to market and all the blood, sweat and tears. We always knew what we had but to finally have it out there in the market and get stories like that. I mean wow. And then just yesterday, had another provider tell me, had a patient come in, had a sinus infection. And I didn't know this, but standard protocol for sinus infections is, you do not prescribe antibiotics until they had symptoms for 7 days. Well, this patient was on day 2 of symptoms. But thanks to FebriDx, they administered a FebriDx to that patient. It came back bacterial positive. So they're able to start them on antibiotics, day 2, the provider said, you save that patient 5 days of misery and a return visit in 7 days to my clinic because they had not gotten better. So wow, I mean, it's just that the stories like that come in daily, we hear them over and over and I'm telling you guys, it's just -- it's a great time to be part of something like this. It's a great time to be making such a big change in health care in the antibiotic world and helping to really provide better patient care out there. All right, Doug. Now I will give it to you.

All right. Tommy...

[indiscernible] tough to follow Doug. We've got [indiscernible]

Yes, yes, yes. But unfortunately, I'll talk anyway. So great job, Bob, great job, Tommy, I really appreciate you guys speaking and giving people an update as what's going on out there. Listen, I'm just going to take a minute here because we're up against time, but I'll just focus on the top half. These we're thinking are going to be the leading indicators dashboard that we're going to try to produce on a regular basis and format for everyone, right? So number of live sites that we have, the corresponding number of flu tests that those accounts did a year ago. And right, we talked about that as a comparative for FebriDx for ARIs. Think of it as like that's about 20% of the ARI claims that they may have had. We'll also talk about the -- as we go geographically and expand, which is really important across the U.S., we'll keep that. And then this last one, without a doubt, to me, is the most important single metric that you're going to get from us, right? Because this decides whether or not -- and Bob, I think you said it. If they don't get paid, they will not order the test, okay? It's as simple as that. And listen, like Bob, fortunately, I've been around a long time and I've launched FDA-cleared cancer sequencing tests into the market, unbelievably great products that impact cancer patients that we're not paid for, right, by the insurance companies, okay? They saw those exploratory and denied those claims. And that's a pretty common occurrence by many products that first get FDA approval and just are not in the mainstream. The great news here is that the team put together this great strategy of getting this PLA code and putting it at a price point, right, that, quite frankly, is -- works for everyone, right? Not only us as the manufacturer doing 60% margin, but then Bob in PHASE and then our sub-distributors, but also the customers. But the last party here are the payers, okay? And they are also, right? They're looking for ways to reduce health care cost overall and if they had to buy a test in order to do that. And it, quite frankly, is a pretty economical test for them to buy. This is working. So pay attention to that one because I think that is without a doubt the most important indicator of success of how we will ramp here. Next slide, please. Okay. Again, this is just a summary of what's going on. I have to leave with this overall view, which is it's kind of interesting. Probably just a few months ago, right? We had no CLIA waiver. We didn't have a ton of money in the bank, and we were sitting here going, okay, this -- the big miracle is going to happen for us relative to getting this FDA clearance and allowing us to go build a market. And then since we've done that, I can honestly say for the last 60-plus days. This is doing much, much better than even I thought, and I'm an optimist, but I'm really, really pleased with everything Bob and Tommy and Paul driving here. So more to come. And as we continue to put out those leading indicators, we'll continue to put out as much PR and announcements where appropriate for disclosure, we'll do both and try to get as much information out to the market. But I got to tell you, we are at a great place for the company right now and for hopefully those that have invested in it. This is going to be, I think, a terrific experience for all of us. So thank you very much. So with that, next slide, and George, I think we'll put it over to you.

Great. Thanks, Doug. Paul Bob and Tommy, that was quite an extensive update. Quite a few questions here, so why don't we get straight into it. First question, can you please give an update on the 8 urgent care pilots? Last news was that they are in evaluation and implementation. Did any of the 8 pilots come on board?

So Dave, I can take that one. The answer is yes. So when we talk about the activity amongst the Tier 1 and Tier 2, those 8 pilots are part of that Tier 1 and Tier 2, and we are actively working with them. They are still in the pilot stage. They have ordered, but they're still in the pilot stage. So unlike WellStreet, we just are still waiting on some data now around reimbursement. It takes a little time and some of the claims data. But we're very pleased that we are actively engaged with -- actually, it's more than 8 at this point. So things are going very well there.

Right. Thanks, Paul. Next question, I believe Tommy answered this one, but I'll ask it again. WellStreet has 1.1 million ARI patients per year. Will they test 1.1 million patients with FebriDx?

Yes. Yes, that is a potential as they do plan to test all patients that present with ARI symptoms. But that will be a ramp-up to that. It's not just a light switch when they go to full adoption. So -- but yes, that is their full intention to test all ARI patients first as I kind of gave a scenario of the patient being in the waiting room with the nurse there.

Great. Thanks, Tommy. Next question. When do you think this product will be introduced into the Australian market and then commercialize for customer use?

Well, it is in the Australian market. It is TGA approved. It's a prioritization at this point in the U.S., but the product has been available in Australia for some time.

Yes. I would say, right, we are waiting for more clinical. The issue in Australia right now has to do with the financials around who pays for the test. And right now, right, the health care system does not pay for FebriDx. We are initiating some clinical studies that are being done actually there in Australia through the university system there in Wollongong. And we'll be able to utilize some of that data to help further get momentum, hopefully, to get this covered eventually in Australia, but the product is sold through a distributor there for people. And there are a couple of accounts that actually do purchase FebriDx in Australia and use it, but it's just an outcome right at the moment.

Yes. It's Henry Schein in Australia and the regional health care group that carries the product. And just to Doug's point, there's a bit of a priority just because of the reimbursement that's readily available in the States, but we're still working on it in Australia.

Great. Next question. What's the abridge FebriDx utilization rate per active clinic per week? And how has that changed since implementation?

Yes. Listen, it's a good question and a good metric. But right now, it's way too premature. I think let me put -- we're 60 days in. We're in the process of actually implementing our CRM and tracking things and getting data to put in there. We have -- while we're glad that we have 100-plus customers, we only have 100-plus customers. The use right now is a lot of people trying to do their -- they buy and then they're testing out the reimbursement scheme, right, to make sure that they're going to get paid. And the good news is most of them are right now, but they have to prove it, right? They have to demonstrate this. I think most of you know that or if you listened before, those 400 ownership groups of the 14,000 urgent cares, many of them are actually owned by PE firms, okay? So it's really, really important that they're managing their profitability and making trips appropriate for delivering health care in an affordable manner and so forth. So getting those claims sent into the private payers and getting them back does take time, right? It literally could take months of that cycle, if you will. The great news is we are seeing that high greater than 90% payments right now. And we'll continue to keep you on board with that as we get more information.

Thanks, Doug. Are all the major private insurers now signed up?

Yes. No, to be clear, no one has signed up, right? There's 2 -- the way it works and Paul, I'll let you describe it. The way it works initially, right, is we have a PLA code that is sent into the payer organizations, say a private health -- private insurer and then they'll make a determination of will they pay that or not? And then there's a whole negotiation sometimes back and forth around those. But the actual to get on their policy actually is a significant process that has more to do with volume, quite frankly, than having a PLA code or even FDA clearance. It's more about the experience and about their membership actually using the test. But Paul, anything to add there?

Yes. No, I think that it is -- it's based on volume and utilization to tee up those coverage policy conversations. It's an excellent question, though, because the effect is just because we don't have a written coverage policy, which again takes utilization, lots of utilization to drive that. And that's where prospectus comes in and tees that up. But the great news is we're seeing very robust reimbursement from those same payers from a standpoint of medical necessity when their claim is actually submitted. So we're still seeing excellent reimbursement. We just don't have a coverage policy. And the reason that's such a great sign is because, generally speaking, when you don't have a policy, you're not -- most likely you're not going to -- you're going to see some -- a lot of denials. And we're still seeing some denials, Don't get me wrong. But overall, we're actually seeing some very decent reimbursement rates come back which shows that they -- that we priced it right, the $41.38 and at the same point, it also demonstrates that they recognize the value of the medical necessity on the front end. So it makes those future conversations and those future policies easier to write and sooner, hopefully, but that is -- it is a process, to Doug's point.

Next question. What is the $7 million marketing budget being used on so far and how much has been used?

Yes. So I don't know if -- right now, I don't think any of it's been used quite frankly. So the first part of that is to identify, as I think Tommy had talked about, we've identified our partner to help drive awareness for FebriDx into the market. It will be targeted awareness campaign, if you will. It won't just be like, hey, across the whole U.S. We will, just like the sales organizations hyper-prioritized, we will -- the marketing will as well. And by the way, that overall budget is not a budget that would be spent all at once, right? That's over a significant time period as well. It's -- so I want to make sure that people are aware of that.

Right. Next question. How is the progress on the facility upgrade going? And when will we realize automation cost savings?

Yes. Good question. So where are we in the process? So we signed all the agreements. We've initiated with our contractor. I'm not -- I wasn't out there this week, so I don't know if they're going to initiate doing some of the initial demo work, right, and on the facility itself, to get it ready in order to do the build. So it may have started this week, but it's initial stage. Right now, it's a little bit of some small-scale demolition within the facility needs to occur and then we can start in earnest on the actual build site relative to when will you see savings relative to automation. Automation part is probably, I would say, 2 years away when we start to see that. We're going to get into the facility. We'll take the current process that we have, duplicate that, validate that. And then when that -- we've moved it over, then we can also start a new process in the new facility of full automation, right? And then that will take some time to enact that, if you will, and then validate that in order to then see the savings associated with full automation.

All right. Thanks, Doug. And another question, how much inventory are we currently holding?

Not a ton. Barrie is not on here. I apologize guys, and that's I normally say, okay, Barrie, what's the answer to that? I don't want to mislead anyone. I don't believe it's a ton of inventory at the given moment, Paul, I don't know if you have any.

I'll let you a guess, and I think I'm pretty close, but I don't think it's any more than, say, 20,000 or 30,000 tests at the current point for FebriDx. It's not a ton.

Okay. Great. Next question. Can you give an indication of the gross margins for the test? I think that might be one for Barrie. Just following on.

George, right now, our gross margin is 60% on FebriDx, right? Our aim -- and for that other question that we had around automation, there are probably 3 or 4 key drivers to lowering our COGS, which will also increase our margin, right? Number one will be volume because we get volume discounts from our suppliers, right? And that's a key driver. And two is automation and 3 are other efficiencies that will be put into play. So yes, we're looking to drive that up by the end of the agreement here in 6 years, we'll be around 80% gross margin, we believe.

Great. As a follow-on question. Will Lumos need to raise more cash to fund working capital. And also, when will you be rolling out to new markets? What's the pathway looking like for that and which markets first?

Yes. So question number one, no, we don't anticipate certainly in the near term, midterm, any need to raise. We're fully funded here based on that capital raise that we just did. So there would be no reason for us to need to go out to raise any. In regard to the second question, what was that again? George?

Whether you'll be rolling out to new markets?

Yes. Listen, we're already in. And what's the number, Paul, how many markets are we in right now? What do you share?

18.

So we're in many, many markets today. The issue is this issue of payment, who pays for the testing, right? And the U.S. has made to deal with this very easily in the type of payer market that we have. I ran point-of-care diagnostics for Siemens for years in Europe. And I launched products there and everything. They do typically start to adopt in Europe point-of-care testing, but it's typically after a couple of years of success, this is the -- not only the health improvement, but also the economic health story is really important to getting adoption in Europe. So we'll continue to launch where it makes sense, and -- but without a doubt, the priority right now like talking to Tommy and Paul, just focus on the U.S., we'll deal with the rest of the world on a more of an opportunistic opportunity right now.

Next question. Can you break down the $41.38 into how much Lumos gains? How much to the distributor and how much to the provider?

Yes. No, we don't give that information out there other than to say approximately, right? We're doing 60% margin. And I can say I'd say that what you want -- and I'm not saying this is the case here, but most distributors would sit there and say, "Hey, they're looking to do -- they can do plus 30% margin that would be good for distributor, sub-distributors probably make a little bit less. And then I'd say your customers in this, not the payers, but urgent cares and so forth. That's really a function of reimbursement, quite frankly, right? I mean, some will be very positive and have expressed hey, as long as I don't lose money and I were to break even and the rest of the story was optimal. It might be okay, might be okay for them. But others are like, hey, if I also can do 30-plus more percent after they cover not just the test, but also their costs to do the test, that would be a positive thing for them. So we kind of think about it in that type of makeup, but we don't give the actual detail to everybody in the food chain.

Great. Just where at the time it is 11:30. Are you guys okay to just continue on for another 5 minutes?

Sure, we can do try.

Okay. Great. Thank you. I'll just combine these 2 next questions. What's the current sales volume like, particularly post the FDA approval? And when do you expect to see significant product reordering?

Yes. Good question. So we do not provide our ongoing live sales numbers and so forth, right? That's why I'm going -- we talked about those leading indicators. We're trying to give the market that information so that they would have that, right? We did -- with PHASE did a preliminary stocking order with us back in March. That's a significant order. And right now, we're at the lowest point of the year, right? So we can expect that there wouldn't be other orders of that magnitude in the short term, let's call it. I don't expect to see them ramping. It will be more consistent with that bar graph that I provided earlier, where that flu, where it kind of starts in November and kind of peaks and then it starts going down and ends around late March, early April, that's what's going to happen with this product. I would think. So you can expect it to be something like that. And that's why we want to give you these other leading indicators because the sales will be, quite frankly, I think it will be pretty small to start with, okay? So -- but it's more about getting the reimbursement data. And if that goes well, and we have a number of live sites keep going up, we're going to be in a great place, and we anticipate to have a very, very good respiratory season with the product.

If I could just add to that, too. And I just encourage everyone because this obviously deck will be available through the ASX through the announcement. And that is that slide is important, that seasonality infection slide because we do expect revenue to adhere to that in a way. But that doesn't mean that adoption and success and milestones aren't being achieved. It just means if you look at that seasonality curve for infection, you'll just see that our job is to -- yes, there will be some revenue and it will be similar to the percentages of infection based on that curve, that seasonality curve. But along the way, the key is to get -- the key is to get the implemented sites increasing so that when you are hitting that infection season that you have multiple -- I mean many, many sites implemented and then the utilization just goes off the charts. That's the expectation.

Great. Just 2 final questions. The WellStreet pilot side, how does that compare with their other centers that have come online?

Yes. So within the Georgia, so WellStreet expands within Georgia, Michigan and Ohio as well. But within the Georgia market, it is one of their larger busier sites and then I'd say, overall, within their 165 sites, it's definitely in the top 20. So I think that question is probably being asked based on the sample sizes that came from the reduction in antibiotic prescribing and reduction in patient throughput time. And I would say that it's very favorable as far as what we'll see and continue to see with the expansion because it is one of their busier sites.

Right. Okay. And just one final question given the time. Said well done on the road shows, did any new universities sign up from the Denver show?

Yes. We continue to add them daily. That show has turned out to be very, very prosperous for us. And we're happy to do it for the universities though. So those kids away from mom and dad are very vulnerable and the tons of statistics around antibiotics prescribing and overuse of antibiotics around our college kids. So we're excited to be getting these student health universities -- student health centers at universities on board.

Tommy, I'll give an anecdote there, too, and talking to one of them. They had said that when they send one of the children back to their dorm without an antibiotic, that first call is to the parents. The parents then light up the health center with why didn't you give my child and antibiotic and they said the admin alone and those phone calls makes FebriDx worthwhile. So I was unbelievably pleased and Henry Schein can back that up because they're at the ACHA show. It was the talk of the show and the leads are numerous. So.

Thanks, Paul. Look, I might just hand it back to you, Doug for any closing remarks, and then we might finish there.

Okay. Terrific. Greatly appreciate it. Well, let me just first thank Bob and Tommy and Paul for being on the call today to give you a lot more information and access to talk to the guys on the front line in bringing FebriDx to the market and building this market, quite frankly, love the anecdotal information there. I would just leave with thanking people to make this call, investing your valuable time. Hopefully, it was well worth it. Continue to reach out if you have some questions through IR department and we'll get back to you with any questions that you have. And I just say, "Hey, my takeaway is I think that we are -- I'd categorize this as just really positive commercial traction right now even better than what I had envisioned in the first 2 months after launch. So I feel great about that. And hopefully, you felt that passion from Bob and Tommy. And we look forward to providing updates as soon as possible.

Great. Thanks, Doug. I'm just reiterating Doug's comments to Paul, Tommy, Bob and to all the participants on the call today. Thank you for your time. That now concludes the investor briefing, and I now invite you all to disconnect. Thank you.