Pacific Edge Limited (PEB) Earnings Call Transcript & Summary

An important disclaimer. Note that by participating on this call, you agree and understand these terms and conditions. Today with me, I also have our CFO, Grant Gibson, who will be speaking to some of the financial results and also available to ask a question. Our news for today is focused on some highlights of the results and, a little bit about the company, a look at our operational performance over the financial period and then some framing of our investment program based on the capital raise we did last year. We'll look at the specifics of our financial performance, and we'll make some statements regarding the outlook, and then there'll be the opportunity for all of you to ask us questions. So diving right into the highlights. Global testing volumes are up 46%. U.S. testing volumes total laboratory throughput are up by 59%. Growth in operating revenue is up 49%, and all of this comes with a slight increase to $19.8 million net loss after tax. And importantly, we still have a very healthy cash balance with $105.4 million cash equivalents and short-term deposits. Importantly, specifically after going through a CEO transition is now set to build on the success with an investment program framed by 3 pillars. These are research and innovation, evidence coverage and guidelines, adoption, retention and revenue generation and these will feature through the call. So we did get on a mission to help improve people's lives and patient outcomes by providing leading solutions for the early detection and management of cancer. We envision a world where the early diagnosis and better treatment of cancer within the reach of everyone because we believe that no one -- nobody should die from cancer. Pacific Edge at glance. Geographically speaking, we have labs in Dunedin in New Zealand, and we have labs in Hershey, Pennsylvania. And we have active clinical studies partnerships in both of those countries as well as Australia, Singapore and more recently, Canada, and we use our clinical studies, partnerships as ways to seed new business in those locations. Pacific Edge has strong IP build those -- build the technology and that IP into great products like Cxbladder develops the clinical evidence through peer-reviewed clinical validation and utility studies. And then focuses on the commercial angle by obtaining reimbursement from key payers like Medicare and Kaiser. And we also focus on patient empowerment with noninvasive efficacious testing, offering the opportunity for increased patient compliance and surveillance and management regime. Urothelial cancer is a significant global health care challenge. And the Pacific Edge is laser focused on the U.S. market, the largest single market, and that is where we already have established reimbursement. One of the reasons that we focus on the U.S. is not just that it's the largest, but it also, the market understands that the best-in-class innovations maybe a higher price point. And with our established reimbursement at $760 per test for Medicare, that validates the hypothesis. It is also the most advanced health care system, meaning that a greater percentage of the population received the gold standard of care. But importantly, we do note that there are large population centers outside of the United States, and we've done some basic modeling of international markets to determine a global total addressable market. This modeling assumes lower cost per test in rest of world regions, uses the baseline figure of incidents from the AUA and clinical practice of value-based healthcare in capitated systems. So I wanted to spend a little bit more time on this particular slide. This will be a new slide for many of you. But this is a key way of framing the market that we operate in. Molecular diagnostics have been around for decades now and has slowly been revolutionizing patient care. And I thought it would be important to highlight the framework for you within which Pacific Edge identifies value for the clinicians and patients along the patient journey. So we conceptualize the value of molecular diagnostics in 4 major areas of the patient journey. The first is being genomic screening or your genetic risk at birth. Looking at the genes of an individual and determining if any of these genes are known to be correlated with increased risk of disease, for example, in oncology diagnostics BRCA1 and BRCA2. During our lifetime and potentially due to lifestyle or other factors, the disease may manifest, where there may be no physical symptoms that occurs and/or patient can identify, so in that case, a patient may not actually see a doctor, and they would be in asymptomatic. Tests designed to detect disease in asymptomatic individuals are typically called screening tests and offer the earliest way to detect the onset of disease. The challenge is that the incidence prevalence of disease is extremely low, which requires enormous clinical studies to validate is a major challenge for health care pundits to justify. Nonetheless, there are examples where this is gaining traction because early detection does give the best possible treatment option to eliminate the disease. Moving forward in the patient journey, we get to the point where a patient observe symptoms and typically chooses to see a doctor. And there they needed a patient care pathway. In the case of Cxbladder, this is the presentation of hematuria or blood in the urine is the segment of the patient journey, you'll find the majority of diagnostic tools used to assist clinicians with decision making for patient care. If the conclusion from the clinician is that therapeutical surgical intervention is necessary for a patient, then you move into the fourth segment of the value chain. Here, diagnostics, try to answer questions like did the therapy or surgery work with tests for residual disease or therapy response monitoring to answer the more realtime question. Is the therapy working? Or in the case that is relevant to Cxbladder products, is there recurrence of disease? What we'd like to do next though is zoom in and focus on the nuance of where Pacific Edge developed this portfolio of products and how we add value to hematuria evaluation for UC and surveillance for recurrent UC. The Cxbladder has 3 commercially available products, triage, detect and monitor, and all focus your eyes on the right-hand side of the slide, to understand the value proposition of each of those. And in the center of the slide, understand where in the patient care pathway the test is used. So triage is used in the earliest part of the patient care pathway to assist clinicians to safely de-intensify hematuria evaluation from low-incidence population. Cxbladder detect is used in the center of the pathway, primarily by secondary care urologists, and assists clinicians to adjudicate diagnostic dilemmas, for example, equivocal cystoscopy and atypical cytology in any patient population. And then we have Cxbladder monitor used after therapeutic intervention or surgical intervention, again, used by secondary care specialist, urologists to assist the clinicians in monitoring for urothelial cancer recurrence intended to reduce the frequency of surveillance cystoscopies and improve patient outcome. So focusing specifically on the U.S. market and building on the earlier slide where in the patient journey, Cxbladder can deliver value. We wanted to highlight one of the common comparators. So you've seen this historically, we've been following the company for a while, but we've introduced another measurement here or another -- where cystoscopy fits in the patient care pathway. And what you'll notice is that there is a significant drop from those patients that require clinical workup to -- for the suspicion of urothelial cancer and those that ultimately get a cystoscopy. This is important when I'm trying to determine the market size for Cxbladder because we are used -- we intend our products to be used on the 3.4 million patients requiring clinical workup for urothelial cancer and not just as an alternative for cystoscopy. It is our view from talking to key opinion leaders that all of the patients that require clinical workup are the target population of Cxbladder, when used to risk stratify patients prior to cystoscopy. This is what drives the figure of 4.6 million testing opportunities and a $3.5 billion market. Moving on to operational performance. On this slide, we'd like to draw your attention to, firstly, the COVID impact on financial '21 on global testing volumes. And as you can see on the right-hand side but also that FY '22 has been a recovery year. This is also mirrored by the commercial testing volumes and that is the lower graph on the right-hand side. We also wanted to note that as majority of our growth during this time has been in the U.S. market and the primary product in the U.S. market for hematuria valuation is Cxbladder Detect, we have seen an increase in the percentage of detect as a percentage of total tests between FY '21 and FY '22 if you look at the 2 donut plots as you go from left to right. So focusing on our sales activities and indicators. Our U.S. commercial efforts, we've actually seen a 59% increase from FY '21 to FY '22, noting also that commercial testing is approximately 84% of total laboratory throughput in FY '22. And we thought it was also useful to inform you how our sales activity is nationwide. But of course, we are clustered in the population centers where we've seen the highest level of traction so far. Again, historically, we've talked about how COVID has impacted our business. And we wanted to share with you a little detail behind what we mean when we say that COVID has impacted our business. To do this, we will start with figures from -- start the time line for these 2 figures just prior to the start of the pandemic, January 2020 and going through to April '22. However, since the impact, we believe it's important to highlight that we have continued to show that we can grow despite those market headwinds, and -- but with fairly sizable dips that you can identify in this graph associated with individual ways of -- particularly for Delta and Omicron. The way this has affected our customers is access to our customers by our sales force has been a challenge, and access for patients to their providers has been a challenge. And that is something that we now believe, based on a recent rulings in the United States in terms of mask mandates waning, access is improving, and that's -- and then hopefully, we will see a greater uptick or less impact from COVID on our sales operations. Again, focusing on the Americas. It's important to note that we've already activated some of the -- and met some of the most important milestones in terms of reimbursement. In the United States, our business is third-party reimbursed, which means the payment comes from the government payer, CMS or from private payers. And CMS is by far the bulk of all of these. I think historically, we've shared with you that it's roughly 2/3 of our patient population are those with Medicare coverage. And the reasons behind that is that we have an aged by population. The average age of somebody presenting with hematuria is over 70. And typically, people over 65 have the option for Medicare insurance and so usually qualify for insurance with Medicare. So consequently, our payer landscape skews towards Medicare. Importantly, with Kaiser, a health plan that covers 12.5 million members and 85 -- greater than 85% of those are actually in California. We have already reported to the market that following a utility evaluation internally, that Kaiser is rolling out our test on a site-by-site basis and physician or clinician-by-clinician basis starting in the Southern California region where it was evaluated and discontinued. Volume growth is steady and is expected to increase but not in a step-change manner, but at a faster rate. Once we secure electronic medical record integration, this is viewed from a perspective of the business as a marathon and not a sprint. And we have no new updates at this time about the status of the EMR integration acceptance. We are in ongoing contact with Kaiser to move that forward. Importantly, for both Kaiser and the Veterans Affairs, we adopt both sides, both organizations are adopting Cxbladder Triage. And Cxbladder Triage does not yet have Medicare coverage, and adoption of these 2 sites will help drive the ultimate case for reimbursement by CMS in the U.S. market. Addressing the commercial situation in the Asia Pacific region. So New Zealand is at the forefront of adoption here with more than 70% of New Zealand population already covered. COVID restrictions did fairly severely impact our progress in the New Zealand market. And the growth is slower than we would have liked here. But we do also anticipate that growth will be slower given how many DHBs are already signed up and under individual DHB agreements. However, there are, 2 very clear opportunities. The first of which is the consolidation of the District Health Board represents an opportunity for extension of Cxbladder to those DHBs that have not historically had exit. And similarly, it represents an opportunity for us to promote the use of Cxbladder in the consolidated District Health Boards in a way that is used in Canterbury, i.e, at primary care and which is an additional opportunity for growth for Cxbladder in New Zealand. Early commercial testing. Volume has been received from Northern Health in Melbourne, and we have ongoing clinical studies at 9 other Australian hospitals that are trialing Cxbladder, and we will look to convert those through the course of the next year. And the Singapore clinical studies have completed their enrollment, and we are in the process of developing a business case to determine the go-to-market approach for Singapore and the rest of Southeast Asia. So the future of Pacific Edge, we wanted set up a framing for our investment program and how we intend to spend the money that was raised during the capital raise last year. And I wanted to make clear our framework for presenting these initiatives to you. We've identified 3 major themes for our initiatives and how we create value in the company. You can see those in the 3 large circles in the middle. We have research and innovation, we have evidence coverage and guidelines, and we have adoption, retention and revenue generation. And into that value creation framework, we have our inputs, our people and our processes, our IP, knowledge and experience, our clinical study partners and our investors, and those inputs into our value creation program has an output that is focused on patients, where we expect excellent patient experience and accurate results reported to those patients because patients always come first and guide everything that we do. We developed early detection and clinically actionable care for physicians. We continue to innovate and build a pipeline of that innovation for clinical applications. We operate an inclusive workplace driven by outcomes, and we expect increased long-term shareholder value from all of our value creation. Having taken my first 90 days to understand the business, I wanted to establish the view that when we look at our research and innovation, we also look to commercialization because it's important that we're discussing that research innovation that we understand our path to market and our path to reimbursement. And so our focus areas as we move things from intellectual properties through the technology through the product and into the market are to evaluate product concept, to evaluate cutting-edge technologies and using that to continue to build a patent portfolio for novel clinical applications with cutting-edge molecular technologies, turning patented technology into clinically valid molecular diagnostic tools that addresses unmet clinical need. As we drive IP through to technology, what are our achievements in FY '22? To a certain extent, some of the test -- communications on this have to be carefully managed because of the IP to technology, it can be commercially sensitive and to material [Technical Difficulty]. So we would like to highlight a couple of more [Technical Difficulty]. So first, we did publish the TDR study, the cascade of Triage, Detect and Resolve, a study which highlights how our current tests can be used in combination including results and also resolve on its own. An important point that we wanted to make on this slide because it's an obvious source of questions for those have been following the company for a while that Resolve is a great product at what it's done in terms of its ability to provide insights and distinguishing between high-impact tumors and low-impact tumors. But as we validated the product with key opinion leaders in the market, their feedback was clear that whether a tumor with high impact or low impact, it wouldn't change their clinical practice. Now this is not a negative for results. And in fact, it guides us very clearly as to where we need to take result to have it be a clinically actionable product. The result is the -- is back in our R&D process, and we're evaluating the various product concepts that it can become. And there are some exciting possibilities that I won't be sharing today, but I do want to reinforce that we are optimistic that when we can the deck results to have an even greater clinically actionable impact we will be advising the market of that. Most of this is already underway, and I look forward to telling you more about it when we make that progress. In the near term, for FY '23, we expect to publish results from our Singapore study that the data analysis is complete. The publication is pending, and we are working through with the authors to have that through as soon as feasible. As we have good coverage of the patient care pathway from a diagnostics perspective, we are intending to explore other products in the prognostics and companion diagnostics space in our core market of urology. Furthermore, we will evaluate opportunities that leverage our core competency, which is identifying molecular biomarker signals from Europe. That may mean looking for adjacent cancers and other diseases in Europe. Again, we won't be disclosing any specifics beyond that at this time. But as and when those product concepts mature to a point that it makes sense to communicate to the market, we will do so systematically. So dividend, coverage and guidelines is an extremely important near-term area where we are going to place a lot of emphasis at Pacific Edge. It is a cornerstone of the initiatives that we will fund from our investment program. At a high level, we want to establish the understanding that Pacific Edge has historically done a great job of developing clinical validity evidence. But following that, still has plenty of work to develop clinical utility evidence for our products, and it's the clinical utility evidence that guides the guidelines committee members to make decisions. So consequently, our initiatives here will focus primarily on utility evidence which typically involves comparator arms and randomized designs in the clinical study to demonstrate superior outcomes of our technology versus current standard of care, using endpoints that the KOLs and the folks that sit on Guidelines Committees agree are the appropriate endpoints to demonstrate clinical utility. So these utility studies typically have a slightly higher cost and run slightly longer than the validity study, but Pacific Edge is well placed with many of those already underway, and I'll elaborate on those in a future slide. Importantly, such clinical utility studies increase the protection that we enjoy of the urology market by building out a bigger and bigger wall for our walled garden for Cxbladder. So this investment is important for that. When we focus -- when we talk about guidelines, hopefully, we've done a good job to date in communicating to the investment community importance of the guidelines, and we want to reaffirm that position here by emphasizing that we understand the requirements of the guideline committees, both through their formal communications with us and through the informal communications we have when we visit them at their practices and when we spend time with them at conferences. Pacific Edge targets 3 major relevant guidelines groups, and that is the AUA, the EAU and the NCCN. And the way that we can influence Guidelines Committee or the most compelling way that we can influence the Guidelines Committee is through the publishing of new clinical evidence and that's why our publication road map is so important and our ongoing clinical studies are so important. Another important element of guideline inclusion that we wanted to clearly articulate to the market is that inclusion is not a onetime deal. Once we're included in guidelines, we will continue to generate evidence for additional -- for the use of Cxbladder and additional context of use, which means expanding the different patient types or areas of the care pathway in which Cxbladder is validated for use. So -- and importantly, what we do before guidelines inclusion and what we do after guidelines inclusion is to focus on execution in the market. And so that is the third major pillar of our initiatives. The following 2 slides summarize the clinical evidence that we are generating at the moment or have generated. So the U.S. primary study in the Singapore study are both in the publication pending stage. We've actually ended up combining those 2 studies, and they are under author review right now. One of the other things that you will likely notice is we've had a little bit of fun internally coming up with names for our studies. But there is a serious side to this activity as we believe it is crucial from a marketing perspective to have strong identification of our studies within the urology and oncology community. They can let me hope to bring the investors along for the ride on the evidence generation journey and believe it will also make it easier to identify our progress of these studies that necessarily take a number of years to complete and are important for us ultimately getting in guidelines. We also aim to make this kind of thing a feature of our website going forward. And so the last 2 studies on this list, stratify, which is a randomly controlled trial, focuses on Cxbladder Triage as the primary product study and demonstrating utility for de-intensify or ruling out patients at the earliest point in the care pathway. We've noted the specific clinical needs that we're targeting for each of the Guidelines Committee in each study, which you can see by the last bullet in each of these categories here for each of these studies. Drive is the name of our ongoing Veterans Affairs study and its product focus is also Cxbladder Triage, was recently expanded to accommodate more patients with the intent to increase the size of the low-risk patient subgroup in the study to develop great evidence for guidelines inclusion language. This again was based on KOL feedback, key opinion leader feedback that integrating out low-risk and high-risk patients in our analysis will provide stronger evidence for the utility and Cxbladder and what the Guidelines Committee are looking for. So just mentioning 3 additional studies here on the second slide. DEDUCT is the name we've given to a study that focuses on Cxbladder Detect, targeting a particularly high-value unmet need which is the avoidance of unnecessary ureteroscopies which are different from cystoscopy. And so this is an expanded context to reduce Cxbladder to the upper tract. As it's just an expansion of the context of use. It doesn't need to be a large study, but it needs to be targeted. And we've already identified 4 sites, but none of those are yet enrolled in. LOBSTER is a newly announced study that will focus on the clinical utility of Cxbladder Monitor to safely risk stratify patients under the surveillance for recurrence of urothelial carcinoma, again, targeting AUA guidelines inclusions for biomarkers as an alternative to cystoscopy in surveillance testing. And MONSTER is a newly announced study that is in planning. And we're going to work initially with Christchurch District Health Board to measure tumor burden in the monitoring setting. And if this is successful, we will expand it. So moving us on to the third area of focus from our -- which is adoption, retention and revenue generation summarized in our execution priorities. So the focus areas include diversifying our sales profit in terms of the types of roles and recognizing that the United States is not a unimodal market. Drive protocolize adoption of Cxbladder at the earliest point in the patient care pathway. We plan to increase event marketing, sponsorship, marketing communications and establish in-network contracts when we can and when it makes sense and empower patients through patient awareness and patient advocacy initiatives through the established societies and also through our own website for Cxbladder. So the specifics of some of this in the Americas, we're going to -- we're taking a phased approach to everything that we do, and we expect to hit various revenue milestones before we will trigger some of these. But it is our intent to hire up to 9 additional account executives and 1 regional sales director during the course of FY '23, then add an additional 2 head counts to the marketing and sales support managers and up to 5 FTE in a new virtual sales team and add up to 2 individuals for strategic account sales. Another important effort is our focus on Medical Affairs and all of the clinical studies that I just talked about, while we have excellent resources in New Zealand, we do need to augment that by having excellent resources in our PEDUSA business. And so we have recently hired Tamer Aboushwareb to be our VP of Medical Affairs, who will lead a team of Medical Science Liaisons. Their focus is on clinical education of engaging with key opinion leaders. And one of the key things that we're targeting is more podium presentations by Pacific Edge and also by the KOL that we work with. So again, additional initiatives in the Americas from a marketing perspective, we're going to be focusing on conference podiums, presentations and posters, increased advertising, where we recently had quite some success at the AUA Meeting and increased and targeted marcom activities focused on communications to the urology community and to the oncology community but -- of which we would like investors to be aware but will typically not be material that needs disclosing. We also have -- we want to focus on customer experience, and that has 3 elements to it, to focus on electronic medical record integration, to focus on in-home sampling and to focus on managed care, which is an element that's really important to the United States health care landscape, where we simplify the process for explanation of benefit handling, billing and claims processing. And so we're going to run through these initiatives there to make sure patients are having the best possible experience. In the Asia Pacific region, we're going to continue to focus on having additional DHBs as we lead up to the impending amalgamation of the District Health Board. But the most important initiative that we have is driving the adoption of the Cxbladder towards primary care. We already have market development in Australia through the clinical studies that we have there. And likewise, in Singapore, and having commenced commercial revenue in Australia, we're going to look to scale that, and we will look to deploy resources that are across the Asia Pacific region, not necessarily country-specific, but looking for the best opportunities across the entire region. So in building the Cxbladder brand and the advocacy for patients, we have some planned partnership activity with BCAN, the Bladder Cancer Advocacy Network. And we are already -- we've already scaled up these activities and we're a key sponsor for the Walk to End Bladder Cancer, which is a national DO. So we've sponsored walks around the country. And if you want to follow how we are engaging, we typically post a lot of photos from those kinds of events to our LinkedIn accounts, and you can see what we're doing there. Importantly, we are also, we also have an opportunity with BCAN to co-develop the various leading patient resources, including drafting the fiction on biomarker education for the primary patient resource that every bladder cancer patient when they get diagnosed is told by BCAN. Please go here and download this document. And so that's a great opportunity for us to highlight for patients, how they have noninvasive alternatives. So in the Asia Pacific region, we also have planned partnership activity. This largely revolves around the Bladder Cancer Awareness Month. And in May '22, we've focused on developing educational videos to promote awareness of bladder cancer symptoms and the risk factors among high-risk groups. But our commitment to working with the Cancer Society and building out patient resources on our website is something where we're going to continue to deploy more reserves. And so with that Grant, I hand over to you to talk us through the financial results.

Great. Thanks, Peter. So as Peter has mentioned, and it's included on Slide 16, the impact that COVID had in certain periods with Delta and Omicron. Despite that, we're still seeing solid growth of 49% in our operating revenue. So it's up $3.7 million to $11.4 million for the year ended 31st of March 2022. Pleasingly, what we have seen though is from March through to last week, increase in volumes as COVID starts to wane on the impact of our ability to get into clinic, and the investments that we've been making in the sales and marketing is beginning to have an impact. Our throughput from April through to last week was up 25% on the average of last year, which is a strong result. We've mentioned as well the importance of U.S. on the future success of Pacific Edge, and the U.S. accounts for 93% of revenue, just to show you the expense and the focus that we're putting on investment into that area. So I'll take you through some of the top line numbers. Throughput increased to 46%, which has lead to 49% increase in operating revenue. Pleasingly, that also need to significantly increase cash reimbursement, and cash reimbursement was up 62% on the prior year. That's reflecting the high levels of reimbursement receiver, and we're continuing to work on that as a focus. Our operating expenses were up $9 million to $33.7 million for the year. That's an increase of 37%. So a couple of things to note on that, that the 2021 year was artificially low, and it was impacted by far greater by COVID as we restricted our marketing resources and our sales reps that didn't have access so reduced -- significantly reduced the costs. And the other thing is the investment in operating expenses as we look to grow. 56% of that increase in operating expenses related to sales and marketing with people costs being the largest component of that. The increased investments seen the loss of the company increased by $5.5 million to $19.7 million. That's an increase 39%. When you reflect on an increase in operating expenses of $9 million, that increased loss is understandable. Those increased costs. So as I mentioned, the largest component of that is sales and marketing investment, and that's increased by 55% year-on-year and makes up 56% of the increased costs. The other major component is general and admin. That's up by $2.3 million year-on-year. Of that $800,000 relates to dual listing on the ASX. The other 2 major components are leveraging operating expenses, which increased in line with volumes and R&D operating expenditure. That one has been impacted to a greater extent with the inability to get recruitment in some of clinical trials, which is now coming off. So we're expecting to see that investment continue in the years ahead. Thanks for that. I'll hand you back to Peter.

All right. Just the last slide here on our thoughts on the year ahead. So Pacific Edge expected investment in innovation, evidence, people and brands to drive growth in test volumes and revenue. We also expect that the selling environment, including international travel will improve COVID restrictions easing as the disease becomes endemic. And consequently, Pacific Edge is excited and optimistic that the investment priority is outlined here, well aligned with long-term shareholder value and that we remain well positioned to deliver that over the coming years. And so with that, we open ourselves up to questions in the Q&A.

Right. We have got some questions that have come in online. So we'll take a few of those, and then I think we'll open it up for any verbal questions or any questions from people that want to ask directly. So the first question is coming from Andrew. Thank you, Andrew With the clinical studies completed and those underway, how does this time with AUA's time line when they review the clinical pathways for the inclusion of Cxbladder test? And Would the AUA be willing to revise the guidelines of new clinical evidence as it appears -- as opposed to fixed time line of reviews?

Yes. So the AUA doesn't have a very strict or rigid time line reviews, and they won't review at all if there is no new clinical evidence published in our area. The guidelines committee meets roughly every 2 years, but if you want them to evaluate your area within guidelines, you do need to publish clinical evidence prior to that window. And that's why the challenge for us, regardless of the AUA -- the timing of the Guidelines Committee meeting, we can only trigger an interest from the AUA by publishing. So our focus is on publishing as the evidence that we have as quickly as we can. But obviously, only where it meets threshold from our understanding that it could change the opinion of the key members on the Guidelines Committee.

Great. Thank you. Good question, Andrew. From Ian, is there any chance of getting more updates on lab throughput and commercial uptake twice a year and this environment needs a lot to be desired.

So we have received that feedback from a number of different avenues, and we're taking it into consideration about what kinds of information we could release on a quarterly basis. So we don't make a firm commitment here today, but we'll evaluate that and try to put together something that makes sense to release on a quarterly basis.

Next question. Are the cost/benefit savings being explicitly evaluated? And do you have studies planned to evaluate these savings better?

So we -- I guess the question refers to the health economics of using Cxbladder in a larger system. And so we've done some modeling for our folks in the U.S., and we also have some anecdotal evidence from talking to the -- that it certainly does, save revenue in certain environments. We are in the process of doing that analysis in a formal way that it will actually ultimately be peer-reviewed and published if we can get there. But it's important to recognize that in the U.S. market, there are actually 3 different stakeholders that may have a health economic interest. One would be the actual practice or a urologist. Another would be the health system if you practice in a health system, and then the third would be the payer. And the strongest economic arguments, we believe are for the payers. But it is something that we want that conclusion to come from doing the work, and we have engaged a health economist to try to move that project forward. But I can't give you specifics on a time line as to when that will be achieved. But the first step is to build a theoretical model of how we would save costs. And to those 3 stakeholders that I mentioned. And then the second phase would be to actually demonstrate that in a kind of case study which would be similar to a clinical study just recording the economics of the change as well.

Good. Thank you. This one is from Dr. Steve. So are you marketing to the U.K. and other countries with National Health Systems where the cost savings for them could be huge?

So currently, we're not marketing in the U.K. and other systems where the cost savings could be huge in Europe, but that is something we are currently evaluating as to where the best way to go internationally is -- the subject of an ongoing strategic discussion internally.

Great. Thank you. Thanks for your questions, Alan. And that is what's your time line for investor publication of Singapore?

So the publication, again, as I mentioned, we don't have a strict time line because it's often, there are a lot of stakeholders to corral to get this over the line. But as mentioned, the enrollment is complete, the data analysis is complete. The publication is currently being reviewed by the authors. And at that point, once the authors have all agreed, it's ready for submission, it will go to ideally our preferred journal, and we are hoping for a high impact journal. And then it is up to the journal's time line as to how long that takes, but we will make an announcement to the market when that has been accepted through a peer-reviewed process. In our view, it should be in the low numbers of months or high numbers of weeks, but many more specifics, given that is not possible.

Great. Thank you. A couple of questions for a similar vein. So A.J. and Shane. Thank you for that. What are the preconditions for PEB to get cash flow breakeven? And what is the time frame for those?

So we can't commit to that at this stage in terms of -- we don't have certainty around that time line, but we do, do a long-term modeling. And so we are not expecting to add any additional capital to require us to get to being a cash flow positive, so we expect to modify our burn rate accordingly so that we can use the current investment to become cash flow positive.

Thank you. You note that this -- thank you, Richard. You note that the CMS funds Cxbladder when it is medically necessary under which situation is Cxbladder medically necessary.

So that does get kind of down in the weeds of the LCD for Medicare. But the most important element of whether something is medically necessary is whether -- when a physician says it is. So if a physician is evaluating a patient for hematuria with Detect, and then the test when it ordered can be medically necessary when signed by a physician. Sometimes there may need to be additional supporting evidence. For example, they may need to provide results show, yes, this patient did have blood in the urine. Yes, they are this ICD-10 code. And so if those criteria are met in typically the threshold of medical necessity is met, but occasionally, private payers who are administrating Medicare Advantage plans may push back and ask for additional evidence, but yes, that really is down in the weeds of claims process.

Great. Question from Peter. In earlier years, you commented around the potential recover payments for tests conducted prior to the CMS reimbursement agreement. Is that action still underway? And if so when do you expect resolution?

So I -- have you communicated that in a...

This is -- it's clearly stated in the annual report. So we have covered all avenues possible to seek reimbursement. And we stated that there's no further potential for -- at least, recover any of those 22,000 tests. So there'll be no further action possible for us to recover that, and disclosure in the accounts going forward won't be included. Okay. There's a question here from Ken. Thank you, Ken. I hope to leave you fine down there. There was a comment in the pack release to the NZX about R&D for noncancer-related products. I assume that means no bladder cancer-related products, does it open the potential of direct-to-consumer or direct to GP opportunities or more than general health assistants?

So there's a lot to unpack in that question. So just to maybe clarify the statements from the NZX release, we are looking to create product concepts and potentially develop intellectual property based on the evaluation of cutting-edge technologies in areas where we have core competency today. So that is looking for biomarker signals in urine, and biomarker signals in the urine may be used for other cancers, but also may be used for other non-cancer diseases. And also, they may be used for other areas of the urothelial cancer pathway, where we currently don't -- or whether it's currently an unmet clinical need. And so all of those 3 are possible leveraging our core competencies.

Great. Thank you. Are your sales team getting back to in-person meetings and help us how people test uptake?

Yes. So I actually had a good fortune recently myself to attend an in-person meeting, the AUA Meeting in New Orleans, which is one of the largest meetings for urology. And we had an expanded presence there with our U.S.A. team. And so the short answer to the question is yes. That large meetings are now taking place in person. Smaller meetings are taking place in person. And we do expect that, that will have a positive impact in terms of how we're able to -- additional touch points with our contacts we've already known, having -- creating leads with accounts who don't already know us and then creating a follow-up of all of that in a well-established lead conversion qualification process, leveraging not just the direct sales force, but also our virtual team.

Great. Thanks. Thanks, Rob, for your question. Any update on Northern Health Triage rollout? And how has this impacted our financial year '22 revenue.

So no major update from Northern Health. They are a single hospital. They continue to send in patients to us. I don't know personally the breakdown of Monitor versus Triage, but I understand the majority that are currently monitored.

Great. Thank you. And we've got one last question here around a request to break down the U.S. commercial volumes by test type. I can answer that. We don't go to that level of detail at the moment. But as we talked about with -- looking at quarterly updates that may be seeing that we look at doing. That's the end of the that have come in. Operator, are you able to take any calls or questions directed by the people on the call.

Yes. [Operator Instructions] We will take the first question from Christian Bell.

If I could just start my questions with Slide 15 of your presentation. While the average test volumes are increasing, this is only due to the number of users -- while, the average per user is only 3 months quite consistently over 2 years. So I guess my question is, why is this utilization so low? What's holding the urologist spec from using it more, given that some have been using it for over 3 years now? And I guess before you answer that, is it because it's only being used for unique cases? For instance, equivocal cystos in atypical cytology, in which case the TAM is only a substance of the large market?

So I think it's following a relatively standard adoption curve, where they do adopt the test in niche applications first, but it's slowly scaled to adopting in more context of use. And so what you're seeing is that the largest number of clinicians are using it for the, I guess, the smallest or the niche application, but there are definitely positive signs from a large number of urologists that they're using it increasingly earlier in the patient care pathway. And there -- and we expect that, it's a focus about sales efforts to continue to drive that to take those small numbers of the 1, 2, 3 and analyze how they're using it and encourage those physicians to use it earlier and earlier in the care pathway for the patient.

So I'm just wondering. Just wondering, Peter, whether it's worth sort of highlighting, and we mentioned in the pack briefly about some of the, what we call, internally stickiness initiatives.

Yes, we are focused on a number of initiatives to address that, which is the electronic medical record integration to ensure that ordering test is easier, so that they'll order it on more patients. The patient in-home sampling system, so they can order on patients even when they're not coming into the office and focusing on the utility, in the evidence generation portfolio, which ultimately once per guidelines, then people will have no reason not to use the test because it will become a standard of care. So that's the bigger picture.

Okay. So I get the -- it's actually well, getting people comfortable with the stuff, but when you look at the graph, some of those users have been using it for over 2 years now. And I guess the average monthly rate hasn't increased at all. So I mean what's preventing those early -- the people back in January 2020, February 2020. What's stopping them from increasing their own utilization?

I don't know that there's an identifiable pattern that we can give you, Christian, but we do know that there's -- some usage patterns among clinicians are sort of idiosyncratic to the individual. And if they have identified that this is what they -- even though the test can be used to rule out patients to resolve diagnostic dilemmas and to monitor patients, they may only see a utility for their personal practice in one of those or a subset of those. And those patients are all important to us because we believe we can convert into greater context of use with type expansion over time, but it may be that on -- that they have a view that this is where the highest utilities for biomarkers are and that's all they use it for that will -- that does happen.

Okay. So I mean, given that -- I mean, when you look at graph reads well really too much, you can't really tell that sort of attitude is changing. So I mean, how do you actually convert those people to use it for more than just those unique cases.

Yes. So I mean that is the opportunity ahead of us. So you've outlined why we can see that's been opportunity. There are large numbers of clinicians that are already using our product, and they're not using it to the full potential. So that is an area in which our sales team are -- they are already focusing. There's another reason why we think it's important to have a broader sales force with different functions, so we can increase the number of touch points with either strategic account selling if it is a strategic account that's ordering this way or with a Medical Affairs team who may work with that particular account to try to enroll patients in the clinical study and gain traction that way, with a virtual selling team who may offer additional touch points and then all of the stickiness initiatives that I mentioned before. Again, just trying to make it easier for them to: a, order the test; and b, once they have ordered the test to stay loyal customers ordering it recurringly on all patients that fit the context of use.

I mean, so earlier in the pack, you said over 2,000 urologists have used it. So that combining those sort of different sets, is 1,500 urologists that have used that haven't signed up. What's stopping them from signing?

So I'm not quite sure what you mean by signing up. But I think you're referring to the difference between the number of monthly ordering clinicians and the total number of clinicians that have ordered through the year, total number of urologists that have ordered through the year. And yes, this does suggest that there are some individuals that don't order every month. That could be a function of the size of their practice. It could be a function of a number of different things. But again, we see that as an opportunity because if we can continue to educate them on not just the use of the product as they are using it today, but for additional context of use by either showing them more clinical studies evidence or involving them in clinical studies, that Medical Affairs education program, we believe can help turn 500 users a month into a higher number, knowing that 2,000 unique clinicians are already aware and ordering our tests in any given year. So that's an opportunity for growth for us.

Thanks, Christian. We just got one last question coming, and that is from Darryl, so do you have sufficient testing capability to meet expected demand in the next 2, 3 years?

That's actually a relatively easy one for us to answer, we do. I think we have the testing capacity of 300,000 tests per year in the United States. And we're obviously just doing around 10% of that at the moment. I mean there are other ways that you can increase the throughput capacity of the lab. You could opt -- and any of these could be the right solution. And I would let the people on the ground, make the decision, but you could increase the number of shifts that we ask people to work. It could increase the number of days of the week that we operate. You could increase the number of instruments and greater footprint. And all of those things are fairly standard operations. So we don't believe that there is any issue with going to meet demand now or in the future.

Great. Thank you. And that's the end of the questions and actually the end of the time.

Thank you, Grant, for keeping us the time. And thank you, everyone, for your questions.

Thank you, operator.

Thank you. That concludes today's call. Thank you for your participation. You may now disconnect.