Pacific Edge Limited (PEB) Earnings Call Transcript & Summary

Okay. But I think the appointed time has arrived. So welcome, everybody, to the Pacific Edge 23rd Annual Shareholder Meeting. My name is Chris Gallaher, and I'm the Chairman of Pacific Edge. I believe we have a quorum present, so I now declare the meeting open. On behalf of the Board, I thank you very much for attending this annual meeting. And to those virtually online, welcome to you as well. This is our first meeting outside '[ Denton ]'. We thought it was appropriate and the right time to give our Auckland shareholders and investors an opportunity to interact firsthand with the company and the Board, so a special welcome to you all. Before we start the formal meeting, business of the meeting, I have a couple of housekeeping points. First, could you please make sure your phones are on silent? And secondly, the fire exit has just passed the registration desk that you passed on the way in. And in the case of an emergency, follow the '[ Link ]' staff. Bathrooms are located in the foyer, turn right upon exiting this room and then turn left. Firstly, some introductions. To my left, Sarah Park, who is Chair of the Audit and Risk Committee; Tony Barclay; Anatole Masfen; Anna Stove, Chair of our People and Culture Committee; Mark Green, Chair of our Capital and M&A Committee. And we have with us from management, Dr. Peter Meintjes. Now, Peter managed to catch himself a nasty virus yesterday and was unable to fly up to the meeting, but he will be online. We have our Chief Financial Officer, Grant Gibson here, and a couple of special guests from the U.S. David Levison, who's the President of Pacific Edge Diagnostics in the U.S. and Dr. Tamer Aboushwareb, Chief Medical Officer from the U.S., and you'll be hearing from both David and Tamer as we go through the session. It's a great opportunity to have our 2 key leaders from the U.S. business with us today to answer questions on all matters that relate to the U.S., which as everybody knows is the giant part of our business. Our auditors, PricewaterhouseCoopers, are represented here today by John Dickson, our audit partner, while our external legal counsel, [indiscernible] [ McCloud ] from Anderson Lloyd, is joining us virtually. So welcome too everybody. This meeting will follow the agenda set out in the Notice of Meeting sent to shareholders on the 26th of June. We'll then take your questions as a panel. And I hope that you will be able to join us for a cup of tea and a scorn after the meeting. Firstly, to apologies. We have received none, I believe, Grant? No apologies from the floor? The minutes of last year's annual meeting held in [ Denton ] on the 28th of July 2022 are available for viewing on the NZX website. [ Would you like to get ] to -- Slide 5, meeting agenda. I'd then like to make a few remarks on the financial year that's just passed. The Novitas local coverage situation, which I'm sure is top of mind for everybody in this room as it is for all of us in Board and management and our response is thus far to it. When thinking about the year behind us, the year ended March 2023, when we released our results in May of this year, we were looking ahead to 2024 with some confidence. We had grown significantly in 2023, and our focus was on continuing that growth as we delivered on our strategy and plan. Peter and his team have delivered an excellent result for shareholders in 2023. They made significant advances in our objectives and our strategic objectives to drive the adoption and more frequent use of Cxbladder. They advance our program for the test to be included in global standards, and they're built on the intellectual property that's embedded in our tests. Confident that we had the momentum, which came off the investment that we've made into the business. We invested for growth, particularly in the U.S. market. We expanded direct sales. Sales support teams, virtual selling team, introduced a new medical affairs team, one of whom is here with us today in Tamer, and we invested in market access capabilities for the company. And we were rewarded for that investment with a 37% increase in test volumes to 31,565 tests, a rise that was principally driven by a strong increase in commercial sales in the U.S. This translated into a 71% increase in operating revenue, which reached $19.6 million. As a direct result of the investment in particular, our net loss after tax did increase to $27 million. Again, exchange rates did have some role to play in both the revenue side and the cost side. We proceeded with our investment program cautiously. And all of our investments were linked to revenue milestones that were underpinned by the legal and industry advice that we consistently received through the year that a loss of our Medicare coverage or lower possibility was a very low probability. We consequently ended the year with a strong balance sheet with cash and cash equivalents totaling $77.8 million, and these reserves give the company options in the event of an adverse Medicare coverage determination. As we are now very well aware that [indiscernible] been warranted. In June, shortly after we announced our results, the most significant risk that we had identified on our risk register materialized. We first obtained our LCD in 2020. And over the 2 years that followed, reinvestment was smooth, including passing several routine audits that CMS applied, and there were no adverse findings on our test efficacy. So, it came as a complete surprise to see the Novitas draft determination in July 2022, which changed the landscape for the company. The draft LCD made it clear that Medicare coverage of our Detect and Monitor test was under threat. And consequently, we began scenario planning for a noncoverage decision. As I noted earlier, this planning was undertaken in the context of advice from our lawyers and industry experts that the LCD would not survive in its current form. This view was reinforced in subsequent months as we took part in a series of open meetings and made numerous representations to Novitas. Over this period, we received vocal and public support from industry, patients and many customers who highlighted the significant clinical value our tests offered and sparing patients from invasive urological procedures, and the role they could have in helping urologists solve diagnostic dilemmas. It's important to note and not lose sight of the fact this draft, LCD was not solely directed at Pacific Edge and was directed in a number of companies, including some very large ones in Castle Biosciences and Abbott, where they had a biomarker tests that were previously covered. Our view was also reinforced at the start of the year when our [indiscernible] test gained Medicare coverage under the same provisions that provided for the coverage of our Detect and Monitor tests, so there's one hand on the hand going on. Given this expectation, Novitas' June '23 determination included an unprecedented amount of new content in the final version including noncoverage of all Pacific Edge's tests was completely unexpected and surprising and in the words of some -- a black swan event over which we have little control. Overturning arrangements that have been in place since 2020, Novitas declared that Cxbladder tests were not medically reasonable and necessary, and therefore, not eligible for Medicare coverage. And to that point, Novitas had left the clinical decision-making to individual urologists. Peter is going to cover our objections to the LCD in detail. I want to spend my time focusing on the strategic steps the Board of Management have taken following that Novitas determination back in July. Board very quickly formed an LCD subcommittee that has met twice a week for the last 6 weeks. We began to pursue all legal and political strategies at our disposal to overturn the LCD, not the least of which because we firmly believe Novitas had not followed the statutory regulated process that they are required to follow as a medical administrative contractor. We were very pleased earlier this month when our objections to this point appear to have been heard, and Novitas agreed that the 17 July date was now off the table and would not become effective from that date, but will be republished to follow procedure and allow for notice and comment on the LCD, so our LCD is still live, still in place and is still up and running. Secondly, while we continue to refute Novitas' evidentiary review on substantial and procedural grounds, we have committed to making a number of changes to our expense profile and to re-dimension the business for scenarios that include a potential loss of Medicare coverage at some time in the future. As to this review that I'll now turn, the Board's overriding objective is to ensure we use our capital to see us through to regaining Medicare coverage, process that we believe could take up to 4 years in the event that Novitas makes another adverse decision. As the largest individual contract globally for our business, we recognize that we must prioritize Medicare coverage and that we will have a much greater chance of realizing the significant value inherent in Cxbladder's intellectual property across other geographies when we have Medicare secured. We set out in June the strategic pathways that we had under consideration. The first was legal challenges and appeals. The first appeal, we were successful. The next round of appeals and challenges will follow the release of the new draft LCD whenever that may happen. We continue to explore path of continuation of coverage with Novitas or an alternative MAC, and work has commenced on looking at our alternatives in that space. We have examined alternative billing practices that would increase patient responsibility for payment. And lastly, we identified that we would look at all things strategic, including what marketing, distribution, joint venture opportunities were out there to enable us to achieve our goals faster. So, we've made progress on several of these strategic pathways. As I mentioned, we've got to stay on the LCD. Now, Peter will talk some more on, for how long that may be with us. But for the moment, and we know last time around when the draft LCD came out in June of 2022, it took a year or just under a year for the final LCD to be released, so there's quite some time to play out before any new draft LCD would take effect. We continue to promote Cxbladder and process all tests ordered by U.S. clinicians with the current team. And that's evidenced by the fact that for the first quarter, the April to June quarter, our year-on-year growth for test volumes was up another 38%. So, the business continued to grow strongly despite the uncertainty of the LCD that sits with us. We have announced our program to enhance patient responsibility for payment for our tests and began rolling out that program for the middle of this month. David Levison will talk more to you in more detail on this particular pathway in his presentation. Tamer, Dr. Tamer will meanwhile set out how we are refocusing our evidence development and our current coverage and guideline strategies for increased coverage certainty. We have begun the process of exploring our other strategic options and more on that in due course. This review is ongoing. We do now have more time than we had originally. We have coverage. We have revenue, we have test volumes growing. So, we do have that time now to take a breath, but just get it right and not rush into things that we probably may have, if we were to -- if we had have lost our coverage on the 17th of July, we wouldn't have had that leeway up time that we now have. In evaluating these strategic power phase, the Board is looking at impact on revenue, the impact on cash and our cash reserves, time and resources to implement, the expected likelihood of success and most important of all, the expected impact on shareholder value. Just before I hand over to Pete, it has been a tumultuous year for everybody, shareholders, staff, Board. And I would like to take this opportunity to thank the Board for their time and commitment over the last 12 months. We didn't see this coming. It's demanded an awful lot of time and consideration from the Board, and I'm very grateful for their support. Also to Pete and his team, I particularly want to pay a tribute to Pete. He joined us in January last year, having no sense that this could ever come down the pipeline. And he's dealt with it in a very balanced and unperturbed way, and shown terrific leadership to the business in what is a very difficult time. So, thanks to Pete in particular, and his team for the way that they've led us through this process to date. I'd now like to hand over to Pete for his presentation.

Thank you very much, Chris. I appreciate all the kind words. My name is Dr. Peter Meintjes, and apologies for me for not being able to make it there in person. I did get struck by virus on Tuesday and still recovering, but expect to be able to talk you through the next couple of slides. So as Chris mentioned, Novitas is very much on our minds. And we've done our best to maintain regular updates to our shareholders through the quarterly updates and through the kind of real-time announcements to the market, but we made a particular effort in the last quarterly updates to go through in some depth what we mean when we talk about this unprecedented and flawed decision. The summary here is that there are some significant criticisms of our data and our evidence that were published in genetic testing for oncology, the LCD in question here. But from our perspective, all of them have sound arguments from Pacific Edge as to why they are not actually very good arguments, and so we've done our best to: a, articulate that for investors. But b, as of this morning, we did have a face-to-face meeting virtually with Novitas to outline our position. We don't expect that will change their trajectory on republishing the LCD, but we have now had the opportunity, an opportunity that was not previously afforded to us to make the case for our products, their clinical value and some of the misunderstandings that we have seen in the LCD. And this is obviously critical for us because Medicare is our largest customer. As you all know, Cxbladder has a majority Medicare and Medicare Advantage population because the average age of somebody presenting with hematuria over the age of 73, and so this accounts for a significant portion of our revenue. As we look to forward to understand what are the scenarios that we need to plan for, we are navigating an uncertain environment where we now acknowledge that what we previously called a high impact, but low probability event may have a higher probability than we previously understood from our legal advisers and industry partners, so, we are preparing to manage that uncertainty. The best knowledge that we have at the moment in Novitas' own words in terms of the time line, is that they will republish the LCD in the near future. From that time, we will have 45 days to provide our comments after we review the revised LCD. Management and Board are planning for a scenario where the new LCD largely resembles the old LCD and that they will publish relatively quickly, but we will have 45 days to make our arguments in both a public open forum and in written form. The written form is the most important in these because Novitas is then required to respond to each of those written comments. And although sometimes they will respond to a summary of multiple similar written comments explaining their reasons for why they either have accepted those or not accepted those responses from us as companies and how they will incorporate that feedback. As a note of encouragement this morning, they did say that the arguments that we had made to them verbally in our meeting today should be well represented in those written comments. That's obviously no commitment either way from them, but it is clear how they expect us to interact with them and how they will look at that feedback. On a more positive note in terms of what we have achieved despite all of this is that, adoption among clinicians has continued to rise. We have seen with the June 2 announcement, we have had the opportunity to reach out to a large number of key opinion leaders in our field, and we have received a groundswell of support from run-of-the-mill urologists using our test on a regular basis through to many of the key opinion leaders with whom we run clinical studies and who can influence public policy at the highest levels in our industry. So, that support from those clinicians will be an invaluable input in the review and comment period. And subsequently, post some challenges for Novitas as they respond to those comments in the next 320 days that would come after the close of the comment period. So, moving on to the financial performance here and as Chris already highlighted the key messages. But for me, it's really important that despite this LCD uncertainty, which did hang over our heads in a different capacity during FY '23, we delivered standout growth. So, we understand as a business, how to continue to execute despite these kinds of uncertainty, managing capital cautiously and investing in only the things that matter in terms of generating additional revenue and making sure that we have ongoing coverage for our products. So in that regard, global laboratory throughput increased 37% to 31,565 tests. Global commercial test volumes increased 39% to 26,691. And what's also useful for everyone to understand is the breakdown by product where the TLT in globally is driven by, firstly, the U.S. And then, of course, within the context of the U.S., this is driven predominantly by the use of Detect, which is in the hematuria evaluation setting. And the hematuria valuation setting is the largest market opportunity for us, 3x the size of the bladder cancer surveillance market. So, we reposted this to acknowledge 2 things. One, that in the face of coverage uncertainty, our strategy actually remains remarkably resilient. So, the adoption retention and revenue generation has been a key focus for us over the last 12 months because we have coverage and because we have the opportunity, because we have a contract with Kaiser. But the second pillar here is the one that is of most relevance in the immediate sense. Usually, we talk about this in the medium-term context, but evidence coverage and guidelines underpins our ability to be paid and has been a focus since I joined the company. It's actually been a focus prior to that, of course, as well. But to really be more laser-focused on the guidelines component of that, given the coverage situation we have had for the last 3 years. And inclusion in guidelines requires a higher standard of evidence. It is something we have been building towards with the reshaping of our clinical evidence program. And consequently, we believe we are as well positioned as we can be given existing updates to our strategy as we can be. And of course, research and innovation is the longer term. We continue to make product improvements to the existing products that we have for hematuria valuation and surveillance and continue to look for opportunities within the urology landscape for further products that can deliver value, and that is ongoing, but the main focus here is on the evidence coverage and guidelines and the adjustments that we need to make to ensure guidelines inclusion. So, refining our focus on adoption, retention and revenue generation. And David will focus on this in a specific sense for the United States, dimensioning the U.S. business to reflect the increased probability of a future adverse Medicare determination. The kinds of things that we are looking at as we really mentioned the business are to focus on national accounts and virtual teams to support Kaiser, VA and other potentially capitated systems that may better be attuned for the true clinical value of Cxbladder, which is to reduce the cystoscopic burden on physicians and patients. And to look at enhanced patient responsibility, where we create a patient assistance program that has a positive gross margin on average per test based on the discounts to the federal poverty level, we are continuing to invest in our Asia Pacific expansion and through our U.S. team, ex U.S. opportunities in Israel and Latin America as these have a different coverage landscape. And while the volumes that we anticipate in these areas is currently still quite low, we do believe that it is important to invest in these areas as ways of de-risking our business and just general opportunities for growth. And as outlined in the financial results in May, we have focused a number of internal efforts on improving the digitalization of our environment to make ourselves more efficient. We want to grow not just by -- we know that we can't continue to grow just by adding additional headcount. That's a very expensive way to grow, but we can grow in effectiveness and efficiency by analyzing our systems through performance excellence programs and building digital frameworks from which we can deliver more with through fewer individuals. We continue to market and amplify our clinical development program within the urology community, although we have already agreed to scale this back given the coverage uncertainty, we will continue to promote our key messages at major meetings through our medical affairs program and our marketing program. And we do acknowledge that we're going -- that patients have always been core to the value proposition of Pacific Edge. We will have to spend more time communicating those messages initially to physicians and directly to patients as we ask patients to take on a greater responsibility, either as a component of balance billing on commercial insurance or through the ABN process for Medicare, both of which we will implement in phases as and when we lose coverage. So importantly, looking at the growth in the APAC region. Things have been largely constant. There hasn't been a huge amount of growth, but we have expanded in terms of the coverage with additional contracts, activating some of those contracts has taken some time, and Australia and the Southeast Asian regions continue to be in a business development phase. We have, of course, announced already in our quarterly update that we have a distribution agreement with Transviet and Hi-Precision for Vietnam and the Philippines. It takes a little while, but we've already undertaken some test shipments and we will obviously spend some of our time educating our distribution partners and, of course, the physicians that they have great relationships with. So, evidence coverage and guidelines. I had the benefits of having David and Tamer in New Zealand over the last couple of days, and we spent Monday and Tuesday of this week in strategy sessions and a key component of this is really focusing in on changing clinical practice and selling the value of our tests, and both David and Tamer will talk more about this. But as it relates to our strategic pillar of evidence coverage and guidelines, we really need to -- or we continue to remind investors that we are focused on generating high-quality clinical validity and clinical utility evidence through clinical studies. The studies we've done to date have been good enough to secure us initial coverage. Novitas has challenged that, but we have for many years already recognized the value of an ongoing investment in clinical evidence generation because we were not yet in guidelines. And we are not yet covered by private payers outside of Kaiser Geminente and the ways to get coverage from those entities is through an increasingly robust clinical evidence generation program that focuses on a very defined patient population and the endpoints that matter to the decision makers on guidelines committees. We will show in Tamer's presentation a road map with our best estimates of how long the these studies will need to enroll for and how long it will take to get all the patients in to monitor the data to perform the data analysis and ultimately publish, and he'll speak to that, but that includes 2 studies that are still as yet proposed. That focus again on the clinical utility that would be necessary for guidelines inclusion that private payers typically need to see. The fourth bullet here is that we continue to consider the merits of the MolDX program. Where we are with that is we know this is something our investors have asked us about because we are not in MolDX jurisdiction. There are some steps that we have been able to take even without moving a lab. And we now have a [ Z code ] assigned through approaching MolDX, and we have also initiated or we are shortly -- sorry, we have not yet submitted the data, but we intend to submit the data for a technical assessment by MolDX out of jurisdiction and we will update shareholders as and when we know the result of that technical assessment. On the research and innovation front, we continue to think about the various -- the other future opportunities in neurology, but our major focus is on improving the current product. So, a Detect and Monitor, we are adding [ DNA markers to both of them to ] have Detect+ Plus and Monitor+ available. That is improving the performance of the test. Other things that we have not yet done is actually just improving the workflows of those tests for scalability, reduction of [ no results and ] various other things that improve the operations lowering, cost of goods, among other things, lowering the headcount requirement, the hands-on time of staff, automating, et cetera, et cetera. So, those are the kinds of things that our R&D team will continue to focus on. An added challenge that we now -- we have some level of clarity is coming our way is that the FDA have announced their intent to regulate laboratory developed tests. How they expect to do that is not yet known, but they expect to provide us with a framework for comments in August this year. Well, the last attempt at this was the [ Valid Act ], which did not pass Congress at the end of 2022, but it had a grandfathering provision that would allow any test 5 years to adapt to the new framework. So, we view this as something that we need to invest in today to ensure that we are compatible in the framework of 3 to 5 years with the FDA requirements, and so our new products, we will make sure that they are compliant with FDA clearance. [indiscernible] maintains a commitment to ESG. And one of the key areas of ESG that we focus on is improving social outcomes. For example, our in-home sampling kits are able to reach rural areas that may not have the kinds of access to health care, debt that people who live in cities may more easily access. And so, we use this as a key example for how Pacific Edge is delivering this, not just in New Zealand, but to rural areas in the United States and focused on a mission of improving social outcomes. We are working through the climate standards, and we expect to, by working with [indiscernible], develop the strategies and policies that will allow us to do accurate reporting for FY '24. So, looking towards the remainder of FY '24. We will continue to be focused on execution in an uncertain framework. So, Pacific Edge is taking a cautious approach to managing cash reserves. And so, in the event of an adverse Medicare coverage decision, until we gain re-coverage, we expect to be able to manage our current capital to last for up to 4 years. We may not need the entirety of those 4 years, but that's the approach that we're taking that if we need all 4 years that we will be able to do that. We expect to refocus the business on clinical development for guidelines inclusion and increased coverage certainty with a particular focus on 2 products, Detect+ and Monitor+. And from a commercial standpoint, we're going to be focused on selling the clinical value as the driver of higher throughput per head count that's as in per sales headcount on our side and higher throughput per clinician, so on the customer side. Of course, the fairly obvious headwinds are that there is a possible noncoverage termination from Novitas on a new proposed LCD after they have now followed the appropriate procedure of notice and comment. There is also the possible negative reaction to the balance billing that we have already initiated for commercial insurance and subsequent ABN billing, should we -- or ABN notices when we lose coverage and have to do the same for Medicare patients. But there are also possible catalysts to Pacific Edge. It is not a foregone conclusion, and we will make the best arguments possible, and we believe that we have the right that the Cxbladder should continue to be a coverage test, both our Monitor and Detect products, but also our Triage product. Other catalysts, of course, we are still working very closely with Kaiser. And we hear only positive signals, although we continue to not have a confirmed go-live date, but we are working very closely with them to ensure the EMR integration in Southern California. We have also submitted with the support of key opinion leaders in the urology group, who have come to our aid. We have made a submission to the NCCN guidelines, and there is a low possibility that we would have increased guidelines inclusion as early as this August, but it is the commitment from this management team that every August, when there was new published evidence available that we will submit in an attempt to gain guidelines inclusion for both hematuria valuation and for surveillance. We continue to work with contact in the New Zealand health care system on a global -- sorry, a national rather [ Sefaira ] contract. And there are certainly some internal champions helping to try to make that the case. And we have wide adoption of our products, and a number of our customers are generating clinical utility evidence in their own hands. And we, as particularly our medical affairs team are engaged with those folks and understand that they may -- even though completely independently of us, they may publish additional articles that highlight the clinical utility evidence of our products in a real-world setting and that we can also use as independent validation of our products, both in New Zealand and in the United States. So, as a summary here, we have world-leading technology, a strong balance sheet, and we are building momentum in the U.S. and around the world to establish footholds in new markets. So, thank you very much for your time. I look forward to taking your questions as part of the panel leader. And our next speaker will be David Levison who will focus on Pedusa.

Thank you very much, Pete, and thank everybody for allowing us to come and speak here. Next slide, please. So, Pete has already covered this slide, so I want to dig down a little bit into the things that are specific from a United States perspective. So, our focus has been and will continue to be on adoption of our technology in the clinic offices, retention of that product in those offices and revenue generation. The uncertainty we currently face around our revenue, particularly as it relates to Medicare, has accelerated several things that we were already doing to continue to drive both the adoption and the retention and revenue generation. Pete had mentioned a number of these things, Kaiser, will talk about a lot. I can spend a little bit more time on that. But historically, we have gone to our customers and said, "Here is an interesting technology that we think has tremendous value to you. We are getting much better with the evidence that Tamer and his team are generating and the experience we have in the marketplace to be much more specific about how we suggest to those clinicians that they order our test. For this patient population, you should use a test in this way, and this is the action that you should take with a positive or negative result." That kind of specificity in terms of working with the clinician is certainly driving additional adoption and retention. And that's work that we have started a while ago and the uncertainty around Medicare has allowed us and forced us to accelerate those efforts. Pete mentioned, are being more specific about the way we talk about our test. That's the practical way in which we do it. The other piece that we're also accelerating is what we call digitization of the experience that our customers have with our products and with our company. When we first launched several years ago, everything was paper-based. That was the way of the world. That is not the way of the world today. So, we are accelerating the work we're doing to create digital interfaces between our systems and our customer systems so that instead of writing things down on a piece of paper, they can like they order Amazon or anything else. They can put it in a computer, and it saves them time. It facilitates the interaction with our organization, so it provides value to the clinician. It also provides tremendous value to us as well because we can make sure that all those fields on our test or acquisition form are filled out correctly, we don't have to call the position back. So, it's a win-win across the board. And we're accelerating those opportunities. We've just finished a large project with Kaiser. As you know, we have yet to have the go-live date, but much of the work that we did for that Kaiser integration, obviously, as you can imagine, Kaiser is a much more complicated system than most of our individual clinician offices. But the backbone that we've built with the Kaiser integration will leverage to virtually all of our other customers. The last point I want to make is, we sometimes don't talk enough about the patient being at the center of what we do, but it is absolutely true. We exist because we believe there are better solutions for patients that are either suspected of or have bladder cancer. And our daily lives are a lot of talking about marketing and sales and clinicians and those kinds of things. But at the end of the day, it's all around making sure the patient is better off. And our tools allow the practice to do that, allow the health system to benefit from those tools, and we are doing a much better job today and going forward to articulate in the value, not only the clinicians but also to the patients. Next slide, please. This is a slide that you may have seen before. It just sort of outlines where our products sit in the continuum of care. On the far left-hand side, we're all born with a set of DNA markers or DNA, and that individually may predispose us for some disease. Eventually, that disease may or may not manifest itself in terms of some symptoms, but we don't start interacting with the patient until that early -- that symptom has come into play. In our case, hematuria, blood in the urine. Virtually all diagnostic tests in the world today are on the right-hand side where that little figure is. Basically, once you aren't suspected or have an increased risk of a particular indication of disease, that's when the medical system sort of kicks in. There's a lot of really interesting R&D work going on around the world today. On the left-hand side of this thing, where can we can -- if we can find particularly cancer early detection cancer well before the symptoms have shown themselves. That is not an area that we are participating in today, but it may be something we do -- it's not where we are today. Once the patient has an increased risk for a symptom, that's where we jump in. We can tell the physician whether their signs and symptoms are indicative of a higher or lower risk of having, in our case, bladder cancer. And if it's a lower risk, we recommend to the clinician. They don't need to go through all of the many procedures that are often invasive and expensive to determine because we can determine from our test, both our triage and our tech tests that, that patient, even though they have blood the urine, have a very low risk of actually having bladder cancer. If that patient is diagnosed and then treated with bladder cancer on the far right-hand side under the surveillance piece, that's where our Monitor product is most appropriate because bladder cancer has a relatively high risk of recurrence. So, we are often monitoring these patients to see whether the, disease has come back even after it's been treated and removed. Like our hematuria test, our monitoring test allows the physician to say, yes, you've had bladder cancer. We are monitoring to see if it recurs. But based on the test from Cxbladder from Pacific Edge, you are at a very low risk of having a recurrence right now. So, instead of going through all those invasive procedures every 6 months or every 12 months, let's [indiscernible] first. Let's do the Cxbladder test ones, wait a longer period of time, come back and do all the procedures and then sort of do this into leaving, and that's how we add value to the system. That's how we add value to the patients. That's how we add value to the clinicians. Next slide, please. That clinical pathway that I just described translates into market opportunities and these are some of the numbers around those market opportunities. There are approximately 7 million patients in the U.S. that show up with their doctor's office with some form of blood the urine, either it's growth hematuria, which you can see or microscopic hematuria, which you can only see under a microscope. Of those 7 million patients that present with hematuria to the health care system, about half of those 3.4% go on to a clinical work up. That clinical workup has multiple components to it. One of them is a cystoscopy that we've mentioned many times. It's a procedure that none of us would like to have. And there are about 1 million patients in the U.S. that get a cystoscopy associated with a determination of bladder cancer. That 1 million patients is where our Triage and our Detect products really fit. Of those patients that get -- of patients in general, about 82,000 new cases of bladder cancer are diagnosed in the U.S. every year. Those patients typically will go on for treatment or removal of the tumor, potentially, some chemical treatment as well. And there are about 750,000, 725,000 patients that are living with bladder cancer in the U.S. That is the population where our Monitor test is the most useful. These patients have to come back frequently for this full workup. And again, as we're working with our clinicians to sort of de-intensify or remove some portion of those invasive procedures over a period of time. And that translates to about a $3.5 billion opportunity in the U.S. with full market share. Obviously, we're a long way from that today. Next slide, please. While we focus on the clinical value, we can't forget about the economic value of what we're doing. Our tests, like many tests, add clinical value but also help the system, and that's why Kaiser is such a big advocate of what we do. Kaiser is a unique system in the U.S. where they are a health insurance company, and they're also a provider of services, and you cannot go to a Kaiser clinic unless you are covered by the Kaiser insurance plan, basically. And that's a unique system in the U.S. It covers multiple tens of millions of patients in the U.S. And it's one where the system advocates for both clinical value, making sure the patient is healthy as possible, but also that the cost of that care is as low as possible, so it's a great experimentation for us because it adds both clinical value and economic value. The economic value that we create, we have recently worked on a theoretical model with an outside firm to sort of demonstrate what that economic value is. If you start with the AUA guidelines of how all these patients should be treated and then you take our test and its sensitivity and specificity and how much it costs you to be in a AUA and a CT urogram, you pull that all into the model, and you say, okay, if the Cxbladder test allows the doctor to say, I'm not going to do a cystoscopy full work up every 6 months, I'll do it every 12 months. That then translates into what the savings of the system could be. And as I said, we were just finishing up this initial work. This is a theoretical model. Once you have that theoretical model that we believe will show that there is a savings to the system so far, it has. Then you go out and you get some real-world data to say, okay, here's what the theoretical model said, do we see that those same economics in real life? And that's the next steps of this process. Once we have that data, it all gets published and it's very valuable not only to the payers that are paying for this, but also clinicians to understand that this adds value to the system. Next slide, please. This is just a depiction of our resources today in the U.S. in terms of our sales team. Obviously, I'll talk in a minute about the redimensioning of that. The blue dots represent customers and then the orange circle is where our lab is in Hershey, Pennsylvania. We approach this market with multiple different types of individuals. You can see from the bottom left, our account executives, those are our salespeople. They're responsible for a geography and they're responsible for calling on the clinicians in that geography and driving our test volume. Those account executives are managed right above them by 3 regional sales directors today. Those are the player coach. They are primarily managing those AEs. They have 8 to ten AEs, but they also have strong relationships with key accounts in their territory, and they manage those. In the last 1.5 years, we've added a national account managers, 2 of them. Those folks are also salespeople, but they're focused on some of the larger national accounts that have sort of a longer selling cycles, and we brought 2 of those folks in. And then Tamer and his team have done a wonderful job of providing us with a series of MSLs, medical science liaisons. Those are the clinically trained individuals that can have a different conversation with our clinicians than our salespeople can. Our salespeople are very good. They understand our data extraordinarily well, but they cannot have a conversation with the clinician that another clinician can. That's just the way it is. And so, this is a very typical structure in virtually every company in the U.S. that I have worked for and run. Next. Pete talked about it, and I want to talk about it a little bit more. Obviously, the potential disruption in our Medicare coverage is forcing us to rethink how we deploy our resources so we can maintain our current cash reserves all the way through a recovery if we're losing it. We are in, I'd call it, the late stages of making those decisions. Basically, what we're going to do is we're going to say, okay, how can we continue to drive volume with fewer people, and that's fewer people both on the sales side, but also in some of the other portions of our organization. We want to do it thoughtfully, and Chris mentioned that this has given us a little more time, and that's helpful. We're in the late stages of making those decisions. We obviously need to finalize those, working with Grant to make sure that it meets the requirements. And if we're getting us down to the cash burn that we will need, if we lose coverage, it's not a fun process. It's a painful process. We've all gone through it before, and we will do it with dignity for our employees and our customers, and we will get out the other end of this with a leaner and, I think, much more efficient organization. The other piece that Pete has talked about is this enhanced pension responsibility. Today, and always, we have always gone to the patient when the insurance company doesn't pay and says, this test hasn't been covered by the insurance company, here's what your responsibility is. What we're talking about now is doing that in it just slightly different way, same thing. We're going to increase the dollar amounts that the patients are responsible for and do a better job of communicating that this patient has responsibility, so they are knowledgeable about that responsibility when they're getting the test not afterwards. So, it's a tweaking of the system we're already doing. We do believe that it will be able to allow us to drive more revenue, not burdensome to the patient. It's never going to be a burden from the patient, but it's another area as we're looking for every way that we can generate revenue. The patients are an important part of that because the patients, again, are at the center of this, and this is where the value is created. Okay. Next slide, please. We've talked a little bit about digitalization. I just want to give you a couple of examples and some of the work we're doing outside the U.S. When we first got launched ten years ago, as I said, everything was paper-based. We haven't moved as quickly into digitalization as I think I would have liked to have, and now we're accelerating that. And that digitalization allows us to go to our customers and say, "Hey, if you like to order the test, it's already in your electronic medical record." So, the computer system that the clinician uses to do everything else in their practice. We want to be integrated into that so they can just pull down the menu that says Cxbladder Detect, push a button, it prints out on their printer, they pull that paper up, put it in with the urine sample and send it off. That's the kind of integrations we're working with. That's what will be our base of our expansion in Kaiser. It's a relatively large part of my kind spent making sure I understand where those opportunities are and driving and working with Andy and his clinical team or a digital team rather, to get those things done. And we've got some more work to do, but we're well down the way. And that's really what's translated to our opportunity to have a much stronger and broader relationship with Kaiser. And with the VA actually, the veteran administration, is another large potential customer. It's a different beast in the U.S. There are hundreds of veteran administration clinics around the country that each work a little independently. So, we have been on the federal supply schedule, which means we are allowed to go in and sell to the VA, but that's nothing more than a hunting license to go into each and every one of those VAs and describe our clinical value. The other piece I want to talk about is a really a nascent opportunity that we've just gotten started with and that is setting up distribution arrangements outside of the U.S. and outside of APAC. Our first one is in Israel, second one is in South America, where we are training the distributor about the value of our tests. They are going to their clinician relationships and they are then getting those clinicians say, yes, this would be a valuable test. The same kit, same process as done in Israel and South America. They package it up, put it in DHL, ends up in our lab in Hershey, Pennsylvania, and we will result it back to the clinician. So, we have a handful of those tests that have come in over the last couple of months since we've just gotten started this program, but it has some real upside and potential for us. Next slide, please. I want to just end on this slide to sort of talk about where we are today with our product portfolio and then where we're going with our product portfolio. On the left-hand side, you can see the 3 products we have today, Triage, Detect and Monitor, and the words we often use intensified, de-intensifying workups and adjudicate diagnostic dilemmas. Sometimes the physician will run the normal test and they'll be one will say positive and the other one will say negative say, what do I do now? And so our test can often be used as a tie breaker to some extent. Those products are really good. They certainly can get better. All products can get better, particularly the fact that we have true products in the hematuria space, Our clinicians more often than I would like, say, I don't know which product to use, which one should I use? We aren't clear enough. These physicians are really, really busy. The more specific we can be, the more directive we can be, the better for them because they are really busy folks. So, one of the things that we're doing have done and we've published some on this, is we're going from our 3 products, 2 in hematuria, one to Monitor to 2 products going forward. We'll have a Detect+ product that has the best of both the Triage product and Detect has both higher sensitivity and specificity. It's actually simpler to use because it doesn't have some clinical factors. And we're working on an enhanced Monitor product as well. That will be, I think, game-changing for us to be able to be very clear and very simple to our clinicians. When you have a patient that hasn't been diagnosed has blood in the urine, this is the product they use, and this is how you use it. When you have a patient that has already been diagnosed and treated, here's how you use our products. That simplicity will be very helpful to us. So, that's the future. We hope to be there pretty quickly, but we've got some work to do to generate the data around those products and Tamer will talk quite a bit about that. And I think that is my last slide, and I'll turn it over to Tamer. Thank you very much. Be happy to answer your questions later on.

Well, thank you very much, David and Pete and everyone. I appreciate the opportunity to be here with you. And hopefully, I can give you a little bit more information, although I think Pete and David really did the majority of the work. So, I'm just going to be very, very brief, if I can. I think Pete already presented this slide and the main point that I really want to make here is when we talk about the focus area on reconfiguring evidence program, it was essential for us since I've joined the company and with Pete and David's support, to understand what do we need to move forward. It's important for everybody to understand, when you are a commercial organization seeking coverage from Medicare and private insurance, as well as guideline inclusion, the level of evidence that is needed is not only at a higher level, but it's also like David and Pete said before, has to be specific. You have to go to these organizations and say, in this particular patient population, the test is used in such and such way. And thus, when the physician uses it that way, that patient -- the outcome is binary. One patient can go this way, the other patient goes that way. That makes it easier for both the physicians and the organizations to assess what the value of this product is. Historically, our data did not support that binary decision. It was a lot more of -- our tests can do a lot of different things, but none of them is supported straightforward with one of that decision. So, our evidence, our reconfiguration of evidence generation has focused on exactly what I just said is every study we're doing is targeted towards a specific patient population with a specific indication that has a one outcome. That will cost more, and I'll be honest, but that is what is necessary to gain these coverages and guideline inclusions. So, the other part of reconfiguration here was, as David just mentioned, refocusing all of our interests towards the 2 products that we believe will be taking us into the future. The Detect+ and the Monitor+. Focusing on those products, getting them over the hump, getting them into guidelines will ensure the viability of this company moving forward as well as increases our opportunities to further do R&D and increase our products in the future. Without at least one product that can actually support the company, I think we can all agree that it's not going to be sustainable for long. We do have a goal to use the clinical utility evidence which, and I'll explain in the next few slides, is important to -- as well to understand, sometimes guidelines will include the test without clinical utility. But it will always be, okay, it's an option. You may use the test in these particular things, but there's no definitive guidance. Clinical utility is intended and meant to do exactly what I said earlier, to show the physicians and the guideline committees as well as payers. When you use the test in this particular way, this is the benefit that you're going to gain from it. And that's why these -- sorry, these make utility studies are important. They will take a little bit longer time. We may actually be included in guidelines before the clinical utility, hopefully, are out, but clinical utility evidence not only ensures the inclusion, but it also defines the inclusion and makes it easier for everyone to understand how to use our tests in the right way. This slide is again meant to just show you what I just said, it's a circle. It's not a binary thing. We're not going to just do one study, create evidence and then it's over. We're done. We create evidence, gets inclusion into guidelines in a specific population, maybe in a very general sense, but then it improves utility. We do more studies. We focus on another patient population and so forth. Our clinical validation data sets are usually standard, meaning, we don't necessarily have to redo or do more clinical validation once we actually showed the right amount of it. But clinical utility is the ones that we can increase adoption in different patient populations as we move forward. And that's going to be the goal for our evidence generation program. It's also important when we talk about guidelines, a lot of time, we just say guidelines, guidelines, and I don't know if everyone understands what are these guidelines. There are 3 main organizations that are sort of universally test by putting together guidelines for urology or oncology. In the U.S. and Europe, American Urological Association, European Association of Urology are the 2 major worldwide organizations for urology. And then the National Comprehensive Cancer Network is the sort of worldwide known center for oncology guidelines. It's important to also differentiate those because the current LCD mentions the NCCN as the target or one of the databases that they will, if the test is included in them, they would include. But NCCN, like I said, is intended only for patients that have already been diagnosed for cancer, which inherently means that our hematuria evaluation testing is not going to be included in these guidelines. That is not what they intended. They will, and hopefully, that's what we're targeting is to be included in American Neurological Association. They actually are, I mean, one of our tests -- the other is including in the European Association of Urology right now, but that's the goal is that we're not just focusing on one guidelines. We're focusing on all guideline committees to add to become standard of care. That's the goal of the portfolio. This is to show you sort of what we're talking about. Those are the currently approved ongoing studies. And then I'm going to show you the 2 in the time line slide. I'm going to talk to you about the at least proposed studies that have not yet been approved for clinical utility. As you can see, the STRATA study has been ongoing for a while now. The STRATA study was intended and still is, obviously, to provide clinical utility for the Triage test. STRATA has actually achieved the goal in the randomized portion of patients, and thus, we had already stopped recruiting. We are now monitoring the rest of the data. We will be analyzing the data, hopefully, by the end of this year, early next year with an expected submission, a paper submission sometime mid-'24. And this, like I said, intended specifically for clinical utility of Triage. We will make an attempt to do a retrospective analysis using the Detect+, which, again, setting expectations. It's not going to be a high level or high quality clinical utility. However, it will certainly at least help in making the point of how Detect+ is going to be a better product. DRIVE, AUSSIE and microDRIVE are all very similarly designed, except microDRIVE is specific for microscopic hematuria while DRIVE and AUSSIE include both microscopic and gross hematuria. The goal of these 3 trials is to achieve clinical validation for the Detect+ or the hematuria evaluation test. Some of you will ask why do you need 3 trials? I will answer. We need 3 trials because the probability of cancer in these patients is very low. And thus, we need a specific number of tumors to achieve that statistical significance. The other thing that's also incredibly important is that physicians and guidelines look at reproducibility of your test. When you do one study and have whatever data it is, there is no guarantee that if you do another study, you have the same actual outcome. So, by us having 3 different populations, we will have 3 different results. Hopefully, they will be very similar or at least close. And then we will do the pooled analysis, which will combine these 3 data sets and have a true average performance of our test that should and hopefully will convince everybody that this needs to be in the guidelines as standard of care. The last study here is the LOBSTER study, which is the clinical validation for Monitor, we put Monitor, Monitor+. The reason we don't specifically say Monitor+ yet is that we don't yet have Monitor+. We are working very hard to create right now this new algorithm. We have the data set to do that. That's already gone. So, we are considering LOBSTER right now to be sort of a sample collection study for the right population for validation, and we will be finishing this study hopefully mid next year and which we will have the Monitor+ by then, that I can guarantee that. This is only meant to just show you a framework for what I'm going to talk about. I did talk to you about clinical validation studies or analytical validation studies are usually what's called single-arm trials, meaning we just collect samples from patients. We do the test. We compare the test to what's clinical truth, simple, straightforward, no problem. Clinical utility study on the other hand, are randomized controlled trials. Those are complicated trials. This is obviously not the final thing, but this is sort of just to give you an idea of what this can look like. When you run randomized clinical trials with 2 arms, you have a control arm and you have the test arm. The test arm is obviously going to be our test to show to the payers and the guideline committees, if you use our test in this very specific clinical pathway, compared to what is a standard of care today, so the control arm is the standard of care. The patient goes to the physician right now, that's what they get, and this is how we use our test. And at the end, if we can show reduction in procedures, improvement in diagnosis or finding tumors, even if we don't actually find more tumors, we just find the same exact tumors, but then reduce not just the cost, I think it's also very important when we talk about the value to the system and the patient, we cannot ignore the fact that a patient getting a cystoscopy is not a comfortable thing. I think urologists underplay or downplay cystoscopy because they do it very simply. I'm pretty sure anyone in this room if they have to get a cystoscopy and they can avoid it, they will want to avoid it. So, that's also very important to understand and figure. All right. These are the time lines that I talked about. These are the studies that I've talked about a little bit earlier. As you can see, our time lines are extremely aggressive. Since the LCD announcement and so forth, we have very aggressively worked on these time lines and tried to create the best potential outcomes that we can. Obviously, this needs more resources, which we have asked for and our Board has graciously accepted and given us these resources since this is our target to create the value for the shareholders. We have 2 studies that should be published, like I said, the DRIVE and STRATA will be published sometime next year. AUSSIE will be done recruitment by the end of next year, hopefully, publication in '25 microDRIVE will also be done mid next year, and we hope to be able to publish that at the end of next year. So, as you can see, there will be by the end of '24, at least 2 to 3 publications that will be high-quality targeted towards the microscopic hematuria evaluation and followed by another one potentially in the '25 and then further than that. The goal is to submit to the guideline committees like Pete and David said, every year. Now, that is not a guarantee that they're going to just accept everything we submit; but we will submit every single year. We will submit to the guidelines. We will also submit to Novitas and say, here is more data, see what happens. Maybe it will be acceptable. Again, if it is, which I would -- obviously, everybody would have to, I go back to the first study, it's a circle. It's not an end. Even if we get coverage for a specific population, that does not mean that we stop doing the rest. Everything will help future proofing our business from ever having to go through this again. This is the rest of the platform. And the 2 studies that I talked about that the CEO, he and the CEO surveillance, so those studies are the ones that are not yet approved. These are future proposed studies. We have not even planned or put together protocols for those, but those will be the ones that we will request funding for from the Board and hope to start them. The hematuria one should be theoretically ready to start sometime mid Q2, Q3 '24, and one quarter afterwards, we would be ready to do the surveillance trial. So, that's sort of the pathway that we have set. And this is the plan that we are now committed to executing. Again, I think I already mentioned this. I'm not going to go through it again. This just tells you that every study we do, we complete, we'll submit. We'll do everything in our power to continue pushing both guidelines as well as our payers to actually accept our clinical evidence. Finally, well, this is completely almost on a different angle, is that everything I talked about right now is sort of the clinical development part. But we also -- our medical organization has the clinic or the medical affairs part. And the medical affairs part, like David said, include the MSLs as well as a medical director, who is also a urologist in the United States, and we do a lot of education programs. Having data is very important, but without education about this data, it's not going to get anywhere. Physicians unfortunately, don't read as much as we would like them to read, so we have to tell them how to do it. So, I think it's a combination of both. There's a couple of things this picture right here. It shows me a lot more handsome than I really am, but we did this presentation last year with Dr. Neal Shore and Dr. Josh Meeks. It was an online forum. And like you see, they had 4,100 views. Now, consider that we only have less than 4,000 physicians that have ever used our test, that's quite a lot within the urology field. So things like that, and we've done multiple afterwards. This is just one example. These are the things that we do on a routine basis to make sure that the physicians understand and know our data, understand how to use the test and continue to educate them. We do have multiple other things that we do, the clinical dossier development is something that we've undertaken. It's almost done. This is a dossier that contains every single piece of information that we have created as a company that is now put in a very sophisticated and professional manner to be submitted to all payers, whether it be Novitas or private payers in the future as well as, of course, building here well relationships, which is sort of in the core of medical affairs mission, and that's what we're doing. Ultimately, at the end, we can't have a product if we can't actually do the test, right? Like we can create all of this information and the data and all of this, but if we can sell the actual product and have a lab that can produce it efficiently and without fail, then we don't have a company either. So, this is exactly what this slide is meant to do is we are working with our R&D teams, with our digital teams, with our operational teams to make sure that when we are ready, when we have the data, when we have guideline inclusion, the lab is also ready to do these tests at a very high number because our expectation is when we get into guidelines, we're not going to be selling 30,000 tests, right? That should not be anybody's expectation. We'll be selling hundreds of thousands of tests. And if our test, our lab cannot accommodate that, then we're in trouble. So last thing, of course, and I think Peter already mentioned this, and there's not much to say other than part of this whole program that we've built is built into it, what's called GCP or good clinical practice. This is how we run the studies, running clinical trials can be done at very different levels. We can run a clinical trial in an academic institution with just myself and a fellow and we can publish that. That's not very hard, but running a clinical trial that can pass FDA muster very different situation. That's why we've built different teams now in the U.S. as well as the team in New Zealand. The team in New Zealand is responsible for the creation and development of all and the contracting of all the sites and so forth. And then now the team in the U.S. is specifically responsible for initiation of the sites, site management, data monitoring, ensuring that every single piece of information that we get from these studies are GCP compliant and at the level of FDA regulation. Whether we get FDA regulator or not, I think it's the right thing to do and that is what we are committed to doing. Thank you very much. And Chris, thank you. I Appreciate it.

Thank you to Pete and David and Tamer. Now I've got a major [indiscernible] , I think, is Bryan Williams online?

Yes, he is.

Because when I was introducing directors, I was looking across the table, Bryan is in Cleveland at the moment. So good evening, Bryan.

Hi, Chris.

So, having heard from myself, Pete, Tamer and David, we will open the meeting up to questions. This has been terrific that we were able to have David and Tamer here with us, and they'll be lingering whilst we're having a cup of tea, and we'll be here for another day or so. So, I'll open it up to questions. How do you want to handle the online questions, Grant?

I'll read them out, but do you want to [indiscernible]

We'll do it from the floor first. I've actually got a couple of text questions and there'll be some questions online as well, so we'll deal with those. That's okay. And we'll certainly look to spread around the team, the question. I don't tend to answer them all. So, with that, any questions from the floor? The local coverage determination. Sorry, if you're going to ask you a question here, we'll pass the mic to you.

Yes. Chris, my name is [ Hari Chen ] and I've been a shareholder for this company for exactly 10 years because I believe in the product that will save the pain of when detecting bladder cancer. Yes, because I'm also from the medical field family. I'm already a baby boomer. My grandfather, grand uncle, et cetera., they were Western practitioners and surgeons and et cetera, et cetera, many of them are medical field a long time ago. So, is very easy for me to read the annual report, that's sort of a thing. And I wish to inquire about Texas. How many people are stayed there for promoting the Kaiser products that is the patients pay case then for the Texas? This providence.

Yes. I've got that right. If you can break it down, how do we support Kaiser?

I mean how many staff are there to explore the Pacific Edge market in the Texas province?

Got you. So, field force or U.S. field force, David, and so in the U.S.

Today, our account executives I talked about, they're responsible for a particular geography is 26 people, sort of fluctuate through 26 and 30. As I said, we're going through a dimensioning, so my guess is that number will be lower. Today, we have 2 individuals in the great state of Texas. It's a big state. And we certainly -- and that's true of all our geographies, not just Texas with 26 people, you can't cover the 330 million people in the United States. What we say we focus on the large geographic areas, Texas, in particular, Houston is a very, very large medical center, and there are a lot of patients that come to Houston. For UT Southwestern those kinds of things. But right now, we have 2 people in Texas. The other question, I think, is around Kaiser and a little bit about the reimbursement. So Kaiser, we have a separate contract with. So, the Medicare issue that we've been talking about does not impact our Kaiser revenue at all. Those are separate and distinct contracts.

Why I mentioned Kaiser is that Texas now is the #1 state in USA in, what should I say, producing revenue. And just last year, you had USD 350 billion and is the #1 U.S. state, the richest one because of this all, not obviously is only 30-odd percent and the other is IT, also 30-odd percent and the rest is computer no, sorry, not for many tests manufacturing like Tesla et cetera, et cetera. And while I mention Texas is as this is the state without income tax, so people would like to move there and no income tax, so they are very rich. And if you count 50 states of U.S., Texas is the #1 revenue producing state now in USA. So, now I wish to point out that we wish to earn revenue.

Yes. So let me finish. Thank you very much. As a fourth generation in California and there's a friend with livelihood between whether California or Texas is bigger, so I won't [ worry up ] on that right now. But clearly, whether it's Texas or Massachusetts or California, we go to where the patients are, regardless of what's [indiscernible] the state, so Texas is a big focus for us. One of our national account managers has been -- is actually also based in Texas, so Texas is an absolute strong hold for us. Thank you very much.

I just wish to -- please wait before I finish, sir. I want you to read the economy dated, 18th of March this year. You had a very detailed information about Texas, the income revenue, so it's a good thing to explore in that market.

Thank you, we will.

Next, please.

[ Aaron Beager ] I have a couple of questions. The first question in regards to consultants who could potentially assist Pacific Edge with applications to regain your LCD coverage. Do you currently use external consultants to assist with these sorts of applications and NCCN coverage and all of the other various means by which you can gain some kind of inclusion? And if you don't use an external consultant, I presume that you're familiar with the opinions of experts in health care like Dr. Bruce Quinn in Los Angeles, who I understand has some very strong opinions as to how companies should go about gaining LCD coverage for diagnostics.

Why don't I start and then I'll have Pete join in. So, the answer to the question is, yes, we absolutely use outside consultants, both on the lawyer side, some very good folks that I've used for many, many years that are really experts. I have known Bruce Quinn for almost 20 years. So Bruce is certainly part of that cadre of folks we go to. But absolutely, we understand that while we know our products the best, we want to get outside opinions about how do we get through the process, both with Novitas and with NCCN. So, we use those folks extensively and have historically. Pete, do you want to add anything to that?

Yes, there's not much I can add to that except just to say that we have different consultants for different purposes. So as David said, we have lawyers who understand the Medicare appeals process and how to comment things from a procedural perspective. We also have folks who are tightly aligned with MolDX and who understand how the process for being granted coverage through the MolDX program, and we also have consultants that they try to work from a lobbying perspective. So, there are a number of different consulting groups that we use depending on the specific purpose that we need them for.

Thanks, Pete and Aaron, just so I don't forget it, and we're talking about coverage and guidelines and the meeting that Pete and Tamer and David had this morning with Novitas. Dr. Eugene Rhee, who is the Head of Urology for all of Kaiser, Southern California, was on that call supporting us, unsolicited. So, that gives you some sense of their commitment to see us better.

If I may have a follow-up. My understanding is that other Medicare administrative contractors like Noridian and Palmetto have a higher approval rate for inclusion of cancer diagnostic tools. I could happily stand corrected on that. But is there respective that there may be an alternative MAC that is more accepting of using urine-based biomarkers or molecular diagnostics testing over that of Novitas, who may perhaps have a more old-fashioned view on what should be included in coverage.

Thanks, Aaron. And I'll start, Pete, Tamer and David, you can add later in. And I think Pete referred to it in his presentation that we we've commenced the MolDX conversations with, I think it's a technical assessment that we are looking to get underway. And which MAX are using MolDX style?

So MolDX, just a little like MolDX is a separate entity that was formed so that there was expertise within the Medicare Administrative Contractors universe for evaluating molecular as I was involved in the first test that came through actually MolDX almost 20 years ago now. So, you're right in that meridian, in which is responsible for California and several other states, has a higher number of molecular diagnostics as that they've approved that's primarily because most of this innovation has been done in California over the last 20 years. So, there are many more labs in California than there are in Hershey, Pennsylvania. So Novitas doesn't do this very often. Novitas has decided that they're not going to participate in the MolDX program. They're going to do the evaluation themselves. You mentioned something about old fashioned. I wouldn't disagree with that approach. So we are investigating any place that we think we can get our tests covered. Now, the MolDX program is very more routinized, it's very specific. I've known the people that run it for a long time. The bar is very high on MolDX in terms of getting over that to get coverage. When we got coverage from Novitas, we would not have taken that same data and gotten coverage in the MolDX territory. Now that we're developing more data, we think we can get over that bar. But we are exploring every opportunity to get coverage regardless of what MAC it is.

My name is Richard Chapman. My question, maybe more than one question. So the first question is, when will the Kaiser EMR integration go live?

I've now been -- I think at this box for 7 years, and Kaiser has been front and center of our conversation for 7 years, and we do have a not pejorative, but we do refer to things in Kaiser time. David met with Kaiser as recently as last week, so I'll probably throw that one to you.

Certainly. I will be blunt and say there is no go-live date. There was a go-live date on February 14, it got paused right before because Kaiser wanted to do a couple more Kaiser things that literally kaiser things, so nothing wrong with us. So, we don't yet have a date. I was with all of the Kaiser urology chiefs on Thursday before I got an airplane defined in New Zealand. They expressed their continued support, the 2 key leaders, Eugene Rhee and Dr. Ron Lu, who are our biggest supporters. They're the ones that are shepherding this through the Kaiser process. They have articulated one or 2 more other people they didn't talk to before we can get that revised go-live date. The go-live date is going to have to be pushed. It's going to have to be in a little bit of extra time because we're going to have to go back and do some retesting of our interface because Kaiser has updated their Cerner and their Epic systems since we last did the testing. So, there's going to be several weeks' worth of work they're going to have to be done before we can set that go live date.

One, just the denim comment is what we've committed to in terms of when we will make an announcement is we will not be announcing when we have a go-live date, we will only be announcing when we go live because of the unpredictability associated with even Kaiser giving us a go-live date in the past. So, we just want to set that expectation for investors.

Okay. And look, my nervousness is because this was announced last year in June with a number of months before it was going in. This feels a bit like it's become as long as a piece of string.

And look, it feels that way to us all, but I think there's little question that the cause of commitment is wavering, the fact that the head of Urology was on the phone call this morning with Novitas, but seemed to suggest that they have committed and have brought in. But that is frustrating for you as it is everybody else, but it's Kaiser. They're a unique, a unique animal that walks up their own patient.

It is Kaiser and they are intensely very, very siloed because when Kaiser does something, they do it all in, and so everybody has to sign off. And what we're finding now is we're just having to go back retouch the silos that we had already touched before. And this is a big deal for Kaiser. This is a significant change to the way they practice urology in Southern California. It is good news for us. It's a big budget impact for Kaiser because that means it's a big revenue impact for us. And this is a frustrating process for us and for Kaiser to some extent, but it is the Kaiser process. I have dealt with Kaiser in the past, and I wish it was different, but it's not.

We just have to be patient. Yes, and test volumes from Kaiser are increasing. So we're getting more and more tests coming through.

My name is Megan Chen. My question is on LCD republish. It seems that they accepted the challenge on they are in appropriate procedure and open for public comments. What about the position of referring the 3-dollar base to identify whether the test is included or not. What do you expect at the end of the day after the public comments, do you expect they completely with all the applications, I mean the LCD proportion? Or do you expect they leave an exclusion for particular test like Pacific Edge as a positive outcome?

So, firstly, that's an excellent question. And the publicly available information is silent on what the Office of the General Counsel, think of that approach. And so, it remains an argument available for us to continue should they elect to go down that path with no changes. There are substantial reasons why that is not appropriate. The concept of automatic noncoverage of a test without LCD consideration on the basis that you don't appear in one of these 3 databases is very clearly not within the intended way that Medicare want local administrative contractors to behave. So no, we have not -- while we made that argument previously to the Office of General Counsel, their position on that argument has not been made clear to us. So, we need to wait and see what comes out in the new LCD whether they stick to this, but preemptive noncoverage on the basis of being not included in 3 databases does not appear to be supported by statutory and regulatory elements of the Social Security Act and the 21st Century Cures Act. So, we believe we still have parts available to us if they continue down that path.

Jim Martin shareholder. Can I just ask where your main research and development was done underneath and you've got people there is the associated with the university. How many people are they keeping ahead of all I am?

Professor Harry Gilford from Otago University is our Chief Scientific Officer, and we have Pete, I think, for one day a week, but I'll hand it to you. But yes, the product development is done in the Dunedin.

Yes. So, as Chris said, the product development, all R&D is done actually in within Pacific Etch. We do have an existing licensing agreement with Perry's Group and the University of Otago for additional new intellectual property should we need any, but for our current products, our focus is more on the development of those products or taking a really good scientific concept and turning that into a robust product and then validating it. And that's where the focus of our R&D resources are today. And all of the development work is done under Dunedin and then the clinical development work is done in a combination of Dunedin in the United States.

How many people have you got working in Dunedin?

Head count in Dunedin, Pete?

So, I think there are 11 people on Justin's team that there is also a significant input from the digital team. So there's probably another 5 or 6 people from the digital team. And then if you add clinical development on top of that, you're talking about another 8 or so when you factor in the in-field and home-based resources and then all the executives. So, there's a few number of people.

So essentially 30 out of 120. Next.

Okay. I just have a comment. You do a lot of studies and they seem to be specifically aimed companies in America, organizations in America. You didn't talk very much about publishing and getting peer review on the products that we're offering. And I'm sure if you're doing that, it becomes a more worldwide thing. That you're promoting rather than focusing on where we're focusing at the moment in America and Asia. I think this isn't what it is here. That's my comment anyway.

Pete?

Yes. So, our patient recruitment has focused in the main on U.S. patients or originally, it was probably more New Zealand focused than anywhere else. But for our more recent studies, it's predominantly on patient recruitment comes from the United States. However, you're absolutely right that when you publish the information that is available to a worldwide audience and that is the intent. So, on the road maps that TAM published, there was a point that was the last patient in, at which point there is patient follow-up and data analysis, and the conclusion of the patient follow-up and data analysis is a publication that will come out as well. And because you have to have for coverage and guidelines reviews, you have to have published peer-reviewed evidence. So that is a necessary step, and that takes roughly 3 to 6 months from the conclusion of data analysis in our very aggressive time lines.

Tamer?

There's not much to add. I think Pete said exactly. And I apologize if I did not make that clear in the time line slides that every study that we do will have to be published. The publication is an essential part of the study. We also will have what's called clinical surgery report, which is a sort of the compilation of everything that we've done in the study, but that's a much, much bigger document that is not outward facing. It's an internal document for FDA and so forth, but the peer review publication is an essential part of every single study, yes.