Photocure ASA ($PHO)

Good morning. Thank you for joining us. I'm Dan Schneider, CEO of Photocure. And joining me on this call today is Chris Thibodeau, CEO of Vesica Health; and Priyam Shah, Vice President of Investor Relations here at Photocure. Today, we are announcing a transformational step for Photocure as we expand beyond visualization and treatment support to a further upsteering precision diagnostics for bladder cancer. We are very excited to announce the acquisition of Vesica Health and its lead asset, AssureMDx, a highly differentiated, noninvasive urine-based molecular diagnostic designed for early bladder cancer detection and hematuria patients. Strategically, this transaction broadens Photocure's reach across the bladder cancer care continuum and strengthens our long-term position as a leading uro-oncology platform company. I'm going to click through the next 3 pages. To remind you, the usual disclaimers and legal information in effect for today's presentation. You can find them on the website, the entire presentation today, but I will take a second to go through it. All right. But let me begin with the structure and the rationale of this transaction. Photocure is acquiring 100% of Vesica Health for a total potential consideration of approximately USD 30.5 million in cash and equity, consisting of an upfront and milestone payments tied primarily to reimbursement achievements. Net consideration of this deal is USD 28.5 million, accounting for the $2 million in cash Vesica Health has held at the time of transaction. We believe the transaction was completed at an attractive valuation and at the right stage of development to leverage Photocure's existing commercial infrastructure and accelerate long-term growth while creating the potential for meaningful operating leverage over time. The transaction structure is designed to align value creation and execution milestones while preserving balance sheet flexibility. The acquisition immediately advances several strategic priorities for Photocure. First, it expands upstream into hematuria valuation market, a significantly larger patient funnel than the currently diagnosed bladder cancer market. Second, it complements our existing Blue Light Cystoscopy platform by helping identify and triage the appropriate patients earlier in the pathway who could receive Blue Light Cystoscopy. And third, there's a substantial commercial synergy. We already possess deep relationships with urology practices and KOLs across the United States and Europe, which creates a highly efficient go-to-market opportunity for AssureMDx. Governance-wise, Photocure's leadership and operating structure remain intact and Vesica's team of Chris Thibodeau, Laura Saba and Manuel Crispin will join us and bring their important molecular diagnostic and biomarker expertise into the organization. Let me quickly frame up where Photocure stands today. Photocure has built a lean but highly differentiated commercial platform centered around Blue Light Cystoscopy with our product, Hexvix globally or Cysview as North America. It plays a critical role in bladder cancer detection and treatment, leveraging OEM partners, including Karl Storz, Olympus, Richard Wolf and now most recently, Stryker entering both Europe and into Canada. The business continues to demonstrate strong operational momentum. Our revenue growth in fiscal year 2025 was double digit, 11%. We have strong gross margins at 92% for fiscal year 2025. We have an expanding EBITDA margin to now double digits, 13% in 2025 and most recently, in Q1, we reported 11% reported adjusted EBITDA margins, which measures the core business in Q1 2026. And we have growing utilization trends, seeing 29% rigid growth in the U.S. market and double-digit growth in Europe as reported in our Q1 last month. We see also several meaningful catalysts ahead that will further accelerate our base BLC, our Blue Light Cystoscopy business. Broader BLC rigid equipment adoption through an expected U.S. FDA reclassification in the second half of this year of Blue Light's begin in the second half of this year of Blue Light Systems and additional geographic expansion. We also see access to 3x larger surveillance market with the global launch of the Richard Wolf Photocure flexible Blue Light Cystoscopy system in 2027. Meanwhile, the interim solution by Richard Wolf is already available in Europe and receiving extremely positive feedback. At the same time, we have made considerable effort to diligence opportunities that diversify and expand our portfolio to access meaningful markets. Vesica Health fits directly within the strategy of a large upstream adjacent market directly tied to funneling patients downstream to our higher-yield Blue Light Cystoscopy business. And the environment for Blue Light Cystoscopy is stronger than ever. Guidelines from AUA, EAU and various others now recommend BLC and the new guidelines coming out are only getting stronger. The science itself from over 300 publications and multiple well-powered randomized studies provides a wealth of clinical evidence. Over 40 independent studies confirmed improved detection and reduced recurrence and we have the world's largest bladder cancer registry with over 4,000 patients in the U.S. Our OEM partners are investing more on the anticipated volume growth in rising tides in bladder cancer diagnostics by upgrading their systems with rollouts of 4K and high def capabilities and no new OEMs like Stryker are increasingly wanting to enter the market to offer BLC. BLC is increasingly viewed as an emerging standard of care technology because it improves the detection and long-term outcomes for patients. This matters because it establishes a strong scientific and clinical credibility foundation from which we can now expand into molecular precision diagnostics. The several investments -- there are several investments to enhance BLC and the acquisition of Vesica Health directly supports our strategic priorities, which have -- which we have consistently highlighted in our corporate presentations and earnings presentations for several years. Photocure's corporate strategy is built on 3 priorities, guiding execution and capital allocation. First, strengthening the core Hexvix and Cysview business, driving disciplined revenue and EBITDA growth while expanding our operating leverage, scaling BLC mobile, along with tower installations and upgrades in the U.S. and Europe for increasing the accounts. and increased penetration in EU markets through expansion, image upgrades and broader and deeper distribution reach. The second, lead the standard, established BLC as a primary precision diagnostic across detection surveillance and treatment monitoring in non-muscle invasive bladder cancer, support next-generation high-def BLC adoption via the recent OEM upgrades and the new OEM entrants such as Stryker, who are entering into these markets. And then partnering with Richard Wolf to grow flexible BLC in Europe while advancing global Flex system development. And thirdly, where we are today, expanding the platform, build a broader uro-oncology and precision diagnostic platform biomarkers, artificial intelligence, flex, new technologies, leverage the partnerships to scale mobile and 4K high-def solutions and advance innovation and pursue M&A to accelerate growth and cash flow. Results, near-term growth and strengthen long-term competitive positioning. The addition of AssureMDx allows us to expand upstream in the patient journey through exciting and fast-growing biomarker and molecular precision diagnostic products, its ability to leverage our current commercial and medical infrastructure to more efficiently now than and into the future. I'm going to turn this over to Chris after saying turning now over -- I'd like to hand off to Chris, CEO of Vesica Health to discuss this best-in-class urine-based biomarker that he and his team had developed over these last many years. So over to you, Chris.

Thank you, Dan. AssureMDx is a patented urine-based multiomic assay designed to help stratify patients presenting with hematuria, the primary symptom associated with bladder cancer. The assay combines DNA methylation and somatic mutation biomarkers to identify patients at elevated risk. We should proceed to more targeted cystoscopy in imaging evaluation. Across prospective multicenter validation cohorts, AssureMDx has proven itself to be a best-in-class assay. Sensitivity has ranged from 93% to 97%, specificity from 73% and to 92%. The negative predictive value has consistently exceeded 99%. Particularly impressive has been the performance of the assay within the micro hematuria population, but it has demonstrated a negative predictive value of 99.7%. The test has also achieved several important validation milestones, in the American Urological Association guidelines breakthrough device designation and strong support among the urology community. From a clinical workflow perspective, AssureMDx can help improve referral quality reduce unnecessary invasive procedures and optimize downstream cystoscopy utilization. We believe this creates value for patients, physicians and the health care system.

Great. Thank you, Chris. Let's talk about the investment thesis. The strategic logic behind this transaction can really be summarized in 5 simple points. First, we now participate across a broader portion of the bladder cancer continuum. Secondly, we gained access to a much larger USD 6 billion hematuria valuation market. Third, we are acquiring a clinically validated and I argue best-in-class and guideline recognized product. Fourth, the commercial overlap is substantial, 100%. We already on call -- we already call on same physicians and institutions. And finally, fifth, there is a clear path forward to near-term reimbursement and long-term value creation. This is exactly the type of adjacent synergistic expansion opportunity that unlocks significant market value. So let me go through each of these points in detail. Historically, Photocure has operated primarily at the confirmed diagnosis and treatment stage, the green box to the right. Majority of Hexvix and Cysview is used today with rigid BLC scopes in the operating room setting. And in the clinical setting for regular bladder cancer surveillance once BLC flexes back on the market. With AssureMDx, the blue box to the left outlined, we now move upstream to the first point of clinical suspicion when patients present with signs and symptoms, primarily hematuria, blood the urine that require further work up to confirm the diagnosis, being upstream expands our relevance throughout the patient journey from the initial hematuria evaluation all the way through resection, surveillance and treatment. We believe this creates a more integrated bladder cancer platform and strengthens our long-term competitive positioning in uro-oncology and precision diagnostics truly the bladder cancer company. And the market opportunity is substantial. Today, the U.S. bladder cancer market already represents a significant TURBT and surveillance cystoscopy opportunity where Hexvix and Cysview play a critical role given the 400,000 TURBTs in the U.S. done every year and over 800,000 surveillance cystoscopies. But upstream hematuria evaluation is a much larger market with more than 7 million potential hematuria tests per year, 2 million in the urology practices, 5 million in general practice primary care. It is here where AssureMDx may be used to roll out early indications of bladder cancer. We estimate the U.S. hematuria diagnostic opportunity alone exceeds USD 6 billion and the market where biomarker adoption is already occurring at a rapid pace. Reminder, Photocure is a global commercial company, which will further support our ambition to expand throughout Europe and beyond. Next, Chris will talk about how AssureMDx market-leading product profile and performance along with the growing market acceptance will speed up the adoption curve, leveraging the tenured and well-established Photocure sales and marketing teams supporting by also the established medical team. Chris, over to you.

Yes. Thank you, Dan. Now when comparing AssureMDx against competing technologies, we believe the product is exceptionally differentiated. It combines 2 independent biological mechanisms. DNA methylation and somatic mutation analysis, whereas many competitors rely on a single modality or even suboptimal analytes. The supporting evidence space is also remarkably robust, including multiple prospective validation studies, across the key metrics that matter most for cancer triage assay, including sensitivity, specificity, negative predictive value and overall accuracy, AssureMDx performs at best-in-class levels.

That's it. Well, thank you, Chris. Appreciate that. And I'm super excited. I mean, you can see clearly on this slide where the Assurant Dx asset stacks up against all others. But one of the most compelling aspects of the transaction is a commercial leverage for Photocure. We already possess a dedicated urology sales organization, a strong community and academic relationships and a proven commercialization infrastructure in both the U.S. and Europe. AssureMDx can't be deployed through the existing platform with limited incremental SG&A. We believe this creates a meaningful competitive advantage. And the reimbursement pathway is another critical component of the story, and it is fast developing in favor of a faster reimbursement for AssureMDx. There has been a recent unexpected and encouraging positive news from CMS in the last 30 days where expected reimbursement could come as soon as mid-2027. The takeaway from the CMS public meeting was biomarkers are and will be an important tool to urologists in the diagnosis and treatment of bladder cancer patients. Look no further than prostate, colon or breast cancer. Biomarkers are now ingrained into their clinical work ups. We are early in bladder cancer, but believe the adoption curve is going to accelerate with CMS support. The company expects important milestones over the next several years, including potential Medicare reimbursement continued health economics and data generation and randomized controlled trial evidence through the SeARCH study, which will aim to provide Level A clinical evidence. Importantly, we recently -- importantly, the recently proposed Medicare policy development may accelerate the reimbursement time line Assuming successful execution, we expect initial U.S. revenue contribution beginning as early as 2027. One of the reasons we're excited about the Vesica Health deal is the attractive risk reward profile it brings Photocure. With the downside protection, the transaction is structured thoughtfully. Of the $28.5 million purchase price, only $14.75 million is paid in cash and equity upfront. The remainder is tied to the all-important reimbursement-related milestones, which we discussed earlier, look to be extremely positive coming in the future. In addition, the business is relatively low reoccurring cost structure, and we've seen several important derisking events already happening, the Novitas proposed LCD just weeks ago, AUA guideline inclusion last fall, FDA breakthrough device designation earlier this spring. In addition, we also see multiple potential pathways to reimbursement. On the upside, our assumptions remain deliberately conservative. Our base numbers assume less than 5% penetration in the U.S. hematuria market, even though other biomarker categories have achieved significantly higher adoption rates over time. We also assume pricing of roughly $900 per test, well below the recent benchmarks in the category of being over greater than 1,300. Final prices is expected in the coming months, but given similar multi-omic tests it is very conceivable the price point will be above 1,100. Strategically, Vesica expands Photocure's upstream into a large material market while adding precision diagnostics platform that can support future growth opportunities across diagnostics, artificial intelligence and bladder cancer management. The key takeaway is that is that we believe we've acquired a highly strategic asset at the right time and at an attractive valuation. Even under the relatively modest assumptions, the opportunity is meaningful and a 10% category penetration, with the current pricing benchmarks, which we've already stated are lower than we believe they will be, the revenue potential exceeds over USD 500 million in the U.S. alone. Overall, we see limited downside multiple value creation catalysts and a substantial long-term upside for shareholders. So let me close with outlook for the business and how we see Photocure evolving over the next several years. Starting with the core business, we remain with our outlook for 2026 unchanged. We continue to expect product revenue growth of 7% to 11% on a constant currency basis alongside continued expansion of the adjusted EBITDA margins, the core business, Importantly, this guidance reflects the strength of the existing business and does not depend upon any of the contributions from Vesica. Looking beyond 2026, we believe Vesica adds on a compelling second growth engine, assuming Medicare reimbursement by mid-2028 which we believe could come sooner and continued positive clinical data support supporting commercialization, we expect the initial AssureMDx revenues in 2027 and positive EBITDA contribution from the business by 2030. We also expect commercialization and market access investments to be funded through Photocure's existing cash generation. In the near term, Vesica is expected to generate only modest operating losses as we invest in market access and commercialization activities as volumes scale, however, we believe the business has the potential to achieve EBITDA margins north or greater than 30%. Consistent with the attractive economics typically seen in successful molecular diagnostic businesses. And the most important key takeaway is the impact on our long-term growth profile. On a stand-alone basis, Photocure was expected to grow at a mid-teens CAGR through 2030. With Vesica Health, we now expect the consolidated company to deliver revenue growth above 25% annually from 2026 through 2030. While maintaining strong profitability and targeting adjusted EBITDA margins above 25% by 2030. And importantly, we continue to see upside beyond these assumptions, potential FDA reclassification and entrance of other OEMs will have a significant impact on the U.S. market by 3x. The reintroduction of flexible scopes again, triples the size of the opportunities, further strengthening their growth outlook for Photocure's core business. Overall, we believe this transaction positions Photocure to accelerate growth meaningfully, expand into a larger adjacent market, create a larger, more diversified and increasingly profitable bladder cancer company over the coming years. With that, I thank you for your time, and I believe we left plenty of time for questions. So I'll open it up.

Dan. Thanks, Chris. We do have quite a few questions here. So let me start with the first one. Dan, this is for you, I guess. How do you think about the total price paid for Vesica given that it does not yet have revenues?

Yes. Well, the total consideration of $30.5 million, of which increments of $11 million paid in cash and $2.7 million in stock is appropriate in our view, given the size of the market opportunity. It opens up and the strong clinical validation of AssureMDx. An incremental $2.5 million in stock is due by the end of 2026 at Vesica [indiscernible] ALD status. And the balance of $13.75 million in cash and stock is due when CMS reimbursement is achieved, which we believe will be prior to 2029. And as we discussed earlier, we believe it could come much, much earlier based on the current actions of Novitas and CMS. Both of these milestones are significant drivers of our ability to generate not only a coverage for AssureMDx but attractive pricing. This is why we've tied future payments to these milestones because they are important catalysts to our ability to generate revenues from AssureMDx.

Next question is, given all the catalysts for Photocure, China entry, FDA reclass, quite a few others that you talked about, why is now the right time for an M&A deal?

Yes. I mean we've been consistently communicating this. It should be no surprise, we have been a single product company -- and for those that have been on this ride for quite some time, you have seen the impact of various things that can hit a single product company. Flex leading the market, took 15% to 20% of our business out. If there's ever an issue we're completely exposed. So this has always been in our plan, but we did it very thoughtfully. We went through hundreds of assets and products over the last several years, looking at products seeing what synergistically fitted and what didn't. But we felt like Vesica Health was an important product portfolio addition because it was right on the uro-oncology bladder cancer continuum. It provides us with a best-in-class. That's very important to us. We believe Blue Light Cystoscopy is a best-in-class enhanced cystoscopy. We want to hang with other products, they're best-in-class and Vesica with its AssureMDx certainly is that. We scaled our -- the scale of our U.S. commercial footprint and European footprints are extremely important. And we knew that we're going to -- with reclassification, the addition of BLC compatible scopes in the U.S. market and flex opportunity meant that we're going to increase the sales force to meet that opportunity and AssureMDx is a second addition. So now instead of going to an account and calling on a doctor and only offering one product at USD 1,300 in the U.S., you now may have 2 products at close to 1,300 each. That's a $2,600 call point for every time you're calling. So that's an important thing to keep in mind. And probably most importantly, both of these products can make a dramatic impact on a patient's care. And that's probably at the heart of who we are at Photocure patients first.

Great. No one here is -- how can you AssureMDx generate revenues in 2027 if Medicare reimbursement is not expected until 2028.

I'll start and maybe Chris might want to jump in here, too. We continue to invest in generating the clinical evidence and the health economics to support CMS coverage for AssureMDx. Our belief in other diagnostic companies have demonstrated this is that a robust clinical evidence and health economics data ultimately will drive reimbursement covers. That's why we'll continue to invest in retimed controlled trials like SeARCH and readout expected in mid-2027. That said, there's been really specific proposed LCD coverage. And maybe, Chris, you might want to go into that a little bit.

Happily, yes. Thank you, Dan. The recent local coverage determination from Novitas really is intended to cover urine-based biomarkers in patients with micro hematuria and that will provide Medicare coverage for the use of our test potentially and selected micro hematuria patients. So this determination that will be finalized in the coming months could provide that quicker path for reimbursement for AssureMDx in the Medicare population.

Yes, this perfect. Great. I think the other thing to look at some of the competitive products like CX Bladder has not had reimbursement. So there is an opportunity in the private pay sector, then our patients will pay for it. So we do believe there is a revenue that will start. I think the real acceleration always comes with CMS reimbursement. So -- and we think that has a real potential. Just in the last 6 months, we've been in heavy diligence. There's been so many positive signs along the way that Chris and his team have delivered on. So we're super excited about it. Next one here is Cysview and Hexvix are currently sold primarily in the LR as part of a procedure, much like a traditional medical device even if the product is regulated as a drug, how do you anticipate your commercial organization being able to sell a diagnostic test?

Well, I mean, it's the same doctors, number one. And also important in these launches in the key academic centers key physicians that are looked upon by other physicians as sort of the leaders in the space. So our sales force and medical teams combined. On Chris' team, we got Laura Saba and our team, we have a whole full out organization in both U.S. and Europe are well ingrained with physicians. I will tell you, upon this this approval, there has been an outpouring of U.S. KOLs, both to our side and also, I think Chris has received a ton as well saying what a great deal between the 2 companies, you're bringing great products and great people together. We do recognize over time, the opportunity for Flex and AssureMDx will expand. We've always had the intention with Flex because it goes out to the lung pus. there's 145 of those in the U.S. plus physician offices, there are 14,000 urologists or plus or minus in the U.S. alone. The sales force was going to need to expand. And now its expansion is predicated now on 2 product call instead of a single product call, which makes every call more valuable for Photocure. So that's an important component of it. And then I think we also bring a European sales and marketing team, and we're going to work diligently to get this launch in Europe. Different in Europe. In the U.S., they use centralized labs and also IVDs which are sort of decentralized versions. In Europe is a decentralized lab where the local hospitals or institutions will conduct a test. I don't know, Chris, you want to add to that a little bit?

Certainly, certainly, happy to help. In Europe, what we would focus on is delivering an IVD can, making the test available for that decentralized model where most institutions prefer to run a test in-house. And that can be applicable in the U.S. market as well with certain institutions.

Yes. Certainly, the lung are interested. And there's an economic incentive for them to do so as well. So the lines of the clinical and the economics. So it's an interesting opportunity for us. So I believe we have all the right things, the right footprints commercially for this.

Okay. Next one is what evidence do you have that owning Vesica materially accelerates Photocure's core growth and profitability versus remaining focused on BLC alone? And how does AssureMDx funnel patients into BLC?

I'll take the first part, and I'll let the panel go to Chris, if that's all right. So I mean I think we've hit on this. We have a sales rep. Our account manager going into an account currently with only one product in hand and sitting in a procedural cell. It's already a technical sell for them, adding AssureMDx is adding an additional technical cell to the same physician, the same group of physicians. So we're leveraging our current footprint. So we believe that -- and those relationships, I think I often -- we often take for granted the sales force, in particular, for us in Europe and U.S., our procedural sales reps in the ORs, they're sitting there with physicians, surgeons more than a second. It's not like a typical pharmaceutical cell, where you go in, spend 1.5 minutes and out the door you go. These reps -- these account managers go into these accounts and spend an hour, 2 hours, 3 hours with a surgeon, they really get to know them. So their relationships are extremely strong and that trust is built. So I think for Chris and AssureMDx, what was attracted to them was putting this product in the hands of the sales force that had the same reputation and respect that they have with their product and its profile. And I think it's just a great opportunity to leverage. And Chris, I probably have some more to add about, I guess, the connection between AssureMDx and BLC.

Absolutely. Yes. And I 100% agree with that view that we just found that this was a perfect alignment in terms of the teams. But also in terms of the product because with AssureMDx, we're going to really help improve the stratification of patients presenting with hematuria, solve a clinical dilemma to say who's at risk for bladder cancer versus who are those that are a sufficiently low risk that they might be able to avoid an unnecessary invasive procedure. And so when we look at the use of the assay in the clinical setting, we can identify those patients are at elevated risk and that really will benefit from earlier intervention using Blue Light Cystoscopy for really targeted detection and then ultimately get those patients treated early when there's the greatest opportunity for cure.

Perfect. Next one here is, why was the full ownership of Vesica Health necessary?

Yes. I guess it's kind of dating, kind of like dating and then you realize you really want to marry the person because it's going to be a stronger partnership and relationship for a long time. Partnership creates in the commercial alignment, but a full ownership is a complete strategic alignment across clinical development, reimbursement settings and strategies, data generation, commercial prioritization, integration of the products and how they complement each other, long-term platform expansion. As we invested back in the first quarter, we really quickly came to realize there was a genius in a deal here to really form this in a permanent way. So yes, I mean, I think that kind of underscores. Chris, from your perspective, why sell out?

Yes. No, a great question. For us, we always envision having a strategic partner to commercialize the assay. And then through dialogue, an engagement with the Photocure team. We just realized that this is just a perfect fit. We'd always envisioned our test is complementary to Blue Light Cystoscopy, both best-in-class products. And this just really brought us both together. And I think the strength of the combined technologies and teams really will help us deliver on significant growth in the years to come.

Yes. 100%. Yes. So I think owning the asset allows us to allocate the capital, prioritize indications, integrate data assets and optimize commercial model, it just makes so much sense to do this and do it now.

Right. Chris, maybe one for you. What will make physicians choose AssureMDx over other competing products like CX bladder, Eurovision. How do we think about the competitive landscape?

There are several other products that have been on the market, some for quite some time, upwards of 20 years. But what we bring is a next-generation assay. We're utilizing, as we mentioned earlier, 2 different modalities, DNA ethylation otherwise known as epigenetics and DNA somatic mutation. So the approach that we deliver that we bring delivers the greatest performance in terms of sensitivity, specificity and negative predictive value. I think that makes a distinct difference. And so when we approach clinicians in the field and we start talking about the benefits for their patients, it's important to recognize that these biomarkers really will deliver, as Dan mentioned earlier, in other cancer and other oncology settings, biomarkers are the standard of care. They are utilized routinely and absolutely important for the diagnosis and treatment of patients. We envision here, just like with prostate cancer biomarkers that evolved over the last decade, that really there's this next generation such as AssureMDx, which is really going to deliver improved patient care. Relative to the other competitors, again, we've been able to demonstrate consistently and reproducibly in clinical validation studies best-in-class performance. And I'll leave you with 2 notes on this. One, I think it's an important distinction that across the landscape when we look in oncology, people are talking about early detection, the importance of early detection. And that is so true in the area of bladder cancer, where patients that have early-stage disease can be treated and cured, whereas patients who have later-stage disease suffer greater mortality. And so we deliver on that promise of early detection. And in fact, a combined sensitivity for Stage 0 and Stage 1 disease, really important data points. We're delivering 96% sensitivity for those populations. And that outstrips and outperforms every other modality and every other assay that's on the market today.

That's good. And I think when we look also, I can add to some of our commercial into this as well. Some of the competitors have gone through fits and starts as organizations. I think they're -- without sliding them too much, they've had some difficulty and relationships have been fractured. Meanwhile, Photocure's relationships and Vesica Health's relationships with both the academic, the KOLs and the surgeons out in the field has always been a strong element of the company. So from a commercial standpoint, relationship-wise and respect and in that market, I think that really gives us a leg up. I thought, Chris, maybe if I can ask a question that I learned about our product, and it's specific to IVD kits and specifically why an IVD kit is important economically and clinically and why it can be done with ours but maybe not with the others. And this is a competitive advantage.

Absolutely. It's a great, great question. And in fact, it is part of our plan, as we discussed earlier, to develop a kit for the European markets, but also strategically in the United States, what we envision is the opportunity to work with large institutions and I won't name them, but just consider like large integrated distribution networks, large hospital systems. And even as you mentioned earlier, some of the groups, where these are large urology group practice association, where they have their own laboratories where they could envision having this test and be able to run it within their own lab and deliver as we said, that decentralized offering, but really provide results to their patients even faster and then also kind of sharing the economics of the program. Now why we can do this is because we're looking at DNM ethylation with very stable sample right, that we can take it from the clinic, we can ship it to our centralized laboratory over 3 to 5 days, and the sample is very viable. Other assays that are on the market, some of them use RNA and RNA can be very labile, meaning that it's dynamic and it can degrade rapidly. Now there are preservatives out there. But to then convert that into a kit makes it very challenging, whereas what we have is a very easily combined assay that can be performed in remote laboratories.

Yes. there you got. Thank you. Dan, you presented this, but just for further clarification, how many new employees will be involved in this transaction.

The total of 3 so far. Over time, of course, as we get closer to commercialization and some of the other elements, I'm sure we'll have to add a few more folks. But currently, Chris come on as Chief Operating Officer of Biomarkers. Laura Saba is coming on as Vice President of Medical and Biomarkers. And then Manuel Crispin, maybe I'll let Chris even talk about Manuel, because I think he has a unique background but he'll come on is leading the Biomarker Scientific Vice President. So -- but Chris, maybe just a little background on Manuel and the test themselves in his background, maybe give people some.

Absolutely. Manuel brings a great area of expertise. He did his PhD and epigenetics. And in fact, if we look back, when we started working on the development of the AssureMDx assay, Manuel is instrumental in actually building the assay, the final configuration of the biomarkers, establishing the analytical validation and really was key. Now Manuel's career, he's developed a lot of different molecular assays. He worked with MDxHealth, he worked at Foundation Medicine. He's worked with some great companies that were developing in molecular diagnostic assay. So that is his area of strength and expertise, and we're just very fortunate that we were able to have them join us at Vesica Health and then subsequently, of course, coming together with Photocure.

Yes. I should mention Chris and Lara both have over 20 years of biomarker experience. They had worked together long ago. Chris brought her with him. She also has a very extremely broad and deep network of relationships with urologists across the globe, which is extremely beneficial in this space. And so we're super thrilled to have Lara with us. And of course, Chris came out NDX Health, that's the prostate side of biomarkers, which is really interesting, as Chief Operating Officer. So he knows how this works. When this is not his first rodeo going to the stage, right, Chris?

Absolutely. Just exciting to be working with the team with such a great reputation and great product technology that we can complement each other.

Great. I think we have time for maybe 1 or 2 more questions. Next one here is, how should we think about the risks associated with the 2 key milestones, ADLT designation, and CMS reimbursement? Chris, maybe you can take that one?

Absolutely. Absolutely. Well, I think that what we can say is that we've got multiple pathways to gaining Medicare coverage. And as Dan mentioned, of course, there's also commercial reimbursement, which we'll pursue in parallel with the private payers. But when we look at the Medicare reimbursement, obviously, this recent news with the LCD, the Draft at Novitas is very, very promising, just all the dialogue, the CAC meeting that was discussing, the need for these biomarkers, the LCD is drafted is just really well drafted. And we think that presents us with a near-term opportunity to gain coverage and really drive commercialization of the assay. But as you mentioned, ADLT, that's advanced diagnostic laboratory test, which is specifically designed for assays like AssureMDx. Last fall, we successfully secured a proprietary laboratory analysis code, a PLA code. It's a billing code for our assay and that positions us well for the ADLT program through CMS proper. We provide unique and different clinical information as compared to anything that's currently available for these patients. And we think that, that's a near-term opportunity as well to pursue coverage under that pathway. But we were, as we all know, like there's the multi-edge program in California, where our core laboratories located presently, but then beyond that, we do envision taking the FDA pathway for the longer term to gain FDA approval of an IVD kit. And so as I mentioned, there's 3 different pathways to coverage. And we're very, very excited about the recent news out of coming out of Novitas, and we think that, that's going to be the nearest-term opportunity.

Great. Chris, I think you talked about this when you were talking about the IVD kits, but the question is, are there plans for launching AssureMDx to Europe, so they can tie the 2 together.

Absolutely, absolutely. In fact, you mentioned earlier -- Dan mentioned earlier that we're participating in a large randomized controlled trial called the search study, and that's with our long-time collaborators at Rasmus University. And that study is about 50% enrolled. We expect it to read out in mid-2027 or thereabouts. And part of that was -- that study was funded by Dutch Cancer Society Grant. So a really great program, really great opportunity to generate real-world evidence, Level A evidence that will provide not only meaningful incremental validation of the assay, but will allow us to demonstrate how the assay works in a real-world setting with intervention in terms of the patient -- the case arm of the population. That will also generate some health economic data in that setting. And that's certainly going to build the foundation for us to pursue EAU, European Association guideline inclusion. And then ultimately, as we mentioned, the development of a kit was always a contingency plan there that we would want to make sure that the test was therefore available in the Dutch market, but then more broadly across the European markets and other parts of the globe.

Great. I believe we're roughly at time. So we will end the Q&A here. But thank you both very much.

Thank you.

Yes. Thank you, everyone, for joining. Exciting times ahead. Have a great day. Bye-bye.