Verici Dx plc (63V.F) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Verici Dx plc investor presentation outline the positive data from the Tuteva clinical validation study. [Operator Instructions] The company may not be in a position to answer every question it received during today's meeting. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we would like to submit the following poll. And as ever, would appreciate your participation. And I'd now like to hand over to CEO, Sara Barrington. Good afternoon.

Good afternoon, everybody, and I want to thank you all for joining us on a hot Friday afternoon. Obviously, we did the results an indicative coverage of positive results from Tuteva a few weeks ago and promised to come back once we have presented at the scientific conference ATC, with a little bit more detail on those results, and that's the purpose of today. So shorter than normal, but obviously, it's still subject to a disclaimer. And this sort of summarizes the press release that we had put out before, which indicated that the results would go. But let's get into a little bit more detail. A lot of this is from the presentation at the conference. So maybe just a little bit more in depth than we need, but I thought it would be interesting for everybody to look through and see what was presented. The first part of the interest in our study is one of study design. And one of the things that we showed was what we called an all-comers trial design. So first of all, this was international, covering both all the U.S., the EU and Australia. So a fair representation across transplant centers, different protocols, et cetera, and had very little exclusion criteria. The point of all of this is to make sure that we ran a trial is what I call up to FDA standards. It is truly something that the clinician can expect to see in their clinic, the clinical reality, I call that. So that when they are asked to use it in the clinic, they do not have any further questions. Not all products have done this trial design. In fact, we are probably the first to do it in an all-comers design up to that level. And there was a lot of interest in that because the industry have been heavily critical of biomarkers that had not to follow this trial design. And this gives us a distinct advantage and moves us ahead in terms of development. The other part that was exciting was that it covered all types of rejection. It was not segregated in any way. That's both T cell and antibody rejection, but also -- Excuse me, different types of rejection that have confounded other studies so that we were able to pick up [ border ] lines, subclinical, no rejection, mixed rejection and chemical rejection. And again, multiple input, multiple outputs made an incredibly strong study, and that was very well received. Another table here, which sort of goes to the idea that we reflected clinical reality. This is the underlying demographics and split. The good news for us was that it did indeed reflect what we see in the general industry. Probably just a little bit light on the Asian population, but that we will be adding further patients as we go forward in the trial, it's still open, if you recall, for the third product, Protega, then obviously, we will be able to address that. But again, very solid underneath clinical reality. And this is the curve. So if anybody love science, you'll enjoy this curve, 2 things to note. One, in the discovery set, we had to have an intermediate group. And that's always tricky. What do you do with intermediate risk? Is it high risk? Or is it low risk? And in the results, we were able to cut of -- put out an intermediate group making it either a binary issue, either high or low. And then obviously, that has clinical advantages because the clinician is directed towards what they might see. The NPV curve, that is the negative predictive value. And let me just take a little step back actually and remind everybody of the importance of both of those measures. NPV is about if you have no rejection of what's happening there. PPV is about if you have a rejection, do we put it up? NPV here, other tests have focused on the NPV story, that would be a roll out lot again, in transplant care, where up to 50% of organs have an event having a negative result is low probability and not that helpful, being able to be picked up in other standards of care. What has been missing from the environment is a PPV story. Other tests -- other genomic tests have been under 20% or slightly above. And other cell-free DNA. So that's later in stage. Again, very anemic PPV figures and especially in light that they had selected high-risk population, very surprising that they can't get that. It comes from being highly nonspecific. Some things happen, but we don't know what. With the RNA signatures, with this technology, we are able to be way more specific. This was very highly regarded, this result. And puts us at an order of magnitude ahead of the game. Why is that important? First of all, we're in the set of early biomarkers that is a prognostic. What's the risk of getting damage? Am I having damage right now as opposed to damage has occurred and being kind of late to that therapeutic party. And then the second thing is that the PPV is in an order of magnitude that hasn't been seen before and was very well received. This was really just the narrative around that. It's also indicating that we were able to distinguish between not only in rejection, but a couple of other diseases that grafts do see. And again, that was well received. The [ AUC ] is for the clinical community to know that it wasn't artificially distorted by a particular cutoff point. And this, again, of almost 0.7 was a very solid result. Everyone was very happy with that. It's much higher than anybody has seen in the industry for this kind of classifier. And then finally, we presented this table. As everybody knows, that although this validation trial was designed to be a point in time at the one test, we've always said that, in fact, this technology, being highly dynamic, RNA is about what's actively going on in the body, the body's messages. But we would be pursuing monitoring claims next. And we were very fortunate that we had 12 patients that have had 2 biopsies. So that's our comparator and deemed to be the gold standard here that we need to compare ourselves to, but we've had 12 that have had different results. And we mapped our blood test against them. We didn't double count them, by the way, in our trial. It's only the first result that got put into the trial. But this was a very interesting subsection of information. Why? Because the majority of the test also changed. So it showed 2 things. One, it's a little bit of a proof for pudding, again, another evidence points that the test really works. And secondly, that movement, that longitudinal view was an early start on the data that we want to collect. Admittedly, this is a small, it's like a discovery set, but it was highly intriguing to people that have wanted to know whether this would be used and useful in a monitoring set. And obviously, this shows that it will be. So as you can see, this is a reminder of the time lines that we've talked about before. And where are we in that time line? Well, we did present as promised. And what was nice in that was we were selected in the conference round up in the what's hot, what's new session, and we were referenced very few translational scientific offerings such as ours get pick, so that was quite the honor. We have obviously now being at the point with Tuteva to be able to commercially launch. So this was our first presentation to the clinical community. We are obviously making more drought during the year. And as you saw from the recent press releases that I hired the commercial team. We have to have a medical science liaison on and a business development person. They are already being invited to centers to present. So that's very exciting. That's the start of our commercial trend. Just a reminder, this year is what we call commercial proof of concept. Less about big revenue numbers and more about whether we can get it into sites. It's almost like beta testing. You try it out with clinicians, you work out how to order it, how to get it into the hospital systems of [indiscernible] and then make it easy for the clinician not only to order it, but to read the results. It takes a little bit of time, a little bit of trial and error. And most importantly, it gets at hand in the hands of what we call key opinion leaders. These early adopters will use it in the clinic and then they will talk to other physicians about their findings. Again, a properly run validation trial, it's very compelling, and we will be publishing that this year. But there's nothing like physicians listening to other physicians. That's really what the proof of pudding is. Just in terms of the reimbursement time line, the -- as you remember, we've already got code for both tests that we've already submitted into the pricing committee that meets on the 23rd, so in a few days for its first meeting, so they have a series of meetings and look at the decision by the end of the year. And then obviously, for Tuteva, there's already a coverage determination in place with Palmetto. And so we are -- once we've got the pricing meeting over and done with, then we can address that, what we call a technical assessment, which is basically a glorified checklist to say that we do qualify under that local coverage determination and that's due for -- in the latter part of this year. So on track with Tuteva. Clarava, we're still collecting what -- a piece of information that's important for Clarava, which is the mismatching information. It's called [indiscernible]. So there are a few centers. We've got about halfway through collecting that from all the centers. It's very important Clarava, not so much for Tuteva. And so that's slowing that down a little bit, but we expect something in the next few weeks. In terms of time lines, it's not really holding us back. We've submitted in for the pricing. And then obviously, in preparation for coverage determinations, we've always said, this is the point where the 2 tests are diverging. We do need to do utility studies. Those are ones that are in the clinic to show that it is clinically useful, it changes clinicians' behavior, therapeutic modulation that improves outcomes, et cetera. We do need to do that. We've got 3 centers that are self-identified as interested in doing that with us. And so we continue to move that process forward whilst we're waiting for the validation of data. And I think that, that -- so that's on the financials, which I presented before. So that is the extent of the briefing from the scientific communities. Okay. I'm going to turn to questions now.

I see one which says what barriers do you see to clinical adoption and in turn, commercialization? How can commercialization be accelerated? I think the barriers are always clinicians sort of trust into the study results. And we removed that barrier in most parts by doing a trial that's up to FDA standards, something that is we're very excited about. [indiscernible] getting the cross, getting that message across. You never have the -- in such a study design, you don't necessarily have the top line flashing numbers that you would guess if you picked a subgroup that was -- that would yield that. And so it's a question of getting that disseminated through the clinical community, and that's our job this year, which is to be out there making presentations, being invited into centers and generally going to conferences and at one now to be able to sort of spread that message. So in terms of the barrier, which is just [ sheer ] communication, obviously, we're addressing that as fast as we can. How can commercialization be accelerated? I'm very conscious that it will be really about the centers promoting to other centers. And that's something that we'll be very focused on, which is getting that credibility, not only from our study design and the trust, which I think has already come, and just need to be communicated. But also in getting that sort of clinician to clinician community. News flow. To be honest with you, I think that obviously, we'll let you know if we're presenting at conferences. We're heads down at the moment, realistically, with the commercial team getting into centers, looking at the pricing decision won't be until the end of the year. Same with the coverage determination. And so realistically, I think the very short term would be on Clarava. What milestones can you achieve with current funding? And when do you -- yes. As everybody knows, we did a small round at the beginning of the year to extend our runway so that we could really get through not only commercial proof of concept, which is what we had funded to IPO, but also the first year of revenue. And so although we stated at the time that it would get us through to August '23, we do have a stake given the state of the market to get that through to 2023. I'm really seeing in the current [ doldrums ], a distinction between many funds between pre-revenue and revenue companies. And I think it's very important for us to be addressing a kind of revenue potential and with first revenues in 2023 before we could anticipate doing any other kind of fundraising in this current community. You mentioned earlier doctors that are keen to trial Tuteva in a real-world clinical setting. Can you talk a little more about what that could look like in terms of numbers? And the process and timing of the test and getting results back to clinician? Yes, sure, certainly. At the moment, without going out to the marketplace, we've had 3 centers that have come and expressed interest on an imbalanced way. So I think that realistically, we need to work out how to get that into their processes and what that might look like. It will probably be 1 or 2 clinicians in their center using it and then ordering it in a sort of reasonably light way, but being able to ensure that they can test it, both in terms of I think, a population that is probably in a 3-month period would be realistic for the end of the year. So I'm not sure whether I can really give you any specific numbers. But I think that, that's -- it's numbers of centers. And although we projected 3, I am looking to stretch the team to be beyond that in terms of numbers of centers. The process is light for the centers. I think this is really important. We only ask them to collect blood, to put it into their system. It sends the blood tube to us, we do the rest. That's the definition of a clear lab. We basically just return the results. So from the center's perspective, implementation is not that tough. They're very familiar with blood draws. The [ rail ] implementation is making sure that everybody knows how to order it and it's in their own system. So we took to the people that are involved with [ EPYC ], and we get established and put in there. And then we train the transplant team where to find it, make sure that there's no kind of small issues like that would trip up and the results get back within 5 business working days. That's very comparable to what we're seeing in the marketplace. So I think that, that's very acceptable. And as I said, because it's light touch for the clinicians, then I think that will be what they're looking for. I see a question on what percentage adoption of Tuteva would I expect at peak adoption? I think that that's kind of a hard question to answer in terms of knowing exactly how the industry plays out. I will say that we saw -- and we often point people to [indiscernible] numbers just because you can extract those from the financials. One of the things we saw is that after about 5 years of adoption, they had about $200 million in revenue from kidney transplants. And there are only 1 of 3 major players in that marketplace. So how much of that can we dislodge? I would say a lot of that is a lot of dissatisfaction with sell-through DNA technologies. And there has been a desire to move towards these earlier biomarkers and being able to dislodge that with such credible results, I think, would be very promising. We do have a lot of enthusiasm. So I hope that gives you a little bit of sizing expectation now.

That's great, Sara. I think you've taken every question from investors. So thank you to all of those investors that have submitted questions. And Sara, if any further questions do come through, I'll make those available to you after today's meeting. I know investor feedback is going to be important to you as ever, and I'll shortly redirect those on the call to give you their thoughts and expectations. But I guess before doing so, Sara, if I may, just ask you for a few closing comments.

Certainly. I think I'd like to just say how pleased, not only was the company, its clinical advisers, but also the clinical community was from these results. This is something that's highly dynamic information. It's early. It's exactly what they want, and it was done in a way the clinicians have been starting to demand in terms of study design, something that they can trust. So incredibly positive information. And I think that this is sort of sets us up very nicely for the rest of the year to set up our trial sites and early adopters so that we can truly iron out all of those last nits, so that all of our marketing dollars are very well spent. [indiscernible] because no one knows how to order it. So we're looking forward to this next phase. I think that kind of concludes us on this product as being an R&D company. Obviously, we're going to do further studies. There will be extra work, and there was a high degree of interest in using this moving forward. So I think that this really establishes a Tuteva as a cornerstone product for us.

That's great, Sara. Thank you very much indeed, and thank you for updating investors this afternoon. Could I please ask investors not to close the session. We're now automatically redirect you for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of Verici Dx plc, we'd like to thank you for attending today's presentation, and may I wish you all a very pleasant afternoon.