Earnings call transcript: Lucid Diagnostics Q1 2025 highlights growth and strategic expansion

Lucid Diagnostics Inc. (LUCD) reported its first-quarter 2025 earnings, showcasing a revenue of $800,000 and significant strides in strategic partnerships and product innovation. According to InvestingPro data, the company has demonstrated impressive revenue growth of 79% over the last twelve months, though it currently trades at a high revenue multiple. The stock experienced a slight increase of 0.42% following the earnings announcement, reflecting cautious optimism among investors. The company’s shares have shown strong momentum, with a 45% year-to-date return.

Key Takeaways

• Lucid Diagnostics performed 3,034 EsoGuard tests, surpassing expectations.
• Cash reserves increased to $41 million following an April offering.
• The company secured its first positive policy coverage from Highmark Blue Cross Blue Shield.
• Lucid is targeting a $60 billion market with potential expansion upon NIH study confirmation.

Company Performance

Lucid Diagnostics demonstrated strong operational performance in Q1 2025, with revenue reaching $800,000. The company conducted 3,034 EsoGuard tests, exceeding the projected range. This performance reflects robust demand and effective execution of their strategic initiatives. The company is actively expanding its market presence through partnerships and innovative campaigns, positioning itself for future growth in the esophageal precancer detection market.

Financial Highlights

• Revenue: $800,000 for Q1 2025
• Cash at quarter-end: $25.2 million, with pro forma cash of $41 million post-April offering
• Quarterly burn rate: $11.3 million
• Shares outstanding: Approximately 108 million

Outlook & Guidance

Lucid Diagnostics is optimistic about its future, anticipating a Medicare coverage decision from MolDx and expanding its testing channels. The company forecasts substantial revenue growth in the coming quarters, with projections reaching $24.05 million by FY2026. Lucid is also preparing for a large-scale real-world evidence study involving 12,000 patients, which could further bolster its market position.

Executive Commentary

Dr. Lishan Aklog, CEO, emphasized the company’s favorable commercial setup, stating, "We really believe we’re set up very well from a commercial point of view." CFO Dennis McGrath highlighted the company’s ambitious target, "Our goal is forty percent when you think about the thirty million patients." These comments underscore Lucid’s strategic focus and confidence in achieving its market goals.

Risks and Challenges

• Reimbursement challenges with major insurers like United Healthcare and Kaiser could impact revenue.
• The company’s burn rate of $11.3 million per quarter necessitates careful cash management.
• Market expansion depends on the outcome of ongoing NIH studies, which could influence future growth.

Lucid Diagnostics is navigating the competitive landscape with strategic initiatives and partnerships, positioning itself for long-term success in the esophageal precancer detection market.

Full transcript - Lucid Diagnostics Inc (LUCD) Q1 2025:

Conference Operator: Good morning, and welcome to the Lucid Diagnostics First Quarter twenty twenty five Business Update Conference Call. Please note this event is being recorded. I would now like to turn the conference call over to Mr. Matt Reilly, Lucid Diagnostics Senior Director of Investor Relations. Please go ahead.

Matt Reilly, Senior Director of Investor Relations, Lucid Diagnostics: Thank you, operator. Good morning, everyone. Thank you for participating in today’s business update call. Joining me today on the call are Doctor. Lishan Ekloge, Chairman and Chief Executive Officer of Lucid Diagnostics, along with Dennis McGrath, Chief Financial Officer.

The press release announcing our business update and financial results is available on Lucid’s website. Please take a moment to read the disclaimers about forward looking statements in the press release. The business update, release and the conference call all include forward looking statements These forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the SEC. For a list and a description of these and other important risks and uncertainties that may affect our future operations, see Part one, Item 1A entitled Risk Factors in Lucid’s most recent annual report on Forms 10 ks filed with the SEC and any subsequent updates filed in quarterly reports on Forms 10 Q and subsequent Forms eight ks.

Except as required by law, Lucid disclaims any intentions or obligations to publicly update or revise any forward looking statements to reflect changes in expectations or in events, conditions or circumstances on which the expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward looking statements. I would now like to turn the call over to Doctor. Lishan Aklog, Chairman and CEO of Lucid. Lishan?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Thank you, Matt, and good morning, everyone. Thank you all for joining our quarterly update call today. As always, I’d like to thank our long term shareholders for your ongoing support and commitment. Our team here at Lucid remains singularly focused on driving this enterprise towards its substantial commercial potential and to enhance our long term shareholder value. I really believe we’re now better positioned than ever to capitalize on EsoGuard’s really huge clinical and market opportunity.

We continue to make steady progress since the last update, which was just six weeks ago. Perhaps most importantly, we’ve secured capital to extend our runway past some reimbursement milestones. And we are continuing to drive our cash pay and contracted programs that we launched earlier this year targeting concierge medicine practices and employers. We continue to have momentum in our engagements with regional commercial insurers on securing EsoGuard coverage. We’re waiting to hear back from the MolDx program on EsoGuard Medicare coverage, which we continue to believe is imminent.

Thanks to our recent financings we have plenty of runway and we’re well positioned to accelerate our commercialization once we secure Medicare coverage. So let’s start with some key highlights related to our commercial execution. So we performed 3,034 EsoGuard tests in the first quarter. That’s the upper end of our range of 2,500 to 3,000 tests per quarter. And as we’ve mentioned before, we’re kind of happy to maintain that volume, that we’ve been able to maintain that volume while transitioning our commercial team to these new sales channels to drive revenue such as concierge and employers.

Our revenue of $800,000 fell a bit short due to external headwinds and greater concentration of testing through our healthcare events. And Dennis will provide some more details and color on that a bit later. We also launched our Embrace the Future campaign showcasing EsoCheck’s groundbreaking collect and protect cell collection technology relative to antiquated sponge on string devices. And we’ll provide some more details on that a bit later. We have had a successful partnership with a major health system to launch a comprehensive EsoGuard esophageal precancer testing program.

And this will expand access to at risk patients across the full spectrum of their digestive health teams, their gastroenterology team, primary care, and for the first time a concierge medicine program that is housed within a major health system. We’ll have a more formal announcement coming in the very near term on this. And we have continued momentum executing our concierge medicine program to expand EsoGuard access on a cash pay basis. We doubled our total number of contracts in the past six weeks. And our team is starting to build critical procedures and materials, marketing materials and other patient materials to drive patient volume once contracts are in place.

We continue to expect an impact on revenue from this effort in second half of this year. And we’re also making meaningful progress executing employer market contracts. And we have a strong pipeline of opportunities both with employers as well as with fire departments. We doubled the number of employer contracts in the first quarter. And of course, these two efforts, the cash pay concierge medicine practice as well as our direct contracting with employers, fire departments, really serves to complement our ongoing efforts at traditional reimbursement through coverage and positive medical policy from private payers and with Medicare.

So now let’s discuss some of our recent strategic accomplishments. As I noted earlier, we’re extremely happy that we strengthened our balance sheet with an underwritten public offering of common stock that netted approximately $16,100,000 in proceeds. This really significantly bolsters our balance sheet with over $40,000,000 in pro form a cash at the end of the first quarter. And this importantly extends our runway well into 2026 and past key milestones. And this really mitigates our risk from the perspective of external factors.

And it also provides us the resources to immediately ramp up our commercial effort after we receive Medicare approval. We’re also happy to report that the new piece of clinical data that the NCI sponsored study showed that EsoGuard was effective at detecting esophageal precancer in at risk patients without heartburn and GERD symptoms, and that this will ultimately support an expanded indication and market opportunity. This was the initial study that led to the larger ongoing five year NIH study for which a large NIH grant was secured. And it showed 100% negative predictive value, so no false negatives. And a prevalence in this population of patients without GERD symptoms who otherwise have risk factors consistent with the American Gastroenterology Association, the prevalence was about eight percent, which is really not that much lower than in the heartburn population.

So it really demonstrates that this is a target population that could emerge in the future. If the NIH study replicates this and in fact the target population expands to patients without symptoms of heartburn, then our already large $60,000,000,000 total addressable market could increase by as much as seventy percent. So before turning the call over to Dennis, I just want to provide a bit more detail on a couple of select topics. So I’d like to review in a bit more detail our ongoing reimbursement efforts and talk a bit about our Embrace the Future campaign related to EsoCheck and our experience with that at the big DDW conference earlier this month. So let’s start with commercial payers.

As we announced in March we have secured our first positive policy coverage from Highmark Blue Cross Blue Shield of New York. And that policy will be active just in a couple of weeks later this month. And our expectations with regard to that have played out. So this clearly is helping us in our conversations with other regional plans, including other Blue Cross, regional Blue Cross Blue Shield plans. It serves as a precedent to drive additional positive policy coverage decisions.

And that’s played out in the field as we continue to engage. And we remain deeply engaged with a robust pipeline of regional plans. As we’ve clearly expressed in the past, and just to reiterate that we believe there’s plenty of opportunity to hunt in the regional plan territory. But that’s a larger plan, United, Anthem and others, Aetna and others will likely wait for us to secure Medicare coverage. Another big area, again, just in the last six weeks that we’ve noticed is that as we announced in March, the NCCN, National Comprehensive Cancer Care Network updated its clinical practice guidelines to include a, for the first time, a section on esophageal precancer screening that mimics the GI guidelines.

And we knew this was highly influential. It’s something that payers pay a lot of attention to. But what we’ve already learned just again in the field is that this has been very helpful already in our conversations with payers. We’ve already had multiple meetings where medical directors at regional plans acknowledged the importance of these NCCN guidelines and acknowledged that us having it would be helpful. So we really do believe just even on the early experience from just a few weeks into this that the NCCN clinical practice guidelines will really be a valuable tool in helping us drive positive commercial insurance policy coverage decisions in the coming months.

And on to Medicare. So just to remind people a little bit of history here, we previously at the end of last year submitted our complete EsoGuard clinical evidence package in support of a request for reconsideration of an existing Medicare LCD that seeks to cover EsoGuard and tests in this category based on existing coverage criteria that align with the American College of Gastroenterology Guidelines. And we really believe that this package is outstanding, it’s complete and provides unprecedented data. And as I mentioned, it really aligns with the criteria for coverage that are already in the existing LCD. And so we really remain optimistic about the outcome.

The next step will be issuance of a draft LCD proposing Medicare coverage. And we really, again, believe this is imminent. And we’re in good shape with plenty of runway to navigate this process before ultimately accelerating commercialization once we secure Medicare coverage, which again we believe is imminent. Moving on to our Embrace the Future campaign. Thought we’d give you a little bit of a highlight of what we’re doing in this space.

You know, historically our marketing efforts to the physician community is focused on And that’s appropriate because that’s the actual test that’s delivering the results and giving the positive and negative results that drive patient care. But there’s really an opportunity that we’ve decided to to really highlight the outstanding performance of not just EsoGuard but our cell collection in over now 30,000 patients to date, and to really contrast them to these legacy sponge on a string devices, which are decades old and sort of equivalent of a Brillo pad versus our, you know, soft balloon, modern soft balloon device. There have been publications out there for other tests. There have been some presentations, electric tests that seek to enter the space using the sponge on string devices.

So we thought that this was the opportunity to highlight to the GI community what the future of esophageal cell collection is. And so we’ve been put forth, as you can see on the slide here, a variety of marketing materials that demonstrate pristine safety record, really high patient satisfaction, very high success rates of over ninety five percent, ninety six percent. The fact that EsoCheck can be performed in less than three minutes or early down to less than two in our hands, and contrast that to the safety profile to the FDA recalls that have occurred with multiple sponge on string devices. And so this has been successful. Have a really positive experience at DDW highlighting this in a pretty assertive, let’s just say, campaign that highlights this contrast.

And we’ll continue to do that really to just remind the gastroenterology community in particular of the unique features of EsoCheck that we think ultimately play a critical role in the performance of EsoGuard and the data, the clinical quality data we’ve been able to generate. So with that, before handing it over to Dennis, just, you know, I’d like to summarize by saying we really believe we’re set up very well from a commercial point of view and based on our financial resources and balance sheet to really advance the EsoGuard through our efforts to gain Medicare and commercial coverage as well as through our new sales channels where we seek to drive revenue. And so we really do look forward to continuing to maintain our test volume and grow revenue over the coming quarters. So with that let’s pass the call on to Dennis.

Dennis McGrath, Chief Financial Officer, Lucid Diagnostics: Thanks, Lishan, and good morning, everyone. Summary financial results for the first quarter were reported in our press release that has been distributed. On the next three slides, I’ll emphasize a few key financial highlights from the first quarter, but encourage you to consider those remarks in the context of full disclosures covered in our annual report and on the form 10 Q. With regard to the balance sheet, Ash at the end of the quarter of March 31 was 25,200,000.0. Obviously, this does not include the net proceeds from the recent $16,000,000 Confidential Market public offering completed on April 11, which when added to the above would give us the pro form a cash of about 41,000,000 as we entered the second quarter.

You’ll recall that during the fourth quarter we refinanced our convertible debt, which is a five year note interest only at 12% with a dollar conversion price that’s held by long term shareholders. The fair value of the convertible notes at 32,800,000.0 at quarter end is really the only other substantive change from the previous reported balances at the December. The fair value increase reflects a mark to market quarterly adjustment in parallel with the common stock price increase of 82% from December 31 to March 31. The quarterly burn rate was 11,300,000.0, which is slightly higher than the average burn rates with the four preceding quarters of 11.1 part of which is due to a full quarter’s interest charge on the convertible debt, mostly paid in cash. The burn in the first quarter included 8,200,000.0 from ongoing operations and 3,100,000.0 from the quarterly management services agreement.

Shares outstanding including unvested RSAs as of last week are approximately 108,000,000. The gap outstanding shares as of March 31 of 84,400,000.0 are reflected on the slide as well as on face of the balance sheet in the 10 Q. GAAP shares do not reflect unvested restricted service awards. At present, PathEd continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 29% of the common shares outstanding. Although PAVmed no longer has voting control lucid.

PAVmed together with the board and management still have significant influence over lucid with more than 27% of the voting interest. As you’re aware, Lucia’s financing last year included the issuance of series of voting convertible preferred securities whereby the preferred shareholders are significantly incentivized to delay conversion of the preferred shares into common shares until 2026, namely the second anniversary from closing. If all of the preferred shares outstanding were converted to common shares as of today, there would be an additional 49,600,000.0 shares outstanding. With regard to the P and L, this slide compares this year’s first quarter to last year’s first quarter on certain key items. I trust you’ll review the information in my comments in light of the cautionary disclosure at the bottom of the slide about supplemental information, particularly non GAAP information.

With over 3,000 tests for the first quarter, we invoiced more than 7,500,000 and recognized revenue of approximately 800,000 largely based on the amounts collected during the quarter. Collections were lower sequentially and year over year mostly related to delayed cash collections from United Healthcare, who generally pays us at the Medicare rate within a reasonable timeframe, but had a national issue with rolling out a new system. Jack Z code for molecular pathology claims that delayed processing claims. They’re still working through the backlog with a sixty to ninety day time delay from the initial Z code assignment to final CPT code pairing and claim readiness. Additionally, the quarterly test mix included some larger testing events that involve Kaiser and we’re still working through claims and aisles with that insurer.

With new investors once again joining us for this call, it’s worth repeating what we have communicated in the past quarters about revenue recognition. He determined and how revenue is recognized at this point in our reimbursement journey is the probability of collection. Therefore, due to

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: the fact that we are in

Dennis McGrath, Chief Financial Officer, Lucid Diagnostics: the early stages of the reimbursement process means revenue recognition claims submitted to traditional government or private health insurers will be recognized when the claim is actually collected first when the patient report is delivered, invoiced and submitted for reimbursement. You’ll see in our 10 Q, this is called variable consideration, a jargon of gaps ASC six zero six revenue recognition guidelines are presently there is insufficient predictive data to reflect revenue when the test report is delivered to the referring physician. For billable amounts contracted directly with employers or through concierge medicine and that are fixed and determinable will be recognized as revenue when our contracted services delivered. Generally, that means when the report is delivered to the referring physician. Our non GAAP loss for the first quarter of 11,200,000.0 is slightly higher than the trailing April average of 10,800,000.0.

However, if adjusted for the 800,000 financing costs incurred in the quarter would have been modestly lower than the April average. The non GAAP net loss per share of $0.16 is lower sequentially as well as in each of the last four quarters with a trailing four quarter average of $0.20 per share. On a GAAP EPS basis, the first quarter non cash charges accounting for approximately 36¢ per share include 13¢ per share related to the Series D preferred dividend issued on March 13. With regard to our operating expenses, this slide is a graphic illustration of our operating expenses after eliminating non cash expenses for the periods reflected. Non GAAP operating expenses were flat sequentially and after normalizing for deal expenses and interest expense for both fourth quarter and first quarter are in line with the last six quarters.

Let me close with a few reimbursement highlights for the first quarter. In the first quarter, we build 3,034 tests reflecting just over 7 and a half million in pro form a revenue. During the first quarter, we collected 800,000 from traditional reimbursement claims of that amount collected about 20% was for claims submitted in the first quarter, about 60% from claims submitted in the previous quarter and the balance from claims submitted more than six months ago with the longest dated item roughly twenty one months ago. Of the claims submitted in the first quarter, about 60% have been adjudicated, 40% are pending. Out of the 60% that have been adjudicated, about thirty percent resulted in an allowable amount by the insurance company with an average of about $13.62 per test.

Important, it’s the note that the median was right at the Medicare rate nineteen thirty eight and one cent. Of those denied about fifty percent are either a being not medically necessary, B, require prior authorization or C required additional medical records. Additionally, about thirty percent were deemed to be non covered. So with that operator, let’s open it up for questions.

Conference Operator: Thank you, ladies and gentlemen. We’ll now begin the question and answer session. You’ll then hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star followed by the two. If you are using a speakerphone, please lift the hands up before pressing the speaker.

One moment please for your first question. And your first question comes from Mark Mazower from BTIG. Please go ahead.

Mark Mazower, Analyst, BTIG: Hey, good morning, guys. Thanks for taking the question. Hey, yes, I just figured I’d start with the Q1 volumes. Obviously, you did come in above the high end of that 2,500 to 3,000 threshold that you’ve talked about to get a large enough number of claims for payers. So that’s good.

Can you just give us a sense if weather was an impact in the quarter? And then as we think about Q2, would it be reasonable to think that that number might increase? Or is it still a little too early based on the timing of events?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, thanks. Thanks, Mark. So you characterized it correctly, as we said before, during this period, while we’re waiting for broader coverage, our goal is to sort of maintain to protect our cash burn and operating expenses to maintain a volume in this range that gives us sufficient volume to remain engaged with the regional payers and other payers. And that’s held up. One thing that Dennis hinted at, that was different, but the direct answer to your question is no, we don’t believe weather.

We have no evidence, let’s just say that weather was a factor. The one thing that Dennis hinted at, which may be worth emphasizing is that, you know, as we’ve made this transition with our sales team to have a subset of them focus on new sales channels, such as concierge medicine and increasing emphasis on contracted and revenue generating targets, that the proportion of the volume that is represented by these larger check your food tube events has increased. And that’s just sort of natural, the natural effect of that as those events are much more efficient. They allow us to kind of reach these numbers and draw out the number of claims submissions to the traditional plans. One thing that comes of that is they tend to be lumpier, right?

So if you have 1,000 tests that are being ordered by a whole variety of physicians versus a handful of departments where there’s a single payer typically for that, it tends to be a lumpier. And so that can make the revenue number a little bit lumpier. But overall, are pretty steady beyond that somewhat shift more towards the check for these events, the health care events. And I would still recommend that we sort of assume that we’ll be in this range until either we get Medicare and are able to drive a volume towards elderly populations, or as the commercial coverage as we start to get to broaden the commercial coverage, at which point we’ll look to drive volume beyond these levels.

Mark Mazower, Analyst, BTIG: Okay, great. And then, I think, Lishan, you indicated that you think the Palmetto GBA decision for Medicare coverage could be imminent. I was just curious if you could provide any color with respect to whether or not there is active dialogue or is this more of like, you had a conversation or meeting months ago and you’re just waiting for to hear something?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, that’s a good question. Yeah, no, we haven’t gone back and engaged with the multi X group. It wasn’t a meeting. We had multiple meetings and multiple engagements heading up to the submission and our expectations with regard to how long it would take them to process. This request for reconsideration is based on the details of those conversations.

As a reminder, so the substance of that is that what we submitted was a request to reconsider the previous LCD, which was written as a coverage LCD, but was not covered because there were no tests that had sufficient data at the time that was published two years ago. And so the work that’s required for them is very different and substantially less than a typical ULCD or even a typical reconsideration, which was would seek to change the coverage criteria or change other meaningful aspects of the LCD. We did not do that. We just said, here’s our data. Here’s a summary of our data.

We provided a detailed summary that, and frankly, a red line of the existing LCD that simply incorporates our data and asks that the test not be covered based on that. So because of that, because the group had already done all of the hard work that typically takes the periods of time, assessing the space and understanding the underlying clinical and scientific basis for all of this. That’s where our estimates as to what how long it would take them complete that process of reviewing our data and acknowledging that it aligns with the coverage criteria. And that’s why we still think it’s coming soon.

Mark Mazower, Analyst, BTIG: Okay, great. And then I’ll ask one more and then hop back in the queue. It was great to see the NCI sponsored study, which showed the value of EsoGuard in patients without symptomatic GERD. I’d be curious to understand what is next. You know, I imagine that additional studies or data would have to be presented in order to longer term potentially gain Medicare coverage.

And I think there was an NIH grant that was associated with that. So how are you thinking about investing in additional data? And what are your thoughts about timelines?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, exactly. So let’s make let’s make sure we put this. You got that right. Let’s make sure we put this in the right perspective. Right?

Right now, our goal is to target the thirty million plus patients who fulfill the more conservative American College of Gastroenterology guidelines, which require that the patient have longstanding heartburn plus three out of six risk factors. There’s plenty of room for us to hunt in that space. And our conversations with payers, frankly, including Medicare are limited to that, right? So the Medicare LCD criteria are identical to that more conservative criteria. However, there’s a growing understanding within the GI community that GERD heartburn is not as powerful a risk factor and also very hard to document accurately.

And the reason for that is a variety of things, but one of them being that patients are taking PPI medications that are effective at suppressing symptoms. And also the development of these precancerous conditions can blunt the symptoms. So there’s an increasing realization of that that was first manifested in the fact that the other big GI society, the American Gastroenterological Association, removed a requirement for GERD and just made it to be a risk factor. So that’s it’s that momentum within the GI community and sort of the understanding of the clinical situation here that in order for us to really have maximal effect on preventing cancer that we have to look at these asymptomatic patients. This NCI sponsored study was the first step towards that.

And it showed, as I said, two really critical things. One that EsoGuard works in patients who don’t have heartburn. We’re surprised by that, but it showed one hundred percent negative predictive value for EsoGuard. But perhaps the more important, at least as important data point was that eight percent prevalence. You might wonder if you remove heartburn that, okay, well, maybe that’s a lower risk population, you know, maybe they’re at three or four percent and the long term opportunity to justify testing in someone in a group of patients that have less pre cancer might be lower.

So that eight percent number is really right up there in similar range to those who have GERD. So that first box has been checked. You’re right, that’s not going to be sufficient for there to be expanded. The universal guidelines for all the guidelines to say that and frankly, for the payers to buy into that, that’s going to require more data. And that’s where the NIH study comes in.

So the group led by Case Western, but that includes multiple major academic centers received an NIH eight billion dollars NIH grant to replicate the data from this pilot study on a larger basis, I believe the number is 800 patients over the coming years. And that data will be the sort of definitive data that will drive the expansion of the clinical indications and therefore the expansion of the market opportunity. I don’t think we’ll need any more data beyond that.

Mark Mazower, Analyst, BTIG: Oh, wow. Okay. Thanks very much, guys.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah. Great. Thanks, Mark. Thank

Conference Operator: you. And your next question comes from Kyle Mixon with Canaccord Genuity. Please go ahead.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Good morning, Kyle.

Kyle Mixon, Analyst, Canaccord Genuity: Hey, guys. Good morning. Thanks for the questions. I wanted to talk about volume. That’s helpful.

On ASP, though, I know, like, you know, just collecting cash and, like, you know, it’s not a perfect system right now given the lack of reimbursement. But, you are I feel like you’re working with more concierge medicine, more contracting and the payment rate should be a little more like at least should be elevated I thought. And now it looks like it declined quarter over quarter, the effect of ASP. So what can just talk about mix in the quarter? Know you got the events and everything, but just mix and then how that flows into pricing and everything?

Again, like maybe how we should think about it for the rest of the year?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yes, let me have Dennis talk about that. But just to start off, just a reminder that the institution, particularly the concierge practice on the expanded targeting of the contract employer stuff that happened pretty recently, right? The shift in the sales team happened at the beginning of the year. We just started pulling in contracts in the past couple of months. And we’ve expanded the number of contracts where we’ve demonstrated that we can get concierge practices on board, but translating that into patients who are actually getting tested even with those sort of the lower bar to recognize revenue in those patients.

We’re still somewhat early in that process. So I think Dennis can probably comment on sort of that contribution to the current revenue numbers in the ASP is minimal for this quarter for the first quarter. Thanks, Dennis.

Dennis McGrath, Chief Financial Officer, Lucid Diagnostics: Yeah, that is absolutely true. Kyle, I don’t want to put too much undue weight on this topic because if we were in network, this wouldn’t even be a discussion point as it would not even affect our revenue or even our analysis of the business performance, maybe an uptick in our receivables, but not affecting our revenue of the accounting methodology. So the only issue is that we are still working through reimbursement and then central active here is still the in the storyline is Medicare approval. But with that, let me give you a couple stats. The two that I mentioned and you can use any AI generated data source, you’ll see that the z code issue has been a chronic issue with United, but in any case, both United and Kaiser in the last two quarters generated each 1,300,000.0 in billable amounts.

And specifically with United, the collection rate for United in the third quarter last year was 30 plus percent, 32%, I think it was, in the first quarter was only 10%. And that Z code issue related to a number of denials and resubmission and working through it. Kaiser on the other hand came about and that was about 10% of our volume in the first quarter, a little bit less than that in the fourth quarter. That 1.3 we have collected zero on and our teams are working through the Kaiser and other IDNs like it, we will be important long term. So it’s important we start filing claims, we engage with them, we start that process to get into their network, but that resulted in zero of our collections.

So there’s some of the stats related to the mix. But like I said, I don’t want to put a whole lot of weight on this topic simply because it’s not an indication of the performance of the business, it’s an indication of where we stand with the reimbursement journey. Maybe I could

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: just emphasize one other thing, Kyle, if you don’t mind. I know your focus was around concierge and employers and that is, again, there was not any meaningful concierge activity in the first quarter. But the IDN question is really an interesting one because they’re not traditional just sort of commercial payers, but they have health plans as well. And we have had, there’s a handful of them, the notable one obviously being Kaiser and a handful of others and our ability to engage with them as a result of the increased volume of activity within them has been positive. So we’ve had some positive engagements with the larger IDNs and we look forward to securing contracted coverage with them while we’re sort of in the same vein as we’re doing with the regional plans.

Kyle Mixon, Analyst, Canaccord Genuity: Okay, perfect. Was great. And can you actually just talk about the Medicare mix and how that’s trended recently and how you expect it to go going forward?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, we should always go ahead Dennis.

Dennis McGrath, Chief Financial Officer, Lucid Diagnostics: Yeah, so interesting question. I’m going to expand upon that. So we have about $19,000,000 total in our backlog that our reimbursement teams are working on collecting about 15,000,000 of that is in the last twelve months. And the Medicare percentage changes every quarter. We focus on this because of when we get final approval, you’ve got the twelve months of backlog that you can submit claims and that varies quarter by quarter and given that we are now awaiting the approval and our teams have been focused on Concierge medicine, the percentage of Medicare is lower.

It’s probably right now, ten, twelve to 15 percent of our volume, but obviously the goal there is forty percent when you think about the thirty million patients that are symptomatic that are part of the ACG guidelines and what we’re seeking for Medicare. Forty percent of that thirty million is our targeted audience, could be even higher than that, but that’s generally the way we think about it. And with Medicare approval, we already have plans in place and tactics that are ready to go to start hunting for that particular patient that is in the Medicare group. And our goal will be as quickly as possible to take that 12 to 15% up to 40% of our test volume and a growing test volume.

Kyle Mixon, Analyst, Canaccord Genuity: Perfect. And finally, I guess you’re alluding to partnering with a major health system to do a comprehensive e cigar testing program. Do you have a lot of those health systems Or is this more of like a pilot and you’ll try it out and you’ll see if others make sense to partner with?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: No, we have a good pipeline of those. But these are long lead time. I think this particular one we’ve been working on for about a year. We’ve had positive engagements with the gastroenterologist and what’s a bit interesting and we also, by the way, haven’t sort of announced every time we have a major health system. We’ve been careful to just sort of wait and see how they develop in terms of traction.

But what’s interesting about this one, as I said, we’ll provide a more detailed announcement once we have sign off to do so from the institution from the health system is that they have a very large concierge medicine practice. So this was the first time where we’ve gone into a health system and said we’d like not only to implement broad based esophageal pre cancer testing that includes EsoCheck and EsoGuard and work out exactly who’s going to do the cell collection and how we’re going to go target patients and how we’re going to communicate with the primary care physicians and all the things that go into building that kind of a program. This particular health system, and many they’re not unique in this has a large concierge medicine practice. So the work we’ve done in learning how to engage with concierge medicine practices over the last couple of months really paid off. And so this is an engagement that covers all of the above and it requires some slight tweaks to how it’s done within the concierge group versus the broader group.

And so it does serve as a template for the future, but we do have a significant pipeline of others that we’re working on. But they’re longer lead time. So we have to do this as long as well as the other the other paths to engaging employers, fire departments, and as well as individual and smaller practices.

Kyle Mixon, Analyst, Canaccord Genuity: Okay, that’s interesting. Thanks, Lishan. Thanks, Dennis.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, thanks.

Conference Operator: Thank you. And your next question comes from Mike Matson from Needham and Company. Please go ahead.

Kyle Mixon, Analyst, Canaccord Genuity: Hi, Mike.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yes, Glad to hear that you’re feeling positive about the MolDX. I guess not to sound negative here, but just, are they do you have any contingency plans or, I guess, what would you do if for some reason you don’t get it when you expect it? Well, I mean, I think the key thing is that we’re we’ve already sort of started. I wouldn’t say contingency plans really, but because we do expect to get it, but we are also we are building this parallel pipeline of concierge and employer contracted revenue to drive revenue. And know Dennis talked last time about our expectations with how that will register in the second half and cut our burn.

The most important mitigating factor is that we raised capital to get us through these milestones. And so we’re well positioned to handle any delays, but we really are expecting it. Time has come given the amount of work that we expect they needed to do in order to do the analysis and proceed with the draft coverage. Okay, got it. And then leads into my next question just on the concierge program.

So I guess, I’m not real familiar with how those things work, but how do the patients that are enrolled in those kind of hear about EsoGuard and decide whether or not that’s something they want to opt in for? And is there anything you can do to kind of market the tests or provide information to those people in those plans? Yeah. So that’s exactly what you described is exactly And we’re not inventing this from scratch.

There are other companies that have done this, most notably GRAIL that has been engaged with concierge practices for a while, and has sort of figured out the secret sauce to go from having a concierge practice that you’ve won over and you’ve convinced this is something that they should be offering to their patients on a cash pay basis along with other testing that is attractive to this particular patient population. And it’s exactly what you described. And that’s exactly what I was mentioning earlier that we are in the process of doing. So we now know that our team can go out and secure contracts. That’s clear.

Our talk track, the data that we’ve built up has worked very well in our ability to engage the physicians to say, oh yeah, this is something I’d like to offer my patients, my concierge patients. And now we are in the process of optimizing and kind of fine tuning our patient facing materials to target this particular patient population. And also our processes by which we work hand in hand with the practice to go out and let their patients know that this is available and why it might be valuable and who’s at risk and who would be the appropriate patients to do that. So that’s a very active process that we’re engaged with. And we’re making, as you might imagine, we have a pretty robust methodology for doing that from our traditional approach going targeting primary care physicians that include even helping them figure out how to go to their EHR and identify at risk patients and contacting them directly and proactively to suggest this.

So we have experience doing this. We’re just in the process of tailoring those processes and materials to the unique aspects of a concierge medicine practice patient. Okay, got it. Thank you. Great.

Thanks, Mike.

Conference Operator: Thank you. And your next question comes from Jeremy Perlman from Maxim Group. Please go ahead.

Mike Matson, Analyst, Needham and Company: Hi, How are you? Good. How are you? I’m doing well. So this shift in commercial strategy more towards the cash pay and concierge medicine, is that was that is that more short term to just bridge the gap to the potential Medicare coverage or is that market the cash pay country is large enough?

Have you seen that it’s worthwhile to continue that commercial push even after a potential approval for Medicare? At that point you would supplement, sales reps and target additional whoever ensures.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: So yeah, let’s be careful about words here because I don’t want to characterize this as a shift really, it’s really just supplemental alongside. It’s all of the above, right? We’re going, we’re targeting coverage and payments and revenue everywhere we can. So we’re on the on the traditional side, we’re engaging with regional plans that we believe we can secure even before Medicare, right? So we have Highmark, the Highmark coverage policy is helping us engage with others.

And we think that will continue to remain fruitful. The larger plans will wait for Medicare. Medicare obviously will wait for Medicare. But then on top of that supplementing that we’ve allocated resources towards areas where there are patients that can pay out And so that or institutions like entities like employers and fire departments that can pay on a contracted basis so we guarantee revenue.

So that’s what we’re doing now. We’re not shifting we’ve shifted some resources, but we’re not shifting our strategy. Overall, it remains on all of the above efforts while we’re pushing on the coverage side. Once we broad broad once we get Medicare coverage and that leads to broader commercial coverage, look, the vast majority of the opportunity here, the vast majority of those 30,000,000 patients are going to be within traditional plans. And that’s where we will put our resources.

But I wouldn’t underestimate there is a significant about on the employer side, about half 50% of the population are in self insured plans through their employer. So there’s still a lot of opportunity to grow there. And the concierge medicine sector is exploding. And given the attractiveness of the economics of targeting those, I suspect we’ll continue to do so. But once we have broad coverage, they’ll tell you the more traditional pathways are going to be are going to will become dominant.

Mike Matson, Analyst, Needham and Company: Understood. And then just one last question from us. You know, there’s some legislative efforts underway in some states. I think it’s even been an act in some states to cover biomarker testing, and particularly in cancer patients. Does that have any effect on your business?

And are you helping with that? Is that how would that?

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, we’re actively engaged in that. We’re helping with that. We are on active and asthma med and other groups that are seeking to push those that New Jersey just passed one just across the river from us. And and there are examples where that can be helpful. But there’s always there’s generally a fair amount of hair on those.

You start with a with a with state legislation that mandates this, but translating that into actually forcing payers to pay for your test takes time. There are larger advocacy groups that are sort of helping to narrow that to make that more straightforward. So we’re actively involved in that. But we’re not assuming that that’s going to be the panacea by any stretch. It’ll be helpful, but it won’t be the panacea.

Mike Matson, Analyst, Needham and Company: Understood. All right. Thank you for taking my questions.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Thanks, Jeremy.

Conference Operator: Thank you. And your next question comes from Ross Osborne from Cantor Fitzgerald. Please go ahead.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Hey, Thanks for taking my questions. Good morning. So looking at your growing body of clinical utility data, would be curious to hear feedback from physicians on what they’re excited about from recent publications and how you’re now feeling about general awareness of ESA from the clinical community? That’s a great question. It’s not something we talk about enough probably.

The clinical validity data is sort of a sexier part of your clinical evidence package. But what’s exciting is that we have the sort of full chain of evidence right now. Have evidence public and all of these are published that physicians use the EsoGuard test appropriately to triage patients who are positive to endoscopy and negative to not getting any further testing. The concordance of that is nearly one hundred percent. We have published data that shows that when patients have a positive EsoGuard test, there’s eighty five percent compliance with them getting the endoscopy, which is really a high number relative to other tests where you triage patients to a more invasive test.

And notably, we haven’t highlighted a whole lot, but it’s double what the compliance rate is with an endoscopy without EsoGuard. So if somebody physician just says, I’d like you to get an endoscopy, only about forty percent of the patients will do that if they have a positive EsoGuard test, the likelihood of them completing that is double. And then the data that shows that when you when the patients do get in their endoscopy, the yield from that endoscopy in terms of the number of positive pre cancers that are detected is 2.5 three fold. So all three of those are really important. They’re particularly important for different target population, different physician groups.

So the primary referring docs want to know that they understand how to use And then at the very end, the gastroenterologists are excited about the fact that their endoscopies are going to have a higher yield, they’re going find more positive patients that they will put through surveillance and then interventional ablation if needed. The awareness, excuse me, been increasing and good. It’s something that you know, the small company always you always have to work hard at to get attention. I think the was our DDW meeting is the biggest gastroenterology meeting in the world.

It’s a massive meeting this year. Was in Seattle. And we had a very strong presence there this year. We had a very active booth. We had a second area that I showed in the slides where we were able to talk about the advantages of how great EsoCheck works.

And, you know, you could tell just from the general traffic and the general engagement that there is much, much better awareness and understanding of the availability of this testing. So that’s all been positive. We look forward to very soon having being able to release data that corroborates this and will make our efforts will strengthen our efforts in this area, which is we’re in the final stages of collecting a very large 12,000 patient experience with EsoGuard and EsoCheck testing in the real world, a real world experience that provides really outstanding data on how EsoCheck is performed as well as on the types of patients that are being tested and how that’s playing out in the real world. And that kind of real world evidence is also often very useful, particularly when you have such a large sample size. So that will be coming soon as well.

And that’ll help with those efforts. Those efforts are going well. Great. Glad to hear it. Thanks for taking our questions.

Great. Thanks, Russ. Great question.

Conference Operator: Thank you. And your last question comes from Ed Woo from Capital. Please go ahead.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Yeah, thanks for taking my My question is, what’s your visibility for large testing events for the rest of the year? And is there any seasonality to them? The pipeline for the large testing events is great. We have a deep pipeline we’re scheduling months in advance. Our goal, of course, I think we’ve said this before, our goal is transition those larger testing events, which still are dominated by fire departments, but we’ll be increasingly including self insured employers to have those be contracted in advance.

And so our team, we have now a dedicated team that’s working on working with the fire departments on grants and other ways to make sure that when we do these larger events, that we get paid without having to go through the traditional claims process. And the visibility is also been great. We have just about every week, there’s local media coverage, particularly with the fire departments. We get really strong local media coverage on testing of fire departments and firefighters. And so there’s increasing visibility.

But the key aspect there is really transitioning those high volume events to months which where we are that we have contractually guaranteed payment in advance. Great. Well, thanks for answering my questions, and I wish you guys good luck. Thank you. Yeah.

Thanks, Ed.

Conference Operator: Thank you. And there are no further questions at this time. I will now like to turn the call back over to Doctor. Lee Sean Eclogue. Please continue.

Dr. Lishan Aklog, Chairman and Chief Executive Officer, Lucid Diagnostics: Great. So, hey, thank you all for your time and attention this morning. Thanks for all the great questions. Hope you got a sense that we are feeling really confident and like we are really well positioned to capitalize on this opportunity that we have in front of us with this regard that there’s a variety of things that are imminent. Believe Medicare coverage is imminent.

We believe we’re going to continue to get momentum with the regional commercial insurers and that the larger insurers will follow with Medicare. When we have really good early signs with the cash paying contracted sales channels, Those efforts then began in the first quarter, we believe will still will actually start reflecting in our revenue numbers over time. And I’m happy that we have a stronger balance sheet to be able to navigate this process over the coming quarters. So with that, again, your time. We encourage you to keep abreast of our progress via our news releases and these calls as well as on our website and through social media on Twitter and LinkedIn.

So thanks again, everybody, have a great day.

Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you very much for your participation and ask that you please do disconnect. Have a great day.

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