Aspira Women's Health Inc. (AWH) on Q2 2021 Results - Earnings Call Transcript
Operator: Good afternoon ladies and gentlemen. And welcome Aspira Women's Health’s Second Quarter 2021 Conference Call. My name is Shimoli and I will be your coordinator for the call today. At this time all participants are in a listen-only mode. Following management’s prepared remarks we will open the call for your questions. As a reminder, this conference call is being recorded today. Leading the call today are Valerie Palmieri, President and Chief Executive Officer; Rob Beechey, Chief Financial Officer; and Kaile Zagger, Chief Operating Officer; and Dr. Lesley Northrop, Chief Scientific Officer; and Dr. Elena Ratner, Global Chief Medical Advisor, Clinical and Translational Medicine. After the prepared remarks, we'll open the call for Q&A. Before we begin, I would like to remind everyone that statements made during this call, including the Q&A Session relating to Aspira’s expected future performance, future business prospects or future events or plans are forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those anticipated due to the impact of many factors beyond the control of Aspira. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise except as required by law. Participants are directed to the cautionary note in today's press release as well as the risk factors set forth in Aspira’s annual report on Form 10-K filed with the SEC. For a description of factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. At this time, I would like to turn the call over to Valerie Palmieri, President and Chief Executive Officer. Valerie?
Valerie Palmieri: Thank you, operator. Good afternoon, everyone. And thank you for joining us today. This afternoon, we will review our second quarter accomplishments, financial performance, as well as provide an update on our overall strategic developments. Our end in mind is to truly transform women's health, starting with ovarian cancer. Our initial goal is to eradicate late-stage detection of ovarian cancer and ensure that all of our solutions will meet the needs of women for all ages, races, ethnicities and stages of disease. We seek to develop a lifelong relationship with each patient from puberty to cure, ensuring each woman has access to the best-in-class diagnostics. Let me begin with a review of our core business. We are pleased to announce the growth of our revenue and volume despite COVID-19 restrictions. We reported second quarter OVA1 only revenue of $1.72 million, an increase of 136% over prior year and 21% sequentially. Our OVA1 product volume was 4,553 tests, which is up 85% compared to the same period last year and up 21% sequentially as well. This impressive outcome was driven primarily by growth of our customer base where strong commercial execution was bolstered by increased access to our physician customers as well as a reflection of the initiation of our salesforce expansion in Q2. Regarding our decentralized platform Aspira Synergy, we are making progress and the interest level is very high, as we have several deals in the pipeline, more to come on this front. I will now provide an update on a number of strategic developments regarding our pipeline, payor and evidence development, government affairs, any additions to our senior leadership team. Before I move on to the pipeline, we have a significant paper that was just published this week, and we'd like to discuss upfront the paper titled Salvaging Detection of Early-Stage Ovarian Cancer Malignancies When CA125 Is Not Informative, has been published in a special ovarian cancer edition of diagnostics. It is a 2,300-patient retrospective study to evaluate the performance of over one and a cohort of patients with low-risk serum CA125 values. This study demonstrates the ability of over one to identify early-stage disease while CA125 reflected 0% sensitivity due to the low-risk cutoff. This paper further validates and supports the superior early-stage detection of ovarian cancer with OVA1 versus the current standard of care in a large population. Dr. Ratner will be discussing this in detail later in the call. Now starting with our pipeline, I will review our EndoCheck breakthrough device program application. We continue to have a positive dialogue with the FDA regarding our planned EndoCheck product. In addition, we are very pleased to announce that we have signed a specimen collaboration agreement with our second pharmaceutical company Opdivo. Opdivo is pursuing new treatments for endometriosis pain. We believe this specimen collaboration will advance our overall endometriosis research. Having two pharma companies contribute specimens demonstrates the critical need for diagnostic. This collaboration between Opdivo and Aspira represents a mutual dedication to create solutions, to help the six to seven million women suffering with endometriosis by radically improving the time to diagnosis as today, it may take seven to nine years for a diagnosis. EndoCheck will allow patients to be treated appropriately and effectively without the need for unnecessary surgery. We are in very productive communications with the FDA regarding our breakthrough device program application. Importantly, the FDA has acknowledged that there are many compelling reasons why this type of device is needed for both the treating physicians and for patients. The FDA has indicated they are very interested in continuing to work with Aspira on EndoCheck and Aspira will be continuing our discussions with the agency on breakthrough device designation. I am now moving on to our second pipeline update regarding our OvaInherit product and collaboration with Dana Farber Cancer Institute, Harvard. We are making very positive progress on our product collaboration with Dana Farber Cancer Institute, which we disclosed in the first quarter. We expect to have data at the end of third quarter, Dr. Northrop will discuss this further in her section. Regarding our payer and evidence development, we have three major updates. Number one, first is the coverage of OVA1 in the AIM Specialty Health Laboratory Medicine Clinical Guidelines. OVA1 is now considered medically necessary according to the AIM Specialty Health’s Clinical Appropriateness Guidelines. Notably they have not included a competitive product called ROMA in their guidelines and consider it investigational and experimental. AIM is a member of the Anthem Blue Cross Blue Shield family of companies, which promotes optimal care through the use of evidence-based clinical guidelines and real-time decision support for both providers and their patients. AME is a wholly owned subsidiary of Anthem serving more than 50 million members across 50 states, including DC and us territories. This represents an opportunity for an incremental 50 million increase to our total covered lives. We have commenced the targeted program to obtain contractual coverage with all of the AIM member plans. Moving on to number two, we also recently obtained coverage determinations from Highmark Delaware, as well as the New York with contracts pending for both. In addition, we continue to gain traction with Medicaid and are now being paid by California Medicaid. Our payer adoption strategy is, making significant progress, and we believe inclusion in the AIM and Evercore guidelines gives us further validation and credibility in our discussions with all health plans. Moving on to number three on the evidence development front, we released our first analytical and initial clinical validation performance for OVASight at ASCO 2021. OVASight is a third generation OVA technology and is a laboratory developed, blood-based, pelvic mass risk assessment test for ovarian cancer and a low prevalence population. It was developed to increase specificity while maintaining high sensitivity with early stage and allow for conservative management of women with a suspected benign mass who are not recommended for surgery. A total of 596 patients were tested from real-world patients to validate the OVASight diagnostic algorithm. Validation data demonstrated 91% sensitivity, 89% specificity, and a negative predictive value of 99.6% and a low prevalence population of 3.8%. In addition, clinical sensitivity for all stages of disease and more importantly, early state sensitivity was significantly better than CA125 as well. I am now moving onto the government affairs front. We are continuing to gain momentum post our congressional briefing. The company is actively engaged with Congress and several advocacy organizations, including healthy women, the National Ovarian Cancer Coalition and the Ovarian Cancer Research Alliance, and an effort to increase awareness about OVA1, ovarian cancer and encourage legislation that provides financial support for additional trials. This also includes starting the discussions on the trial requirements, for adding the company's ovarian cancer technology into guidelines, such as the U.S. Preventative Services Task Force, which would support the company's objective to launch a product that is more broadly applicable as a screening tool. The company will also be presenting to a congressional committee in September focused on women's healthcare access issues. In addition, the company is also working on the Medicare innovation technology initiative to ensure coverage and reimbursement immediately following breakthrough approval for any of its products. And lastly, we have made significant addition to our leadership team, Laura McPadden joined the company as Head of People and Culture. People are the core of our innovation and growth engine. Laura joins us with over 25 years’ experience leading human resources and talent engines and providing strategic guidance for employee relations, performance management, talent acquisition, and organizational design. Before I turn the call over to Kaile to provide a commercial update, we are reaffirming the investment in sales and marketing and our investment in our pipeline. Our target launch date of OVASight is on track for fourth quarter of 2021 launch. This test initially will allow physicians to assess benign pelvic masses, not recommended for surgery, which much better performing technology versus CA125. While our next revision of this technology will allow a mass to be monitored over time. This new test will leverage its high negative predictive value to assist in rule out as well as its high PPV to assess risk of malignancy. In summary, we continue to work toward our overall strategic goal, which was to emerge from the pandemic stronger, and we believe we will continue to accomplish this irrespective of any resurgence in the COVID pandemic. We have had a faster than expected recovery with a limited sales force coming into Q2 as well. Our team is now stronger on all fronts with a solid financial position plus improved price appreciation year-over-year and our development pipeline has been ensured with our third-generation product expected to launch in Q4 2021. We are well-positioned to invest, to grow and to drive adoption and most importantly, save lives. I would now like to turn the call over to Kaile Zagger, our Chief Operating Officer. Kylie?
Kaile Zagger: Thank you, Valerie. As Valerie mentioned, we are pleased with our revenue and volume progress in the second quarter, I will now provide an update on our overall commercial progress. We are continuing to execute on our overall commercial strategy with meaningful additions of talent based on the complexities of the patient journey through the health ecosystem, coupled with the convoluted presentation of ovarian cancer, we have expanded and are deploying across our three direct sales channels and supported these three verticals we have invested additionally in critical support functions that will allow for rapid acceleration and adoption of our products into the clinical care pathway. Those supporting functions are commercial activation, enterprise integration solution and business analytics. We have aligned our strategies with the consolidation of the health system and providers and the transition to the digital health in preparation for our much-anticipated launch of OVASight. We are now also very focused on the establishment and development of our marketing and customer experience organization. We are thrilled to welcome an acclaimed marketing executive Jennifer Van Aken to the organization to build and lead our marketing organization. Jennifer comes to us with deep CPG, healthcare and private equity marketing experience. And in under just two months has made significant strategic progress, commercial achievements and key talent acquisitions within the organization. Starting with our core vertical, it has strong performance in Q2 with our three key metrics outperforming historic performance of the company. The team delivered unprecedented record volume and total customers. The total number of ordering physician in the second quarter was 2,951, an increase of 65% over prior year and 14% sequentially. Our new customers were up 69% compared to the same period last year and up 7% sequentially Q2 was the strongest quarter. The company had seen across all drivers, sessions , revenue and ordering physicians. Regarding our health systems team, which we originated in March of this year, we had scaled it to six sales representatives as of July, and they are establishing a deep funnel of health system that we are actively working with to transition the standard of care and bidirectionally integrate our solutions into the electronic system, which should allow for the ease of ordering and standard of care adoption across the network. We expect to be able to announce wins in this area in the third quarter. And lastly, our specialty force focused on our decentralized platform Aspire Synergy, has executed a second agreement since product launch in Q1. This agreement will be announced shortly. In addition, we are in final stages of approval with the third agreement, which is one of the largest health networks in the United States. We believe that arrangements like this will form the fundamental building blocks to truly change the standard of care. Finally, the fundamental key to our strategy is the commercial activation activities that are fueling our Salesforce support functions, namely marketing, business analytics, commercial activation, and the insourcing of enterprise implementation and solutions team. I will now review high-level achievement of each of these teams. First, our marketing function has implemented a myriad of new commercial strategies, including the launch of multiple programs that reached over 300 new physicians in seven weeks, double the span of our digital and social media reeds and develop cutting edge campaigns that penetrate the Medicaid and Medicare market adoption resulting in four large, new ordering physicians with practices focused on Medicaid. We believe increasing awareness around ovarian cancer signs and symptoms. And the fact we have strong differentiators for early detection, specific ethnicities and insurance coverage are all critical factors in driving adoption at the provider and patient awareness level. Visits to our website have more than doubled from a year ago. And followers on Aspira’s major social media platforms have increased year-to-date by double digits. In addition, we were present at ACOG and SGO held virtually in 2021, and we'll be presenting our OVASight abstract at ASCO in June which will be further discussed by Dr. Northrop later in the call. Our enterprise implementation and solutions team have rapidly expanded and it's comprised of highly talented system engineers and industry experts in the digital informatics space. This team is working closely with our core synergy and health system vertical to build bi-directional integration interfaces, to ensure we are well-positioned to displace the standard of care and move the market towards a better solution for early detection of ovarian cancer. In summary, we have invested in our growth strategy by constructing deployment models, formulating very strong, go to market positioning and are now well positioned to capitalize on acceleration and adoption. We have increased the size of our growth organization by 75% since January of this year and continue to scale in preparation for the OVASight launch in Q4. Specifically regarding sales. We started the year with 15 sales representatives in our core vertical, and we now have 35 sales representatives across three sales verticals. Within these verticals, the majority of the representatives to name 20 of them were hired in the last three months. We truly believe we are positioned to accelerate adoption across the healthcare continuum while driving growth and delivering a stellar customer experience. We have an innovative portfolio of products that solve for an unmet need for large population of women. And we are now prepared to mobilize and change the standard of care. I would now like to hand the call over to Dr. Elena Ratner, to provide an update on our momentum to becoming the standard of care and driving awareness of our technologies and its impact on early stage risk detection of ovarian cancer specifically.
Elena Ratner: Thank you, Kaile. As a physician, education, awareness and adoption are key to changing the standard of care. We have had several milestones in this quarter. We continue our utmost commitment to provide awareness and education. We have hosted multiple successful, highly attended general educational series, and a currently launching GYN and GYN oncology advisory boards directed at better management of pelvic masses and approvement of ovarian cancer, early detection. Regarding clinical studies under my leadership, we are continuing to recruit more academic sites to support both the clinical validity and utility of our tests. We have also launched our physician initiated research program for healthcare system. This program provides nominal funding for projects that helps fuel clinical implementation and adoption of ovarian cancer risk assessment tool and allows us to continue to expand our data repository. I'm incredibly excited about the direction our clinical studies have taken, and we are continuously building our study programs to strengthen the data around our products. And lastly, I would like to report a major update on significant paper, which was accepted and published as of August 10. It is an evaluation of the performance of OVA1 in a cohort of patients with normal CA135 values that was accepted to the special ovarian cancer edition of Diagnostics under a revised title, “Salvaging detection of early-stage ovarian malignancies when CA125 is not informative.” In this publication, we analyzed 2,300 patient data from previous collections with a prevalence of 4.5% where CA135 levels were in the normal range, depending on the age of the patients, which is less than 67 units per milliliter for premenopausal women and less than 35 units per milliliter for postmenopausal women. Of most importance would devastate it, that in those women OVA1 detecting – detected over 50% of ovarian malignancies in premenopausal women that CA125 would have missed. OVA1 also correctly identified 63% of early stage cancers missed by CA125. As a standalone test, CA125 misses more than 50% of ovarian malignancies, they can be detected by OVA1 in both early stage cancers and pre-menopausal women which have a much better long-term survival if detected early. Speaking as a clinician, the who constantly loses women till to ovarian cancer that is diagnosed at advanced stage. Finding and treating this cancer early will change the paradigm of this disease. I would now like to hand over the call to Dr. Northrop to provide an update on our innovation pipeline.
Lesley Northrop: Thank you, Dr. Ratner, I would like to provide an update on our overall innovation pipeline. We continue to build out and support our current products with publications focused on clinical validity and utility of our current product OVA1plus. More specifically, we have two recently accepted publications, one which Dr. Ratner just discussed. And the second, which is an update on our OVA1plus technology. The paper was accepted to the International Journal of Biological Markers titled a two-step Multivariate Index Assay improves the accuracy of ovarian cancer risk assessment for women within adnexal mass.. It is expected to be published at a future date. This paper highlights an orthogonal laboratory reflux called OVA1plus that benefits patients who are not readily stratified as lower high risk using OVA1plus alone and classifies as intermediate. The Overa is employed in these cases that allows for a higher specificity. This study was validated over a 1,000 perspectively collected retrospectively analyzed serum sample dataset and a prevalence of 22% and further verified using an independent data set of 207 with a prevalence of 40%. 35% of the samples were defined as intermediate risk by OVA1 tests and reflex to Overa, which eliminates 58% of the false positives and improve the overall specificity to 72%. Overa reflex testing of samples, which have an OVA1 intermediate risk score decreases false positive rate, thereby reducing the number of unnecessary surgical referrals without notable reduction in clinical sensitivity. We expect that we will have more publications to announce in the coming quarters. I would now like to provide an update on our upcoming products and enhancements. First, let me reiterate my optimism for EndoCheck. As Valerie mentioned, we are having a productive dialogue with the FDA, while we cannot disclose their sensitivity and specificity of the test performance, while FDA discussions are ongoing. We are pleased with our data relative to the current standard of care laparoscopic surgical assessment. We are working on updating our submission to the FDA based on their guidance meet breakthrough designation, doing endometriosis is an irreversible debilitating disease. We are also excited to boost our specimen bank of endometriosis cases as diagnosed by laparoscopic surgical assessment with the collaboration agreement we just announced with Aspira as it will assist in our future refinement of the EndoCheck product. I would now like to provide updates on OVASight. We continue to be on track for our accelerated launch of OVASight thus far. The analytical and initial clinical validation of OVASight performance metrics was presented in an ASCO poster presentation on June 4 of this year. The accepted abstract presents data demonstrating the initial clinical and analytical validity of Aspira's oversight blood-based biomarker test for ovarian malignancy risk assessment in all women within adnexal mass. Samples collected from real-world evidence studies with a low prevalence of cancer 3.8% were used to validate the algorithm. This third-generation technology, which is a laboratory developed test, will provide clinicians with a high negative predictive value to provide confidence in planning a suspected benign mass monitoring plan as well as a greater positive predictive value to increase confidence in risk of malignancy and next steps on clinical management. This product is expected to be available in Q4 of 2021. In addition, peer-reviewed publications on both the analytical and clinical validation findings are scheduled for Q4 of 2021. I would like to now give an update on OvaInherit. We are working on building a robust recruiting program in high risk populations, such as family history, personal history, and or germline carriers of highly prevalent hereditary breast and ovarian cancer genes, as well as diverse populations across racial ethnicities to increase their study cohort, to support the OvaInherit test design. Our proof-of-concept study with Dana-Farber Cancer Institute in Harvard is progressing nicely and we expect have preliminary data at the end of Q3 2021. The goal is to combine our high sensitivity performance as reported with OVASight with the high specificity by detecting microRNA and serum to provide multi-omics approach that can help eradicate late-stage ovarian cancer detection. Multi-omics technology will allow us the opportunity to develop the diagnostic and eventually screening technology that we desperately need to increase a woman's survival rate when faced with an earlier diagnosis ovarian cancer. Now moving on to clinical studies. One of our primary efforts in innovation these past two quarters is to enhance our clinical studies and enrollment, despite COVID-19 restrictions. We are continuing to recruit larger academic institutions and clinical practices to allow us to collect from a comprehensive cohort of women across all races and ethnicities and continue to enhance our product development pipeline. We continue to develop data metrics for these large academic institutions through our clinical studies, as well as already established technologies validated for the detection of ovarian cancer. In summary, with our product pipeline, you will begin to see we are building a lifetime relationship with the patient. This is our OVA360 approach and providing a circular loop of products to better women's health. We are developing products that can start as early as menses with EndoCheck allow early detection risk of hereditary cancer with genetic hereditary cancer testing, monitoring of high risk women with OvaInherit. And until later in life in a population of background risk of 1.3% for ovarian cancer would know heritable detection OVA1Plus and OVASight. And look to the future in developing residual risk assessments as well as reoccurance monitoring and eventually therapeutic clinical diagnostic testing. Innovation is the core of our strategy. Our goal is to invest and accelerate our evidence development and pipeline and surround it with wrong IP as we maximize shareholder value. I will now turn it over to Bob for an update in our financials.
Rob Beechey: Thank you, Dr. Northrop. We reported second quarter OVA1 revenue of $1.7.2 million, an increase of 136% over prior year and 21% sequentially. The 136% product revenue increases permanently due to the lower number of tests performed in 2020 due to COVID-19 as well as an increase in OVA1 average revenue per test in 2121 compared to the prior year. The revenue per OVA1plus test performed increased to approximately $377 compared to $375 for the first quarter. The year-in-year price increase was 28% compared to the prior year second quarter of $295. This increase was primarily driven by an increase in payments by contracted payers and improved collections. While we've made progress with payers in the second quarter, we take a conservative approach to revenue recognition and do not recognize the revenue until we establish a track record of payments received . Gross profit margin of over OVA1plus was 52% in the second quarter compared to 54% in the first quarter of 2021, The decrease was primarily driven by non-recurring costs associated with a switch in our kit assembly vendor, which will result in a lower cost per unit in the future. Gross profit margin on OVA1plus increase from 37% to 52% compared to the second quarter of 2020, as we leverage our fixed costs with the increased volume. Research and development expenses for the three months ended June 30, 2021 were $1.47 million an increase of $599,000 or 69% compared to the first quarter of 2021. This increase was primarily due to clinical utility and product development costs related to OVASight, our third generation as well as investments in bioinformatics, Aspira Synergy and consulting expenses associated with EndoCheck regulatory clearance. The second quarter of spend represents an increase of approximately $1 million compared to the second quarter 2020 spend, as we've made investments in personnel focused primarily in OVASight and EndoCheck. Sales and marketing expenses were $4 million for the three months ended June 30, 2021, an increase of approximately $900,000 or 29% compared to the first quarter of 2021. The increase was primarily due to increased personnel and consulting costs as we execute upon the commercial strategy previously discussed. The prior sales and marketing expense of $1.7 million was depressed due to lower travel and entertainment and commissions, and did not reflect the current investments we're making in market awareness and the sales team additions. General and administrative expenses were $3.3 million for the three months ended June 30, 2021, an increase of approximately $793,000 or 32% compared to the first quarter of 2021. The increase was primarily due to an increase in headcount and personnel expenses, as well as stock-compensation expenses. We incurred $1.9 million in general and administrative expenses in the prior year quarter. We ended the second quarter with approximately $53 million in cash. Cash used in operations in the second quarter of 2021 were $6.4 million, compared to the first quarter of 2021 of $5.2 million. The increase was driven by investments in the sales team, marketing and promotional activities, as well as research and development spending focused on EndoCheck. I will now turn the call back over to Valerie.
Valerie Palmieri: Thank you, Bob. Before we open up the call for Q&A, let me restate our optimism for building the company for sustainable growth for the near term and the long-term. In parallel, we are executing on our larger mission to serve the 20 million women in the U S starting with ovarian cancer risk assessment, pelvic mass monitoring, and eventually tackling the largest disease endometriosis. Keep in mind, our hereditary ovarian cancer monitoring test OvaInherit will be incremental to this market. And this product will be for women with and without a mass. Ovarian cancer accounts for more deaths than any other cancer of the female reproductive system. And as the only gender specific cancer with greater than a 50% mortality rate. Our work in products are at the forefront of changing the standards of care and detection of ovarian malignancies. We believe we're helping close the gap in detection and more importantly, survival for women. In the near term, we believe OVA1plus with our diversity differentiation and genetics will become the standard of care for personalized pelvic mass risk assessment for ovarian cancer. And we are now moving forward with the launch of our third generation OVASight technology for benign mass management in Q4 2021. For the longer term, we are moving forward with our plan launch of EndoCheck for endometriosis, and lastly, OvaInherit for high-risk genetic predisposition monitoring. Our end in mind is the incorporation of proteins, genes and other modalities to detect gynecologic disease, which cannot be detected via traditional biopsy. In time, our goal is to become the liquid biopsy standard for these diseases, inclusive of all ages, stages, and most of all ethnicities. With our enhanced team, strengthened financial position and our robust portfolio, we could not be more confident across the business. It is now time that all women of every race and ethnicity receive the best care possible and we are proud and excited to make that happen. We are now happy to open up the call for Q&A and answer any of your questions. Operator?
Q - Brian Weinstein: Hey guys. Good afternoon.
Valerie Palmieri: Hey, Brian.
Brian Weinstein: Can you hear my questions? How are you?
Valerie Palmieri: Pleasure.
Brian Weinstein: Yes, I certainly have going on. And so trying to come up with a couple of questions that kind of are targeted, but on OVASight oversight obviously the Q4 launch is great. Can you talk a little bit about how you're preparing your organization for that? I think I heard something about a digital health program there. Can you talk about what that is? And then also as it relates to OVASight, how should we be thinking about a price point here, I think you had made some comments about that previously, but just one of the kind of confirm kind of the price point there in your plan for payer outreach on that pro on that product.
Valerie Palmieri: Sure. Thank you for the question. So I'll start and then Kaile chime in. So with OVASight because the market size OVASight is three times out of OVA. So we are launching OVASight in all of our verticals in terms of the GYN, as well as the hospital market in the future. It'll also be a synergy product as well. So our go to market with this, and we're also I want to caveat with this COVID environment. We have gone with a parallel path, both with accessing the physicians, which is actually going fairly well and also what I want to say is a virtual approach as well. So it's a two-fold approach. What we're really pleased about the progress we have brought in some, I want to say outside consultants from a creative standpoint, to really help us launch this from a continuing medical education to ensure the reps have the right information in their tool belt to also, I want to say doctor to doctor, because this is really, we believe the answer the doctors have been looking for in terms of how they have been wanting to use OVA. But I'm going to have Kaile go into details in terms of the physical launch and how we are ready in the sales team.
Kaile Zagger: Hi, Brian. Thank you for the question. So I'll go into a little bit of the commercial design of what we've constructed in preparation for the OVASight much. We have, as we mentioned, I increased our commercial organization, the sales folks specifically by 75% since January. And this is really to address the fact that OVASight is going to tackle the entire continuum of the patient with pelvic masses. So one in five women will have a pelvic mass in their lifetime, and we now have a solution to address the beginning of this pelvic masses when they might be benign and not scheduled for surgery all the way to the most complex. As Valerie mentioned, the total addressable market goes up significantly when we're looking at all of those pelvic masses and in order to make sure that we have the proper footprint and commercially we have really focused on putting salespeople where it matches the ICD 10 diagnosis. So we've studied exactly where those high volume of pelvic masses exist. We have been very focused on placing sales reps in those specific geographies. And then to couple on top of that, we are hard at work on a digital strategy to ensure proper education of not only the providers, but the patients on pelvic mass awareness in those respective areas. So we've got very targeted campaigns and approaches, whether it's through web or social or web search and Google to ensure that we've got proper education and that we're effectively priming the market before lunch. I hope that answers your question, but I'm happy to take any further.
Brian Weinstein: No, that's great. And then just on the payer outreach side there for OVASight, how will payers, how are you guys working with payers here to generate an option?
Valerie Palmieri: Sure. So OVA1is really grease the skids with pears Brian. So as we just received the AIM guidelines, it opens up the door for OVAwatch or OVASight in a big way. So we're starting with a PMA code. We basically have applied for a PMA code and then we will also be applying for Medicare coverage and going down that road in parallel with the launch. In addition, we already have started our perspective study for clinical utility. So we've got the – I want to say the IRB in process as well as we really want to do things in parallel class paths so that we can get reimbursement as quickly as possible. So I think OVA is really greeting skids. We're already priming the pump and getting the – I would say renegotiations on the contracts where we have contracts, the inclusion of OVASight into those contracts. And as we brought on Board Greg Richard from the managed markets perspective, we are adding resources because between the AIM and now OVA site, we really have quite a bit of work on the managed care side.
Brian Weinstein: Great. Thank you for that. And then on the synergy side, I'm just curious kind of what constitutes a large account. I mean, how do you guys bifurcate that market figure out, what's an appropriate synergy accountant. Can you remind us on the economics for you guys there versus having these tests run in your own lab and then I guess that's it on the synergy stuff, and then I'll have one more after that. Sure.
Valerie Palmieri: So let me start. In terms of the size of the account terms of customer segmentation, what we really are looking at is 100 plus physicians being a very large health network. And these health networks is not just GYN focused. There's some health networks that are actually primary care and GYN. So we're looking at a 100 plus physician health networks. We've closed one, which we are actively implementing right now. And we have – we're close on several others. We were hoping actually for them to hit this call. But we're close on several others. But it's really a 100 plus. I will also point out on the genetic side, there is also interest at a laboratory level. So there's laboratories that are sending out their HBOC testing to let's just say a common HBOC provider and they have the ability now to run it in house. And then the second part of your question was the economics. So the economics are for us is really depending on OVA or genetics, it is going to be at very high margins. So the total price of course is lower than us doing the OVA ourselves, but in terms of margins, it has high contribution. And I think more importantly is going to be the fact that these, especially on the CA125 side, as well as the genetic side, it is a revenue opportunity for the customers. And it gives us access to the identified data. That's absolutely critical that we are getting data assets is important for our algorithm development at the genetics level, as well as at the protein level. And this will truly be a software as a service model.
Brian Weinstein: Great. And then last one for me is an EndoCheck. So can you just talk about the importance of the additional set of samples that you're getting? Are they different in any way than the samples that you were getting from your first partner in terms of makeup of the individual that is where the samples are coming from, or is it just getting even more samples in what is the kind of importance of getting these additional samples where you're not getting enough kind of at their first partner? Or is there something broader here in terms of a potential longer-term relationship that you're trying to signal?
Valerie Palmieri: Yes, no, it's really good question. So these samples are from the second partner is trying to build a drug to compete, of course, with with better safety profile. And these samples are actually a different specimen type. They are plasma versus serum, and this does allow us to expand things from an NOI perspective, as well as it is a more of a global population. So we're very – we're really, really pleased about it. And I would say also in terms of being a public company, you will see that actually they have actually canceled their trial in the U.S. because they weren't able to recruit patients into their trial because the patients with endo are not having surgery. So they truly need a diagnostic to complement that. So there is a high level of dialogue with this company and having two separate banks from two separate companies has truly been game changing for us and really helps just bolster our overall endometriosis research.
Brian Weinstein: Okay. Thanks for the answers. We'll get some more than follow-up call here. Thank you.
Valerie Palmieri: That sounds good, Brian.
Operator: Our next question is from Charles Duncan from Cantor. Please proceed with your question.
Charles Duncan: Okay. Thanks. Valerie and team. Congratulations on a good quarter of progress. And thanks for taking my question. I had a couple questions first on the commercial side for OVA1. I guess, you have very, very good test volumes seems like nice sequential growth. When you think about how the tone of business is going into the third quarter? How do you feel about that growth sequential growth and then into the second half of the year, particularly with Delta variant, I think, you mentioned increased access for physician access. And I guess I'm wondering how you feel the dynamics of the COVID pandemic could impact growth going forward?
Valerie Palmieri: Sure. Well, thank you Charles, for the questions. So let me start and I'm going to have Kylie actually jump in. So, we came out of the Q2 in the 4,500 range and I'm really pleased. And by the way, majority of our sales team members did not join to the back half of that. So, we were really pleased with the Q2 performance coming in Q1 with 15 and taking up to 35. So going into Q3 each one of these reps really is going to have their first quarter of performance. So, we have a larger footprint, number one. Number two, our patient base, are patients that are not being screened. So, there's a sense of urgency. They have a mask, whether it's benign they're still very worried, right? So, they need to go to the doctor. So, we are seeing, I would say in Q3, we're seeing somewhat of a dip in a sense, but I don't think it's anywhere in terms of just say companies that are doing screening products. And we saw this during COVID. So, the nice part is, is that during this process, we sort of are looking back at Phase 1 of COVID and saying, okay, what were the lessons learned? And one of the lessons that we had learned was that our technology actually was helping doctors bring patients to the OR when they're high risk and helping doctors manage patients that were low risk to actually say to them, look, we're going to do surgery, but we're going to wait 30, 60, 90 days. So that same playbook is moving forward. But I would also say another piece of this is just the virtual element of this. We really have just everyone keeping track of the news, although I saw some good data in the UK where Delta has surged and then actually decreased. But I would say that we are preparing a Plan A and a Plan B, we're prepared with our larger footprint to not only get the access, but also we have a very well-integrated virtual program that I'll have Kaile go into in detail. Kaile?
Charles Duncan: Okay.
Kaile Zagger: Thank you. Thank you, Valerie. To re-emphasize Valerie's point 20 of the 35 sales representatives that have joined the company joined in Q2. So, most of them are out of training and we expect somewhat of a lag effect through training, but that productivity will start to demonstrate itself towards the end of Q3. So right now, I am not concerned about the July and August numbers. We absolutely are preparing and expecting September to be as strong month, but to Valerie's point, we are thinking very strong about the Delta Variant and what we need to do with lessons learned from the first phase of COVID. And we are hard at work at redefining the commercial, go-to-market with a bifurcated approach that incorporates innovative virtual approaches to ensure we continue to increase our penetration with new physicians and awareness with women. So, to do that, we're deploying four new channels and we expect to do this. We've done some of this already, but we expect to continue and formalize in the next few weeks. One, we have rigorously focused on a digital marketing strategy. That is a segmented approach around lots of different markets and have heavily invested in ensuring that we are educating through every digital channel that we can. And we've seen incredible uptick in this to the tune of double, the amount of volume to the websites and close to those numbers on our social media. Number two we have put together a virtual commercial toolkit. Our marketing team has started work constructing this. This is a toolkit that has six pillars that will allow our force to continue with their strategic plans virtually and effectively if necessary. Number three, we've invested very strongly in our physician-to-physician platform. So, before we had a modest number of physicians on staff, we've rapidly increased that number. And instead of relying just on our commercial organization to be out in the field and creating new physician relationships, we are now bifurcating that approach with physicians that are speaking directly to physicians on our behalf and creating a call to action around ovarian cancer and early detection. And we've seen a lot of success in those peer-to-peer discussions. Number four, we are actively involved at an executive leadership level within the company looking at strategic partnerships with other organizations. And this is an atypical approach in that we're not looking at typical business-to-business relationships that with further research and development, et cetera, we are looking at creating strong alignment with organizations that have the type of physicians that we want to access on their Board of Directors involved in their cause and a large base of patients that either care about the disease with ovarian cancer and want to help make an impact. And we have had very successful conversations in the past six weeks, and we're expecting to formalize some very important strategic partnerships that will work as a very strong adjunct to the commercial organization as we anticipate moving modestly to virtual.
Charles Duncan: Very helpful, thank you so much.
Kaile Zagger: I hope that gives you enough granularity.
Charles Duncan: Yes, it definitely provides a lot of good information. I guess, just to follow-up, it sounds like fully increased size sales force for full productivity in call it the fourth quarter and then beyond, do you focus on new prescribers or new users more so than within a prescriber's practice, or how would you define success going forward? Because I think Kaile mentioned 14% increase sequentially in terms of prescribers. And I guess, what would you like to see that?
Kaile Zagger: Thank you so much for the question. So, it's actually a great question, very timely for what we're looking at right now. So new physicians have always been a very strong metric within the organization and we continue to be very, very focused on that. However, and simultaneously, we are also very, very focused on customer retention and we have seen this be something that we want to work on going forward. And I'm very happy to tell you that in the second quarter, we've seen some incredible numbers with retention come up and stickiness within customers be created, but this is just the beginning of what I think you can expect to see from us. We're very focused on building a customer experience division and translating our what now is the customer service division into more of an experience and doing some work to retain and increase our footprint within the physician practices that we have worked so hard to get on board and looking at expansion plans, land and expand plans inside of those practices. The big focus that we have right now is on ensuring we understand whatever tension problems might exist, how to rapidly fix those, address them, bring them back into the fold and continue to move down this road with them. So, I expect to see the new physician percentage continue to increase, that continues to be our big focus. But simultaneously you will see our inside salesforce and our customer experience team work to increase our customer retention, create a wonderful customer experience and create stickiness within our important customers.
Valerie Palmier: Yes, just to piggyback on that Charles, it’s also within a customer we want to get, so if a practice has 10 physicians, we want to land all 10 and keep all 10. So, I want to make sure you understand that piece too. So, it's usually the friendly or the first physician that starts, then it's going through that whole practice. Extremely important too as we close these large practices that are a hundred plus physicians. So, it's getting that 80-20 from those practices. And that's a different sell process as you know, but it's that continuity and that maintenance is also very important. And it's Kylie pointed out with the inside salesforce, I want to say that we have some service reps in certain territories, but it's really, I want to say a multi-front approach as we build the products within that customer and also the retention within that customer.
Charles Duncan: Do feel like you're in at a sufficient capacity now, or would you anticipate in the next call it 12 to 18 months, some additional hires in the salesforce?
Valerie Palmier: Well, I think, with EndoCheck, that market is 20 times the OVA. That's going to take us to a whole another hemisphere. So right now we're at about 35, we'll probably go up to about 40 hold tight through OVASight. This is really prepped for OVASight so we can really get that market being adopted. But with EndoCheck there will be growth in the Salesforce as well as I would say, strategic partnerships as well in parallel because of the size of the market.
Charles Duncan: Can I ask you one last question since you brought up EndoCheck? And I you're not going to be able to be all that disclosive given discussions with the agency. But you mentioned sensitivity and specificity, and please that you will exceed that of endoscopy surgical assessment. But I guess, beyond just talking about certain numbers I'm wondering how you would see a clinically meaningful improvement? It seems like your EndoCheck is much more convenient or facile than and endoscopy. So, do you need a big change in terms of sensitivity or specificity to be clinically valuable or even a small change would be compelling? And then I know this one is really difficult, but with regard to timing of those FDA discussions, can you provide any color?
Valerie Palmier: Sure. So let me just walk you through, this is a – it's not a complicated answer, but this is a multi-front EndoCheck will make a difference. If you look at the pain, I'm just going to walk through pain, delay in treatment, and the major, just the care pathway. Just to start with pain, what EndoCheck will provide is immediate disease detection, right? So, a patient may try OTTs or , et cetera, but it'll basically supply immediate detection because of the high sensitivity and specificity. And that will allow medical therapy immediately. And we believe, potentially avoid surgical intervention, but in avoids this trial and error of medical management. The second is right now and endometriosis takes seven to nine years based on the latest data. And so, what we will do is eliminate that delayed diagnosis really halt the disease progression if the therapy is put in place and improve the quality of life by reducing time to treatment. The other piece is exploratory surgical intervention. We can avoid surgery, that's unnecessary, right? Only performative it's clinically warranted. And I would say the last piece is really when the GnRH antagonist is actually therapeutically administered, this will prevent the delay, of course, in treatment, prevent the delay and major disease progression. And again, I think in summary, it's a major improvement in quality of life, because right now the current process is not in the best interest of the patient. And that is very important to the FDA. I will also say with the FDA we're going up against mostly, I'd say oncology changes, so oncology diagnostics and oncology breakthrough. What we're doing here is really novel in that we're taking a benign disease. And really, I would say there's an education process, but putting it right out in the open, and it's not only us presenting to the FDA, it was experts on all different facets. But having them truly understand that it is an irreversibly debilitating disease. So, I would say the conversations Charles have gone very well. The fact that we are in dialogue and it's breakthrough because they're giving you advice as you're building your, I want to say, your protocol and recognizing that this is uncharted territory and there's no predicate device, so they're really working with you. So, the fact that they see there is a problem, the fact that they see that we've gotten a lot of great feedback, I do believe that there is a partnership here. So things are going well.
Charles Duncan: Okay. Thanks for taking my questions.
Valerie Palmier: Our pleasure, Charles.
Operator: And we have reached the end of the question-and-answer session. I'll now turn the call over to Valerie Palmieri for closing remarks.
Valerie Palmieri: Thank you, operator. In closing, we believe that our accomplishments during Q2 set us up nicely for the second half of 2021 and beyond. We are focusing on doing the right things to drive sustainability and growth. With our increased commercial footprint strengthened balance sheet, and a guideline endorsed and differentiated tests, a differentiated portfolio test within the same call point, and now we're at 54% of the lives under coverage in the U.S., we believe we're in a position to support continued growth and profitability. Our end goal, it could serve a large, global, public, mass population and overall women's health market with a platform coupled with proprietary science and data tools, which will better serve and improve better health and wellbeing to each and every patient we serve. Thank you for joining us today, and we appreciate your support and interest in Aspira Women's Health.
Operator: This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.
