Renalytix Plc (NASDAQ:RNLX) Q2 2023 Earnings Call Transcript

Page 2 of 10

So we expect that the June quarter and quarters going forward, you should start to see a diversity of revenue from different places of MyIntelX directed position. You should see it from prepended, integrated hospital initiated ordering. And you should also now begin to see it from independent insurance companies who’ve now done the health economics and data analysis on KidneyIntelX, including the recent large not for profit insurance group that we’re working with, who will be taking a look at innovative ways to provide KidneyIntelX testing to their own primary care physician bases. And so, while we’re not going to give a forecast, what we’re now seeing is multiple channels where KidneyIntelX can grow. And we are seeing for the first time, an environment where you have a super majority or a diverse comprehensive insurance base, which can allow us now to market directly to primary care physicians.

And again, I just want to point out that you cannot get substantial scaled sales without having a full cohort of commercial payers online because we primary care physician cannot hear from a patient that they’ve received a bill for $950. It’s just a non-starter. So what you’re seeing now is the emergence of comprehensive diverse insurance, you’re seeing the opening up of different channels, direct to primary care, integrated hospital system, population health supported adoption, and of course now we are seeing a whole new category which is insurance lead potential adoption for KidneyIntelX.

Daniel Arias: Okay, okay. So just to that point, I mean, because there’s volumes and then there’s revenue, is your point that the test volume ramp shouldn’t be dramatically different from the revenue ramp because you need reimbursement which triggers revenues in order to drive volumes, or should we think about test volume improvement, sequential improvement over the next four to six quarters being beyond revenues, the way that it sometimes does with a test that’s in the early stages of being paid for?

James McCullough: Yeah, the delta between test volume and revenues or billable tests is not going to be huge, because we are now enabling diverse, comprehensive insurance in specific regions that we are rolling out to. So we’re not — we have to be careful, right, in this capital markets with capital resources, we have to be very careful. So, as we stated in the past, we’re focused on specific regions where we have comprehensive insurance and we can then move forward with billable testing, and apply direct sales, etc. So the difference between billable testing and test volumes is not going to be huge, there will always be a little bit of a difference. I think, where you are going to see a delta, which again, I don’t think is going to be significant but it will be there is between the average revenue recognizable price per test and the test volume.

So you can’t just go $950 for every test that you run, right. And especially because we’re moving into, although it’s a small minority, there are people who will need KidneyIntelX testing. We want to expand access to everybody we can. There’s a huge health equity component here. So there will be people that will be federally means tested, for who we have a different pricing. And there will be people that are cash pay or self-insured. So — or who are out of network, but that’s a standard, customary thing that you see when you start to roll testing into a distributed reimbursed model. Tom, I don’t know if you want to add to that, did I get that right.

Page 2 of 10