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

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Thomas McLain: You did a great job there, James. And again, reiterating that we intend to focus our building volume in regions where we have that super majority coverage. And Dan that type of discipline and focus should help to minimize that disconnect between realized price per test and our contracted rates versus what is typical at this stage for a company like Renalytix.

Daniel Arias: Okay. Okay. If I could just ask one follow-up on the VA. You started off the year with some progress there on integration of the test into the EHR complex. To what extent was that the barrier to faster adoption versus more just sort of personnel related issues like the bureaucratic nature of the VA, just how fragmented the systems are, I’m just getting — at the end of the year, it felt like there was a little bit of a slog in the VA, I’m just wondering how much better you feel about the situation now, given that you’ve had some EMR progress there?

James McCullough: I’ll let Tom answer that thoroughly but it’s a lot of slog, it’s not a little bit of a slog. I think that we substantially underestimated the complexity of rolling in that system. At the same time, we are working through this and there’s a significant population of diabetic kidney disease patients available, and obviously being able to get into a national integration is going to help but Tom, please characterize it.

Thomas McLain: Sure. I think there is a bureaucratic slog at VA as you both have stated. We didn’t fully appreciate how much worse that would become during an environment of COVID, post COVID. And the consequences of all the budget pressures that the cost of the COVID pandemic put on to the VHA. That said, we are now at a point where people are raising their eyes back up and looking at other health care challenges and how they can be dealt with. As we did that the access to patient health information and how we worked with the VHA system, because of the government’s requirements for protecting veteran’s health information, those were significant. Renalytix will be the first laboratory given the opportunity to develop this EHR solution using the VA cloud, where we’ll be able to basically get access to data run our test in the VAs environment.

And we think that’s going to be a significant enabler as we go forward. It’s not going to mean that VA starts to ramp up instantly and we’re all across the system right away. There’s the development for that, and then educating and introducing that across centers. But it will certainly be a significant help to us with the success of that development effort, which we’re initiating with the VHA right now.

Daniel Arias: Okay, super. Thank you, guys.

James McCullough: Thanks, Dan.

Operator: Please stand by for our next question. Our next question comes from Mark Massaro with BTIG. Your line is now open.

Unidentified Analyst : Hello, this is Vivienne on for Mark, thanks for taking the question. So do you have any outlook for visibility if the 950 ICR rate can continue over the course of 2023, I think you also mentioned getting paid above 950 in some instances and talked about diversity and revenue going forward, so just any guidance you can share on ASP? Thanks.

James McCullough: Yeah, we’ve been very — thank you, we’ve been very consistent that we do not want to compromise the Medicare price. And I don’t see us doing that in the foreseeable future. That’s a very important point for us. And being paid by Medicare on individual claim review at the 950 price as far as we see is going to continue. There are other contracts which exceed that price but we are very happy and very pleased. We’re very happy and very pleased where we are in terms of pricing and margin and KidneyIntelX and we think it’s a unique position. And it continues to be validated as we expand insurance covers to other significant players. So I think our confidence that that is the price is very high and will continue forward.

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