Release Date: May 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lucid Diagnostics Inc (LUCD, Financial) reported a 124% annual increase in revenue, demonstrating significant growth.
- The company successfully completed a $29.8 million Series D preferred stock offering, strengthening its balance sheet.
- Lucid Diagnostics Inc (LUCD) published positive data from a National Cancer Institute sponsored clinical validation study, enhancing the credibility of its EsoGuard esophageal precancer testing.
- The company has secured a date for a pre-submission meeting with the multiplex group, aiming to secure Medicare coverage for EsoGuard.
- Lucid Diagnostics Inc (LUCD) has developed a robust pipeline of direct contracting engagements, which could lead to increased revenue through covered benefits.
Negative Points
- Revenue for the quarter was flat quarter on quarter, indicating a potential stagnation in short-term growth.
- Test volume remained approximately the same as the previous quarter, showing no significant increase in testing services provided.
- The company faces challenges with reimbursement processes, with a significant portion of claims being denied or requiring complex appeals.
- Lucid Diagnostics Inc (LUCD) is still working to secure in-network status with major insurers, which is crucial for broader market acceptance and easier patient access.
- There are ongoing uncertainties in revenue realization due to the early stages of reimbursement negotiations and the need for more predictive data on claim collections.
Q & A Highlights
Q: Can you elaborate on what to expect from the upcoming Mall DX pre-submission meeting and the potential outcomes?
A: Lishan Aklog, CEO of Lucid Diagnostics, explained that the pre-submission meeting is somewhat informal yet similar to FDA pre-submission meetings. The goal is to review clinical validity, utility, and analytic data in the context of existing foundational LCD guidelines. The meeting will include discussions with key personnel and medical directors at Multi-Act to potentially influence the technical assessment for seeking coverage under foundational LCD. The company will be represented by internal experts and external medical advisors.
Q: Given the current test volume and revenue, how long will Lucid Diagnostics remain in this holding pattern, and what conditions would prompt an increase in test volume?
A: Lishan Aklog mentioned that the current test volume can be maintained with the existing team, and modest growth is possible through increased event efficiency and direct contracting. Dennis McGrath, CFO, added that investment decisions in increasing test volume would depend on improving cash collections as a percentage of billable claims, progress in direct contracting, and transitions from out-of-network to in-network with insurers.
Q: What is the status of reimbursement coverage from large insurers like UnitedHealthcare, and what is the likelihood of them signing up within the next year?
A: Lishan Aklog stated that while Lucid Diagnostics does receive out-of-network payments from large insurers, the focus for near-term medical policy changes is on regional plans, especially in states with biomarker legislation. Direct contracting offers a pathway to cover tests independently of traditional insurance processes.
Q: How long do you anticipate it will take for EsoGuard and EsoCheck to become standard practice, akin to how Pap smears changed cervical cancer screening?
A: Lishan Aklog believes that the process will not take years due to increasing awareness of esophageal cancer and the compelling nature of Lucid's testing solution. The company is actively engaging with the GI community and leveraging media exposure to accelerate national awareness and adoption.
Q: What are the international opportunities for Lucid Diagnostics, and how does esophageal cancer prevalence compare globally?
A: Lishan Aklog noted that while there have been inquiries from entities in South America and Asia, the focus remains on the U.S. market due to more favorable reimbursement rates. Internationally, esophageal squamous cell carcinoma is more prevalent, especially in Asia, but changes in diet and lifestyle globally are leading to increased cases of adenocarcinoma, similar to trends in the U.S.
Q: Can you discuss the competitive dynamics following the Class II FDA recall of a competing product and how it might benefit Lucid Diagnostics?
A: Lishan Aklog and Dennis McGrath discussed the recall of a competing sponge-based device, emphasizing that EsoCheck's protected sampling technology is superior for detecting esophageal precancer. They believe that the design limitations of sponge-based devices and the robust patent protection around EsoCheck will maintain Lucid's competitive advantage.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
