NASDAQ:MDXH MDxHealth Q2 2024 Earnings Report $2.11 -0.01 (-0.52%) As of 04:00 PM Eastern This is a fair market value price provided by Polygon.io. Learn more. ProfileEarnings HistoryForecast MDxHealth EPS ResultsActual EPS-$0.31Consensus EPS -$0.26Beat/MissMissed by -$0.05One Year Ago EPSN/AMDxHealth Revenue ResultsActual Revenue$22.16 millionExpected Revenue$20.66 millionBeat/MissBeat by +$1.50 millionYoY Revenue GrowthN/AMDxHealth Announcement DetailsQuarterQ2 2024Date8/21/2024TimeN/AConference Call DateWednesday, August 21, 2024Conference Call Time4:30PM ETConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by MDxHealth Q2 2024 Earnings Call TranscriptProvided by QuartrAugust 21, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00and welcome to the MDx Health Second Quarter 20 24 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this call is being recorded. Before we begin, I would like to remind everyone that we will make forward looking statements during today's call. Operator00:00:26Whether in prepared remarks or during the Q and A session, these forward looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on on Form 20 F. I would now like to turn the call over to Michael McGarity, CEO. Thank you, Michael. You may begin. Speaker 100:00:52Thanks, Paul, and thank you all for joining us for our Q2 2024 earnings conference call for MDx Health. With me today is Ryan Kalfas, Chief Financial Officer. I am pleased to report that our business continued to generate strong financial performance in the second quarter and first half of twenty twenty four with revenue growth of 32% 34% respectively over 2023. Our results reflect our continued focus on commercial execution and operating discipline, which we believe will drive sustainable growth through 2024 and beyond. On our last call, I noted our strategy of creating multiple sources of growth. Speaker 100:01:45That proved to be the case again in Q2. And in a moment, I will provide greater detail on some of the key factors that help drive our strong performance. But first, a few brief highlights from our results that support our review our view that our growth trajectory is sustainable. We reported 2nd quarter revenue of $22,200,000 an increase of 32% over prior year period. Of note and as I've consistently stated, we have 2 levers of revenue growth. Speaker 100:02:21The first is with our sales team driving unit adoption from our urology customer base and the second is our market access managed care team driving coverage, which shows up in our average selling price. In Q2, we clearly delivered on both levers, with total billable test volume of approximately 21,000 tests, representing total test unit growth of 31%. These two important metrics clearly underscore the balance and sustainable execution of our commercial team and the growth opportunity that lies ahead for us as we expand our menu offering in a $5,000,000,000 total addressable U. S. Market and build our market leading precision and precision urology diagnostics. Speaker 100:03:15Based on the expansion of our business and test menu, in an effort to continue to provide good visibility to the market, we are now disclosing volume and growth rates for our menu by segment. Volume for our tissue based tests consistent with CONFIRM and GPS achieved 15% year over year growth in the 2nd quarter with ASP clearly continuing to accelerate. Our liquid based tests consistent with Select and Resolve provided 35% unit growth in Q2 over last year and we expect the recently introduced hereditary germline test to begin to contribute to growth in this segment of our menu. For context and refresh on the value of our expanded menu driving our growth, I think appropriate to characterize the value of each test. CONFIRM MDx is a tissue based test performed after a negative biopsy, which is the only test that analyzes each core of the biopsy with our proprietary methylation technology and delivers a result with a 96% negative predictive value. Speaker 100:04:35Additionally, a positive confirmed test can identify patients harboring undetected clinically significant prostate cancer, which regrettably biopsies miss up to 30% of the time. We are seeing increasing understanding the importance of this test by our urology customers and by pathologists advocating for the value of CONFIRM after a negative biopsy. Our GPS test is a highly advanced multiplex gene test from tissue following a positive initial biopsy in which we interrogate the tumor for risk stratification directing again clinically actionable follow-up by urologists and providing informed decision making for patients. It should be noted that the GPS test has 20 year follow-up data for adverse pathology and prostate cancer specific mortality and requires materially less tissue than any other test on the market, which is critical to our pathology stakeholders. To be clear, we are the only company that can provide an actionable diagnostic on the other side of initial biopsy, whether positive or negative. Speaker 100:06:02As an additional update, I've commented on the complexity of the integration of the GPS test post acquisition as a carve out from Exact Sciences. We completed the integration on the field sales organization mid year 2023. And importantly, we have now completed the laboratory operations transition from the Exact Redwood City Lab to our MDx Health Lab here in Irvine. Credit to Exact as our partner and our laboratory and information technology groups for completing this complex transition. We are confident that our diligence and thesis of the value of this acquisition has been realized and will continue to show in our growth trajectory, cementing our offering as the most comprehensive diagnostic menu for the pathway of prostate cancer. Speaker 100:07:04On the liquid based side, our select MDx test is utilized after elevated PSA and can deliver a 95% negative predictive value, potentially avoiding unnecessary biopsies and associated risk to patients. Our RESOLVE MDx is a urine based test for DNA of organisms that can lead to complex and recurrent infections with a 10,000,000 cases of UTI that present annually, 20% of whom present to urology. It is again a highly multiplex test of pathogens and importantly also provides a broad and comprehensive susceptibility profile to treating clinicians, effectively getting to the right drug for the right drug. We believe this additional transparency provides a more consistent and granular view of our growth across our business. In addition, Q2 of last year was the strongest quarter for the business and we believe this quarter's unit and revenue growth over that comp reflects both customer understanding of our value proposition as well as our sales team's execution. Speaker 100:08:22Our core technology provides multiple drivers of growth with our menu covered by Medicare and our prostate cancer tests included in the NCCN guidelines. So it is our expanded menu and execution that serve as a basis for our recently raised 2024 revenue guidance to $85,000,000 to $87,000,000 from the initial $79,000,000 to $81,000,000 provided at the beginning of this year. This new guidance represents greater than 20% year over year top line growth, which we view as a long term sustainable goal. In a moment, I will provide some closing comments on the considerable progress we have made as well as our view forward. But first, let me turn the call over to Ron for a brief review of our financial and operating results for Q2. Speaker 100:09:19Ron? Speaker 200:09:20Thank you, Mike. To follow on Mike's remarks, we are very pleased to report strong performance in the Q2 of 2024. Revenues for the Q2 ended June 30, 2024 increased by a robust 32% to $22,200,000 versus $16,700,000 for the Q1 of 2023. All of this growth was organic and delivered without expansion of our sales organization, which is a testament to the leverage we are generating from our sales channel and reflects greater market penetration of our full line of tests into the $5,000,000,000 U. S. Speaker 200:10:00Addressable market. Revenue from our tissue based tests made up approximately 81% of our Q2, 2024 revenue. It should be noted that the recently introduced hereditary germline test did not contribute to our growth for the Q2. And as stated previously, we expect it to begin to contribute to our revenues in the second half of the year. Moving below the revenue line, our gross profit for the Q2 of 2024 was $13,300,000 an increase of 33% as compared to $10,000,000 for the Q2 of 2023. Speaker 200:10:41Gross margins were 60% for the Q2 of 2024 as compared to 59.7% for the Q2 of 2023. Operating loss for the Q2 was $7,400,000 compared to $7,700,000 for the Q2 of 2023, representing a reduction of 4% driven by top line growth, improved gross margins and continued operating discipline. Cash and cash equivalents as of June 30, 2024 were $21,300,000 This concludes my brief overview of the results. And I will now turn the call back to Mike. Speaker 100:11:19Thanks, Ron. Our top line revenue growth of 32% in the second quarter speaks to multiple positive factors that are driving our business and positioning our company for long term growth. These factors include the strength of our underlying precision diagnostics technology, the incomparable breadth of our menu offering, the extraordinary network of relationships that we have built with healthcare providers, recognized and expanded reimbursement for our tests and of course the significant opportunity for growth from the precision diagnostics end markets. Our menu has been custom built to help fundamentally change of the confounding and complex diagnosis of prostate cancer and be more effectively navigated for both clinician and patient. Each year our technology is enabling a growing number of patients and their physicians to make better informed and personalized treatment decisions. Speaker 100:12:23What is clear is that the adoption of precision diagnostics is only accelerating and we believe we are uncommonly positioned to take advantage of these long term sustainable trends in the high growth urology market. I will then comment that our inside mission is that there is a patient and family on the other side of every sample we receive. With that in mind, we passed the friends and family test. That is if you have a friend or family member being worked up for potential prostate cancer, you want them on our menu and pathway, front to back, full stop. And as always, we carry a great deal of responsibility to provide value to all of our stakeholders, including patients, customers, payers and shareholders. Speaker 100:13:21So thank you for your interest in and support of MDx Health. And now I'll turn the call back over to Paul for questions. Operator00:13:30Thank you. We'll now be conducting a question and answer session. Thank you. Our first question is from Andrew Brackmann with William Blair. Please proceed with your question. Speaker 300:14:03Hi, guys. Good afternoon. Thanks for taking the question. Maybe to start here, you're obviously seeing some nice tick ups in volume on both sides of the business on the tissue and liquid side of things. But can you maybe just sort of talk about the drivers of this on the account level? Speaker 300:14:19What are sort of what are you sort of seeing in terms of compliance towards the overall menu? And I guess how do you sort of think about furthering that along in the back half of this year into 2025? Thanks. Speaker 100:14:30Thanks, Andrew. Yes, I think we feel 2 things. 1, our urology customer base, we've really advanced the pathway, right? It was previously in a number of years ago, it was a lot of docs trying tests and reps having to follow-up. We've really driven compliance to the term you use to our pathway where it really becomes if this then. Speaker 100:14:59And but probably a more material change I would note is our embracing of engagement with and network of pathology, right, because what we are seeing and what's showing up in our numbers that we believe is sustainable is I would say that our relationships, access, influence, and our pathology customers is becoming as strong as our urology. And some of these pathology groups serve multiple urology group practices. So we're generating real leverage there. And I think the understanding by pathology of the value of CONFIRM that it's not a missed read by the pathologist, right? It's the limitations of a finite sampling of tissue from a biopsy, which samples less than 1% of the prostate. Speaker 100:15:51And I think that understanding and engagement between urology and pathology has made all the difference candidly. And we're really confident that both ways, both confirm and GPS and GPS, I pointed to some of the features, but that tissue requirement is a big deal for pathologists, right? Preserving the limited tissue that they have from the biopsy is very important characteristics of the GPS positive. So it all kind of holds together and our sales team has got a strong building a strong hold with both urology and pathology. When you have it coming from both ways, we're seeing that be a really compelling driver to why we see this growth rate continuing. Speaker 300:16:40Perfect. And then maybe just on the pricing side of things, you obviously called out market access and your efforts there. But can you maybe just give us a little bit more color around how much room you think is left to move ASPs higher for the portfolio, be that from further market access and coverage decisions or even just improved revenue cycle management? Thanks. Speaker 100:17:01Yes, Andrew, it's both, right. So we and we've seen both, right. Our we have room, right. So our Medicare rates for confirm and GPS and then our ASP associated with broader commercial private payer coverage as well as our revenue cycle management's ability to drive compliance to the contracts we have even if they're out of network has made a big difference. And we have a lot of room to go there with coverage. Speaker 100:17:33And in fact, often we'll get a coverage decision, but not medical policy. So there can be a 2 step process to coverage by certain payers. And that shows up in the acceleration of the ASP even by payer. So a contract payer, we may get a rate and then when we get in policy, that rate becomes more favorable. So we believe we have room there and we're seeing it across each of our tests. Speaker 100:18:03So when I speak to the value of the sales team, but also our managed care team, all the levers are working. Speaker 300:18:14Great. Thanks guys. Speaker 100:18:16Thanks, Andrew. Operator00:18:20Thank you. Our next question is from Mark Massaro with BTIG. Please proceed with your question. Speaker 400:18:27Hey, guys. This is Vivien on for Mark. Thanks for taking the question. So I guess the volume breakouts were just a little bit different than the buckets we had. Can you just give us any qualitative color on relative areas of strength in the quarter? Speaker 400:18:44I understand that RESOLVE volumes in particular have been beating us for a while. So just curious if you had anything to call out there? Thanks. Speaker 100:18:53Yes, Vivien. So we've clearly moved from unit revenue by test for which we've discussed probably more for competitive market reasons. But we feel like this is a really good way to provide better visibility to our menu builds and it's driven by a couple of things. One is when you look at the pricing of the tissue base versus the liquid base test, it's materially different, right? So we think that gives you better visibility as far as our unit growth rate. Speaker 100:19:24Again, I would point to the comp of Q2 over Q2 last year. So we think these growth rates and acceleration of revenue are very, very sustainable across our menu. So from a tissue perspective, the Medicare rates for GPS and confirm and correspondingly our ASPs are significantly higher than Select and Resolve. So we are seeing continued growth across our menu for the most part in Resolve. And we have a lot of room in each of those markets. Speaker 100:20:01So we're confident that this gives better visibility for comparison purposes as we go forward in better detail on how the menu as we've expanded it, which I think is somewhat uncommon, contributes and builds up to our reported revenue and just as importantly our view forward from a guidance perspective. Speaker 400:20:24Okay, perfect. Understood. Thanks for the color. And just to follow-up, this one is a little bit nitpicky, but it was a bigger quarter revenue wise, but it didn't seem to drop down the gross margins as well as it has historically. I assume that would just be driven by the test mix, but just any other variables to call out on the gross margin? Speaker 400:20:47Thanks. Speaker 100:20:48No other variables. It's strictly the timing, the mix and its mix of not only as our met again as our menu is expanded, the mix becomes more relevant as far as the quarter by quarter gross margin, but also the payer mix that comes across. So it's a permutation of expanded menu and payer mix by quarter, but no material change there. Speaker 400:21:19Great. Thanks for taking the question. Speaker 100:21:22Thanks, Devin. Operator00:21:27Thank you. Our next question is from Thomas Brinken with KBC Securities. Please proceed with your question. Speaker 500:21:34Hi, thanks for taking my question and congrats on the nice growth rates again. Maybe two questions from my side. The first one is whether you could give us a bit more insight in exactly where you stand with the integration of that germline testing? What are the steps that are needed or that still need to be taken to reach that revenue contribution as of H2? And then secondly, I also wanted to pick back up on a comment that you made a couple of months ago with regards to potentially adding or looking at additional opportunities to expand the testing menu given the fact that the test has been added? Speaker 500:22:17What is now your current outlook into, let's say, the rest of the year and maybe next year with regards to evaluating additional opportunities? Thank you. Speaker 100:22:27Thanks, Thomas. Yes, as far as the germline, we communicated, which is the way we take these new opportunities where we engage in a limited launch and that's really twofold. 1, to confirm our diligence and to get some experience with our sales organization in a limited launch to be able to roll out. So we're in that phase now in Q3. We have received samples. Speaker 100:22:55We also like to get, as you know, Thomas, about a quarter of history of payer mix coverage and historical get some history of payments. Even with Medicare, we did the same thing with Select last year. So we again feel like we'll begin to report revenue contribution in the second half of this year and probably then be able to give you a better visibility as to how it contributes to our overall view forward. But we like the fit for sure with our menu offering. And again, I would point to the fact that that concept not unlike resolve came to us from our customers, right? Speaker 100:23:33All the good ideas come from the people in the field, whether it be our reps or customers and that's a good example of that. As far as the second part of your question, our growth opportunities, I'm careful there, but we have them, right? So I'll provide the detail, right, as I think I've commented before. I mean, we run a growth strategy process here. We have over the last 2 years and we were always looking out as to what's out there that we think is interesting. Speaker 100:24:02It's also candidly an unattended consequence exercise to sure we don't miss something, both from our current menu offering competitively and where the direction of the market goes, but for new opportunities. And I think the strength of our channel and our customer base and our access and influence has flipped that from us always looking outbound to inbound. But we're very careful and focused in our diligence process for these opportunities. But if you made the assumption and communicated that we have a dashboard of opportunities that we evaluate, but we haven't even more rigorous process to before we take anything to market or engage in any sort of partnership for distribution or strategic partnership. I'll make one more comment that I think he'd be okay with, but you saw the recent addition to our Board of Sandy Siegel. Speaker 100:25:03And I would say that already having someone like that on our side, on our team and supporting our marketing group, our relationship started with Giambolitano and Ken Kameny and the credibility they built with our key opinion leaders and having not only an accomplished practitioner and clinician, but somebody who clearly can see beyond where the market used to be, where it is today and where it's headed. So we like our setup there. And if you made the assumption that our menu will look different 2 years from now as it does very different 2 years prior where we had one test generating rather, I think that's a reasonable assumption. Hopefully that answers your question, Thomas. Speaker 300:25:57Yes, very clear. Thank you very much, Mike. Much appreciated. Speaker 100:26:01Thanks, Thomas. Operator00:26:04Thank you. Our next question is from Jason Bednar with Piper Sandler. Please proceed with your question. Speaker 600:26:12Hey guys, can you hear me okay? Speaker 100:26:14Yes, Jason. Great. Speaker 600:26:17So I just wanted to ask 2 questions, I'll ask you both upfront here and sorry for any background noise. But just want to ask on pace of volume activity during the quarter, just how that informs your view in the second half of the year, obviously doing very well here in the first half. And just kind of wanted to see if there was any strengthening or weakening or things were pretty stable across the quarter. And just remind us if you could of where we're at with respect to getting back to normal testing volumes across the industry. And then the second question, separate question, just now that we fully consolidated the GPS operations, are there efficiency benefits that we can expect to see in the second half of the year? Speaker 600:26:56Thank you. Speaker 100:26:58Thanks, Jason. Yes, and I'll comment on the second part first. So we modeled the GPS obviously Exact was running the test for us. So there were some economics associated with that. We believe that it's they solve for each other as we staffed our laboratory to go live with the GPS test. Speaker 100:27:21So we don't see any material favorable or unfavorable impact to the P and L. And as far as the view for the second half of the year, yes, we view it as very sustainable. Q3 is always a little bit of a wildcard. I'm usually a little cautious without Q3 with even post pandemic more, I guess I would say seasonality with regard to patient flow staffing, vacations. But I would not expect any material downturn or change in our trajectory from a growth perspective, probably even with absent any material change in Q3 from a seasonality perspective. Speaker 100:28:09So that's the message we're delivering. I think it's reflected in our guidance and our view that I made the comment that internally we believe that we can drive 20% or greater revenue growth in a very, very sustainable way. Speaker 600:28:31Okay. Thank you. Speaker 100:28:33Thanks, Jason. Operator00:28:36Thank you. There are no further questions at this time. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.Read morePowered by Key Takeaways Second quarter revenue of $22.2 million (+32% YoY) on approximately 21,000 tests (+31% unit growth), driven by balanced commercial execution and market access initiatives raising average selling prices. Segment performance showed tissue-based tests CONFIRM and GPS growing 15% YoY with accelerating ASPs, while liquid-based tests Select and RESOLVE saw 35% unit growth; the newly launched hereditary germline test is set to contribute in H2. Integration of GPS test operations acquired from Exact Sciences is complete, with field sales unified mid-2023 and laboratory functions transitioned to MDx Health’s Irvine facility, fortifying the company’s comprehensive prostate cancer diagnostics menu. Financial metrics improved with Q2 gross profit up 33% to $13.3 million and gross margin at 60%, a 4% reduction in operating loss to $7.4 million, and cash balance of $21.3 million as of June 30, 2024. Raised full-year 2024 revenue guidance to $85 – 87 million (over 20% YoY growth), supported by Medicare coverage, NCCN guideline inclusion, and multiple sustainable growth drivers in the $5 billion U.S. urology diagnostics market. AI Generated. May Contain Errors.Conference Call Audio Live Call not available Earnings Conference CallMDxHealth Q2 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K) MDxHealth Earnings HeadlinesWall Street Zen Upgrades MDxHealth (NASDAQ:MDXH) to "Hold"May 26 at 1:39 AM | americanbankingnews.comMDXHEALTH SA Earnings Results: $MDXH Reports Quarterly EarningsMay 16, 2025 | nasdaq.comMarket Panic: Trump Just Dropped a Bomb on Your Stockstock Market Panic: Trump Just Dropped a Bomb on Your Stocks The market is in freefall—and Trump's new tariffs just lit the fuse. Millions of investors are blindsided as stocks plunge… but this is only Phase 1. If you're still holding the wrong assets, you could lose 30% or more in the coming weeks.May 28, 2025 | American Alternative (Ad)MDxHealth SA (MDXH) Q1 2025: Everything You Need to Know Ahead of EarningsMay 15, 2025 | finance.yahoo.comMDxHealth Reports Q1-2025 ResultsMay 14, 2025 | globenewswire.comLake Street Reaffirms Their Buy Rating on MDxHealth (MDXH)April 5, 2025 | markets.businessinsider.comSee More MDxHealth Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like MDxHealth? Sign up for Earnings360's daily newsletter to receive timely earnings updates on MDxHealth and other key companies, straight to your email. Email Address About MDxHealthMDxHealth (NASDAQ:MDXH), a commercial-stage precision diagnostics company, provides urologic solutions in the United States, Europe, and internationally. Its testing solutions includes Select mdx, a non-invasive urine test for prostate cancer that measures the expression of two mRNA cancer-related biomarkers; Confirm mdx for prostate cancer tissue test that validates epigenetic test that guides the detection of occult prostate cancer on a patient's previously biopsied negative tissue; and Resolved mdx for urinary tract infection that identifies personalized effective antibiotic options against the patient's infection. The company offers genomic prostate score which provides personalized genomic insights to both physicians and patients navigating the complexities of prostate cancer diagnosis and treatment. It sells its products through urology sales force, consisting of direct sales representatives, strategic account managers, and regional sales managers. The company was formerly known as OncoMethylome Sciences SA and changed its name to MDxHealth SA in October 2010. MDxHealth SA was incorporated in 2003 and is headquartered in Herstal, Belgium.View MDxHealth ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Bullish NVIDIA Market Set to Surge 50% Ahead of Q1 EarningsAdvance Auto Parts: Did Earnings Defuse Tariff Concerns?Booz Allen Hamilton Earnings: 3 Bullish Signals for BAH StockAdvance Auto Parts Jumps on Surprise Earnings BeatAlibaba's Earnings Just Changed Everything for the StockCisco Stock Eyes New Highs in 2025 on AI, Earnings, UpgradesSymbotic Gets Big Earnings Lift: Is the Stock Investable Again? 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There are 7 speakers on the call. Operator00:00:00and welcome to the MDx Health Second Quarter 20 24 Earnings Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this call is being recorded. Before we begin, I would like to remind everyone that we will make forward looking statements during today's call. Operator00:00:26Whether in prepared remarks or during the Q and A session, these forward looking statements are subject to inherent risks and uncertainties. These risks and uncertainties are detailed in the Risk Factors section of our filings with the Securities and Exchange Commission, specifically in the company's annual report on on Form 20 F. I would now like to turn the call over to Michael McGarity, CEO. Thank you, Michael. You may begin. Speaker 100:00:52Thanks, Paul, and thank you all for joining us for our Q2 2024 earnings conference call for MDx Health. With me today is Ryan Kalfas, Chief Financial Officer. I am pleased to report that our business continued to generate strong financial performance in the second quarter and first half of twenty twenty four with revenue growth of 32% 34% respectively over 2023. Our results reflect our continued focus on commercial execution and operating discipline, which we believe will drive sustainable growth through 2024 and beyond. On our last call, I noted our strategy of creating multiple sources of growth. Speaker 100:01:45That proved to be the case again in Q2. And in a moment, I will provide greater detail on some of the key factors that help drive our strong performance. But first, a few brief highlights from our results that support our review our view that our growth trajectory is sustainable. We reported 2nd quarter revenue of $22,200,000 an increase of 32% over prior year period. Of note and as I've consistently stated, we have 2 levers of revenue growth. Speaker 100:02:21The first is with our sales team driving unit adoption from our urology customer base and the second is our market access managed care team driving coverage, which shows up in our average selling price. In Q2, we clearly delivered on both levers, with total billable test volume of approximately 21,000 tests, representing total test unit growth of 31%. These two important metrics clearly underscore the balance and sustainable execution of our commercial team and the growth opportunity that lies ahead for us as we expand our menu offering in a $5,000,000,000 total addressable U. S. Market and build our market leading precision and precision urology diagnostics. Speaker 100:03:15Based on the expansion of our business and test menu, in an effort to continue to provide good visibility to the market, we are now disclosing volume and growth rates for our menu by segment. Volume for our tissue based tests consistent with CONFIRM and GPS achieved 15% year over year growth in the 2nd quarter with ASP clearly continuing to accelerate. Our liquid based tests consistent with Select and Resolve provided 35% unit growth in Q2 over last year and we expect the recently introduced hereditary germline test to begin to contribute to growth in this segment of our menu. For context and refresh on the value of our expanded menu driving our growth, I think appropriate to characterize the value of each test. CONFIRM MDx is a tissue based test performed after a negative biopsy, which is the only test that analyzes each core of the biopsy with our proprietary methylation technology and delivers a result with a 96% negative predictive value. Speaker 100:04:35Additionally, a positive confirmed test can identify patients harboring undetected clinically significant prostate cancer, which regrettably biopsies miss up to 30% of the time. We are seeing increasing understanding the importance of this test by our urology customers and by pathologists advocating for the value of CONFIRM after a negative biopsy. Our GPS test is a highly advanced multiplex gene test from tissue following a positive initial biopsy in which we interrogate the tumor for risk stratification directing again clinically actionable follow-up by urologists and providing informed decision making for patients. It should be noted that the GPS test has 20 year follow-up data for adverse pathology and prostate cancer specific mortality and requires materially less tissue than any other test on the market, which is critical to our pathology stakeholders. To be clear, we are the only company that can provide an actionable diagnostic on the other side of initial biopsy, whether positive or negative. Speaker 100:06:02As an additional update, I've commented on the complexity of the integration of the GPS test post acquisition as a carve out from Exact Sciences. We completed the integration on the field sales organization mid year 2023. And importantly, we have now completed the laboratory operations transition from the Exact Redwood City Lab to our MDx Health Lab here in Irvine. Credit to Exact as our partner and our laboratory and information technology groups for completing this complex transition. We are confident that our diligence and thesis of the value of this acquisition has been realized and will continue to show in our growth trajectory, cementing our offering as the most comprehensive diagnostic menu for the pathway of prostate cancer. Speaker 100:07:04On the liquid based side, our select MDx test is utilized after elevated PSA and can deliver a 95% negative predictive value, potentially avoiding unnecessary biopsies and associated risk to patients. Our RESOLVE MDx is a urine based test for DNA of organisms that can lead to complex and recurrent infections with a 10,000,000 cases of UTI that present annually, 20% of whom present to urology. It is again a highly multiplex test of pathogens and importantly also provides a broad and comprehensive susceptibility profile to treating clinicians, effectively getting to the right drug for the right drug. We believe this additional transparency provides a more consistent and granular view of our growth across our business. In addition, Q2 of last year was the strongest quarter for the business and we believe this quarter's unit and revenue growth over that comp reflects both customer understanding of our value proposition as well as our sales team's execution. Speaker 100:08:22Our core technology provides multiple drivers of growth with our menu covered by Medicare and our prostate cancer tests included in the NCCN guidelines. So it is our expanded menu and execution that serve as a basis for our recently raised 2024 revenue guidance to $85,000,000 to $87,000,000 from the initial $79,000,000 to $81,000,000 provided at the beginning of this year. This new guidance represents greater than 20% year over year top line growth, which we view as a long term sustainable goal. In a moment, I will provide some closing comments on the considerable progress we have made as well as our view forward. But first, let me turn the call over to Ron for a brief review of our financial and operating results for Q2. Speaker 100:09:19Ron? Speaker 200:09:20Thank you, Mike. To follow on Mike's remarks, we are very pleased to report strong performance in the Q2 of 2024. Revenues for the Q2 ended June 30, 2024 increased by a robust 32% to $22,200,000 versus $16,700,000 for the Q1 of 2023. All of this growth was organic and delivered without expansion of our sales organization, which is a testament to the leverage we are generating from our sales channel and reflects greater market penetration of our full line of tests into the $5,000,000,000 U. S. Speaker 200:10:00Addressable market. Revenue from our tissue based tests made up approximately 81% of our Q2, 2024 revenue. It should be noted that the recently introduced hereditary germline test did not contribute to our growth for the Q2. And as stated previously, we expect it to begin to contribute to our revenues in the second half of the year. Moving below the revenue line, our gross profit for the Q2 of 2024 was $13,300,000 an increase of 33% as compared to $10,000,000 for the Q2 of 2023. Speaker 200:10:41Gross margins were 60% for the Q2 of 2024 as compared to 59.7% for the Q2 of 2023. Operating loss for the Q2 was $7,400,000 compared to $7,700,000 for the Q2 of 2023, representing a reduction of 4% driven by top line growth, improved gross margins and continued operating discipline. Cash and cash equivalents as of June 30, 2024 were $21,300,000 This concludes my brief overview of the results. And I will now turn the call back to Mike. Speaker 100:11:19Thanks, Ron. Our top line revenue growth of 32% in the second quarter speaks to multiple positive factors that are driving our business and positioning our company for long term growth. These factors include the strength of our underlying precision diagnostics technology, the incomparable breadth of our menu offering, the extraordinary network of relationships that we have built with healthcare providers, recognized and expanded reimbursement for our tests and of course the significant opportunity for growth from the precision diagnostics end markets. Our menu has been custom built to help fundamentally change of the confounding and complex diagnosis of prostate cancer and be more effectively navigated for both clinician and patient. Each year our technology is enabling a growing number of patients and their physicians to make better informed and personalized treatment decisions. Speaker 100:12:23What is clear is that the adoption of precision diagnostics is only accelerating and we believe we are uncommonly positioned to take advantage of these long term sustainable trends in the high growth urology market. I will then comment that our inside mission is that there is a patient and family on the other side of every sample we receive. With that in mind, we passed the friends and family test. That is if you have a friend or family member being worked up for potential prostate cancer, you want them on our menu and pathway, front to back, full stop. And as always, we carry a great deal of responsibility to provide value to all of our stakeholders, including patients, customers, payers and shareholders. Speaker 100:13:21So thank you for your interest in and support of MDx Health. And now I'll turn the call back over to Paul for questions. Operator00:13:30Thank you. We'll now be conducting a question and answer session. Thank you. Our first question is from Andrew Brackmann with William Blair. Please proceed with your question. Speaker 300:14:03Hi, guys. Good afternoon. Thanks for taking the question. Maybe to start here, you're obviously seeing some nice tick ups in volume on both sides of the business on the tissue and liquid side of things. But can you maybe just sort of talk about the drivers of this on the account level? Speaker 300:14:19What are sort of what are you sort of seeing in terms of compliance towards the overall menu? And I guess how do you sort of think about furthering that along in the back half of this year into 2025? Thanks. Speaker 100:14:30Thanks, Andrew. Yes, I think we feel 2 things. 1, our urology customer base, we've really advanced the pathway, right? It was previously in a number of years ago, it was a lot of docs trying tests and reps having to follow-up. We've really driven compliance to the term you use to our pathway where it really becomes if this then. Speaker 100:14:59And but probably a more material change I would note is our embracing of engagement with and network of pathology, right, because what we are seeing and what's showing up in our numbers that we believe is sustainable is I would say that our relationships, access, influence, and our pathology customers is becoming as strong as our urology. And some of these pathology groups serve multiple urology group practices. So we're generating real leverage there. And I think the understanding by pathology of the value of CONFIRM that it's not a missed read by the pathologist, right? It's the limitations of a finite sampling of tissue from a biopsy, which samples less than 1% of the prostate. Speaker 100:15:51And I think that understanding and engagement between urology and pathology has made all the difference candidly. And we're really confident that both ways, both confirm and GPS and GPS, I pointed to some of the features, but that tissue requirement is a big deal for pathologists, right? Preserving the limited tissue that they have from the biopsy is very important characteristics of the GPS positive. So it all kind of holds together and our sales team has got a strong building a strong hold with both urology and pathology. When you have it coming from both ways, we're seeing that be a really compelling driver to why we see this growth rate continuing. Speaker 300:16:40Perfect. And then maybe just on the pricing side of things, you obviously called out market access and your efforts there. But can you maybe just give us a little bit more color around how much room you think is left to move ASPs higher for the portfolio, be that from further market access and coverage decisions or even just improved revenue cycle management? Thanks. Speaker 100:17:01Yes, Andrew, it's both, right. So we and we've seen both, right. Our we have room, right. So our Medicare rates for confirm and GPS and then our ASP associated with broader commercial private payer coverage as well as our revenue cycle management's ability to drive compliance to the contracts we have even if they're out of network has made a big difference. And we have a lot of room to go there with coverage. Speaker 100:17:33And in fact, often we'll get a coverage decision, but not medical policy. So there can be a 2 step process to coverage by certain payers. And that shows up in the acceleration of the ASP even by payer. So a contract payer, we may get a rate and then when we get in policy, that rate becomes more favorable. So we believe we have room there and we're seeing it across each of our tests. Speaker 100:18:03So when I speak to the value of the sales team, but also our managed care team, all the levers are working. Speaker 300:18:14Great. Thanks guys. Speaker 100:18:16Thanks, Andrew. Operator00:18:20Thank you. Our next question is from Mark Massaro with BTIG. Please proceed with your question. Speaker 400:18:27Hey, guys. This is Vivien on for Mark. Thanks for taking the question. So I guess the volume breakouts were just a little bit different than the buckets we had. Can you just give us any qualitative color on relative areas of strength in the quarter? Speaker 400:18:44I understand that RESOLVE volumes in particular have been beating us for a while. So just curious if you had anything to call out there? Thanks. Speaker 100:18:53Yes, Vivien. So we've clearly moved from unit revenue by test for which we've discussed probably more for competitive market reasons. But we feel like this is a really good way to provide better visibility to our menu builds and it's driven by a couple of things. One is when you look at the pricing of the tissue base versus the liquid base test, it's materially different, right? So we think that gives you better visibility as far as our unit growth rate. Speaker 100:19:24Again, I would point to the comp of Q2 over Q2 last year. So we think these growth rates and acceleration of revenue are very, very sustainable across our menu. So from a tissue perspective, the Medicare rates for GPS and confirm and correspondingly our ASPs are significantly higher than Select and Resolve. So we are seeing continued growth across our menu for the most part in Resolve. And we have a lot of room in each of those markets. Speaker 100:20:01So we're confident that this gives better visibility for comparison purposes as we go forward in better detail on how the menu as we've expanded it, which I think is somewhat uncommon, contributes and builds up to our reported revenue and just as importantly our view forward from a guidance perspective. Speaker 400:20:24Okay, perfect. Understood. Thanks for the color. And just to follow-up, this one is a little bit nitpicky, but it was a bigger quarter revenue wise, but it didn't seem to drop down the gross margins as well as it has historically. I assume that would just be driven by the test mix, but just any other variables to call out on the gross margin? Speaker 400:20:47Thanks. Speaker 100:20:48No other variables. It's strictly the timing, the mix and its mix of not only as our met again as our menu is expanded, the mix becomes more relevant as far as the quarter by quarter gross margin, but also the payer mix that comes across. So it's a permutation of expanded menu and payer mix by quarter, but no material change there. Speaker 400:21:19Great. Thanks for taking the question. Speaker 100:21:22Thanks, Devin. Operator00:21:27Thank you. Our next question is from Thomas Brinken with KBC Securities. Please proceed with your question. Speaker 500:21:34Hi, thanks for taking my question and congrats on the nice growth rates again. Maybe two questions from my side. The first one is whether you could give us a bit more insight in exactly where you stand with the integration of that germline testing? What are the steps that are needed or that still need to be taken to reach that revenue contribution as of H2? And then secondly, I also wanted to pick back up on a comment that you made a couple of months ago with regards to potentially adding or looking at additional opportunities to expand the testing menu given the fact that the test has been added? Speaker 500:22:17What is now your current outlook into, let's say, the rest of the year and maybe next year with regards to evaluating additional opportunities? Thank you. Speaker 100:22:27Thanks, Thomas. Yes, as far as the germline, we communicated, which is the way we take these new opportunities where we engage in a limited launch and that's really twofold. 1, to confirm our diligence and to get some experience with our sales organization in a limited launch to be able to roll out. So we're in that phase now in Q3. We have received samples. Speaker 100:22:55We also like to get, as you know, Thomas, about a quarter of history of payer mix coverage and historical get some history of payments. Even with Medicare, we did the same thing with Select last year. So we again feel like we'll begin to report revenue contribution in the second half of this year and probably then be able to give you a better visibility as to how it contributes to our overall view forward. But we like the fit for sure with our menu offering. And again, I would point to the fact that that concept not unlike resolve came to us from our customers, right? Speaker 100:23:33All the good ideas come from the people in the field, whether it be our reps or customers and that's a good example of that. As far as the second part of your question, our growth opportunities, I'm careful there, but we have them, right? So I'll provide the detail, right, as I think I've commented before. I mean, we run a growth strategy process here. We have over the last 2 years and we were always looking out as to what's out there that we think is interesting. Speaker 100:24:02It's also candidly an unattended consequence exercise to sure we don't miss something, both from our current menu offering competitively and where the direction of the market goes, but for new opportunities. And I think the strength of our channel and our customer base and our access and influence has flipped that from us always looking outbound to inbound. But we're very careful and focused in our diligence process for these opportunities. But if you made the assumption and communicated that we have a dashboard of opportunities that we evaluate, but we haven't even more rigorous process to before we take anything to market or engage in any sort of partnership for distribution or strategic partnership. I'll make one more comment that I think he'd be okay with, but you saw the recent addition to our Board of Sandy Siegel. Speaker 100:25:03And I would say that already having someone like that on our side, on our team and supporting our marketing group, our relationship started with Giambolitano and Ken Kameny and the credibility they built with our key opinion leaders and having not only an accomplished practitioner and clinician, but somebody who clearly can see beyond where the market used to be, where it is today and where it's headed. So we like our setup there. And if you made the assumption that our menu will look different 2 years from now as it does very different 2 years prior where we had one test generating rather, I think that's a reasonable assumption. Hopefully that answers your question, Thomas. Speaker 300:25:57Yes, very clear. Thank you very much, Mike. Much appreciated. Speaker 100:26:01Thanks, Thomas. Operator00:26:04Thank you. Our next question is from Jason Bednar with Piper Sandler. Please proceed with your question. Speaker 600:26:12Hey guys, can you hear me okay? Speaker 100:26:14Yes, Jason. Great. Speaker 600:26:17So I just wanted to ask 2 questions, I'll ask you both upfront here and sorry for any background noise. But just want to ask on pace of volume activity during the quarter, just how that informs your view in the second half of the year, obviously doing very well here in the first half. And just kind of wanted to see if there was any strengthening or weakening or things were pretty stable across the quarter. And just remind us if you could of where we're at with respect to getting back to normal testing volumes across the industry. And then the second question, separate question, just now that we fully consolidated the GPS operations, are there efficiency benefits that we can expect to see in the second half of the year? Speaker 600:26:56Thank you. Speaker 100:26:58Thanks, Jason. Yes, and I'll comment on the second part first. So we modeled the GPS obviously Exact was running the test for us. So there were some economics associated with that. We believe that it's they solve for each other as we staffed our laboratory to go live with the GPS test. Speaker 100:27:21So we don't see any material favorable or unfavorable impact to the P and L. And as far as the view for the second half of the year, yes, we view it as very sustainable. Q3 is always a little bit of a wildcard. I'm usually a little cautious without Q3 with even post pandemic more, I guess I would say seasonality with regard to patient flow staffing, vacations. But I would not expect any material downturn or change in our trajectory from a growth perspective, probably even with absent any material change in Q3 from a seasonality perspective. Speaker 100:28:09So that's the message we're delivering. I think it's reflected in our guidance and our view that I made the comment that internally we believe that we can drive 20% or greater revenue growth in a very, very sustainable way. Speaker 600:28:31Okay. Thank you. Speaker 100:28:33Thanks, Jason. Operator00:28:36Thank you. There are no further questions at this time. This concludes today's conference call. You may disconnect your lines at this time. Thank you for your participation.Read morePowered by