Renalytix (LSE:RENX) — Financial results for the full year ended June 30, 2020

0:02 Good afternoon, ladies and gentlemen, and welcome to the RENALYTIX AI Full Year Results Investor Presentation. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the top right hand corner of your screen. Simply type in your question in the box below and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard. Thank you for those that responded to the poll, but if you could respond to the poll, that would be fantastic. Thank you very much indeed to you all. Before we begin, I'm sorry, I'd like to also remind you that this presentation is being recorded. I'd now like to hand over to James McCulloch, CEO of RENALYTIX AI. Good afternoon to you, James.

0:54 Good afternoon, and good afternoon to everybody. I apologize. We can't be with you in person like we were last year, but these are the times that we live in. And I hope that everybody and their families have been safe and well since we last met. 2020 was nothing short of a pivotal year for us. Together with our colleagues at Mount Sinai and EKF Diagnostics, we founded RENALYTIX in 2018 with the goal of accelerating advanced diagnostic product solutions into the clinical practice that could significantly lower health care costs and improve the quality of life for the millions of patients living with chronic kidney disease. The social and economic impact of chronic kidney disease globally, or CKD, cannot be underestimated.

1:46 CKD is one of the largest unmet medical challenges today with more than thirty seven million individuals with CKD in The United States and an additional six hundred and sixty thousand people currently living with kidney failure in The United States alone. Our lead product, Kidney Intellex, provides critical information about the rate of CKD progression and the risk of kidney failure in an easily understood format to health care providers and patients in an effort to support optimization of care delivery, effective use of available therapies, to improve patient outcomes, and to reduce the sum 120,000,000,000 in annual cost in The United States of chronic and end stage kidney disease, management in the health care system.

2:33 Kidney Intellect is an artificial intelligence enabled in vitro diagnostic that combines the power of blood based protein biomarkers with features drawn from an electronic patient record, all processed by a powerful machine learning algorithm. The result is a first in class solution that can provide an accurate prognosis of a patient's risk of kidney function decline and or kidney failure early in the CKD disease cycle. That's CKD stages one, two, and three, where over eighty percent of CKD patients reside. Taking a blood draw and measuring biomarkers means that we can capture the current picture of a patient's biology. A foundation in blood based biomarkers also means that we are not wholly dependent on what is and is not in a patient's electronic health record in order to generate an accurate risk score.

3:26 We believe this represents a significant competitive advantage that will be difficult to overcome. And, again, we believe it is necessary to take a blood draw and measure biomarkers in order to enable early stage prognosis that is in stages one, two, and three, early stage CKD. Most importantly, understanding risk of progression in early stage CKD can help doctors and patients can provide doctors and patients with the most lead time to prepare for an optimal treatment strategy and increase choices to slow or stop the march towards kidney failure. For patients who do progress to end stage kidney disease, Kidney Intellect's early prognosis can help can potentially help provide more lead time to assess the option for home dialysis versus in center hemodialysis, potentially substantially reducing the cost and patient suffering.

4:22 Because Kidney IntelliX is first and foremost an in vitro diagnostic, we were able to follow a well developed road map to product validation and clinical use. This has enabled two critical commercial milestones. First, the ability to have a regulated product, and second, the ability to define reimbursement payment in The US medical system. While developing and validating an in vitro diagnostic can be time consuming and costly, we firmly believe this is an innovative and pragmatic route towards enabling the power of artificial intelligence through a regulatory pathway, achieving defined payment and establishing a long term guidelines ready standard of care. To date, our in vitro diagnostic strategy has yielded an acceleration of core milestones in period, including, number one, a distinct national reimbursement code effective October 2019, '2, national Medicare pricing effective January of this year, and three, New York State Department of Health approval in June, which has allowed us to begin commercial product sales.

5:28 In addition, post period, we submitted our final regulatory submission to FDA for consideration of the kidney Intel X clearance. This consideration is, as you know, part of a process which began eighteen months ago with FDA awarding breakthrough device designation to kidney Intel X in May 2019 May 2019. Operating under breakthrough device designation has allowed us to have an ongoing clinical dialogue with FDA to address some of the more innovative aspects of Kidney Intel X. I firmly believe running a full regulatory FDA process has helped make Kidney Intellects a more robust product that rises to the quality necessary to set a long term standard of care. Initially, Kidney Intellects is indicated for use, with adult patients with type two diabetes and existing CKD.

6:19 This population accounts for roughly thirty percent of the estimated thirty seven million US CKD patients. As you know, Kidney Intellect is a scalable platform, and we are pursuing development and validation of additional indicated uses, which we expect to submit for regulatory consideration as early as this December. We will share more on the platform expansion strategy in the coming quarters. Throughout the fiscal year of 2020, we crossed several core milestones sooner than we expected. These milestones are necessary for sustained long term market adoption. In addition to the regulatory and reimbursement objectives, mentioned, we have also signed key strategic partnerships, completed large scale clinical studies, secured private insurance payer support, continued to generate clinical utility and health economics data, and substantially expanded our operating team on the executive level and also on the senior operating level.

7:19 And, of course, we successfully completed a dual listing to the Nasdaq global market, which raised over 85,000,000 in gross proceeds, substantially strengthening our balance sheet and allowing us to pursue a more expansive product development and commercial implementation course. Hiring the right people to help us execute has been a major focus. To date, we have filled several core positions, including health system partnerships, vice president, VP chief human resources officer, VP project management, director scientific project management, and senior director in quality assurance. And we have expanded our internal software development and AI capabilities. Other roles added to support our commercial scale up of KIDNEY INTELLEX include billing manager, client service director, senior site reliability engineer, clinical laboratory scientists, senior manager technical accounting, clinical service specialists, and several others.

8:18 We have a mission driven culture at RENALYTIX with an underlying commitment to transform the lives of patients with CKD. As we continue to invest heavily across our technology platform, we are committed to retaining these core values, hiring the right people that are critical for our long term success. At the end of September, we crossed a key implementation milestone with the activation of Kidney Intellects in the Mount Sinai health system in New York City. The Mount Sinai implementation has been has been proceeding in line with our expectations. Kidney Intellect is currently being ordered with risk score reporting to more than 30 primary care physicians and more than 20 nephrology specialists. We expect the ordering group of physicians within Mount Sinai and other health providers to continue to grow in coming quarters.

9:10 Getting into more detail on the regulatory process. Post period in July 2020, we received a clinical laboratory permit from the New York State Department of Health to provide commercial testing of Kidney Intellects in New York State. The permit was granted following a review by a panel of New York State Department of Health scientists and external reviewers of the analytical and clinical validation results of Kidney Intellects. Officials from New York State successfully completed an inspection of the RENALYTIX AI New York laboratory as part of this process with no findings reported. For reference, a New York State approval is the most stringent state run regulatory process and serves it as a cornerstone for our national commercial rollout. Achieving broad reimbursement coverage beginning as early as fiscal year two thousand twenty one remains one of our highest objectives.

10:01 In fiscal two thousand twenty, we established several of the fundamental components necessary both for both private payer and Medicare coverage determinations. Medicare recipients represent a substantial portion, if not a majority, in many US regions of our addressable market, and Medicare coverage remains one of the defining milestones for broad kidney Intel X commercial success. Further, to date, we have execute we have executed Medicaid contracts in seven states, including Michigan, North Carolina, Rhode Island, South Carolina, Vermont, Wisconsin, and Wyoming. We expect to continue executing medical, Medicaid contracts throughout fiscal two thousand twenty one and fiscal two thousand twenty two.

10:48 In the period, Kidney Intellects has achieved a distinct common procedural terminology code or CPT code, a payment code, which is, allows Kidney Intellects to be included in the final 2020 clinical lab fee schedule by the Centers for Medicaid and by the Centers for Medicare and Medicaid Services, also known as CMS. As a reminder, a CPT code is a unique identifier for the kidney Intel X test used by CMS as well as by private payers in The United States. And in January, CMS set a price, as you know, of $950 per reportable test result, which became effective nationally. In an interesting development, post period in August 2020, CMS submitted for public comment a rule on innovation, which would provide an automatic national Medicare coverage determination for those diagnostic devices under FDA breakthrough device designation upon their approval.

11:56 If this rule becomes effective, this could substantially help shorten the time to insurance coverage for some twelve million Americans within Kidney Atellix initial indicated use population, adult diabetic kidney disease. In our New York City launch market, Medicare recipients represent a majority of insured DKD patients. Whether or not this rulemaking ultimately plays out, it is important to note the recent and ongoing favorable changes in policy landscape for the diagnostic industry and specifically for the chronic kidney disease landscape. We believe these policy changes will continue to benefit the Kidney Intellect's commercial path. For example, starting in January 2021, patients with private insurance covered under a Medicare Advantage plan will be able to choose to stay with their private insurance company for kidney failure and dialysis treatment rather than being automatically transitioned over to the government insurance plan Medicare.

12:58 This policy shift will likely result in a material health economics burden to large private payers in The United States for managing kidney disease. We believe early and accurate identification of disease prognosis will become an even more important part of the private payer insurance equation in CKD in 2021 as a result of this. During the period, we continued to achieve traction towards private insurance coverage of Kidney Intellects, most notably with physician led health plans, CDPHP in Albany, New York, and two large preferred provider organizations, including the Three Rivers provider network. Our conversations with additional insurance payers and health care providers continue to advance, and we expect to continue to grow private reimbursement coverage over the near term. We believe, of course, achieving FDA clearance will also be an important factor to building on our national reimbursement strategy.

13:53 At the core of our commercial strategy is a focus on driving strategic collaborations. Strategic partnering activities are important to not only building commercial use cases for Kidney Intel X, but also for validating Kidney Intel X as unique in the early stage CKD progression space. To date, we have announced collaborations with two major pharmaceutical companies, most recently with AstraZeneca. With AZ, we have entered into a multiphase collaboration to develop precision medicine strategies for cardiovascular, renal, and metabolic diseases. In our initial work together, we are examining the uptake of and patient adherence to chronic kidney disease treatments using the ability of the Kidney Intel X platform to identify patients earlier with progressive kidney function decline.

14:39 We expect to report out our initial findings in collaboration with AZ, in the first half of two thousand twenty one. Based on based on these study outcomes, a multicenter randomized controlled trial will be initiated to evaluate uptake adherence to new potassium binding agents in patients with CKD and hyperkalemia. We're confident that Kidney Intellect's unique value proposition and the early but rapid developing market for applications in CKD drug therapeutics will allow us to form long term partnerships with key industry stakeholders, including pharmaceutical companies as well as service and health care providers. Turning now to clinical evidence. As our health care as our health economics and clinical utility data continues to accumulate, Kidney Intellects is growing potentially to be viewed as a compelling solution to promote early intervention in kidney disease where impact on care and cost is most effective.

15:40 We have now completed expanded validation studies for more than 12,000 blood samples and analyzed across multiple time points in 6,000 patients with positive results consistent with the Kidney Intel X interim analysis that we announced back in July 2019. These study results were presented at the eightieth Annual American Diabetes Conference and are under peer review for internationally recognized journal publication. These data results were also part of our Kidney Intel X FDA filing request, filing requesting clearance.

16:14 Included in these data results is a collaboration study that was completed with the University Medical Center of Groningen, UMCG, in The Netherlands to determine the ability of kidney intellects to identify patients that will experience a progressive decline in kidney function or kidney failure in over 9,500 blood samples and analyzed across multiple time points in about 3,700 patients, followed over time. Initial findings from this work are being prepared for presentation and publication. In addition, we are evaluating the response to drug therapy based on baseline risk and change in risk over time as defined by kidney and telex. Concurrent with this clinical data generation, our intellectual property portfolio is continuously evolving.

17:02 In the period, the US Patent and Trademark Office allowed claims extending the use of one of kidney and Telex primary blood markers, STNF r one, to all patients with diabetes to determine an increased risk of developing progressive kidney disease or kidney failure. We have also completed rights to additional patent applications for use to kidney and Telex, and we're actively evaluating, in licensing opportunities that will enhance our competitive product positioning. As you know, we are working closely with leading clinical investigators, population health departments, clinical societies, and patient advocacy groups to make sure we have an actionable, simply understandable, and accurate medical communications profile. Expert experience is reflected in the design of the Kidney Intel X test report and the newly launched product website, which can be seen at kidneyintelx.com.

17:59 We believe our education and support program will be an important resource to help to help inform and improve care for early stage DKD patients and support future hospital system deployments of kidney Intel X in The United States and abroad. We have asked we have been asked many times about the effect of COVID nineteen on our business. Without question, this is an unprecedented environment. We ultimately cannot quantify the challenges which all of us may face with the emergence of the fall and winter infectious wave, but I am incredibly proud of the intensive effort and innovation that our employees and our partners have demonstrated as we continue to build on the kidney Intel X franchise to patients in need and their clinicians.

18:45 A particular highlight during this time is the level of proactive collaboration, that we have witnessed to solve complexities of technology licensing, translation, and data generation. We expect that collaboration to continue. While our focus remains, purely primarily on CKD, like many others in the diagnostic community, we are contributing to help find a diagnostic solution to the COVID crisis. In May 2020, we entered into a joint venture with Mount Sinai to form Contaro Biosciences for the purpose of developing and commercializing test kits for the detection and quantification of blood antibodies to SARS CoV two. Yesterday, Contaro announced CE Mark approval of its quantitative antibody testing kit, which can now be distributed to laboratories in The UK and Europe.

19:38 Global manufacturing leader in immunoassay technology, Biotechnique Corporation is Contaro's manufacturing and distribution partner, giving Contaro access to testing laboratories worldwide. A major advantage of the Contaro kit technology is that it does not require any specialized testing equipment to produce antibody test results. This further expands the commercial scale up potential globally. Cantero has also applied for FDA review, and we expect to hear results in the near term. In addition to the Cantero joint venture in August, we announced a multicenter study to evaluate the risk of long term kidney damage by kidney and Telex to patients who have experienced hospitalization from COVID infection. Investigative teams participating in the study include Mount Sinai, University of Michigan, Johns Hopkins, Yale, and Rutgers.

20:26 We expect to report initial results from the study in the first half of calendar two thousand twenty one and subsequently to prepare regulatory fraud, regulatory filings, for product review.

20:40 In conclusion, fiscal two thousand twenty was a transformative year for RENALYTIX. We believe we have a truly unprecedented opportunity to transform patient care for CKD patients with our AIIVD solution. We have made significant progress towards our operational, regulatory, and reimbursement goals, and we're now engaged in commercial rollout of kidney Intel X across The United States. Looking ahead, we have a number of core milestones to achieve over the next twelve months, which include increasing reimbursement coverage, expanding strategic partnerships, FDA regulatory events, additional health system partnerships, and growing testing volumes. We intend to keep our heads down and focus on the fundamentals of execution, which provide a long term business case.

21:31 I wanna thank the RENALYTIX team for their continued hard work, and we look forward to updating all of you, on our progress in the near term. And, again, I wanna wish all of you, to stay stay stay safe during this upcoming period. Now let me please turn it over to James Sterling, our chief financial officer, who will provide detail on some of the financial results. James? Thanks. Good afternoon, everyone. The earnings release we issued this morning outlines the financial results for the fiscal year ended 06/30/2020, in full, and I'll review a summary of these results now. All the figures I'm about to cite are in US dollars, which is our reporting currency. Our operating expenses were $11,100,000 for fiscal twenty twenty compared to $7,100,000 in fiscal twenty nineteen on an IFRS basis.

22:25 The increase in operating expenses was primarily driven by the scaling up of our organization as we begin the commercial rollout of KIDNEY INTELLEX in The United States. On a GAAP basis, operating expenses were 10,300,000 in fiscal 'twenty versus $42,300,000 the year before. Fiscal 'nineteen's OpEx under GAAP included the Mount Sinai license fee and the fair value of the Jocelyn license, license as well as R and D expenses, which were all capitalized under IFRS. Net loss was $9,300,000 or $0.16 a share for fiscal year twenty twenty as compared to $6,200,000 or $0.17 a share for fiscal 'nineteen. On a GAAP basis, fiscal 'twenty net loss was $9,800,000 or $0.17 a share versus $42,300,000 or $0.99 per share in fiscal twenty nineteen.

23:21 Turning to our cash, we ended fiscal year twenty twenty with $13,300,000 Shortly after fiscal year end, we completed the NASDAQ dual listing and associated financing, raising net capital of $76,100,000 after commissions, fees and operating offering expenses. Also subsequent to fiscal year end, we completed the spinout of RECY DX, previously known as Fractal DX, which included a portfolio of advanced diagnostic and prognostic solutions used in kidney transplant. RENALYTIX is now under consideration for admission to the AI market.

24:00 And we will now open it up to questions. Thank you very much indeed, OJ. That's very kind of you. For for investors on the call, obviously, joining OJ and James is Steve Coker, Fergus Fleming and Thomas McLean. Ladies and gentlemen, if you would please continue to submit your questions via the Q and A tab situated on the right hand corner of your screen. But just wanted the company to take a few moments to review those investor questions submitted today. I'd like to remind you that a recording of this presentation, along with the published Q and A, can be accessed via your Investor Meet company dashboard. And lastly, before we hand back to the RENALYTIX AI team, I'd like to remind you that your feedback is important to the company. Immediately after the presentation has ended, you'll be redirected for the opportunity to provide feedback in order that the company can better understand your views and expectations, and we would very much encourage you where possible to provide that feedback.

24:55 Obviously, investors had the opportunity to pre submit questions. We have a total of five questions that were pre submitted. And then perhaps what I'll ask you to do is that if I hand over to James and OJ perhaps to look at the questions that have come in the live event and to choose those where it's appropriate to respond. But if I could start with these pre submitted questions. The first one is, could you please update your investors on the Contaro joint venture, which was hoped to be authorized by August under AUA?

25:26 As Donald Trump has now stopped AUA, how long do you anticipate a full application will take? And what sales do you expect to receive from the JV along with projections and margins?

25:39 So thank you for that question. I'm not gonna comment on sales and margins, because we're gonna find out as we go in. We're starting to understand the definition around that, but, the COVID marketplace, is a very confused marketplace. And we are going for a very specific type of clearance, which was outlined in the CE Mark around quantitative testing of antibodies that is, at the moment, quite unique. So it's gonna take us a little bit longer. The good news is that, we've already submitted for FDA EUA before they close down that loop. So we're in the process. I always say it's a fool's game to call FDA approval of any kind, in terms of timing, but it would not be unreasonable for us to expect, an FDA EUA authorization going into November.

26:42 Now I put a caveat on that. Cantero, for us, was an important thing to do because we do have specific expertise in immunoassay, and we have a very close partnership with Mount Sinai. It is not the focus of our business, which is very important. The focus of our business is CKD. But at this point, I'm actually encouraged by the regulatory movement. The CE Mark timing was very important.

27:12 We do expect to sign additional distribution agreements for Contaro coming up, so there will be additional news flow. And I think, unfortunately, our timing is actually quite good. The whole concept of, antibody based immunity, level based analysis, these are questions as a society we're gonna have to start to understand much more clearly. And, Mount Sinai's, research program is world class. The depth of research into this issue, is the best that I have seen. And I think, unfortunately, now that we're all starting to experience what is either an extension of the first wave or a third wave, whatever you wanna call it over here, we're hearing some pretty, nasty things like exponential uncontrolled growth.

28:08 That was Scott Gottlieb, the former commissioner of FDA. This problem with COVID is not only not going away, it's about to get a whole lot worse. I am actually speaking to you from Park City, Utah, where the news media is now talking about rationing medical care. In my lifetime, in my country, I've never heard anything like that. It's substantially disappointing to me as a US citizen to see the, situation that we're in over here, but here we are. And so, the Cantero technology, is becoming even more relevant. So please stay tuned. There should be additional news flow coming up in November. And, of course, we're gonna start to get clarity on pricing and distribution.

28:57 But I I certainly don't wanna promise anything in this market space, which is highly confused and unfortunately has become political. Thank you very much indeed. Follow on question here. How are discussions with other health providers processing? Are you still on track to sign up three new providers in the next twelve months? Yes. So I stuck my neck out and said we will do three providers. We will have clarity and validation to three providers within fiscal two thousand twenty one, which started in July and will end at the end of June next year, and I'm still sticking to my guns. We are making progress. Thank you. Now that Kidney Intellect has begun being used by Mount Sinai, have you encountered any problems?

29:44 Is it proving very useful and performing in line with expectations? Yes. It is. And I have to say implementing KIDNEY IntellX in a system as complex and large and important as Mount Sinai was a significant goal. To be able to do it in effectively under twenty four months from our first financing

30:09 has been quite an achievement. And I wanna thank the the technical team, is run by Fergus Fleming, who've been working around the clock to make sure that this happens. There are a lot of devils in the details for a first of kind implementation like this. It is not easy. We have learned a considerable amount, which will help us when we move on to the next system and the next system. But it is it is quite something to see when you start reporting live results into a system with a population health, supported reportable result, and it's doing exactly what we expected it would do. We did not wanna hire a Salesforce and start knocking on physician doors. We wanted to be able to go out and capture a broad population, of existing disease patients and be able to collect novel data around the treatment of those patients, how are they care navigated.

31:07 We wanted to be able to apply a sophisticated set of tools, including behavioral economics, which is the the very, subtle but incredibly important part of how the clinician interprets a test report, how do they put it into their practice, what is the patient behavioral response. These are the things that we've learned over decades, make the difference between rapid scale adoption and languishing. You've really gotta get this stuff right, and

31:36 it's all of the upfront fundamental work. I keep coming back to this. It is very much the upfront fundamental work that we put into this deployment, which is gonna pay, I believe, significant dividends in the near and the long term. So, the fact that we have, multiple physicians now up and running that are ordering and we're getting test reportable results, is quite an achievement. That obviously extends onto revenue generation. We're new we're relatively new in the cycle, so we're only a month into it. So we're not gonna sit here, and project revenue out on that. But what it does do is it gives me greater confidence with each quarter that we can build a sustainable business. And we're not again, we're not reliant on a a push strategy simply from a Salesforce to try to make the next quarter.

32:25 This is very much about how much of the market can we set a new standard of care in. This is a very large wide open market in The United States. How can we set the standard of care and start achieving significant market share in 2,022, 2023? That's where our multiple should be based. In order to get there, you've gotta put all the fundamentals in place. There are no shortcuts. Reimbursement, regulatory, implementation, data generation, all of these things, so far, we are setting up on a fundamental basis very well. So we're very pleased with what's going on with Mount Sinai, and, it it's quite an honor to be able to report, be having live test generation and result reporting going on right now. That's perfect. Thank you very much indeed.

33:14 James, if I could just ask you, I think your volume is ticking up on your machine, just a small element of feedback. But there's a couple of questions I'd like to ask. One has come in in the live event around competition. It's from Chris Kay who says, what competition do you see in this area? And do you have first mover advantage? And then one of the presubmitted questions around competition is, are you aware of competitors in this space? And what advantage do you have? I thought we could address both of those in in the same time. So it's fascinating. I've never been in this position. We do not have any direct competition, and that's full stop. And the reason I can say that is because there is no multivariate early stage progression tool available.

34:01 In other words, KITNEY INTELLEX is really the first to look at a multivariate input and generate a progression based risk score in early stage CKD. So this is a huge population, and this is early on in the disease cycle. It's eighty percent of the population in CKD stage one and two and three. And the question we are answering is very simply who has kidney disease that matters and who doesn't. And in order to do that, you need an in vitro diagnostic solution. When I say in vitro diagnostics, that means I have to take a blood draw. And when I take a blood draw and I have a biomarker cornerstone, now I can look at the immediate biology of that patient, and I give myself a huge kick start in terms of risk assessment for progression likelihood

34:57 over the next coming years. At the moment, we're the only ones that are able to do that. It is an in vitro diagnostic strategy. There are many players out there at the moment that are using algorithms, care navigation, looking at big data systems, major players, CVS Pharmacy, for example. All of those tools will give you an advantage in late stage kidney disease. We firmly believe that if you wanna get into the early stage kidney disease, you cannot rely on electronic health record data alone. There are too many missing variables, and you're relying on a specific time point which may or may not be current to get a risk assessment for the patient. So if you wanna go to the heart of this issue, the the the health economics heart of this issue, the clinical heart of this issue, you've gotta take a blood draw, and you have to have biomarkers.

35:49 And if you do that, now you're in our camp, which is in vitro diagnostics, and there are no shortcuts here. You have to run a regulated FDA process. You have to run a reimbursement process. You have to do boring things like analytical validation, quality control systems. This is all the language of in vitro diagnostics, which we've been practicing for many years. And only by doing that can you get into early stage prognosis. Now we happen to think that now that we have an early stage prognosis tool, that this becomes highly complementary to a lot of the other strategic partners, some of whom are major, who are out who are out there right now trying to apply algorithms against big data and care navigation to late stage disease. So there's a lot of complementary, components here. We do not, at the moment, see any direct competitors.

36:40 That's great. And finally, are you comfortable with analyst forecasts for revenue and earnings over the next two years and, obviously, within the confines of what you can or can't say? I'm gonna stay a little bit away from that equation because we are not providing guidance, which is similar to a lot of companies at the moment. And, we are early on in the game. I do believe that we are making progress towards a lot of the stated goals in the research reports, but that's as far as I'm willing to go at the That's perfect. Thank you very much indeed for that, James. Well, concludes the presubmitted questions. If I could just draw your attention to, if you were to click on the q and a tab, and if I could ask you to go to the top. I think the first question, it was at 43240.

37:28 Perhaps if I could ask you to read out the question where it's appropriate for you to give a response and to to all investors, you know, we will review all questions submitted today. So over to you, if I may, James. Thank you. Certainly. So one of the questions that's coming up is can we give any guidance as to the time frames involved with signing up insurance companies to use Kidney Intellects? I won't give a time frame, but you should expect, certainly, over the next twelve months that we will be delivering additional coverage determinations, and that's on the private payer side. And, also, we have a very specific strategy to achieve Medicare coverage, which obviously accounts for the majority of our market. That has been in place. We press released and presented on that.

38:19 I believe it's it's a very progressive strategy, which should give us a good shot at getting Medicare coverage in 2021, the calendar year. There's never any guarantee, but we certainly have a good shot. And then, of course, now with the potential rule making at CMS, it's called CMIT, around innovation for products that are under breakthrough device designation that get approved, there is a growing potential that we could achieve national Medicare coverage determination sooner than we expect. There's no guarantee there, but it does reflect, again, the policy changes, significant policy changes that are going on at the federal level. So there are a number of bites at the apple here to increase, coverage.

39:15 And, of course, I've said from the very beginning that this is our number one issue, reimbursement, reimbursement, reimbursement. We already know what the price is. That has been set, and we have a code. But now the drive for coverage determination remains the number one focus. Tom, would you like to add, anything to that perspective? No. I I think you covered that very well, James. We have a comprehensive strategy. We're approaching all sectors of the coverage market and with a package of information about the value of kidney and Telex that companies often don't have at this stage of launch.

40:03 So just moving on to a next question. In your experience, what is the typical timeline for a potential FDA outcome for kidney and Telex? Under breakthrough device designation, we're running with an innovative product. We're running pretty well in terms of the time frame. And, again, it's very difficult to call FDA timing. And, again, it's very difficult to call FDA timing in COVID. We know from a number of different comments that have been made by people in FDA that the FDA is under enormous strain right now, and we have a lot of sympathy for that. There's a huge number of COVID based product filings which are coming through and has really overwhelmed the process. I think they're doing a superb job.

40:55 Fortunately, our breakthrough device designation kidney and Telex timeline is continuing. We have not been put on the side, which is very nice. So it would not be unreasonable for us to expect FDA clearance in the coming months. Do you have an expectation to roll out kidney and Telex in The UK? Fascinating question. The answer is yes. We do have an expectation. We are a UK company, a PLC. We have a number of significant long term institutional shareholders, thank you, that have helped support the Kidney Intellect's development program.

41:42 Kidney disease is not an American problem, unfortunately. It is a global problem. The NHS is a very interesting entity, although it's not a monolith, and kidney intel x would fit very well into that system. So, yes, we do, at some point, expect we'll start to provide some color on a UK and European strategy. For the moment, it's much more about focus. We wanna deploy in a select group of regional markets with core partners like Mount Sinai in conjunction with individual payers that cover the patient populations that are treated by those core health care provider partners. But, yes, we're we we will be across The Atlantic, at some point, hopefully physically and also from an implementation standpoint.

42:37 David b asked a question. Are the seven states where Medicaid approval, the only states where KIDNEY INTELLEX can be specified, how challenging and how important is it to get approval in key states, presume presumably California and others? A very good question. David, you're wandering into the lasagna plate of confusion around US reimbursement. But, Tom, I think you should take that question and talk about the reimbursement strategy and the progress we've made incrementally. Sure. Thanks, James. I'd be happy to. Medicaid, although it is a national program, the government has charged states to manage Medicaid for their population. Without a contract with the state, RENALYTIX the test can be offered, but RENALYTIX is not allowed to bill within the state without having that contract in place.

43:34 And the requirements in every state for that Medicaid contract are different. We have a strategy, a prioritization of Medicaid states based on our expected rollout of kidney and Telex. We are executing on that strategy. Medicaid contracting with the state is also one of those factors that makes private payer coverage determinations move faster as well. So the Medicaid coverage in, numbers will continue to increase in 2020, what remains, and in 2021, that is a priority.

44:20 At the same time, in addition to what we've discussed about Medicaid, we're making tremendous progress with other private and, government payers for coverage of kidney and telex. You've seen the CDPHP coverage determination, as James mentioned, some of the PPO coverage determinations. And you will learn of a steady increase in coverage determinations as we go through 2020, 2021 into 2022. In The United States, this coverage process is a multiyear progressive process. Tom, it may be helpful to clarify the difference between Medicaid, which that answer addresses, and Medicare for those in The UK?

45:12 Yep. I would be happy to do that. The Medicare program targets adults of age 65 and over regardless of their income level, it becomes their primary insurance. The Medicaid program is an income driven program so that if you do not meet certain income minimums, your health insurance is provided through Medicaid. So two separate programs but both administered through, CMS. And to clarify one aspect to that question, we can now offer kidney and telex in all 50 states.

45:59 And if we get Medicare national coverage determination, that applies to all 50 states. Medicaid is a state by state. Thanks, thank you for all the questions that are coming in. We have quite a few. I'll try to get to most of them if we can in the next fifteen minutes. Chris, you've asked a question which is very important. What would be the saving for a person that is discovered to have a high chance of CKD? And, actually, I just wanna modify that a little bit. All the patients we're testing already have chronic kidney disease. This is not screen. This is an existing disease population, and we're really looking at the rate of progression or the risk for progression. Is there a cost, you ask, that can be applied to CKD treatment? And if diagnosed early, how much could that save per person if the cost for the treatment is $9.50?

46:53 I will say that this is the strongest cost to benefit equation that I have seen in the diagnostics business. The cost of missing just a few people who end up progressing through the larger stages of kidney disease and end up on dialysis is so significant that you can easily justify a breakeven for populate population wide testing, with kidney and Telex. We must get a handle on early stage disease progression. That is the only way we're gonna understand who to treat because the populations are so large and the consequences of missing people early, and letting them, for example, have kidney and kidney failure in an emergency room entrance or not being given enough time clinically to be able to understand the options or prepare for the options for something like a home dialysis versus an emergency room in center hemodialysis or to be put on an SGLT two inhibitor before their disease progresses too far.

48:07 This is this is basic stuff that we have to begin doing. But we have done a very detailed health economics assessment. And, Tom, maybe you wanna just give one minute on that health economics assessment. It is on our website by Boston Healthcare Associates, which goes right to the heart of this question. And I think just to put some numbers around the comments James just made, if a patient crashes in the emergency room because of kidney failure, the cost of that single event is $50,000 If a patient goes on to dialysis, the annual cost of dialysis is $88,000 So again, preventing any one of those events for a single patient drive savings for the whole population at a significant level.

48:58 We have done an economic model. It actually shows that for private payers with coverage that they hit a breakeven point in terms of cash in less than two years. So after that eighteen or twenty twenty month period, the use of Kidney Intellect saves that payer more than the payer is paying for system wide testing. And the numbers that accrue for potential savings even in a population of a 100,000 patients begin quickly to climb into the millions and hundreds of millions of dollars over a five year period.

49:47 So the the savings potential associated with kidney and Telex are very sound and very compelling. Bruce, I'm sorry we don't have a presentation. This is a function of the Nasdaq driven format. I apologize if it's not easy to follow all this, but we now are under a very different regulatory regime. It's called the nineteen thirty four act, and we need to keep consistent messaging now across The Atlantic, which is one of the reasons that I've read from a script in this recorded phone call because we absolutely have to make sure that we represent accurately to all investor groups in a broad basis.

50:35 That doesn't mean we won't have presentations in the future. As a consolation prize for you, we're now quarterly reporting. So you're gonna hear from us on a quarterly basis as opposed to every six months on the AIM, but my apologies that we didn't have a presentation. That's a function of the way that the Nasdaq reporting requirements with the analysts in The United States. We gave this identical presentation this morning to US investors and analysts. Several of you have asked if this platform is available in other diseases. For example, Richard, you've asked whether this is, red across to leukemia. And, Chris, you've asked, whether this is red across to different cancers.

51:23 The answer is it could be. We're not gonna do it, but this raises a very important point because this is very much a platform. We hear a lot about platforms. I've heard a lot about platforms in my career. Most of them are not. But in this case, because of the core algorithm and our ability to train additional algorithms before we move them into a very codified product development cycle, we're able to take in a lot of information, disparate information. We've already done that with kidney and telex. So we have blood based biomarkers and a bunch of features from an electronic health record system. We are adding additional biomarkers. We are taking a look at inherited genetics. We are looking at other features in the electronic health record.

52:11 This application, the way we've approached this, the way we've set up the regulatory reimbursement pathway, the partnership pathway with groups like Mount Sinai, all of these things are applicable applicable across any disease state. We are gonna stick with, some of the core diseases associated with kidney disease. There is a reason that in the AstraZeneca press release, we talk about cardiovascular, renal, and metabolism and not kidney disease. So, yes, this is an expandable platform, and we intend to pursue that aggressively. But, like Jeff Bezos, who started Amazon, first, you have to learn how to sell books, become before you become the store for everything. So, we're learning how to sell books right now in diabetic kidney disease, which is a large enough population to build a substantial business.

53:05 Monica, thank you. Will the outcome of the US elections influence RENALYTIX's progress? Trump's policies have been very helpful. Yes. They have. The good news is that Trump is building on what was in the Obama administration as well, although some on this call may differ. The reality is what's going on is we're establishing a value based health care environment. It's no longer what does your diagnostic cost, and we'll give you 30%. It's what does your diagnostic do, and how much value does it add in terms of health economics and outcome. And this is building on a decade's worth of progress. The changes in reimbursement law, which were instated under Obama, gave us a direct line and allowed us to get, into an accelerated reimbursement format. So regardless of who's inaugurated in January, whether it's Biden or whether it's Trump, they're obviously gonna be positives and negatives, but we expect this policy favorability to continue and especially in kidney disease because we can't afford it. It's one of the largest Medicare one of the largest government health care expenditure line items, and the problem is only getting larger.

54:19 The CDC is now, projecting that by two thousand and thirty, a third of all US adults, one third will be considered clinically obese. That's a 100. This is unfortunately very fertile ground for the development of complications, including chronic kidney disease. So this is a time and a place with a lot of policy implications, which are heading in our favor, a lot of socioeconomic implications, are heading in our favor. It's a great place to play. Very different than what we encountered, unfortunately, often in the cancer world, which dealt with relatively small and and specific populations. Tim, you have a question. 85 million in cash on the balance sheet. You clearly have plenty of runway. Yes. We do.

55:11 To carry the revenue, which is great. Do you anticipate making any tactical acquisitions or funding other investments like Vireci over the next two years? I would like to think that we have a lot of opportunities. Again, I I can't go over the line and specify them. We are what what's interesting is we find ourselves in a position with KIDNEY INTELLEX where we're really the only game in town at the moment for a platform based approach to early CKD progression. And what that means is we're getting a lot of inbound from strategic partners, very superb researchers who are wanting to collaborate.

55:58 This represents in licensing and partnering opportunities, and we're seeing a whole lot in the kidney space. Vareci is one example. And from my perspective, that was accretive to be able to spin that out. That looks like that's gonna firm up as a nice IPO here shortly. And, certainly, we'll be looking to that success to model other things in the future. Yes. And, one of the reasons we did go to the Nasdaq is because we realized we're hitting tipping points in terms of commercial activity, regulatory, and reimbursement, and it was time to balance sheet this company to make sure that we could bring in all the appropriate people we needed to build the business, make sure that we weren't inhibited by in licensing, any complementary technology.

56:45 And, of course, the Nasdaq profile, has increased our visibility among significant strategic partners. So partnering is a a very viable route for us, to expand the reach of kidney and Telex. We have another question on the EUA, as well as the timing and beyond FDA. Do you wanna talk about that, the EUA for a moment, Tom, around I'd be happy to. Yeah. So with regard to EUAs, the EUA process hasn't been blocked, but it's been focused. And so EUA submissions are being prioritized on tests that address can be distributed widely, kit based technologies, or at home based testing.

57:42 And rather than slowing that process down, the FDA is shifting resources from noncritical reviews to COVID EUA reviews. So, the Kentaro kits, which can be distributed widely across The United States or around The US and and the, fact that they measure antibodies and begin to correlate that with virus neutralization, that's an area that remains to be of strong interest to FDA and, keeps the, the the movement on that EUA through the process, moving along. Thanks, James.

58:28 Richard, you have a question about share price. We don't typically comment on share price. I'm in this for the long game. After each raise we've done, we've seen a retreat of the share price. We're actually performing quite well year on year. And at the end of the day, it's a focus on fundamentals and execution, which is ultimately gonna drive share price, and that's what we're doing. Short term market capital fluctuations come from a number of different directions, which we won't discuss here. But the core question is, are we executing and building the right business? And I hope I've made that case today. And I hope it becomes clearer, in the December quarter and the March quarter that we are, in fact, building a proper business, which is crossing again additional milestones.

59:21 We intend to continue to accelerate the pace of milestones. None of us are getting any younger here on the phone. Fortunately, I've lost all my hair, so I don't have to worry about that. But we we've got our heads down, and we're putting the fundamentals in place to make sure that we're creating a long term standard of care, which is robust in one of the largest unmet medical needs that I've ever experienced at the right time in the right place. It's all about timing. We tried to do this five years ago. We couldn't have done it. The onset of value based care has given us reimbursements, coding milestones. The regulatory landscape has changed in our favor, and, of course, the cost issues, which are only gonna be exacerbated under COVID.

1:00:08 We've got new populations, coming out of the hospital post COVID infection that are worried now about systemic problems like kidney and cardiovascular disease. And, ultimately, as a society, unfortunately, we're getting fatter, and we're seeing diabetes taking off, as well. All of these populations are gonna need proper risk assessment around early stage disease progression, which we believe we're singularly focused on. And to me, that is a very strong value proposition, which is obvious to the people ultimately in the payer system and the health care system that are struggling to understand how do we focus resources on who. You've gotta have a stratification device to do it.

1:00:57 So, I'm very pleased with where we are. And, unfortunately, we are out of time. I think I've gotten to most of the questions. You've been brilliant. Yes. You indeed have. On the phone, but I wanna wish everybody I hope that you and your families are all safe as we go into whatever's gonna happen here in November and December. I noticed that some of our colleagues in Wales are now under deep dive full lockdown. This is all gonna be interesting to see how this plays out, but please, do be safe. COVID is not, something to take lightly. We talk to a lot of infectious disease people, a lot of the key thought leaders, in the world, And it it's a good time to practice social distancing and wearing a mask at this point until we get beyond this.

1:01:50 Anyway, thank you all for listening, and I look forward, hopefully, next year post vaccine and retreat of COVID if we can do this in person. That's brilliant. Thank you very much indeed. Well, is it brilliant? I don't know. It's an online platform, but, and we have filters for the hair as well, James. Anyway, thank you very much indeed to James and the team from, RENALYTIX AI. Could I please ask investors not to close the session as you'll be automatically redirected now for the opportunity to provide your feedback? If you access this meeting via the website, the feedback page will appear. If you access this via the link sent to you by email, you'll be asked to log in to submit your feedback. That will take a few seconds just to appear. On behalf of the management team of AIRENALYTIX, I'd like to thank you very much for attending today's presentation.

1:02:36 That now concludes today's session. Good afternoon to you all, and good morning to you in The U. S. Thank you very much. Thank you.