DermTech, Inc. (NASDAQ:DMTK) Q4 2022 Earnings Call Transcript

We’re excited about it. I mean it really works phenomenally well. We exceeded our expectations on how well the product works. And so, we’re excited to sort of test it out, but we’re not — we’re going to — it’s going to be controlled. But until the environment improves, we got to be very cost-conscious. We can’t be excessive with a big product launch. We’re going to just test it out, get some of the metrics and then inform our planning going forward with that product. The other products, we’re making progress. Go ahead.

Mark Massaro: Awesome. Awesome. Thank you for that. John, I’ve received a couple of questions from investors. Really, I know you addressed it in the prepared remarks that perhaps another executive can come in with maybe some more commercial acumen, if you will. But you’ve done a pretty good job driving strong volume growth. I guess can you maybe elaborate as to why now is the right time after 11 years at DermTech to move on?

John Dobak: Sure. It’s never easy. These transitions and the timing is always seems difficult, but this is really just about long-term planning. And my job right now is to anticipate the needs of the company looking out nine to 12 months. And if I look at where we are going to be with payers, with the commercial progress, with the infrastructure that we have, it’s going to be the perfect fit — time to find someone who’s got that leader that’s adept at scaling around a very large commercial opportunity. I’ve always said I’m a company creator and a builder, that’s my skill set. And I think the next phase of growth can be driven by some with a different skill set. That’s really — it’s an unselfish move. I just feel like it’s in the best interest for DermTech.

And it looks funny, the timing maybe now, but when you look, it’s going to take six months. We don’t want to be rushed with it, six to nine months, and we’ll give ourselves plenty of time to find the best person. And at that point, where we are in our growth rate is going to make sense to everybody.

Operator: Our next question comes from François Brisebois with Oppenheimer. You may proceed.

Francois Brisebois: Hi. Thanks for taking the question. Congrats, John, on the long tenure here. So I think just — I was just wondering, in terms of the national payers, can you just maybe discuss there’s been a lot of wins on the regional side, but what a win this year from one national payer would do and how it would it impact the business? And then is there any correlation between — it seems like you’ve already proposed stuff to the payers. But can you just discuss maybe TRUST 2 and the readout and what that can do for reimbursement?

John Dobak: So your first question around the impact of the ASP that the national payer would have, is that what you’re asking?

Francois Brisebois: Yes.

John Dobak: Yes. It’s going to be a very meaningful impact. We can’t — we have never quantified that, but it will be a very meaningful impact. I think that’s just the best to leave it there. We don’t want to get out in front of those things as we said until we see the numbers, but it would have a meaningful impact. And that’s why it’s very important to us to get those national payers. In terms of the TRUST 2 study, we think this is going to be a great study. We did the TRUST 1. The TRUST 1 had a component of a perspective element that had about 300 patients that were prospectively followed. But this study is going to be much larger, 3,000 patients prospectively followed for up to a year. That really tells you what’s going on with a pigmented lesion and if there’s melanoma by following it to see if it changes.

And so that’s what we’re doing in that study. It would be a very robust data set. We’ll also have a very big data set on positive cases. And we think it’s just a good follow-up study to the TRUST 1, much larger, and it’s just going to add to our tremendous database publications and evidence that says this test is very important, does what it’s supposed to do. We’re excited to get it done and announce the top line results in the back half of the year.