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

Francois Brisebois: Okay. Great. And is there maybe a clear impact correlation here on the impact it would have on reimbursement or…

John Dobak: Well, I think payers always love more evidence, right? It’s always important to be putting out evidence, so do doctors. So we have a few publications that should be coming out here on some smaller studies that we’ve done in 2022, but this is really the biggest effort we took in 2022 to start was around this long-term TRUST 2 study. I just — we always believe it’s important to generate data. Payers love more data. If there are some that are still on the fence, I think this study is going to do a lot to push them over. And so, we just want to get it done and add to that tremendous database that we have.

Francois Brisebois: Okay. Great. And then in terms of penetration of the docs, you mentioned 46% penetration. Where would you like to end up? Or what would you think would be reasonable in terms of a peak penetration of the doctors?

Kevin Sun: Well, I think if you look at any kind of technology through there, getting heavy levels of penetration, more than half would be ideal. As we noted, we’ve only targeted the first 9,000 doctors based on efficiency of scaling and sizing the sales force appropriately for the best bang for the buck. Once we talk about expanding beyond the 9,000 to the full 11,000 doctors, it’s more investment to get the entire reach of it. But I would say we would target whatever a good penetration for typical dermatology or genomics types of products are. And again, I would estimate that to be more than half of those doctors.

Francois Brisebois: Okay. Great. Thanks. And then just lastly, when you mentioned that you believe the tariff friction is easing, can you just maybe give us a little color as to what you base that statement on?

John Dobak: Well, so one, we’ve been able to get out in front when they’re sending redirection letters and explain to our customers what that means, and we actually turned the customer into an ally of ours and help us go back to those plans that send those letters. And so, we’ve turned that around, and we’re out in front of that now, and the sales reps know to be on the lookout for any of those things. And so, we’ve seen that dropping off. We haven’t seen as much of that in this quarter. We’ve been able to get some of the folks that got those letters and kind of shut down. We’ve got them back on track. The other thing we’ve done is EMR integration. So one of the challenges the payers are doing that creates friction is they require medical records even for the first claim submission.

So we’ve now done some technology integration where instead of us having to go, have the doctor pull records and provide them to us, it’s just going to be done seamlessly electronically with our EMR integrations. We’ve got a tremendous scale up in the EMR integrations with our customers and we have that functionality that will now be added, and we can just pull those records without having to have put a lot of burden and administrative pain on the customer. We think that’s going to be important. And so we’re excited about those opportunities to reduce that friction.

Francois Brisebois: Thank you.

Operator: Thank you. Our next question comes from Alex Nowak with Craig-Hallum Capital Group. You may proceed.

Unidentified Participant: All right. Great. Good afternoon everyone. This is (ph) on for Alex. Maybe first, John, I appreciate the color on what we’re looking for in the next leader of DermTech, kind of looking for somebody with a different set of skills. I wanted to just follow on that a little more. I mean what sort of individual is needed to really take DermTech to the next level? And I mean is this primarily an external search? Or has there been an effort to build out an internal bench?