Exagen Inc. (NASDAQ:XGN) Q2 2023 Earnings Call Transcript

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John Aballi: Hi, Dustin. Good morning. Thanks for joining the call. Thanks for the question. So I can speak to this from a qualitative standpoint really queue [ph] in on some of the things that we look at. In terms of performance as an organization, we take a look at orders per physician. We take a look at our physician base. In Q2, we had a growth in our physician base. We’ve had a growth in our higher ordering physicians. I think we have the overall outsized performance really across the board for all of our key metrics. So from that standpoint, when we take a look at it whether it be driving new business, whether it be further penetration with any existing business, I think throughout the rep transition, we’ve done a phenomenal job — the team’s done a phenomenal job in executing well.

And so I think that we’re very strong in that regard. Our reputation, our brands within the rheumatology community is extremely strong, and the transition has had much less of an impact than we originally anticipated to be completely frank. So from that standpoint, I think we are right on track. Really as we get into Q3, as I tried to detail, it’s a slightly different scenario, right? You’re changing expectations with our customer base. And when the price of our test hasn’t changed for 10 years, there’s an ingrained expectation that’s out there. And change management is always challenging I think, especially when it comes to pricing and especially when it comes to physician behavior. So our team is adept at this. The company has a history of launching and expanding the product portfolio.

And so in terms of educating the physician base, I think we’re very good at it. We’ve prepared extremely well. We’ve generated quite a bit of new collateral that’s gone out really to aid in explaining the change and the why to the physician. We’ve developed quite a bit of patient support material as well. And then we have a very compassionate team internally that’s been educated as to how to communicate these changes and how to articulate them to patients as well as clinicians. So I think we’ve done what we can to prepare. And I’ve seen it firsthand. I was in the field actually in Houston and St. Louis over the last couple of weeks, specifically for this reason, working to have conversations with some of our key clinicians, understand what the challenges of these changes mean for them and their practice.

And the majority that I visited, I visited over I think it was 17 or 18 different clinicians over a couple of week period. And it was well received. Once you explain the why, I think it was very positive. There are some use cases that will likely fall off better, more price sensitive. And so that’s being taken into account into our guide. But from a sales rep standpoint and from a preparation standpoint as an organization, I think we’re right where we want to be, I think handling it as best we can.

Dustin Scaringe: Got it. In the past, you’ve also talked about opportunities with large academic institutions. Just wondering how you guys are tracking in there in terms of ordering dates and trends?

John Aballi: Great question. So we don’t pull this out as an individual metric to report on, but I can give you a few highlights. We continue to do well with large academic institutions. I think we are strongest in the community-based practices, where rheumatologists have kind of different pressures, if you will. They’re trying to operate a more effective business on their own, and they’re seeing upwards of 20 patients per day. So time is of the essence in that context. In the academic setting or maybe even in the large institution setting, there’s typically a combination of research demands along with clinical demands. And so there may be some more time for discussion, but also may be less patient flow and they tend to see some of the more severe patient cases.

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