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

Page 6 of 10

Once you get referred into some of the academic institutions, your disease has likely progressed, you’ve likely filtered through some of the community-based practices as well. But we’ve had — over the first half of this year, we’ve had some significant wins. We’ve had a major system in San Diego actually take on our product, and we signed a contract with them to offer the AVISE test throughout their entire system. And then additionally, we’ve had Northwestern as well, that’s a new contract for us, major academic institution that we’ve worked with. That was a multiyear effort to get that partnership established. And we’re launching within that system here in Q3. So I think we continue to do well. I think we serve the client bill, if you will, customer very well and we have a very strong value proposition.

We save the system money. And so for those systems which are integrated within themselves and maintain a cost share component, it’s a very attractive value proposition not to mention the clinical benefit of the test. So we continue to do well on both fronts. We have a team that’s focused on this area, a team of individuals that their sole responsibility is to take a look at some of these large practices. There’s quite bit of bureaucracy. So you have to have the skill set, you have to have the experience to work through these institutions. And so we have a strong team that continues to do so. And we’ve seen some of those improvements. We just don’t telegraph all of them on a regular basis or kill this part out mostly because I think when it comes down to it, what really matters is the performance of the organization as a whole and within the numbers.

And so we’ve queued people into the trailing 12-month ASP, we’ve taken a look at overall revenue and then the cost per revenue. And so we think that all of our efforts will culminate in improvements there and subsequently help us achieve a profitable organization.

Dustin Scaringe: Got it. Good to see progress going on there. And just the last small one for us. Any update on the AVISE CTD to mid last July? Thank you.

John Aballi: Sure. So just to level set everyone as well on the call, we obtained a proprietary PLA code for the AVISE Lupus testing and it was granted in April of 2022. We went through the pricing procedure over the past 12 months or so. And pricing for AVISE Lupus was finalized in January of this year. And then we’ve maintained coverage as well as payment for 2022 and 2023 claims throughout that process. As part of this, Medicare had asked us to submit for and apply for an LCD. We did so in September of last year. And we got acknowledgement at the time that it was a valid submission. And we are waiting for the next contractor advisory committee meeting, CAC meeting, to understand when a draft LCD will be published. At that point in time, it will be approximately about a year before any coverage document will be finalized and public comments will be welcomed throughout that approach.

But for now, there’s no statutory requirement for timelines and we’re just waiting on our local MAC, that’s Noridian to hold this meeting and to push the ball forward. So for now, no additional updates. We have a great working relationship with the Noridian team. And to date, they’ve given us no indication as to when that meeting will occur. So we remain in the queue and exactly where we were almost a year ago at this time.

Dustin Scaringe: Great. Thank you, John.

Operator: Thank you. Our next questions come from the line of Kyle Mikson with Canaccord. Please proceed with your questions.

Page 6 of 10