Alright, let's go ahead and get started. Good morning, everyone. My name is Ross Osborn. I'm the MedTech and Diagnostics Analyst at Cantor Fitzgerald. This morning we have Lucid Diagnostics, and with us is the company's Chairman and CEO, Dr. Lishan Aklog. With that, Lishan, would you provide a brief background of yourself? Sure. Thanks, Ross. Thanks for inviting us. It's always great to be here at this conference. I appreciate the invitation from yourself and from Cantor. I'm Dr. Lishan Aklog. I'm Chairman and Chief Executive Officer of Lucid Diagnostics. Lucid Diagnostics is a cancer prevention company. We have a groundbreaking molecular diagnostic test that can be performed in patients non-invasively in a couple of minutes in an office setting that can detect esophageal precancer as a means to prevent esophageal cancer, which is the second most deadly cancer and one of the biggest sort of tragic cancers we deal with. Great. I guess diving right in, some exciting news yesterday. Would you walk us through the meeting? Something happened yesterday? I'm not really sure. It looks like. No, thanks. What Ross is referring to, and I'll probably give a bit of background here, is that it is sort of hot off the press that we've been in a kind of long process of trying to secure Medicare coverage. That involves working with the MolDX group that operates out of one of the medical administrative contractors, Palmetto GBA, on behalf of multiple MolDX participating contractors. We've been working very closely with the MolDX group now for many years. There's a published local coverage determination that was issued prior to us having sufficient data to be able to secure coverage. We've been seeking to now flip that local coverage determination to cover our EsoGuard molecular diagnostic test. We're in the late stages. We're quite confident of that and we're quite optimistic, really confident that we are on the verge of securing Medicare coverage. An extremely important step to that end happened yesterday. The MolDX participating contractors, there's four of them, including Meridian, which is the one that covers our laboratory in California, hosted a multi-jurisdictional Contractor Advisory Committee meeting. That's a really important fact that it's multi-jurisdictional, they do have multiple labs together. The purpose of this meeting was to provide clinical context to the clinical evidence that we've submitted that includes multiple clinical validity studies, multiple clinical utility studies. The purpose of this meeting was to sort of flesh that out with medical experts discussing the clinical context of that as it relates to guidelines, as it relates to real-world experience using the technology, and so forth. We've had a very good working relationship with the MolDX leadership. We have a very strong, clear understanding of what the purpose of this meeting was. He actually described it. Dr. Bien-Willner, in the opening and closing parts of the meeting. The meeting went great. It was really, he had 11 medical experts on there. I have no idea how he got through 17 questions. Several of them were multi-part, a really substantive discussion, and over two hours, actually, moderating, working towards it. It accomplished its goal. We believe it accomplished his goal, as he outlined it at the beginning of the meeting, and it accomplished our goal, which was to have an opportunity for clinical experts in the field to highlight a series of things. One is the just unprecedented, overwhelming clinical validity data. There was overwhelming clinical support for that. It was a very detailed, you know, they really dissected out the negative predictive value of 99%, positive predictive value. Its role is a rule in test, how you, how it interfaces with the endoscopy confirmation testing. It included a lot of discussion with regard to clinical utility, which is something that payers, both Medicare and other payers, are extremely focused on. They want to know that not just that this test is sort of, you know, fulfills its technical wizardry in the laboratory, but that clinicians can actually use it in an appropriate fashion. Every single element of that, including all the challenges to getting people to go to endoscopy, the patient compliance. They highlighted the fact that a patient who has a positive biomarker test with EsoGuard has double the compliance rate of getting an endoscopy. That EsoGuard enriches the population who are getting the invasive test so that there's almost a three times increase in the diagnostic yield. All of that was, you know, very well fleshed out. Honestly, the part that I, and that was fleshed out by leading academic, you know, gastroenterologists and pathologists, all from prestigious institutions who had, you know, who wrote the guidelines for this technology, wrote the guidelines that actually include non-endoscopic biomarker testing. Honestly, the part, the part that I found, you know, most fascinating. I mean, I've been in medicine for 40 years. I've been involved in, in, you know, either witnessed or participated in very similar panels over many decades. I've never seen quite a meeting quite like this, which was able to balance the clinical panel, you know, the clinical sort of sciencey part of it with a focus on patients. You know, that's what we're all about. That's what our entire company is all about. Sure, you know, we're, you know, we're a commercial company. We look forward to being successful. At the end of the day, this is about access to patients for a lifesaving technology, people who are dying of esophageal cancer. Dr. Panzarella, a gastroenterologist from Florida, highlighted the fact that we lose a basketball arena full of patients every single year to this [fatal] cancer. That's, you know, that's a nine to 11 every six weeks. He put that right at the beginning and in stark respect. Dr. Dunst, who is a leading esophageal surgeon and is the head of this program at Hoag Hospital, we talked about before, where they're launching an entire program to eradicate esophageal cancer in their region in Orange County using this test. She was very adamant about, you know, she's a surgeon. She's like, I don't want to do any more ineffective activities on these patients. We got to find these patients, get them to endoscopy, get them to heal. Perhaps, honestly, in a sea of, you know, sort of high-powered academic doctors and surgeons, perhaps, you know, I would say maybe the star of the show was a primary care physician in Colorado, Dr. Jamie Glover, who did an incredibly powerful story of her challenges with getting people to, you know, to comply with the early detection programs, to drive patients to invasive tests like endoscopy, and how she's generally quite skeptical of new technology. It's not something that, you know, especially every private practice person does, but she knew about the paradigm here. After overcoming that skepticism, adopted it in her practice. She had two patients right off the bat. One of them was negative, and she said, "You're good. Done. No problem. You need nothing further. You don't need an endoscopy." The other patient was positive. They did an endoscopy. They found high-grade dysplasia, which is what you would, what we're trying to do, just to find that. They sent the patient to Dr. Juan. He was one of the panelists, who's an expert endoscopist at the University of Colorado. Not only did he find high-grade dysplasia, he found a T1a cancer, essentially a stage zero cancer. That patient, no doubt, that patient would have presented with invasive cancer and a death sentence in some period of time, early within two years. He was able, with an endoscope, without surgery, to get rid of that T1a cancer. Sorry to be a little bit here, but the patient side of this, even though that's an anecdote, it's just a reminder that, yes, there's science. This was public research. There's data. We're talking about, you know, more patients who are out of it. You know, that was sort of at the heart of this. It's good to hear. I guess maybe taking a step back, what was the rationale for the CAC meeting? Yeah. What are the next steps? Yeah, the way local coverage determinations through the MACs work, let me just backtrack a little bit now to give a little bit of the history. In 2023, based on our request and several years of effort, they published a final Local Coverage Determination that reads like a coverage determination, like one of these foundational coverage determinations, which say we will cover this test under criteria that are already in the American College of Gastroenterology Guidelines, not making up for the population. A very well-established, high-risk, symptomatic population. It said, but there's no test yet at that time that has sufficient data to justify our coverage. It was a non-coverage decision, but written with clear guidelines and a clear roadmap as to what they would expect. Once we had sufficient data, which we were able to complete by the end of last year and get it all in the published peer-reviewed literature, both clinical validity and clinical utility, we submitted in December a request for reconsideration to basically say, we love this LCD, please, we're requesting that you flip it from non-coverage to coverage based on our overwhelming data. They accepted that request and have been working on that since. They spent a good part of the first half of this year, I think the early part, navigating some of the challenges with the transition. Eventually, you can tell just from their work, the work product out of MolDX, they're issuing a lot of TAs and LCDs. They announced this meeting about six weeks ago. As I said, and as Dr. Bien-Willner clearly stated both in his opening and closing, the purpose of the meeting, the reason he and his colleagues called this meeting was not really necessarily to debate the clinical evidence. They could see it for themselves within the peer-reviewed literature. The reason, again, as you said explicitly, is that in order to inform a Local Coverage Determination by statute, by the statutory regulations that they operate under, there are only two ways to get information that can inform an LCD. One of them is peer-reviewed published literature. Another one is a CAC meeting. It's a public meeting of established experts discussing the clinical context. The goal there is, you know, in drug studies, sometimes you'll just have one study, right? That's the definitive study. It's a randomized control study. It's got 50,000 people. Boom, the answers are all in one study. That's not the case in these kinds of things. In diagnostics and medical technology, you have a series of data points that form a chain of evidence. Sometimes you need clinicians, you know, the folks at the medical directors are not gastroenterologists. There are many of them who are molecular pathologists and others. They just need clinicians to say, okay, how does this whole thing actually fit together in the real practice? That was the purpose, to provide the clinical context. I think the clinical experts just headed out of the box to achieve that goal. Great. Going forward, what are the next steps? The next steps, now that this is done, again, we think we're quite confident this is kind of the final stages. The next step, and the one we believe is the milestone, I'll explain sort of the technicality why that is, is the publication of a draft LCD, a draft Local Coverage Determination. That's how it's worked. First, they first officially publish a draft. The reason that's the milestone is this is a request for reconsideration. There's an existing LCD that says these tests are not covered. If they were going to deny that, they would just say there's not anything published. You just say, sorry guys, you know, I don't know how to do that. Many reasons they're going to do that. The publication of an LCD is essentially an assent that they are, you know, an indication again that they want to come to this. There's a formality. There's kind of a bureaucratic formality you have to go through. A draft gets published, and then there's a 45-day comment period where you have a public comment meeting and an opportunity for comments. Honestly, we believe that's a formality. You saw the consensus there. No one's going to come in and say, we don't think you should cover this after, you know, after this kind of overall. About a 45-day window to complete that, and then some time to get through a few more bureaucratic steps to get it on in the article for coverage. The big question, of course, is when would we expect to draft coverage? Look, we have, we don't know for sure, obviously. I think it's, you know, I have a high level of confidence, and even more so after yesterday's meeting, that it is coming soon. It does take some time. There's just sort of the logistics that are required to get everybody on board. The whole way MolDX group works is through consensus. I have to get all of the formats to all agree to publish the same LCD. That's generally what you do. You can copy and paste them. There's some time that's required to do that. Everything that we've seen, both in our deliberation, strongly suggests that they kind of already put in the work the first half of this year in doing the analysis and reviewing this literature. It was very clear to anybody who listened to the call that Dr. Bien-Willner is completely facile with the data. He knows it inside out. It just feels like this is the final step of kind of getting everybody on the same page. I'm certainly hoping and expecting that kind of thing to work. Great. Are there any steps between a draft and a final or published LCD? Yeah, the steps are just bureaucratic formalities. I really believe it's a 45-day window for public comment that gets finalized, and then another period after the final is issued to technically get listed in the articles under CMS, the matching program. Certainly a few months, at least, after a draft before a final subscription. Frankly, as far as we're concerned, once we have a draft, we're off to the races. Great. Speaking of off to the races, you know, what's the commercialization plan now? Yeah, you know, we talked a little bit about this on our last earnings call. In anticipation of getting Medicare coverage, you know, we've never, and you know this from having followed us for years, we've never made any particular effort to identify patients for the Medicare population. In fact, our commercial strategies to date, where we're trying to be really efficient with keeping our OpEx down and be really efficient with our commercial team, has focused, frankly, a bit on younger patients, like firefighters and other people who still are, you know, qualified for testing. Only about 10%- 15% of our patients historically have a Medicare. [I think we have a quarter of a show of 23%]. By the epidemiology, about half of these patients are Medicare. There's an immediate opportunity for us, which we've already started, to go and to really talk more directly to the physicians and to the practices about identifying Medicare patients who, you know, call something. One reminder, which is that upon issuance of a final coverage, we have a year backlog. We could submit claims that we're holding for an entire year prior to that. Any effort we have right now with regard to Medicare patients, we expect to get based on. That process has started. We have made some tweaks to our commercial team and our commercial strategy, and that started to base it. It's not that hard to target practices. There are lots of data tools right now that are available. You're back to them with digital advertising and things like that to try to encourage Medicare patients to submit. That's our traditional commercial policy. We're also pushing hard on commercial payers. All the Medicare, Medicare, Medicare, but we're, you know, there is a pathway. We believe that even as we're waiting for Medicare, we're going to start continuing to get traction on regional plans. We just got our first Blue Cross Blue Shield plan. That's Highmark and Blue Cross Blue Shield in May, and that was a fairly quick process. We had our data finalized at the end of last year, and by the time we kind of were able to submit them and get a medical policy, which just happened to work in a month. We have a pipeline of regional plans that we're working on right now. The larger plans are almost certainly going to wait for Medicare coverage. We're still pushing hard on that. We have an active program, as you know, that is kind of separate from the traditional claims process. We engage with employers, the fire departments, to do contracted testing. It's something that we've been doing more and more of with the program that we really started pushing for force in the first and second quarter of this year. We're starting to get traction, starting to get employers that are willing to, you know, that are taking up some of the offers just on a purely contracted basis, offering testing for their groups. We have fire departments that are successfully securing grants or other sources for us to do, you know, healthcare type-wise. We think those will start to be influenced through our bottom line. Great. You mentioned, you know, maintaining OpEx to spend ahead of not having broad coverage. Now that looks like you will receive coverage. You know, what's the plan for your sales force? Yeah, we're going to be cautious, right? We think with our existing sales force, with the tools we have, we'll be able to drive coverage. Everything else within the company is absolutely scaled onto our laboratory, our manufacturing, cell collection device, and so forth. We're not going to get ahead of our ski if it starts. Not the capital to do that. Let's just say we've been kind of tested by fire in the last few years. [We're not capital to hide it]. We built a company that has a clear path, pathway to profitability, once we start securing broader coverage. We're going to stick to that path to get to cashflow plus, of course, [the full, full of]. Great. How should we think about ASP [best]? The Medicare price, one of the fortunate things that we got that came out of this engagement, which is now a five-year engagement with the MolDX program, was quite attractive. A Medicare payment, $1,938. Our cost of goods, [$1,200], but gives us a nice margin to build the business. Right now we're only collecting commercial out of network. We're starting to collect with the, you know, with iMark and others, and through the contracted side, but our traditional business, we're only collecting about a few percent of what we're billing. Certainly, you know, we're billing tens of millions of dollars in the revenue. I think you've seen the math, and we're only collecting a small amount. If you do the kind of, it's a bit of an artificial number, right? You could do sort of an ASP, that what were your revenue? How many tests did you do? It's not really apples to oranges, but apples to apples. That number is clearly, you know, going to start going up because every single Medicare patient will be a fully paid patient, including Medicare Advantage. Right. At some point, does it make sense to revert back to really pushing testing centers? I'm sure you mentioned that. Just to explain to folks, early on when we were, the whole process of doing cell collection here is tricky, as you know, right? This requires a trained person to do a cell collection. You talk about primary care office. It's very hard to kind of justify them, you know, using the resources, they're tight. If you go to a big health system like Hoag, which has 200 primary cares, they can basically centralize all of that as well as GIs. All of that came out, by the way, in the meeting yesterday. Dr. Panzarella, the GI, does the test himself. Dr. Glover is learning to do the test herself, but on the other hand, she utilizes our nurses in the office. Dr. Panzarella uses our mobile unit in Florida. Other centers have their own folks that are trained. We've had a kind of a multifaceted approach to this. One of them is, in fact, having physical centers where, particularly when a patient self-refers, you can get them in, have them use telehealth, get them the cell collection part of the one-minute office space test under our, you know, within our program. We can send the positive, have the positives referred to a gastroenterologist. They will become an increasing part of it. Right now, just as a reminder, it's part of a multifaceted way where we just want to make sure that every patient has a way that's streamlined to get the cell collection part of this, no matter what the practice environment under which they're operating and where the referring physician is. Makes sense. You mentioned driving awareness. Could you walk through some PTC efforts? Yeah, you know, this is an interesting situation here in that we know that this is a testing paradigm or, you know, early detection program that easily resonates with patients. Not that hard to say. Everyone knows about heartburn, and everyone knows about cancer. Educating patients on the link between heartburn and cancer is a very straightforward thing, and getting them to do a non-endoscopic test that's quick and in the office that doesn't require an endoscopy is a low hurdle, as was discussed in quite a bit of detail at yesterday's meeting. We've tested this. We have a full market program. We've got Freddie, the [stomachic], you know, tells you to check your food tube. We did do a bit of that in Phoenix where we had multiple physical centers, and it clearly worked. There's a billboard jumping you, and you advertise on radio and TV and on the Internet, and people will come. We just haven't pushed that until we have broader coverage. Once we do, we'll be able to do that, and I think we'll be able to do it in a way that's more capital efficient than, let's say, others who've tried to do this where their pricing is lower, their margins are less. The 15%-2 0% that you spend on the process of getting a DTC program up and running, we have plenty of room with that within our margin. Others have been successful with a lot less room. Right. Maybe on the physician side of things, how do you feel about awareness from the community? Yeah, that comes up a lot. One of the things that we've learned when you start a program, whether in any medical technology or anything, you worry about clinician adoption. You worry about how hard is it going to get people to change the way they do things, change their practice, use your new technology, whatever it is, right? Six, seven years ago, we were appropriately concerned, like, how are we going to get physicians? It just has not been a problem. We have great sales, a commercial team in the field, when they walk into a physician's office, either they know the guidelines already or they have a general sense of the relationship. As long as they know that they don't have to, they don't want to burden their staff or otherwise with the cell collection part of it, it's just not an issue. We've kept our test volume, as you know, at a pretty steady level to kind of keep our OpEx flat. That's not because we have any problems with physician adoption. Once we're in, what we have, we don't have that 100% coverage. Even if we're at 40%- 50% covered lives, there's just not going to be an issue. It's a very straightforward discussion point. They can go to their EHR and look up, the guidelines are there. This is a very straightforward situation that you have a very well-defined target population, which is not true for some of the new technologies, right? They don't come pre-attached with a, you test it in these patients. This is a hospital player. You know who you're supposed to test. The physicians will typically, once they get on board, say, okay, let's go through our EHR. Let's start sending emails and letters to people who are at risk. Let's start bringing them in for testing days, often in their office. It works extremely well and it's very scalable. Is there any need for incremental clinical data? We don't believe for, we'll continue to collect clinical data because we're a data-driven organization founded by and run by physicians. That will continue. We have a BE2 study, which is just closing out, which is a larger case control study that we're confident will replicate those results. There's some data that I think you're aware of. There's an NIH study right now that's being a follow-up to a pilot study, which shows that heartburn is a, that patients, even if we don't have symptomatic heartburn or don't have particularly severe symptomatic heartburn, have essentially the same incidence of precancer. And EsoGuard's performance in that population was essentially the same. That was a pilot study. Now there's an $8 billion NIH study that's looking to demonstrate that, that will provide an expanded market opportunity at some point in the future. Right. We used to talk about Europe. Does that come back in the picture? Europe's interesting, you know, yes, it will. Continental Europe is just tough because, if you look at other big diagnostic companies and you look at their footprint there, some of the genomic profiling and all that's fine. Screening is kind of hard because they at least claim they're highly efficient and they are. They do a lot of centralized testing with regard to endoscopy and so forth. The math is difficult to make that work. The U.K. is a different place. I mean, the U.K. has an interesting hybrid. We think of it as a national health system, but it has an interesting hybrid of private as well as NHS-based pay. It's actually quite different. There's a lot of awareness right now in the U.K. about that. That's something we may take a look at. Right. Looking to next year, key catalysts or milestones we should be watching out for? I think there's one, which is, again, securing Medicare coverage and getting that through the final process. From that point, it's going to be about really two things. One, driving our, the portion of our patients that are Medicare up towards the normal rate within the target population, about 50%. That's in our control. We'll drive that, and then sort of steadily increasing the number of covered lives with the commercial payers, which we think will really accelerate that. We have good data that's well established, and once we get Medicare, particularly we do that. That [will assign. We do have a pipeline. We don't talk about it much. We have, you know, we have a really robust R&D program. We're looking at other marketers for other applications that we'll be, you know, talking about a little bit more as soon as they're here. Perfect. Congratulations on the positive CAC meeting. Thank you for being here today. Yeah, thanks, Ross. Appreciate it.