Lucid Diagnostics Provides Business Update and Preliminary Fourth Quarter and Full Year 2023 Financial Results
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Insights
The announcement by Lucid Diagnostics Inc. regarding a 33 percent sequential increase in quarterly EsoGuard revenue is a strong indicator of the company's growth trajectory in the medical diagnostics sector. This performance metric is particularly significant as it reflects not only an increase in sales but also potential improvements in market penetration and adoption of the EsoGuard test, which is designed for the early detection of esophageal cancer.
Furthermore, the mention of expanding clinical validity and utility data that could drive medical policy coverage, including Medicare, suggests that Lucid is positioning itself to capitalize on a broader market. The ability to secure Medicare coverage could substantially increase the addressable market for EsoGuard, as Medicare beneficiaries represent a large segment of the population at risk for esophageal cancer. The engagement with medical directors at major commercial payors for positive coverage is another pivotal step that could lead to increased utilization and reimbursement rates.
Investors should note that stable test volume and improving revenue cycle management processes, yielding better allowances and stable pricing, are indicative of a maturing operation with potential for enhanced margins. Lucid's #CYFT program and high-volume testing events could further bolster revenue streams and diversify the company's portfolio of services. However, investors should also consider the inherent risks associated with the healthcare industry, such as regulatory changes and competitive pressures, when evaluating the company's long-term prospects.
The emphasis on clinical validity and clinical utility evidence is paramount for the adoption of any new medical diagnostic tool. Lucid's strategic focus on building a robust evidence base for EsoGuard is a critical step toward establishing the test as a standard of care for esophageal cancer screening. The potential line of sight to Medicare coverage is particularly noteworthy as it implies that the company has amassed sufficient data to demonstrate the test's efficacy and cost-effectiveness to Medicare's medical directors.
From a research perspective, Lucid's engagement with commercial payors to request positive coverage is an essential process that involves demonstrating the test's ability to improve patient outcomes and potentially reduce overall healthcare costs by catching cancer earlier. The success of these engagements could lead to increased adoption of the test by healthcare providers, which in turn could have a positive impact on public health outcomes. Moreover, the company's direct contracting initiative, which is gaining momentum, could provide more control over pricing and distribution, potentially leading to increased market share.
It is important for stakeholders to monitor the ongoing accumulation of clinical evidence supporting EsoGuard, as well as the outcomes of discussions with payors, as these factors will significantly influence the test's adoption rate and, consequently, Lucid's financial performance. Additionally, the company's ability to navigate the complex landscape of healthcare reimbursement will be a determining factor in its success.
Quarterly EsoGuard® revenue increased 33 percent sequentially
Expanding EsoGuard clinical validity and clinical utility data poised to drive medical policy coverage, including line of sight to Medicare coverage
Conference call and webcast to be held tomorrow, March 26th at 8:30 AM ET
Conference Call and Webcast
The webcast will take place on March 26, 2024, at 8:30 AM, and be accessible in the investor relations section of the Company's website at luciddx.com. Alternatively, to access the conference call by telephone,
Following the conclusion of the conference call, a replay will be available for 30 days on the investor relations section of the Company's website at luciddx.com.
Business Update Highlights
"We are very pleased with the excellent progress Lucid has made on multiple fronts in the fourth quarter and recent weeks," said Lishan Aklog, M.D., Lucid's Chairman and Chief Executive Officer. "We saw solid revenue growth on stable test volume and our revenue cycle management processes are yielding improving allowances and stable pricing. Our #CYFT program targeting firefighters and other groups is thriving and we have a robust pipeline of scheduled high-volume testing events. Most importantly, we have rapidly built our clinical validity and clinical utility evidence base to drive positive medical policy coverage, including what now we believe is line of sight to Medicare coverage. Equipped with sufficient data, we have for the first time engaged with medical directors at major commercial payors to request positive coverage. Our direct contracting initiative is also accelerating and we are excited about the near-term prospects of delivering contracts, testing and revenue."
Highlights from the fourth quarter and recent weeks include:
- 4Q23 EsoGuard revenue was
$1.04M - Lucid's CLIA-certified clinical laboratory performed 2,201 commercial EsoGuard® Esophageal DNA Tests in 4Q23.
- High-volume #CYFT health fair testing events continue to gain traction with a robust roster of events scheduled through July.
- Lucid initiated EsoGuard testing at over a dozen strategic accounts at health systems and academic medical centers with several dozen more engagements in process.
- Since upgrading to a new revenue cycle management provider in mid-June, Lucid has submitted claims to commercial and governmental payors representing approximately
$20 million $1,800 - EsoGuard's clinical validity and clinical utility data evidence base has expanded significantly in the fourth quarter and recent months. Lucid now has publicly-released data from three clinical validity studies demonstrating excellent EsoGuard sensitivity and negative predictive value, including unprecedented performance of a molecular diagnostic test in detecting precancer. In addition, three published clinical utility studies have documented near-perfect concordance between EsoGuard results and physician referral for upper gastrointestinal endoscopy. These data provide a strong foundation of critical evidence needed to support broad EsoGuard medical policy coverage. Lucid expects to leverage this data in its upcoming re-engagement with the MolDX program to secure Medicare coverage under the final and effective foundational Local Coverage Determination.
- Held several meetings in recent months with medical directors of major commercial payors to discuss clinical validity and utility data and formally request positive medical policy determinations for EsoGuard. The Company also participated in a Blue Cross Blue Shield Association of America webinar with dozens of medical directors in attendance, during which Nicholas Shaheen, M.D., M.P.H., a leading esophageal precancer expert and lead author of the American College of Gastroenterology's guidelines, advocated for coverage of non-endoscopic biomarker testing consistent with the ACG guidelines. Lucid also expects recent expansion of legislation requiring coverage of certain biomarker tests, now effective in fourteen states, will help drive medical policy coverage.
- Established that EsoGuard testing can be offered as a covered benefit within health and wellness programs as a means to drive contractually-guaranteed revenues. Lucid has built a robust pipeline of direct contracting counterparties, including benefits brokers, third-party administrators, and self-insured entities. The Company expects to drive direct contract testing events with meaningful revenues in the coming quarters. The Company is adding resources to the direct contracting team to accelerate this initiative
Financial Results
- For the three months ended December 31, 2023, EsoGuard related revenues were
$1.0 million $2.4 million $12.5 million $50.9 million $1.0 million $6.8 million $10.8 million $52.7 million $(0.26) $(1.26) - As shown below and for the purpose of illustrating the effect of stock-based compensation and other non-cash income and expenses on the Company's financial results, the Company's non-GAAP adjusted loss for the fourth quarter and full year 2023, were approximately
$9.9 million $38.4 million $(0.23) $(0.92) - Lucid had cash and cash equivalents of
$18.9 million $22.5 million $18.1 million - The audited financial results for the year ended December 31, 2023, were filed with the SEC on Form 10-K on March 25, 2024, and available at www.luciddx.com or www.sec.gov.
Lucid Non-GAAP Measures
- To supplement our audited financial results presented in accordance with U.S. generally accepted accounting principles (GAAP), management provides certain non-GAAP financial measures of the Company's financial results. These non-GAAP financial measures include net loss before interest, taxes, depreciation, and amortization (EBITDA), and non-GAAP adjusted loss, which further adjusts EBITDA for stock-based compensation expense and other non-cash income and expenses, if any. The foregoing non-GAAP financial measures of EBITDA and non-GAAP adjusted loss are not recognized terms under
U.S. GAAP. - Non-GAAP financial measures are presented with the intent of providing greater transparency to the information used by us in our financial performance analysis and operational decision-making. We believe these non-GAAP financial measures provide meaningful information to assist investors, shareholders, and other readers of our audited financial statements in making comparisons to our historical financial results and analyzing the underlying performance of our results of operations. These non-GAAP financial measures are not intended to be, and should not be, a substitute for, considered superior to, considered separately from, or as an alternative to, the most directly comparable GAAP financial measures.
- Non-GAAP financial measures are provided to enhance readers' overall understanding of our current financial results and to provide further information for comparative purposes. Management believes the non-GAAP financial measures provide useful information to management and investors by isolating certain expenses, gains, and losses that may not be indicative of our core operating results and business outlook. Specifically, the non-GAAP financial measures include non-GAAP adjusted loss, and its presentation is intended to help the reader understand the effect of the loss on the issuance or modification of convertible securities, the periodic change in fair value of convertible securities, the loss on debt extinguishment, and the corresponding accounting for non-cash charges on financial performance. In addition, management believes non-GAAP financial measures enhance the comparability of results against prior periods.
- A reconciliation to the most directly comparable GAAP measure of all non-GAAP financial measures included in this press release for the three months and year ended December 31, 2023, and 2022 are as follows:
Condensed consolidated statements of operations (unaudited) | ||||||||
(in thousands except per-share amounts) | For the three months ended December 31, | For the year ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | |||||
Revenue | $ 1,040 | $ 112 | $ 2,428 | $ 377 | ||||
Operating expenses | 12,493 | 15,086 | 50,910 | 56,628 | ||||
Other (Income) expense | (624) | (47) | 4,184 | (80) | ||||
Net Loss | (10,829) | (14,927) | (52,666) | (56,171) | ||||
Net income (loss) per common share, basic and diluted | $ (0.26) | $ (0.40) | $ (1.26) | $ (1.55) | ||||
Adjustments: | ||||||||
Depreciation and amortization expense1 | 629 | 615 | 2,499 | 1,936 | ||||
Interest expense, net2 | (84) | (47) | (8) | (80) | ||||
EBITDA | (10,284) | (14,359) | (50,175) | (54,315) | ||||
Other non-cash or financing related expenses: | ||||||||
Stock-based compensation expense3 | 964 | 3,740 | 6,822 | 14,991 | ||||
ResearchDx acquisition paid in stock1 | — | — | 713 | — | ||||
Change in FV convertible debt2 | (540) | — | 2,980 | — | ||||
Offering costs convertible debt2 | — | — | 1,186 | — | ||||
Debt extinguishments loss - Senior Secured Convertible Note2 | — | — | 26 | — | ||||
Non-GAAP adjusted (loss) | $ (9,860) | $ (10,619) | $ (38,448) | $ (39,324) | ||||
Basic and Diluted shares outstanding | 42,330 | 37,373 | 41,756 | 36,172 | ||||
Non-GAAP adjusted (loss) income per share | ||||||||
1 | Included in general and administrative expenses in the financial statements. |
2 | Included in other income and expenses. |
3 | Stock-based compensation ("SBC") expense included in operating expenses is detailed as follows in the table below by category within operating expenses for the non-GAAP Net operating expenses: |
Reconciliation of GAAP Operating Expenses to Non-GAAP Net Operating Expenses | ||||||||
(in thousands except per-share amounts) | For the three months ended December 31, | For the year ended December 31, | ||||||
2023 | 2022 | 2023 | 2022 | |||||
Cost of revenues | $ 1,458 | $ 1,618 | $ 5,979 | $ 3,614 | ||||
Stock-based compensation expense3 | (30) | (6) | (100) | (16) | ||||
Net cost of revenues | 1,428 | 1,612 | 5,879 | 3,598 | ||||
Amortization of intangible assets | 505 | 505 | 2,021 | 1,649 | ||||
Sales and marketing | 4,408 | 5,012 | 16,404 | 16,134 | ||||
Stock-based compensation expense3 | (355) | (393) | (1,411) | (1,622) | ||||
Net sales and marketing | 4,053 | 4,619 | 14,993 | 14,512 | ||||
General and administrative | 4,204 | 5,509 | 19,254 | 23,974 | ||||
Depreciation expense | (124) | (110) | (478) | (287) | ||||
RDx Settlement in Stock | — | — | (713) | — | ||||
Stock-based compensation expense3 | (390) | (3,227) | (4,628) | (12,953) | ||||
Net general and administrative | 3,690 | 2,172 | 13,435 | 10,734 | ||||
Research and development | 1,918 | 2,442 | 7,252 | 11,257 | ||||
Stock-based compensation expense3 | (189) | (114) | (683) | (400) | ||||
Net research and development | 1,729 | 2,328 | 6,569 | 10,857 | ||||
Total operating expenses | 12,493 | 15,086 | 50,910 | 56,628 | ||||
Depreciation and amortization expense | (629) | (615) | (2,499) | (1,936) | ||||
RDx Settlement in Stock | — | — | (713) | — | ||||
Stock-based compensation expense3 | (964) | (3,740) | (6,822) | (14,991) | ||||
Net operating expenses | $ 10,900 | $ 10,731 | $ 40,876 | $ 39,701 | ||||
About EsoGuard and EsoCheck
Millions of patients with GERD are at risk of developing esophageal precancer and a highly lethal form of esophageal cancer ("EAC"). Over 80 percent of EAC patients die within five years of diagnosis, making it the second most lethal cancer in the
Esophageal precancer screening is already recommended by clinical practice guidelines in millions of GERD patients with multiple risk factors, including age over 50 years, male gender, White race, obesity, smoking history, and a family history of esophageal precancer or cancer. Unfortunately, fewer than 10 percent of those recommended for screening undergo traditional invasive endoscopic screening. The profound tragedy of an EAC diagnosis is that likely death could have been prevented if the at-risk GERD patient had been screened and then undergone surveillance and curative treatment.
The only missing element for a viable esophageal cancer prevention program has been the lack of a widespread screening tool that can detect esophageal precancer. Lucid believes EsoGuard, performed on samples collected with EsoCheck, is the missing element – the first and only commercially available test capable of serving as a widespread screening tool to prevent esophageal cancer deaths through the early detection of esophageal precancer in at-risk GERD patients. An updated American College of Gastroenterology clinical practice guideline and an American Gastroenterological Association clinical practice update both endorse non-endoscopic biomarker tests as an acceptable alternative to costly and invasive endoscopy for esophageal precancer screening. EsoGuard is the only such test currently available in
EsoGuard is a bisulfite-converted NGS DNA assay performed on surface esophageal cells collected with EsoCheck, which quantifies methylation at 31 sites on two genes, Vimentin (VIM) and Cyclin A1 (CCNA1). The assay was evaluated in a 408-patient, multicenter, case-control study published in Science Translational Medicine and showed greater than 90 percent sensitivity and specificity at detecting esophageal precancer and cancer.
EsoCheck is an FDA 510(k) and CE Mark cleared noninvasive swallowable balloon capsule catheter device capable of sampling surface esophageal cells in a less than five-minute office procedure. It consists of a vitamin pill-sized rigid plastic capsule tethered to a thin silicone catheter from which a soft silicone balloon with textured ridges emerges to gently swab surface esophageal cells. When vacuum suction is applied, the balloon and sampled cells are pulled into the capsule, protecting them from contamination and dilution by cells outside of the targeted region during device withdrawal. Lucid believes this proprietary Collect+Protect™ technology makes EsoCheck the only noninvasive esophageal cell collection device capable of such anatomically targeted and protected sampling. The sample is sent by overnight express mail to Lucid's CLIA-certified, CAP-accredited laboratory, LucidDx Labs, for EsoGuard testing.
About Lucid Diagnostics
Lucid Diagnostics Inc. is a commercial-stage medical diagnostics company focused on cancer prevention, and subsidiary of PAVmed Inc. (Nasdaq: PAVM). Lucid is focused on the millions of patients with gastroesophageal reflux disease (GERD), also known as chronic heartburn, who are at risk of developing esophageal precancer and cancer. Lucid's EsoGuard® Esophageal DNA Test, performed on samples collected in a brief, noninvasive office procedure with its EsoCheck Esophageal Cell Collection Device, is the first and only commercially available diagnostic test capable of serving as a widespread screening tool for at-risk patients to mitigate the risks of cancer and cancer deaths through early detection of esophageal precancer.
For more information, please visit www.luciddx.com and for more information about its parent company PAVmed, please visit www.pavmed.com.
Forward-Looking Statements
This press release includes forward-looking statements that involve risk and uncertainties. Forward-looking statements are any statements that are not historical facts. Such forward-looking statements, which are based upon the current beliefs and expectations of Lucid's management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Risks and uncertainties that may cause such differences include, among other things, volatility in the price of Lucid's common stock; general economic and market conditions; the uncertainties inherent in research and development, including the cost and time required to advance Lucid's products to regulatory submission; whether regulatory authorities will be satisfied with the design of and results from Lucid's clinical and preclinical studies; whether and when Lucid's products are cleared by regulatory authorities; market acceptance of Lucid's products once cleared and commercialized; Lucid's ability to raise additional funding as needed; and other competitive developments. In addition, Lucid continues to monitor the COVID-19 pandemic and the pandemic's impact on Lucid's businesses. These factors are difficult or impossible to predict accurately and many of them are beyond Lucid's control. In addition, new risks and uncertainties may arise from time to time and are difficult to predict. For a further list and description of these and other important risks and uncertainties that may affect Lucid's future operations, see Part I, Item 1A, "Risk Factors," in Lucid's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as the same may be updated in Part II, Item 1A, "Risk Factors" in any Quarterly Report on Form 10-Q filed by Lucid Diagnostics after its most recent Annual Report. Lucid disclaims any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in its expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.
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SOURCE Lucid Diagnostics
FAQ
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