Earnings Call: H1 2021

Nov 25, 2020

Good day, and welcome to the Pacific Edge First Half Interim Results and Presentation. Today's call is being recorded. At this time, I would like to turn the conference over to Mr. David Darling, Chief Executive Officer. Please go ahead, sir. Thank you very much. Good morning, everyone, and thank you for joining us today. With me on our call today is our CFO, Grant Gibson Simon Wilson, our VP, Corporate Finance and Investor Relations Anatol Madsman, our Director from our Board of Directors and online from Australia, Chris Gallagher, our Chairman of the Board of Directors. If we can start at Slide 3 of the results presentation, which was provided to the NZX this morning and will be on the screen in front of you. The 6 months from April to September 2020 has been a transformational half year for Pacific Edge. Despite the initial negative impact of COVID-nineteen on our test volumes, we have reported a significant increase in operating revenue, a reduction in operating expenses, a reduction in our monthly cash burn and improvement in our bottom line. Our first half year has been defined by 3 main events. Firstly, the COVID-nineteen pandemic, which has had a significant impact on our test volumes as patients were unable to access medical centers for testing and care. Secondly, the inclusion of CX bladder into the local coverage determination or the LCD in the U. S. In July, which has enabled reimbursement for tests for patients that are being treated and managed by the Centers For Medicare and Medicaid Services or known as the CMS. And thirdly, reaching commercial agreement with Kaiser Permanente. On the back of these 2 significant commercial events and supported by our strengthened balance sheet following the extra capital investment of $22,000,000 by ANZ New Zealand Investments in July, We've started the planned scale up with our commercial operations in the U. S. To drive further growth. We began seeing the initial impact of the COVID-nineteen pandemic on our business in March this year with the restrictions on patients accessing medical care and testing. And urologists who were struggling with the management of bladder cancer patients, nearly all of whom are deemed COVID at risk patients. By the end of May, our test volumes were down 43% for the 1st 2 months of the half year. During this time, there was a dramatic increase in the use of telehealth globally by physicians, including urologists. The FDA lowered the barrier to unencrypted health communications and the CMS increased the reimbursement for teleconsultations. This is all fueled a strong resurgence in teleconsultations and any products that support telehealth. Accordingly, the benefit of our CX bladder patient in home sampling system, PIHSS, to enable at home management of urology patients became very clear. By way of response in New Zealand, 3 public health care providers commenced in home sample collection during the half year period and 2 others added another CX bladder product to the mainstream commercial use, enabling even more patients to be managed outside of the clinic at home. Pacific Edge has also seen increased sales activity with other healthcare institutions in the U. S. As they embrace telehealth and seek alternative methods to safely and accurately treat their patients remotely. Some healthcare providers are citing increases from 25% pre COVID-nineteen to 95% post COVID-nineteen of the healthcare consultations being tele consultations. We saw a strong recovery in our test volumes from June to September following the easing of COVID-nineteen restrictions and the growing use of telehealth. Our New Zealand business has been quick to return to normal trading and the U. S. While still largely under the influence of COVID-nineteen has been making good progress on its return to normal. Despite this pandemic operating environment, we have continued to grow our revenue. We continue to operate as an essential business during the COVID-nineteen restrictions in both New Zealand and the U. S. All our staff were retained across the company and we took actions to preserve cash and also received financial support in the form of COVID-nineteen relief packages from the governments in New Zealand, Australia and the United States. While many of our laboratory staff already work in a highly controlled environment, health and safety for all employees was a priority. The COVID-nineteen pandemic has had a transformational effect on traditional healthcare and there has been a dramatic increase in the use of telehealth, which the healthcare industry expects will continue post COVID-nineteen. Our CX bladder in home sampling system plays an important enabling role in this new telehealth environment, allowing patient evaluation and assessment to be managed remotely. There is significant IP involved in our test collection system and it provides another strong point of difference for our products that we are now able to reap in ways not previously conceived. The 2nd major event, which was defined in the first half year was the inclusion of CX bladder in the CMS' local coverage determination. This has enabled reimbursement for the many CMS patients that utilize CXplater monitor and CXplater detect at the national CMS reimbursement price of US7.60 dollars per test. These 2 CXplater tests made up 94% of the U. S. Commercial test volume in the first half with 67% being for CMS patients. The LCD inclusion has resulted in a positive change in our U. S. Revenue recognition. CMS tests performed after 1 July 2020 are now able to be recognized on an accrual basis. Previously, this was a cash basis. Tests for other non CMS providers will remain on a cash basis. The half year result includes 2 months of cash contribution from CMS tests as well as an NZ800000 dollars accrual for tests, which have been performed but not yet paid as of the 30th September. The negotiations continue with the CMS for reimbursement of the previous 22,000 tests done for CMS patients as of the 30th June 2020. But there is no certainty of whether these tests will be reimbursed or at what price. This is a long process and there is no guarantee that we will be successful. However, we will treat any retrospective payment for any previously billed tests as upside. LCD inclusion is generating additional revenue and is expected to result in significant commercial growth in 2H21 and beyond from direct tests on CMS patients and as validation and leverage for more adoption with other scale customers and payers. Kaiser Permanente. The 3rd major event was our commercial agreement with Kaiser Permanente, who are one of the USA's largest non profit health care providers to commercially use all of our CX Beta products nationwide starting with CX bladder monitor for the monitoring of recurrence of disease in their patients. More than 800,000 people are regularly monitored for the recurrence of bladder cancer in the U. S. And Kaiser Permanente with their 12,400,000 members manages approximately 2% of these patients who will present to the clinic for evaluation annually up to 4 times a year for 5 years. This provides a large pool of patients and a significant commercial opportunity for CXBA to monitor. The advent of the COVID-nineteen pandemic has seen a significant shift in the use of telemedicine. Pfizer pre COVID have reported that approximately 25% of their patient consultations were teleconsultations and since COVID-nineteen more than 95% of Pfizer's appointments are now telehealth, providing an opportunity to utilize the CXplater patient in home sampling system. For the past 4 months, we've been working with Kaiser Permanente to integrate CXplater into their systems, along with a focus on Pacific Edge's supply chain logistics and back end of the BIHSS business to ensure that all systems are in place to provide our gold standard service for urologists and patients. This is all now being completed and commercial testing is underway. We expect to see the early benefits of this in the second half of the year as you should scales up across the organization. Combined, the Kaiser Permanente agreement and the LCD inclusion are driving a step change in the growth of the U. S. Business. Commercial operations have been scaled up with a strengthened leadership team from the addition of David Leverson, who stepped down from the Board of Directors to join the U. S. Executive team, providing significant molecular diagnostic sales experience. We have now added an extra 5 sales representatives in new territories, a medical affairs person to provide more clinical input to urologist customers and last but not least, the addition of further in house customer liaison managers to help with the expected increase in our patient in home sampling system PIHSS to drive further growth. Our focus remains on encouraging commercial adoption of Seaspanter by large healthcare organizations such as Kaiser Permanente and gaining coverage and inclusion from private payers or the insurers. The U. S. Laboratory has the design capacity to process 260,000 tests per annum, which is sufficient to support the expected increase in test demand for some time yet. A growing number of large healthcare organizations are now using or evaluating CX bladder and we will continue to work with them to gain commercial adoption of our products. Some may take longer than others to gain significant penetration and adoption of CX bladder. However, this will be significantly easier with the added validation that comes from having both the inclusion in the CMS' LCD and a commercial relationship with Kaiser Permanente. These are the 2 largest validation customers in the U. S. Now moving on to our financial results for the 6 month period. In summary, it was a transformational half year for our company. Despite the negative impact of COVID-nineteen on our test volumes, we have reported a significant increase in operating revenue, a reduction in operating expenses, a reduction in our monthly cash burn and an improvement in our bottom line. COVID-nineteen impacted significantly on test volumes, particularly in April May and total laboratory throughput for the group was down 16% to 6,864 tests for the period. A strong recovery was seen from June to September, but year on year growth achieved in both June through September. Of the tests, total tests processed, 81% were commercial tests consistent with the prior year. You can see on the graph the major impact COVID has had on our average commercial tests in April May this year compared to our average tests last year. Strong recovery has been seen since June with commercial tests numbers ramping back up to be 11% higher in September than the same month last year. The U. S. Remains our primary market providing 72% of total lab throughput, 71% of commercial test volumes and 87% of operating revenue. New Zealand is the primary contributor to our rest of world results with Southeast Asia and Australia at earlier stages of their commercial journey. Our suite of 4 CX bladder products continues to be a major competitive advantage for us. The ability for our tests to be used across the entire clinical pathway to match the needs of individual customers, the multiple tests, the consistent performance and the ease of transfer of urine samples from patient to the lab all enhance our competitive advantage. Volumes of each test processed in each market annually are relative to the time when they were launched into the market. As you would expect, our first product CXpladder Detect still represents the largest volume of tests with growing use of CXpladder Monitor and Triage. I'll now hand you across to Grant Gibson, our CFO to walk you through a summary of our 1H21 financial performance. Grant? Right. Thanks, David. Okay. This has been a strong half year for us. You can see on the slide, which shows a comparative of our key financials compared to the prior period with strong growth on our metrics. Operating revenue has increased 46% to $3,300,000 Operating expenses reduced 8% to 11,200,000 and we reported a net loss after tax of $7,100,000 an improvement of 25% on the prior year. Cash receipts from customers were up 9% to $2,600,000 and we have net operating cash outflow of 7,700,000 dollars up slightly on the last year. Cash on hand at 30th September was $29,300,000 and that included the $22,000,000 investment from ANZ Investments during the period. The strong revenue growth has been primarily driven by CMS reimbursement of CX Bladder Detect and CX Bladder Monitor tests and a quick recovery in our New Zealand market. Total operating revenue increased 46% year on year to $3,300,000 with the benefit of healthy debt inclusion compared to July 2020 being offset by the impact of COVID-nineteen, particularly in the 1st half of 3 months. I'm sorry, pardon the interruption. We are having some distortion on the line and we're unable to hear you. We're still unable to hear you. I would recommend please trying to call back in and see if that helps the connection. If everyone could just stay on the line while our presenters dial in. Is this Peter? Yes, it is. Great. Okay. I'll carry on from line. I'm sorry. It's cutting out again. I think we should just try to reestablish the line. Everyone, please standby while our speakers reconnect. That's coming through now. Is it better? Yes, it's better. Okay. So the strong revenue growth has been primarily driven by CMS reimbursement of CX bladder detect and CX bladder monitor test and a quick recovery in our New Zealand market. Total operating revenue increased by 46% year on year to $3,300,000 with the benefit of LCD inclusions on 1 July 2020 being offset by the impact of COVID-nineteen in the Q3. The first half of the year included a 3 month contribution for tests completed for FEMES patients from July to September. This was made up of 2 months of cash payments for tests completed in July August and an accrual of $800,000 for tests performed, but which for which we have not received payment by 30th September. The commencement of reimbursement from the CMS was a primary driver behind the U. S. Business delivering 3 consecutive months of record revenue from July to September. The successful LCD coverage for CX bladder defect and CX bladder monitor from 1st July 2020 has allowed Pacific Edge to start recognizing revenue under the New Zealand IFRS 15 accounting standard for all tests that were all performed on CMS patients, which are Medicare and Medicare Advantage in the U. S. Test for CMS patients performed after the 1st July are now able to be recognized on an accrual basis. We previously recognized these on a cash basis. We continue to recognize revenue on a cash basis for our other U. S. Customers who are not yet in contract and we will continue to review this regularly. U. S. Operating revenue increased 46% on the prior corresponding period to $2,900,000 and accounted for 87 percent of all our operating revenue. Average U. S. Operating revenue for the 3 month period from July to September, which included CMS, increased 117% on the prior corresponding period, with average cash receipts for August September up 87% on the prior corresponding period. This strong revenue growth has continued into the second half, with a further record sales month reported in October 2020. Rest of world operating revenue increased 40% on the prior corresponding period to $400,000 driven by strong growth in New Zealand market following the lifting of COVID-nineteen restrictions. The continued adoption and increase in test use by New Zealand public health providers, the DHBs, is driving this growth momentum and is expected to continue into the second half with a focus on growing the number of CX bladder tests used by existing customers and converting the remaining public health care providers into commercial customers. We've seen a strong reduction in our monthly cash burn this half year, partly this is due to the cost management during COVID-nineteen lockdowns, but the most significant impact has been the growing cash receipts following the LCD inclusion. Overall, the cash burn in the first half was down 6% on the prior corresponding period, with the average monthly cash burn in the 2nd quarter down 23% on the prior corresponding period driven by CMS reimbursement. One of the other major impacts now of the LCD has been the reduction in the time to payment. The CMS payments are now received in approximately 30 days and most of the other U. S. Providers average 1 to 3 months for the payments. Cash receipts from customers increased 9% to 2,600,000 dollars despite the significantly reduced test throughput in April May and reflects only 2 months contribution from CMS for tests performed in July August. Strong cash receipts have continued into the second half and have supported the accrual of revenue for the period ending 30th September. I'll now hand you back to David Darling, our CEO, for his comments on the outlook. Thank you, Grant. Our growth catalysts and our outlook. For all our markets, our key objectives remain as follows: achieving commercial contracts with large institutional health care customers, growing sales to existing customers, gaining stronger inclusion and guidelines and targeting private payers for coverage inclusion. Our recent progress in commercial achievements underpin our future growth and we're now starting to see the benefits of the significant effort and resources that have gone into the commercializing our CX bladder cancer technology and our business model and strategy are now well proven. We believe this is just the start of a strong growth trajectory for our company. Our main priority is to leverage the recent commercial milestones in the U. S. To increase adoption and commercial use of our products. Agreement with Kaiser Permanente and the coverage under the CMS' LCD will not only drive direct sales with those organizations, but will also help us capture other large healthcare institutions and convert them into commercial customers. We have a targeted list of institutions that have large scale commercial urology programs in the U. S. That are currently using or evaluating CX bladder and we will focus on getting these to emulate the successful commercial outcome that we have now achieved with Kaiser Permanente, albeit on a faster timeframe. We will also be working to add further large institutions to the list and to grow their commercial use. Concurrent with all of this, we will be putting a team of skilled negotiators to work on gaining in network and in some cases in contract status with the many private payers that are currently reimbursing us for CX bladder and the others that we have targeted to provide reimbursement coverage. We've expanded our U. S. Executive team, our specialist sales and our customer services teams to take full advantage of the expected increase in adoption that comes from attainment of the inclusion in the CMS' LCD, a great endorsement from our agreement with Kaiser Permanente and to maximize the growth opportunity in the U. S. We will continue to invest in clinical evidence to support our adoption and gain inclusion in guidelines and where we are already included in guidelines, better inclusion language. Accordingly, we are planning to launch our 4th product CXPLATAR RESOLVE into the U. S. Market following the publication of the validation study early next financial year. In New Zealand, we are looking to bring the remaining public health care providers into contract and expand the use of CX better tests by existing customers. This is mostly now an administrative and budget related issue for New Zealand's large public health care providers. The focus for Australia and Southeast Asia is to transition the public healthcare providers from the clinical studies to a commercial customer model as well as progress discussions with potential strategic partners in Southeast Asia. Right now, these countries are still struggling with the COVID-nineteen pandemic and may take some time to return to normality. We are delighted to have the significant support of the Urology Society of Australia and New Zealand or USANS to help us with our endeavors in Australia following the very successful integration of CX bladder into the New Zealand standard of care. We have a strong growth outlook for the second half of FY 2021 and beyond as we leverage the very successful validation that accrues from the CMS's LCD coverage and a commercial relationship with Kaiser Permanente. The global COVID-nineteen pandemic has had a profound impact on the delivery of healthcare and this is expected to continue to impact through 2H21 and beyond. Despite this, we expect continued growth in test volumes albeit at a rate that may be slower than could otherwise be expected in a COVID-nineteen free operating environment. Our short to medium term focus is on generating growth in commercial test volumes and revenue, particularly in the U. S. The positive trends seen in the first half of the year is expected to continue through the second half with increasing numbers of CMS tests and as Chivas or Permanente urologists commence commercial tests ordering. Our strong growth momentum has continued into the second half with revenue for October November to date reaching record levels. Further growth in test volumes is expected with more resources in the U. S. Directed towards achieving commercial contracts with large institutional healthcare customers, growing sales to existing customers and private payer coverage inclusion. The New Zealand market also remains important with a goal to extend commercial coverage towards 100% of all public healthcare providers. We're currently sitting at 65% and to grow the number of CX better tests used by each of these providers. Both Southeast Asia and Australia at an earlier stage of their commercial journey with the goal being to transition the public health care providers from clinical trials to a commercial customer model. Escalation of commercial test sales is now front of mind and is expected to have a positive impact on our operating revenue and operating cash flows going forward. We now have the major reimbursement and clinical milestones in place to enable us to scale up and position CXplater as the first choice for urologists evaluating patients for bladder cancer. Our strengthened balance sheet, our improving operating cash flow position has operated us to accelerate our global growth initiatives, including the scaling up of our U. S. Commercial operations. We are now well positioned with experienced, motivated people capable of maximizing the substantial growth opportunities in front of us. And so I'd like to take this opportunity to thank the Pacific Edge shareholders for their continued faith and support and the Pacific Edge team across the globe for all their hard work and delivering us such a positive result, one that we've all been waiting for, for some time. Thank you all very much and we'll proceed to questions. Thank you. Good morning, Dave and team. It's Chelsea here from Force Sais. Just maybe a couple to start with. Just wanting to unpack the sort of COVID impact a little bit more, if I may. I guess maybe if you could give us a little bit more color on what you're seeing with the whole second wave in the U. S. Versus the first wave of COVID and kind of, I guess, the ability of your reps to get access to be able to sell tests, impact on test volumes, all of those type of things. Has there been any major difference this time around? And equally, do you think the sort of, I guess, momentum that you just see in sort of the back end of the half of October, how much of that do you actually think is catch up versus kind of new growth? I appreciate these are pretty difficult things to answer, but just trying to get some context. Yes, lovely. That's a great question, Chelsea. Thank you very much. Yes, it is a difficult one to answer, but we do see quite consistent performances there. What we're seeing in the U. S. Is some states start open up for free traffic. And so the health care providers open up and we can get more free and easy access to the urologists. However, they are switching from being open to being closed. And what we've been able to do in the U. S. Is build a capability around virtual lunch and learns. So lunch and learn is a major means of engaging with the entire office, urologist office, because it's not just the urologist that makes the decision, but also the supportive decision that goes through ordering and repeat ordering of the test. So bringing the entire office on board is very, very important. So these lunch and learns in a virtual setting have now become the norm. And so we think that's one of the key things that seeing these record revenue months in the last 4 months and we're certainly looking to do that again in November, and a few days to close out in November. So it's quite sustained in that respect. For sure, some of those states do play the catch up game. Very clearly, some of those urologists like to bring customers into the clinic. Kaiser Permanente are very clear about the fact that they wish to use CX bladder in the in home setting. And remember, for those of you that to provide some extra context to that, Kaiser Permanente are the only customer in the world who have actually generated their own clinical evidence by using the CX-twenty test in patient setting. So they have a lot of data. So hopefully that answers all your questions there, Chelsea. Okay. Thanks, David. I guess just while we're on the subject of Kaiser, I appreciate it's still very early into the sort of commercial relationship. But over the past 6 months or maybe even last couple of months, call it, have you had any sort of kind of key learnings, maybe your sort of initial experience to what I'm trying to really understand is how to think about the ramp pass in particular, but also the medium to longer term opportunity. Has there been any change in terms of I guess your thoughts on that opportunity as you scale? I guess the biggest opportunity is the rate at which the CMS tests come on board, the rate at which Kaiser fire up and get rolling, the rate at which they switch from CX beta monitor to CX beta triage and then into the other tests. They all have profound impacts on our rate of growth. In some ways, when you look at Kaiser Permanente, we can only see that this has been significantly increased. It's much more state of mind and current in mind right now. They're very aggressive when it comes to adopting new technology. However, it does take them a long time to implement it as we found out. So yes, the vision remains the same. We remain very agile and how we grapple with the market. The sales representatives on the ground, the sales management teams have been very creative and finding ways to engage with the customers, including the payers. And the whole world has been upside down by COVID. So telehealth has been a massive health care environment and we have yet to see that fully play out. Whilst our patient in home sampling system has been absolutely beneficial in helping us achieve these results, It's not a panacea for all things COVID, because these urologists still need to change some of their behavior before we can really get that thing to Okay. No, I appreciate it. And I guess just last one, kind of maybe taking a sort of a more headline kind of approach here. Would you say over the past 6 months with Kaiser in particular as a customer, now you've worked with them for a little bit of time, you're feeling more confident, at least confident, the same in terms of, I guess, what the prices at the end in terms of kind of how they're taking it up with sort of, I guess, few weeks of data points that you've got to date? Yes. Thanks. We're more bullish than ever, Chelsea, and it comes from the engagement with Kaiser. We see the escalations through the Kaiser organization. We see Doctor. Nancy Chen who has made a public statement to the adoption, albeit not naming the expert, but citing the technology and the integration into their system. She's the Chief, the Head of the Clinical Quality for the Kaiser Federation. So this escalation has been right throughout the Kaiser Federation. This is what they call the broader Kaiser Group. And so when we get involved with Kaiser and we start integrating CX bladder into their Health Connect, which is their EMR system that provides the data to the urologists in a real time way. It's a significant investment. There's teen coders in the United States that are coding right now. They'll be coding through to Christmas. And once you're integrated into the system, that's a big step forward. So we only see upside. We have no real idea about the total size of the price that continues to unravel in front of us. And like all things that we've seen in New Zealand, we only see upside what as we announced previously with Canterbury that's helpful. I'm sorry, your audio is still cutting out pretty bad again. If you could just repeat that part? Sorry. Thank you. Sure. How is that now? Still cutting out a bit. Yes, it must be a line connection problem there, I think. But how is that now? You're sounding better. Thank you. Okay. That's great. So just to close out on the question, Chelsea, very bullish about Kaiser Permanente and the integration that we're seeing inside the organization. The commitment of the resources, the commitment of the individual clinical case manager to a portion, the individual urology cases to the urologists, it's all being very positive, so onward and upward. Great. That's all for me for now, Dave. Thank you. Thank you. So we have a question sorry, we just have a question online coming in here from Andrew Ott. Andrew asked the question, are you able to provide any color on the potential timing of the publication of white papers and peer reviewed studies on CX bladder? Andrew, thank you. That's a good question. We have been notified that there is another paper coming out that published it's going to be published on the 18th December. We've had some indication that the results are very favorable and we look forward to reading that. This is a publication that looks at the sustained use of CX bladder over another 900 patients in the Canterbury disc health board setting. Looking back over the technology and they've been looking at the 22 month follow on from CX bladder on patients that have been called negative. We understand the results are very, very good and we look forward to seeing that publication coming through. I'm sorry. If you guys could just try to dial back in or maybe if you have a mobile device that's near it, if you could just move it away from your microphone that might help. Everyone, thank you so much for your patience. Does that sound right better? Yes. I'm so sorry. You're cutting out again. Please try to redial and that should help the connection. Everyone, thank you so much for your patience. Our speakers will be back with us very shortly. Once again, everyone, thank you so much for your patience. They will join us shortly. And Mr. Dialing, please proceed. Sorry, we can't see those. There we go. Thanks, guys. Sorry about the technical problems we're having here. So we have some more questions here online. So there is a question here from Christian Bell. Thank you, Christian. Are you ramping up education and for how long? With regard to Kaiser, yes, we've been working on the Kaiser education over the last couple of years. We've had several training sessions with Kaiser. We'll continue to follow through on educational requirements, and we'll respond to any requests from any of the urologists in any of the clinics with regard to the utilization of the tests. So we expect to see some direct questions around recognition of results and interpretation of results. It's a normal process for any customers that we start providing service to. Christian, I hope that answers your question. Another question here from Andrew Ott. Will CX beta tests done by Kaiser now be accounted for on an accrual basis? It's Grant Gibson here. I can answer that one. We will accrue for it if we can reliably predict the transaction value. And because you're under contract, we expect that we should be able to do that. So the answer to that is yes, we expect to accrue once we get some history on performance and payment for those tests. We have another question here from Christian Bell. CMS, can you confirm that you're now getting paid for all CMS tests? The graph on slide 19 obviously reflects this, but has this improved collection from other payers now as well? Answer to those two questions is yes. We can confirm we are now being paid for all CMS tests. And it has definitely helped with improved collections from other payers. And that should continue to increase. Moving through here, we've got one from Ming Yang Chen. How long would it take in general to receive the cash from CMS after a CMS test has been done? As outlined in the presentation, that's pretty close to 30 days in most instances. And another question here from Jeremy Jones. Excellent half year results. Many thanks. Please can you confirm if the strong revenue results in July September have continued to October November? The answer to that is yes. We have record month revenues right through to and what would appear to be the case again in November. We're 4 days out from closing the November cash receipts and it's looking very positive to become yet another record month. When do you anticipate being in a position to initiate dividend payments? Alastair Ross. Thank you, Alastair. Dividend payments, the Board will determine when we have reached a point in which the investment into the company will enable us to provide a dividend payment. So there's no discussion right now at this point in time. The company is still working very hard to get through to a breakeven position, and that's coming ever closer. Another question here from Graham West. Despite a positive announcement this morning, the share price has dropped by 4% this morning. Any insight into why please? It's the market operating. There are more sellers than buyers at the tune of 4%. Thank you very much. Can we please refer to see if there are any more verbal questions? Certainly. We do have another one. We'll go ahead and take our next question. Caller, please go ahead. Hi, Dave and Grant. Christian here. I'm not sure I put some more questions on the webcast, but I'm not sure if they came through. So I'm just going to say them now. Sorry if I'm repeating myself. It took me a while to get back on. Just when you say in your slides that your back end integration is now complete, does that mean that all the coding is done and now everything is automated within HealthConnect? That's a very good question, Christian. No, there are still some pieces that we're talking about the back end of our business, not the integration into the Kaiser business. So the coders are still working. The coding will is planned to include we have coders in our team and coders in a 3rd party provider and coders at Kaiser Permanente are working on these internal processes. Now these coding was planned to conclude in December just before Christmas. And it's expected that the integration won't actually incur for another 7 months following that. That's a normal price of time window. So during that 1st 7 months, the integration of the results will be by will be manually into the Kaiser system. But the great news is that the significant investment by Kaiser to integrate our technology into their systems, as you can appreciate with the number of people and the resources being put onto it. Yes. Okay. So that means when you talk about commercial test volumes, sort of the commercial tests commencing, that's obviously not going to be mainstream commercial volumes until at least another 7 months then? It's live now, mate. Okay. So okay. So they're quite happy with the manual entry sort of thing just for now. And so it is mainstream commercial type stuff. Okay. Yes. And then just continuing following on from that, about what portion of the total network does that cater for? Is that a small portion? Or is that the whole of Kaiser? Sorry, I'm not quite catching your after that question. Christian, can you pull that out with a little more? So the commercial test, is that from all of the urologists within the Kaiser network? Or is that just a small bundle of them just for now until you sort of No, no. They have their own rollout process that's underway. And they're working their way across the organization. And we don't actually know what that rollout process looks like. They'll do that they're doing that themselves. So what we'll be doing, we'll be receiving the sample systems. We'll receive notification of the test requisition form for each patient and our customer liaison people interact with the patient to obtain the sample. And we then received we organize for the courier to carry the sample back to the laboratory, run the test, encrypt the results and seen it to the urologist for it to be integrated into the HealthCare system manually at this stage. Okay, cool. I mean sorry, I'm just going to drop my luck here. Are you able to give a run rate for the last couple of weeks from Cozza? No, we can't give you that question. I'm sorry. I thought I'd try. Okay. And then so moving on to CMS. The graph on Slide 19, that was obviously reflective of the fact that you are getting paid for the CMS test. Has it also improved terms with the other payers? Yes. We answered that question just previously. You might have been offline. Oh, sorry. I had to go offline. Yes. Okay. Sweet. No problem. I'll pick that up with you directly as well offline. Okay, cool. And then the last one for me. The negotiations for the callback, I understand you're still in negotiation phase, but have those negotiations been more positive or negative since the last time you updated? Just very sort of it's very hard to kind of put a positive or negative on that mission. They involve a lot more people and a lot wider negotiation process to date than we thought that would be the case. However, it's we understand from everybody and that is a long process. So we'll continue to ask just to signal clearly to people that there's no guarantees and there's no guarantee of price and number. So we'll be working on it pretty hard. Okay. Thank you. Cheers, guys. Thanks, Christian. And once again, that's Have any other questions coming online? And it appears we have no further questions over the phone at this time. Thank you very much. We'll conclude the presentation and the question session. Thank you. Once again, that does conclude today's conference. We do appreciate your participation. You may now disconnect your phone lines.