Good morning, ladies and gentlemen, and Welcome to Aspira Women's Health Inc.'s Second Quarter 2022 Conference Call. My name is Vikram, and I will be your coordinator for the call today. At this time, all participants are in a listen-only mode. Following management's prepared remarks, we will open the call for your questions. As a reminder, this call is being recorded today. Leading the call today are Nicole Sandford, President and Chief Executive Officer, Bob Beechey, Chief Financial Officer, and Dr. Ryan Phan, Chief Scientific Officer and Chief Operating Officer. After the prepared remarks, we will open the call for Q&A. Before we begin, I'd like to remind everyone that forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995 will be made during this call, including statements relating to Aspira's expected future performance, future business prospects, and future events or plans.
Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those anticipated due to the impact of many factors beyond the control of Aspira. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events, or otherwise except as required by law. Participants are directed to cautionary note set forth in today's press release, as well as the risk factors set forth in Aspira's most recent Form 10-K filed with the SEC for a description of factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. At this time, I'd like to turn the call over to Nicole Sandford, President and Chief Executive Officer. Please go ahead.
Thank you, operator, and thank you everyone for joining us today. We are very pleased to provide an update on our progress in the 2nd quarter. Joining me on the call today are Bob Beechey, our Chief Financial Officer, and Dr. Ryan Phan, our Chief Scientific and Chief Operating Officer. I will begin with an overview of our 2nd quarter performance and an update on a number of important strategic developments. Dr. Phan will follow with an update on our product pipeline before handing the call to Bob, who will provide a financial update. After our prepared remarks, we will then open the lines for a question and answer session. Last quarter, I shared my priorities for 2022. I told you then that my focus and the focus of the entire company would be on execution across three dimensions, growth, innovation, and operational excellence.
While we still have much to do, I am happy to report encouraging progress in all three areas in the 2nd quarter of 2022. Let's begin with an update on our cash utilization as it sets an important context for the rest of the conversation. When I joined the company, I made it a priority to align our spending and resources to the most important business needs. I asked my executive leadership team to exercise fiscal conservatism, but to do so without jeopardizing our strategic vision. We have made significant progress since then. In the 2nd quarter of 2022, we utilized $6.4 million in cash, roughly 40% less than we utilized in the 1st quarter of 2022 and 16% less than the 4th quarter of 2021.
This was a major achievement that required the attention of every Aspira team member, and I'm extremely proud of our progress. We achieved this reduction in utilization without sacrificing our growth or innovation goals, as you'll hear shortly. We continue to hire individuals to fill key roles, especially in the commercial and R&D organizations, and invest in the infrastructure required to increase our volume and deliver on our Aspira Synergy contracts. We plan to operate the business this way going forward. I'll ask that you keep that reduced cash utilization number in mind as Ryan, Bob, and I detail our 2nd quarter achievements. First, let's talk about growth. In Q2, we broke through the $2 million revenue threshold for the 1st time in a single quarter with a volume of 5,411 tests performed.
This represents an 11% increase in revenue over the 1st quarter of 2022 and an 18% increase over the same period in 2021. Our testing volume increased to 83 tests performed per day in Q2, compared to 75 tests performed per day in Q1. We achieved this growth while continuing to execute our previously disclosed commercial transformation, which I'm happy to report is largely complete. As of today, 67% of our sales professionals have been with the company for more than three months, and 58% have been with us for more than six months. In the 2nd quarter of 2022, approximately 593 physicians ordered an OVA product for the 1st time, which is essentially flat with new ordering physicians in the 1st quarter.
We aim to increase the number of physicians ordering for the 1st time and do more to drive repeat orders from existing physicians. The latter will be a focus area for the rest of the year. Bob will provide additional information about revenue and AUP later in the call. While I'm happy to see the uptick in volume, I'm far from satisfied with overall revenue growth. This quarter, I've spent time in the field with our reps and physicians, and I will continue to do so in the 3rd quarter to better understand challenges to adoption and overall growth. Elsewhere on the growth front, Aspira and BioReference established a national collaboration to co-market and distribute Ova1Plus. BioReference is one of the largest full-service specialty laboratories in the United States, with a leading position in women's health, oncology, and urology, and 40 years of expertise in clinical diagnostics.
We are targeting a launch of the arrangement no later than the 4th quarter of this year. It is our expectation that the relationship will drive incremental volume in 2023 and beyond. Both Aspira and BioReference are deeply committed to enhancing health outcomes for women, and I've found the cultures to be very complementary. I believe this is the beginning of a mutually beneficial long-term relationship, and I'm working hard to ensure a strong start. Separately, Aspira Women's Health has established a standalone agreement with Scarlet Health, an innovative mobile phlebotomy solution, providing collections for Aspira's patients from the comfort of their home. As an update to the Aspira Synergy platform rollout, we are encouraged by adoption from our 1st physician super group, which I am now able to identify as Women's Care.
We were able to design and implement a commercially reproducible solution in Playbook for future Aspira Synergy opportunities while implementing an arrangement that has helped both Women's Care and Aspira achieve their shared mission to expand patient access. Now turning to innovation, it is my pleasure to welcome Dr. Ryan Phan to our call for the 1st time. Dr. Phan, can I ask you to briefly introduce yourself and then provide an update related to our product portfolio, including today's announcement of an expansion to our relationship with Harvard's Dana-Farber Cancer Institute and a number of other academic institutions to include endometriosis in addition to our ongoing collaborations related to ovarian cancer?
Thank you, Nicole. I am honored to join Aspira as Chief Scientific and Operating Officer after many rewarding years in leadership at academic institutions, healthcare systems, and most recently at KDF, where I was the Senior Vice President of Lab Services and Medical Director. As a member of KDF's leadership executive team, I led the commercial testing operation, clinical development pipelines, manufacturing, supply chain, regulatory affairs and compliance, and automation and engineering divisions. In addition, I served as the licensed medical director of the company's CLIA laboratory and played a key role in the growth and expansion of the company's testing revenues and portfolio. Prior to joining KDF, I was Managing Director and head of Regional Molecular Genetic Pathology and Cytogenetics at Kaiser Permanente in Northern California. Before that, I was a faculty member of the University of California, Los Angeles and the Los Angeles VA Medical Center.
I received my bachelor degree from UC Berkeley and my PhD from Columbia University in New York. I completed my postdoctoral training at Harvard Medical School, where I was a Cancer Research Institute fellow and American Society of Hematology scholar. I look forward to working with everyone at Aspira to strengthen our innovation efforts, accelerate the expansion of our product portfolio, and scale our commercial testing service as we move forward. Now let me turn to our product portfolio by reiterating our intention to launch OvaWatch, our next generation ovarian cancer risk assessment, by the end of the year. With its superior negative predictive value, OvaWatch is non-invasive tests that provide additional data points for clinician initial assessment in women with an adnexal masses. This lab-developed test will support physicians in making informed clinical decisions in the management of women with adnexal masses.
OvaWatch represents a significant expansion of our potential patient population when compared with our existing FDA-cleared Ova1Plus tests, which are only approved for use in women with masses that have been referred for surgery. We estimate the total addressable market for OvaWatch to be three or more times the addressable market for Ova1Plus. As we previously disclosed, our paper entitled "Analytical Validation of a Deep Neural Network Algorithm for the Detection of Ovarian Cancer" was accepted for publication by JCO Clinical Cancer Informatics. While our ability to collect samples for the study was significantly impacted by COVID research over the past two years. Today, I can report that we recently completed enrollment of our multi-site prospective study based on real-world data in support of our plan to launch OvaWatch. We are in the final stage of analysis and are preparing a manuscript for peer review publication.
We are satisfied that the data provided in the analytical and clinical validation study will be sufficient to drive physician and payer adoption. OvaWatch and Ova1Plus will be marketed together as part of our newly reimagined ovarian cancer portfolio we have branded as OvaSuite. Physicians will be encouraged to consider an OvaSuite test for all women with adnexal masses to provide a more informed clinical decision in the assessment and management of their patient risk of ovarian cancer. In this regard, a single test requisition form of OvaSuite will allow clinicians to determine which test is appropriate for their patient. We are on track to launch the product in the 4th quarter of this year and expect to see meaningful volume from OvaWatch during the early months of 2023.
We can also report on our ongoing efforts to support research related to the impact of race on the detection of ovarian cancer. Sponsored by Aspira's clinical research efforts in the Philippines, a manuscript entitled "Clinical Performance of a Multivariate Index Assay in Detecting Early Stage Ovarian Cancer in Filipino Women" has been accepted for publication in the International Journal of Environmental Research and Public Health in a special issue on ovarian cancer prevention and treatment. The study was designed to validate the effectiveness of a multivariate index assay, such as Ova1Plus, in the assessment of ovarian cancer risk in Filipino women. As soon as the report is published, we will share it on our website.
You will hear more about our suite of ovarian cancer offerings, including a presentation regarding the clinical application of Ova1Plus and OvaWatch on August 24th at 12:00 A.M. Eastern Time when Nicole and I host a webinar with Dr. Charles Dunton, Aspira Chief Medical Officer, Dr. Nicole Williams of the Gynecology Institute of Chicago, and Dr. Cheryl Riley of Axia Women's Health. An invitation to the event will be distributed by LifeSci Advisors. Registration details can be found on the investor relations page of our website. Moving on to our endometriosis product offerings. We are excited to announce that we have entered into a sponsored research agreement with Harvard, Dana-Farber Cancer Institute, Brigham and Women's Hospital, and Medical University of Łódź for the generation of a multi-omic, non-invasive diagnostic aid to identify endometriosis based on circulating microRNAs and proteins.
We will collaborate with this prestigious group of world-renowned institutions to identify candidate markers and build a series of diagnostic models for women being evaluated for possible endometriosis. We intend for the collaboration to be completed via phases and anticipate the total cost of the partnership to be approximately $1.2 million. The result of the technology to guide medical and clinical management of women with a pelvic mass presenting with symptoms of endometriosis, and to limit surgical evaluation for those cases where non-invasive tests are equivocal or in whom surgical excision of endometriosis is clinically indicated. This research collaboration agreement will build on our extensive prior R&D efforts, and will expand our access to appropriate samples as well as scientific resources required to accelerate the commercialization of our EndoCheck diagnostic test.
We believe this agreement helps to ensure a launch of an endometriosis diagnostic test in 2023, which continues to be our goal. We plan to host a 2nd webinar to provide additional insight on our endometriosis test, and we'll announce the timing of that webinar soon. I now turn to Bob Beechey for a discussion of our financial performance. Bob?
Thank you, Ryan. Second quarter 2022, Ova1Plus revenue was $2 million, an increase of 17% year-over-year and a 10% increase sequentially. The revenue and volume numbers represent a record quarter for the company. The revenue per Ova1Plus test performed was $373 for the 2nd quarter of 2022, compared to $378 during the 2nd quarter of 2021 and $380 for the 1st quarter of 2022.
The year-on-year price and sequential 1% decrease in revenue per Ova1Plus test performed was driven by the mix of payer type, with decreased patient pay collection for the 2nd quarter of 2022, as well as our strategic initiative to serve the Medicaid population, which currently has a lower price when compared to our average and representing a higher percentage of our revenue. Our price for Medicaid was $90 in the 2nd quarter of 2022 and represented approximately 12% of volume. Gross profit margin on Ova1Plus was 48.6% in the 2nd quarter of 2022, compared to 52% for the same period in 2021 and 53.2% in the 1st quarter of 2022. The decreases were driven primarily by software license costs and maintenance costs.
Research and development expenses for the three months ended June 30th, 2022, were $1.4 million, roughly flat when compared to the prior year 2nd quarter of $1.47 million and the 1st quarter 2022 spend of $1.35 million. The spending was focused primarily on product development costs related to OvaWatch and EndoCheck. Sales and marketing expenses were $3.6 million for the three months ended June 30th, 2022, a decrease of $917,000 compared to the 2nd quarter of 2021 and $439,000 compared to the 1st quarter of 2022. The decrease was driven by decreases in personnel costs associated with our 1st quarter reorganization, as well as reduced consulting costs. General and administrative expenses were $4.2 million for the three months ended June 30th, 2022.
We incurred $3.3 million in general administrative expenses in the prior year quarter and $4.4 million in the 1st quarter of 2022. The year-over-year variance is attributable to headcount and personnel expenses, while the sequential decrease is driven by reduced consulting costs. We ended the 2nd quarter of 2022 with approximately $20.7 million in cash equivalents, and restricted cash. Cash used in the 2nd quarter of 2022 was $6.4 million. As Nicole mentioned, we are focusing our investments on development of products with a near-term impact, namely OvaWatch and EndoCheck, and enhancing our sales and marketing in preparation for the BioReference collaboration and the launch of OvaWatch. This focus on execution has resulted in reductions in spend on more speculative long-term research and a reduction in awareness marketing, which we concluded was not yielding adequate returns.
In addition, we have rationalized our cost structure across all functions while maintaining appropriate quality, and we are pleased with the resulting cash utilization in the 2nd quarter. We expect to sustain or reduce cash utilization levels in the coming quarters. We expect to utilize in the range of $14 million-$15.5 million total during the 2nd half of the year. This outlook includes cash that we expect to use to maintain our current staffing levels and the required investments to launch OvaWatch, kick off our partnership with BioReference, and continue discovery and development of EndoCheck. The cash utilization expectation does not contemplate any revenue contributions in the 4th quarter from the OvaWatch launch or from the BioReference partnership initiation.
Note, we do expect an increase in cash utilization in 3rd quarter compared to the 2nd quarter of 2022, as we expect to fund endometriosis development of approximately $1.2 million. We expect the 4th quarter will then revert to levels in the range of the 2nd quarter. We're examining all options for extending our cash runway and will announce specific plans as appropriate. With that, I will now turn the call back over to Nicole. Nicole.
Thank you, Bob. As a final update, let me introduce and welcome two new board members, Dr. Robert Orbach and Ruby Sharma. Dr. Orbach is the retired president of CooperSurgical. He brings extensive clinical and executive experience in the medical industry, including experience as a director and as an executive officer. Ms. Sharma, the managing partner at RNB Strategic Advisors, brings decades of senior leadership, accounting, and audit committee experience. Each brings different but equally critical skills and expertise to the board. Bob's medical background and track record of success as an executive in the women's health sector, along with Ruby's strategic mindset and extensive financial, business, and governance acumen, will be highly valuable to Aspira as we accelerate our strategic execution in today's challenging environment. Overall, we are pleased by our accomplishments this quarter and our strategic focus on growth, innovation, and operational excellence.
Things you can expect from us in the coming months include launch of our BioReference relationship in the 2nd half of this year, launch of OvaWatch in the 4th quarter of this year, launch of an endometriosis diagnostic test in the 2nd half of 2023, and continued focus on cash utilization and sources of liquidity with the expectation for cash usage to be between $14 million and $15.5 million for the balance of the year. In closing, our executive team remains committed to our strategic vision, and we are focusing all of our efforts on execution for the remainder of 2022 and beyond. We have made tremendous progress and more is yet to come. With that, I would like to now open the call for questions. Operator?
Thank you very much. At this time, we will be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handsets before pressing the star keys. One moment, please, while we poll for questions. We have a 1st question from the line of Brian Weinstein with William Blair. Please go ahead.
Hi. Good morning. This is Griffin on for Brian. Thanks for the questions. Maybe just to start on the sponsored research agreement for the endometriosis test. Just to clarify, you know, is this product separate from EndoCheck or more of an extension of the existing R&D work that you guys have already done? You know, I think Endo, the LDT launch was expected in 2023, so I just want to better understand you know, how this research agreement work compares to the Endo product.
Sure. Great. Well, thanks for the question. I'll start and then, Ryan, you can add your thoughts, as appropriate. The sponsored research agreement is best characterized as an extension of our R&D efforts overall. As I think, we've talked about in prior calls, you know, we have been looking for opportunities to accelerate and sort of ensure a launch of an endometriosis LDT in 2023. This arrangement will give us access to resources and importantly specimens, and expertise, to complete both protein and microRNA development work. You know, the exact LDT to be launched, we will obviously give more information about that when the time is appropriate. I think the way to think about it is the latter, in your question, as an extension of our team and access to additional resources. Ryan, anything to add to that?
No, I think you covered, Nicole. Thank you for the question.
Okay. Thank you. Then on the BioReference Laboratories co-marketing distribution agreement. I know it's you might be limited in what you could say, but can you give us a sense of maybe how many reps on their side will be carrying the Ova1 product and, you know, with your focus being more on depth in the 2nd half year in driving adoption utilization against existing docs. You know, is that? Are they gonna be helpful here? Will that also be these reps focused? And then any deals details on the economics of this agreement, the revenue share potential margin impact would be helpful.
Yeah. It's challenging to give anything that's gonna satisfy you in terms of details. I apologize in advance for that. But I will say, you know, we're extremely satisfied with the commitment that BioReference has made to us in terms of their promotion of this relationship and our products with their sales team. I really can't comment. It wouldn't be appropriate for me to comment on the size of their sales team. All I can say is-
Sure.
They've been incredibly supportive, and we found the cultural fit between what we're each trying to achieve with this relationship has been extremely positive. You know, we feel really confident that they're going to do what they can to drive adoption within their sales force, but then obviously importantly within their customer base. The economics are, you know, consistent with our current Ova1Plus sales. Although I would ask Bob to just confirm that there's nothing else he'd wanna say on that.
I would just comment that our expectation is that it's attractive to both sides, and we expect our margin profile to be consistent.
Okay. Appreciate that. And then just a last one here on the, you know, the capital situation. The burn was down nicely year-over-year. Bob, I appreciate the color on sort of 2nd half expectations, but maybe can you just talk a little broadly about how you're thinking about the cash burn in 2023 and ultimately addressing what will likely be a financing need?
Well, we haven't, you know, we haven't given guidance for Q3—I mean, for 2023. Obviously, the major catalysts are the BRL relationship and the OvaWatch launch. We would expect top line, you know, sequentially year on year to be meaningfully higher, and we don't anticipate any significant cost increases. We believe the R&D that we just spoke about relative to the partnership is what's necessary to get over the finish line on Endo in terms of our development. We're not at the point where we've assessed the marketing needs, and that's on the come. The only cost step function that might be appropriate is the front end on marketing relating to Endo.
You know, look for top line growth with consistent cost discipline and we think the majority of the R&D is covered by this research. The majority of R&D development discovery is gonna be covered by this Harvard Dana-Farber relationship that we're gonna fund in the current year.
Okay. Thank you for the questions.
Thank you.
Thank you. We have next question from the line of Ross Osborn with Cantor Fitzgerald. Osborn, please go ahead.
Hi. Thanks for taking the questions. Just starting off, could you walk through the 2Q cadence and then how July shaped up maybe relative to June?
Hey there. Thanks for the question. I'm sorry. Could you just clarify what are you looking for on the 1st part?
Just, you know, how the volume progressed throughout the quarter.
Oh, sure.
Accelerating volumes, you know, month-over-month, and then, you know, how July, and then even, you know, how August volumes have turned it.
Sure. Well, too soon to say much about August. In terms of volume for the 2nd quarter, it was pretty consistent month-to-month, and we continued to see, you know, marginal growth in April for sure. Frankly, July is never a great month, but we've actually seen strong volume in July so far. You know, pretty even growth over the three months.
Okay, got it. On the Scarlet relationship, could you just walk through how that testing process works?
Yeah. Again, I don't wanna get too over my skis by describing somebody else's product, but how it essentially would work is as a mobile phlebotomy. A patient can choose, instead of going to a draw station, to have a Scarlet mobile phlebotomy visit and have a draw done at their house. It will help with people and/or anywhere else for that matter, work, whatever. You know, it gives additional optionality for having blood drawn for tests like this. Also what's really exciting is that the coverage is also inclusive of rural folks as well, so rural areas as well. Really nice national coverage and we think will be helpful to get our tests to be more available to all women, which, as you know, is a big part of our mission.
Okay, great. I guess lastly, so it looks like the OvaWatch timeline has narrowed down from the 2nd half of this year to the 4th quarter. You know, how should we think about the 4th quarter rollout of OvaWatch?
Our plan is to spend the time between now and the launch, which we expect to be pretty early in the 4th quarter, to secure additional progress relative to reimbursement. We're submitting our clinical dossier in Novitas in the next two weeks, and then lots of work to do on reimbursement there. We're feeling very positive about the progress that we expect to make between now and the launch there. You know, I think I would look at it as an early 4th quarter event. We've said that we are not counting on revenue this year for either OvaWatch or the BioReference co-marketing arrangement. There could be some uplift there, but frankly, we just didn't think it was appropriate to rely on that.
Okay, got it. Thanks for taking my questions.
Sure. Thanks for the question.
Thank you. Ladies and gentlemen, we have reached the end of the question and answer session, and I'd like to turn the call back over to Nicole Sandford for closing remarks. Over to you, ma'am.
Thank you everyone for joining us today. We look forward to seeing all of you on our KOL event on August 24th.
Thank you. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.