Good afternoon, everyone, and thank you for joining the 2025 HC Wainwright 27th Annual Global Investment Conference. I'm Dr. Jade Montgomery, an Associate Research Analyst at the firm, and I'd like you to please join me in welcoming Josh Riggs of Insight Molecular Diagnostics. Josh?
Thank you. Insight Molecular Diagnostics, obviously we're a diagnostics company, healthcare space. We're going to make some forward-looking statements here today. Most of us at some point in our life are going to be in the unfortunate situation where we're sitting in front of a doctor and, you know, they're going to want to order a test for either us or for a loved one, and maybe it's a specialty test, and they're going to have to send that across the country somewhere, and it's going to take a long time, and it's going to be confusing, and you're going to be waiting at your house and hoping that you get the answer that you're looking for.
We believe that, with our technologies, getting as close to the patient is not only beneficial for the care, but it's also a great way to kind of reach the market where the market is, which is generally there as close to the patient as possible. When I took over the company two and a half years ago, we looked at our portfolio through this lens. We were like, what was, was there an opportunity for us to find our customers by getting closer to the patients and getting closer to that point of care. When we looked out, we were trying to find an area where we had high clinical demand, which means that tests are routinely ordered, the technology, or the testing type was routinely ordered, so doctors knew how to use the test.
We wanted an area where we had high reimbursement, so that there was plenty of margin for everybody to share. The third piece, this is kind of like the special sauce in all of it, is that the market itself would be IP protected. What we wanted was something that you had a lot of testing ordered, there was a good amount of revenue already present, and that you didn't have many entrants in the market because you had to have IP to play. When we looked through our portfolio, what we saw was a really nice opportunity in transplant. In the United States, transplant monitoring is about a $2 billion clinical market. What we saw was something that was underpenetrated, inefficient, and right for disruption.
In this market, we felt if we got closer to the patient, we would have an opportunity to win a significant piece of this business. What you can see is that, like, in the current market, you've got about $500 million or better in billing on an annualized basis, but it's all captured at central labs. It's captured at a couple of labs in California. There's another couple of players here, but zero of that is captured at the transplant centers themselves. That's where we saw the opportunity that we could take by taking our workflow and our patent-protected workflow, making it simpler, putting it in a box, and shipping it out to the transplant centers. We could enable them to keep that revenue themselves, keep it there at their transplant centers, and also manage their patients better on a day-to-day basis. How do we get there?
What do we have to do? We have to have, you know, three things. We have to have the test that's regulated. We need to be able to make a claim. That means going through the FDA. It means going through IVDR. It needs to be reimbursed. It also needs to be clinically useful. We have to prove the utility of our specific technology. We've been publishing in transplant for over a decade now. We have a long history of validating the biomarker. Our papers were cited twice in the LCD that Multi-X put out there covering this type of testing for transplant patients. We're well reimbursed. We know that we have a useful test. We got, you know, $2,753 reimbursement from Multi-X this year. The last step in the path is getting regulated. We've been talking about going to the FDA for over two years now.
We're finally in that process. We've announced that we've got our first patient enrolled. We're still expecting to submit to the FDA by the end of this year. If we go through the process really quickly, that's a five-month process. That means middle of next year, everything goes well. We've got a product that's reimbursed, that's regulated, and clinically useful, which leads to potentially rapid adoption in the marketplace. Oh, there, oop, clicked it twice. There we go. Why do you invest in molecular diagnostics to begin with? Like, why does this space exist? For investment, I think, you know, the high-value creation is that moment that you're sitting with the doctor, it's like, what do we do next? That's why we like diagnostics as a technology. That's why they get high reimbursement is because they impact a meaningful moment in the clinical care process.
There's an opportunity to do high-value capture. The technologies that we have available to us, they're not terribly expensive to run. There's an opportunity for a lot of margin capture between the cost for running the test and the clinical value that it creates. I think this part is kind of intuitive in that there's always another patient coming in. There's this high-quality recurring revenue, particularly if it's long-term care. That's what we have in transplant. We have where you're testing this patient four times in the first year, multiple times a year after that. We believe that regulated transplant testing is a $1 billion greenfield global opportunity. That's across the United States, across Europe, and in the rest of the world markets.
We have a test that costs us tens of dollars to manufacture that we're going to be able to charge hundreds of dollars to produce the results in the local lab. That's software-like margins that we can scale rapidly and globally. We have a wonderful network of community and academic center transplant surgeons and nephrologists that are helping pull us forward. We announced that we have three of the top 10 transplant centers in the United States that are partnered with us to help pull this product forward. We're looking forward to this launch moment next year, where we'll have a significant lead going into the space from these top institutions in the top backup additions that are pulling us forward. We're not the only ones that believe in it. Last year, we announced a relationship with Bio-Rad Laboratories. They're a $9 billion publicly traded company.
They saw the same opportunity that we did, which is to place instruments nearer to the patient, capture this high-value recurring revenue stream, and really start to exploit that local channel. They made an equity investment when we announced the partnership. They've invested two more times since then. They still are near the top of our cap table. They've been wonderful partners for us through the regulated process. They've been marching in lockstep with us as we've gone through all the meetings with the FDA, all of the various organization groups that we have to get their product out and our product out at the same time. We've been building momentum. Over the past six months, it's really accelerated. I think we announced that we had improved reimbursement rate for Multi-X, where we went up from $1,000 to $2,753.
We announced head-to-head data against one of the top competitors in the space, where we came out as equivalent, which is great for us. We've also announced the clinicaltrials.gov listing, and you can go there and see the sites that we're collaborating with. We had a really nice KOL event with Dr. Langone, who's our National Principal Investigator. He's at Vanderbilt. I encourage everybody to take a look at that and see his thoughts on how this can be adopted locally.
This morning, we announced that we had our first patient in, and we also are setting up a registry to help the community understand some of the more advanced parts of our technology that are out ahead of the field, particularly looking at what we're calling the Berlin protocol, which is advanced monitoring for patients that are at higher risk and potentially catching AMR early and intervening so that those patients maintain their kidneys for longer. Secondly, looking at the improved positive predictive value, four weeks ago at the World Transplant Congress, we showed that we had a positive predictive value that was well above what's available from competitive technologies. That's going up from 50% to 80% positive predictive value. All that means is that when you do biopsy a patient, when they do need that, that more often it's going to be right.
I think that's important for screening applications in this space. We've committed to getting the product to the FDA by the end of this year so that it can be out by the end of, hopefully by early summer next year, so Q2. We're excited. We expect that we're going to have increased engagement from our transplant center partners and beyond, those that are in our study through the registry. We look forward to updating everyone on that progress. We have a wonderful team. I like to say that we punch well above our weight as a company. You know, Dr. Ekkehard Schutz is the inventor of the technology. He's got multiple patents behind him and, you know, a world expert in dd-cfDNA and molecular diagnostics broadly. Johnson Chang comes to us out of, you know, several public companies that have done very well with regulated products.
He's put 20 to 30 products through various regulatory agencies. Obviously, we have Andrea Susan James with us as well, who's an expert in capital markets. We're excited. We're moving forward quickly and look forward to, you know, continuing the conversation with you guys in the Q&A. All right.
Does anyone have any questions?
Yes, sir.
Thank you. Cancer, OCX, yeah, an old name. Yes, you got a patent approved. Yes, can you just in some way enumerate where you are, what this could mean, and how long it will take?
No, thank you for the question. I don't get to talk about oncology much these days. That patent is related to CNI, so copy number instability. We have a product called DetermaCNI. This came to us through the Chronix acquisition. It's for late-stage cancer patients. It's answering the question, is the drug working? You've got a patient who's now on therapy post-diagnosis, and you want to follow the signal in the blood and see, is the drug working for that patient? This patent came through specifically in colorectal cancer. We believe it has applications, and we have patents beyond that. Right now, we are not investing heavily in that. I think we have a couple of research studies ongoing, but it's not front in our pipeline.
I'd say the announcement that we made, I think it was maybe a month or two ago about an LOI with a strategic partner, was more towards DetermaIO, which is a PD-L1 classification tool. Are you going to respond to PD-L1 therapy or not? This is also for late-stage cancer patients primarily. There is a company that is interested in helping us explore the utility of that, particularly in the rest of the world markets. I think it's an interesting opportunity for us. It's very much in the vein of what we've been doing with transplant, where we do a pilot in RUO before we find our way into the regulated space. The next investments we're likely to make are probably going to be incremental in transplant, going into heart and lung. As we build our cash flow, we'll start to turn some investment more towards the oncology side.
Let me follow up, if I may.
Sure.
Money.
Yeah.
All right. How do you expect the money stream will come in over the next two years, other than internally generated, which might start the end of 2026 in any substance?
No, thank you. We haven't given any formal guidance on particular revenue streams. We have guided on, you know, the average of six. That can go up or down next year as we come out of the FDA program. I think we have some levers to pull. I'd say there is the opportunity for revenue to start with the registry program that we've announced today. We have not given any guidance on when that would start, so I can't break news right now, but I think that's an opportunity for us to begin earlier than expected revenues next year. All right. Thank you.
One last one, if I may.
Of course.
What are the main questions you see from physicians, and is there any difference with what you see from potential payers?
Yeah, the physicians are, you know, one of the hardest things to change in medicine is behavior. I think we're already seeing it where the physicians want to know, is this equivalent or as good as what I'm already using? They're using this type of technology today to manage their patients. They order this type of test about 250,000 times a year. It's part of the standard of care. I would expect that before anybody or any institution adopts this broadly, they're going to run some head-to-heads. They're going to want to see that they're getting similar results between the technologies. That's why the publication earlier this year where we went head-to-head against one of our competitors was important. We're already seeing another one underway at one of our RUO sites or sort of our beta sites.
I think that data will go a long way to answering that question, like, can I trust this new technology? I think the FDA stamp of approval really helps on that as well. We've gone through all of that rigor to show that you get reliable results from our technology. I'm sorry, there was a second part to your question as well, I believe.
Does it differ potentially from what payers are asking?
You know, payers are an interesting group. CMS has wholeheartedly agreed that this technology is useful for the patient population. Private payers have been more reluctant. I think we have some work to do. That's part of why we've set up the registry is to help build the data set that shows improved outcomes through earlier intervention. I think that's going to take time, but we are, you know, we're on that path.
Great. Thank you so much for the talk. Really appreciate you being here and have fun at the gala.
Yeah, thanks for having us.