Greetings, and welcome to Lucid Diagnostics' third quarter update conference call and webcast. At this time, all participants are in a listen-only mode. A brief question- and- answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Adrian Miller, Vice President of Investor Relations. Thank you. You may begin.
Thank you, operator. Good afternoon, everyone. This is Adrian Miller, Vice President, Investor Relations at Lucid Diagnostics. Thank you for participating in today's business update call. Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer of Lucid Diagnostics, along with Dennis McGrath, Chief Financial Officer of Lucid Diagnostics. The press release announcing our business update and financial results will be available shortly on Lucid's website. Please take a moment to read the disclaimers about forward-looking statements in the press release. The business update press release and the conference call both include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the Securities and Exchange Commission.
For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part I, Item 1A, entitled Risk Factors, in Lucid's most recent annual report on Form 10-K filed with the SEC, and any subsequent updates filed in quarterly reports on Form 10-Q and subsequent Form 8-K. Except as required by law, Lucid disclaims any intention or obligation to publicly update or revise any forward-looking statements to reflect changes in expectations or in the event of conditions or circumstances on which these expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. With that said, I would like to turn the call over to Lishan Aklog. Dr. Aklog.
Thank you, Adrian. Thanks everyone, and welcome to our quarterly call. I'd like to first start by thanking our long-term shareholders for their ongoing support and commitment. As we discussed at our last quarterly call, we had some recent transformational milestones that we've put behind us, and the team is now, for this past quarter and moving forward, just intensely focused on executing on our long-term strategy. We're very satisfied with the solid results that they've delivered over this past quarter and are really particularly proud that they did so, you know, well under budget, for the quarter and the year as we continue to keep a close eye on cash preservation.
I will note that, for the first time, we've changed the format here, moving from truly an audio conference call to a webcast. We've done so in response to feedback, including one of our long-term patient investors suggested that this would be more useful, and we look forward to ongoing feedback to make sure that we are providing the type of transparent communications that we have always aspired to. Let me start with some quarterly highlights. EsoGuard testing volume has increased 28% sequentially quarter-over-quarter, and 436% annually to 1,088 tests performed in the third quarter. We're happy that we're gratified that we've cleared that 1,000 tests per quarter milestone.
We now have 13 Lucid test centers that are operating in 11 states, and three more are due to open during this coming quarter. The satellite LTC activity, a concept that we introduced on our last call and I'll describe more in detail later, has been increasing rapidly and now includes about 22% of the patients undergoing EsoGuard testing. Our laboratory, Lucid Dx Labs, is operating independently with enhanced quality and efficiency metrics that I'll review. We're starting to receive payments and recognizing revenue on EsoGuard claims that were submitted under Lucid Dx Labs starting in August. We have clinical utility studies to support private and public payer reimbursement that are underway. We completed the transfer of EsoCheck to a high-volume manufacturer.
As I mentioned, we're executing on our growth strategy while continuing to focus on preserving cash and are running well ahead of our budget for both, the full year and for this past quarter. Brief introduction for those of you who are just learning about our company. Lucid Diagnostics is a commercial-stage cancer prevention medical diagnostics company. We're focused on early pre-cancer detection in the tens of millions of patients with gastroesophageal reflux disease or chronic heartburn who are at risk of developing highly lethal esophageal cancer. Our mission is to prevent these deaths from these cancers in at-risk patients with chronic heartburn. Esophageal cancer is highly lethal and is becoming more prevalent. About 16,000 patients die every year.
You can see on the far right there, we've had a 500% increase in incidence over the last few decades, and it remains the second most lethal cancer, with an 80% overall five-year mortality. The key statistic on this slide, however, is that the stage 1 mortality rate at five years is 40%, unlike most other, nearly all other, common cancers like colon cancer and breast cancer, where a stage 1 diagnosis is actually a victory. Because of this, early pre-cancer detection is really necessary to prevent these deaths. Unfortunately, less than 5% of those who have been recommended for screening for over a decade have historically undergone endoscopy. Lucid's products include two products, EsoGuard, our esophageal DNA test, and our EsoCheck cell collection device.
They are the first and only commercially available test capable of serving as a widespread screening tool to prevent these deaths through the early detection of esophageal precancer. So in a sense, they're the missing link to establishing a viable cancer prevention program for this particular type of cancer. We're really excited, and we've previously announced this, that the society guidelines from the major gastroenterology societies now recommend EsoCheck in conjunction with EsoGuard as an acceptable alternative to endoscopy. The further updates also no longer consider having symptomatic heartburn as a mandatory prerequisite, which has significantly expanded the population of patients who are candidates for EsoGuard testing. The commercial opportunity here is very large. As I mentioned, the target population, because of the updated guidelines, is now 30 million patients.
These represent patients who are at risk, who have chronic heartburn and are recommended for screening. I should note that this increase does not include the elimination of the need for GERD symptoms in the American Gastroenterological Association guidelines but does reflect an expansion to include an unequivocal recommendation in women. A Medicare payment has been established at $1,938, resulting in a very large multi-billion-dollar market opportunity and an over 90% estimated gross margin at volume. Our sales strategy includes targeting primary care physicians, specialists, and institutions. The specialists include gastroenterologists, foregut surgeons, and ear, nose, and throat doctors, as well as institutions, large practices, hospitals, and so forth. These two channels are somewhat different.
When we talk to small PCP practices, our goal is to get them to order an EsoGuard test. However, with the specialties and institutions, we're looking to have them build an EsoGuard program, and by making the case that by detecting more patients with esophageal pre-cancer, that will create downstream revenue opportunities for more endoscopies, ablations, pH monitoring, and other testing. They also have somewhat different locales. The PCP referred patients are sent to one of our Lucid test centers, where one of our Lucid nurse practitioners performs the EsoCheck cell collection procedure. With the practices and institutions, there are two options. We have some practices and institutions where their own nurse or nurse practitioner or physician assistant performs the test after we've trained them.
As I mentioned at the beginning, we're also increasingly utilizing our own nurse practitioners, who are able to perform the cell collection procedure at the particular practice, typically allocating a day or so where patients are teed up for that day. We've had situations where up to a dozen patients have been set up for our nurse practitioner to perform those tests. We're looking forward to continuing to expand this. We have established a you know robust compliance program around this, and there are a couple of states where we have some limitations, California and Florida being two, but we're figuring out ways to work around the compliance and the regulation challenges in those states for satellite test centers.
Lucid test centers that we've established are not just physical locations where nurse practitioners can perform testing, but they also tend to be sort of centers around which a lot of educational programs targeting patients as well as physicians are centered. The economics of our test centers are very attractive, as I've mentioned many times before. Won't go through all of the numbers today, but the bottom line is that we can cover the fixed cost of the personnel as well as the location by performing 2 reimbursed procedures per week. As I noted in the beginning, we continue to show steady growth in EsoGuard testing volume.
We had 1,088 tests performed in the third quarter, which represents a 28% increase from the second quarter and a 435% increase from the third quarter of 2021. I've described this as a mid-throttle strategy where we are deploying sufficient resources to get good, steady growth, but not going full throttle until we have more predictable reimbursement, which we hope to see in the coming quarters. This growth has been driven by a variety of factors. We have increased our personnel, as I'll show in the next slide. We've also dramatically improved our sales training and really data-driven sales processes. We're now steadily, as we've grown our team, developing increased experience.
Although I will note that the median rep has only been in the field for a month or two, and we look forward to continuing to extract improved performance from our existing team through increased experience in the field. We are starting to track the testing volume by referral source and by operator. We're still optimizing the tracking and reporting of both of these. These are generally rough numbers, but you can see that approximately half of the patients, just under half the patients right now are being referred by small individual or small PCP practices, and the remainder are coming from specialists or institutions.
As I noted earlier, the performance of the test is being done in a variety of settings, including our own nurse practitioners in the LTC or the satellite LTCs, as well as the physician practices. The important thing to note and the important trend from the last quarter on this slide is that 22% of the tests performed in the fourth quarter were in that satellite LTC model where our nurse practitioners are co-locating with a physician practice to perform tests on patients that were referred from that practice. We expect this to continue to. It's clearly making an impact now, and we expect it to be a growth driver moving forward. This slide shows the expansion of our sales team. I've showed this in previous slides.
You can see we're making good steady progression month to month at expanding our team. We have 37 sales professionals across the full spectrum of sales reps all the way to senior sales leadership. Our target, where we intend to plateau for the near term is at 58. We look to complete that by the end of this year, but likely we'll reach that target by the early part of the first quarter of 2023.
Our plan, as we've described before, is to, at that point, to pause both the expansion of our sales team as well as the expansion of our test centers, and continue through 2023 while we're establishing more predictable reimbursement by allowing the team to continue to grow volume through the measures and the effects that I described earlier. As previously mentioned, we now have Lucid test centers located in, we have 13 centers located in 11 states. You can see them here. A couple of notes. We did have a center in Seattle, which we pulled.
The regulatory hurdles with regard to managing nurse practitioners there became a bit cumbersome, and we'll go back there at a different point, but we thought we would be better allocation of our resources elsewhere. Since our last announcement, we've added a center in Chicago. That's our most recent opening. You can see there in Illinois. We continue to, as we described previously, are shooting for an additional three centers by the end of this year. We're on a good path to do so. Let me talk a little bit about our laboratory operations. We're really quite proud of the progress that we've made. As you may recall, Lucid Diagnostics Lab or Lucid Dx Labs went live in February of this year.
We've been gradually working our way, and now I can proudly say that we've transitioned to being fully independent, with our own personnel, performing all aspects of the test and running the laboratory. You can see here that we've extracted substantial efficiencies. I won't go through all the details here, but I just thought I'd highlight a few, that our ability to extract the DNA from the sample as it arrives has improved in multiple parameters there, you can see by substantial amounts. We're actually garnering more DNA per sample, which has an impact on the performance of the test. Even in a very somewhat obscure aspect of the test, the bisulfite conversion phase, which is a critical step that's been incredibly time-consuming and costly.
You can see that the team in just a couple of months has dramatically decreased the time and resources that go into that, and that bodes well for our decreasing the overall cost. There are opportunities to continue to extract efficiencies and cost savings through a variety of means, including automation. The team has also, from a really important patient and physician-facing point of view, has been able to get the turnaround times down. You can see when we took over the lab, times increased as there were some growing pains in the early couple of months. Now we've decreased the turnaround time to six days, which is a record for us. Next, I'll talk a little bit about the reimbursement strategy and where we are with that.
If you look at the upper left, you can see that our payer mix for the thousands of tests that have been performed to date skew heavily towards private payers with Medicare and Medicaid only representing about 11%. That is really important as we look at the near-term opportunities for securing reimbursement from private payers versus Medicare and as it relates to the local coverage determination for Medicare. A quick update on that, really we don't have a lot of news. The MolDX group, which is reviewing the local coverage determination comments that occurred in the second quarter of the year, that included us and about a dozen other entities that commented on a draft foundational LCD.
They are still working on that, but we haven't heard any response to that. Although we did have a call with them, we weren't allowed to talk about the local coverage determination, but we did have a call with the team to discuss our plan for collecting the type of clinical utility data that's required that will be required to translate a final foundational LCD into an actual coverage determination for EsoGuard at the appropriate time. Those conversations were quite fruitful and productive. On the private payer side, you see that we are steadily working our way through from the lower-hanging fruit, which are the secondary PPOs or Preferred Provider O rganizations through increasingly increasing lives covered all the way to national plans.
The key factor we continue to have ongoing discussions with private payers, with medical directors and so forth remains as with the one on the Medicare side with collecting clinical utility data, and I'll talk a little bit more about that later. Our plan to do so, we've been vetting that through both retired and existing medical directors of multiple plans, and we believe we're in a position to start collecting that data in a way that we should start being able to start securing more of the plans further down on this chart here, and securing networks for that. Claims processes.
As we discussed last quarter, we just completed in August the transition to our new revenue cycle management partner, which is the entity that submits claims on our behalf and then goes through the entire claims process, including a variety of adjudications and so forth, ultimately leading to payment or denial. That process was launched in August of this year, beginning part of August. We have several thousand claims that we've been holding. These are claims that started all the way back to February when we took over the laboratory CLIA certificate and were able for the first time to theoretically bill on our own behalf. We did start billing once the revenue cycle management partner was in place in August. We are...
This is how it works, just to give a little primer on that. Once we bill, the payer can either pay directly, and the direct payment can be out-of-network, as a percentage of charges billed, typically at some out-of-network rate. Or if we're in-network on that particular payer, paid at a contracted rate. If the payment is denied, there's an opportunity to appeal and to secure payment after the appeal before or a final denial. This process is important, obviously, for securing payment, but it's also extremely important for the entire reimbursement process.
I've described this many times that in order to actually have meaningful conversations with the larger payers, you actually have to generate a claims history where claims are being submitted, denied, paid, appealed, and so forth. We're looking forward to starting to now that we have all the elements in place, starting to build up those claims histories so we can start having substantive conversations to be in network on these various plans that are shown on the slide. We did, as I said, start submitting these payments in the second quarter. We did start to see some payments.
They include a few in-network payments, but the majority of them are out-of-network payments, where the payer paid us typically at a 50%-60% standard out-of-network benefit rate, resulting in payments of about $1,200-$1,300, which is gratifying because these payments do reflect the full list price that we charge the payer. We don't really have enough data yet to know what percentage of the claims submitted will get paid. We need another couple of quarters to get a better picture of that. We look forward to tracking that closely over the next couple of quarters to give you a better sense as to how it will do for out-of-network payments as we are waiting going in-network and securing the network contracts.
As I've mentioned several times, the key factor for our securing reimbursement is establishing clinical utility. If you look at the clinical studies that are currently active, we've talked about this over several quarters, that we've substantially shifted our own internal resources from the performance studies that we had launched earlier, BE1 and BE2, to clinical utility studies. I won't go through these in detail, but these are coming along. We are starting to enroll patients in them. We have the retrospective study from NYU that has hundreds of patients that should start generating data quite soon. We're hopeful by the mid part of next year to have substantial meaningful amount of clinical utility data to engage private payers on.
As I mentioned previously, we made the strategic decision to pause the screening portion of the performance studies, the BE1 study, until such time that we have better predictability and frankly, an improved assay. We've been since we've transferred the test to our personnel, we've been making significant strides with regard to improving the assay itself. We're gonna keep that on hold for now. We're continuing to enroll in the case control study and expect to do so for the next couple of quarters. Once we close that out, that'll be a nice piece of performance data that will supplement the excellent data that we currently have from the Science Translational Medicine paper from a couple of years ago.
As I mentioned, again, even for this study, we're benefiting from the fact that we've delayed things a bit for cost control and cash preservation purposes because we're continuing to improve the assay, and we'll be subjecting the samples collected to the best version of the assay. There are a lot of other studies out there. On the far right, you can see that other investigators are initiating, whether they be ongoing, National Cancer Institute studies, American Thoracic Society, VA, and others, and we're really excited as those studies continue to enroll and generate positive data for this. Finally, before handing it over to Dennis, just a quick comment about our manufacturing.
This was a long process, and I want to commend our team for completing what is a, you know, very technical process of transferring the manufacturing of our EsoCheck cell collection device to a high volume manufacturer at Coastline. The manufacturing of the device began there in October of this year, just last month. This kind of a company that's headquartered in San Diego with plants in Tijuana and Mexico will have an immediate impact by moving to the high volume provider of decreasing our per unit manufacturing cost of EsoCheck by about 60%.
Also the capacity, even with just the initial line, we'll go to about 20,000 units a year. But what's really important with regard to this transfer is that we have fully scalable capacity at this facility, we can just add additional lines as demand dictates, upwards of 1 million devices a year. Really unlimited for the near term. With that, I'll pass it on to Dennis to talk about our financials.
Thanks, Lishan, and good evening, everyone. Our summary financial results for the third quarter were reported in our press release that was published earlier today. On the next three slides, I'll emphasize a few key highlights from the quarter. I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10-Q that was filed with the SEC earlier today, and is also available on our website. You see the balance sheet in front of us. Cash between the quarters sequentially decreased by $5.7 million. Our vendor payables decreased by $2.2 million when considering not only accounts payable that's reflected there, but other recurring accrued expenses. It is offset by intercompany debt to the parent company, PAVmed, a $4.2 million increase.
However, both boards have agreed that that could be settled up in stock in the coming weeks. We have a committed equity facility, as you're aware, up to $50 million of possibility of stock issuances. We did during the quarter record $1.8 million of proceeds, most of which we had already reported to you as part of our update in August. Our shares outstanding included unvested restricted stock awards. As of today, it's 39.1 million shares. We are now S-3-eligible, as previewed with you previously. Similar to what we've done at PAVmed, the Lucid board considers it good governance to have a shelf registration with the embedded ATM on file with the SEC, and we plan to do so in due course. Go back one slide. You see our P&L in front of us.
Slide 20 here compares this year's third quarter to last year's third quarter on certain key items. I'll trust you'll review the information in my comments in light of the cautionary disclosure that's probably hard to read on the slide, but it's at the bottom of the slide and provides supplemental information, particularly about non-GAAP information. The revenue for the quarter reflects 39 tests at an average payment rate of $1,945 per test. The rate slightly higher than the Medicare rate of $1,938, as we received one payment closer to our ASP of $2,499 than the Medicare rate, and that skewed things slightly higher. The prior year reflects the fixed monthly fee received from the third-party lab that we used before setting up our own lab earlier this year.
Just a comment on revenue recognition, that's consistent with our past discussions. A key determinant in revenue recognition is the probability of collection. For the vast majority of patient out-of-network claim submission, this means revenue recognition occurs when the claim is actually collected versus when the patient report is invoiced and submitted for reimbursement. As you'll see in our 10-Q, this is called variable consideration in the jargon of GAAP's ASC 606, for revenue recognition guidelines. Presently, there is insufficient predictive data to recognize revenue when invoiced. That will occur in time as contracts start to come on board and the probability of what we invoice gets collected, we will shift to recognizing revenue, when it is invoiced. Our GAAP and our non-GAAP loss for the third quarter of this year is fairly flat sequentially.
Our non-GAAP loss per share is $0.28 for the third quarter, and was also a loss of $0.28 per share in the previous quarter, in the second quarter. On slide 21 is a graphic illustration of our operating expenses as presented in detail in our press release. The total non-GAAP OpEx was relatively flat sequentially. The cost of revenue primarily consists of EsoCheck devices, lab supplies, and fixed lab facility costs, and is now being presented in our 10-Q as an operating expense consistent with the practices of other diagnostic companies. Sales and marketing was relatively flat sequentially, and G&A decreased by 35%, primarily related to the allocation of almost $1 million of lab costs in the prior quarter.
As you'll recall, there was no revenue recognized in that quarter, and therefore the typical cost of revenue-type expenses are required to be reclassified to G&A. R&D, consistent with Lishan's comments already, decreased sequentially by 22%. With that, operator, let's open it up for questions.
Thank you. We'll now be conducting a question- and- answer session. If you'd 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 would like to remove your question from the queue.
For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question is from the line of Mike Matson with Needham & Company. Please proceed with your question.
Yeah. Thanks. Hi.
Hello.
I guess just doing some rough math on the test centers and then some of the numbers you guys gave. I think that it's about 240 tests of the 1,088 were at the test centers. That's about, you have 13 centers. That's about, by my math, 18-19 per center in the quarter, about 1.5 per week. Does that sound right? You know, maybe you can just comment on kind of what you've seen at the centers that are, you know, I know some of them are newer, so maybe the ones that have been running longer, you know, what kind of volumes you've been seeing there on a weekly or monthly basis.
Let me make a couple comments on that, Mike, and then let me ask Dennis to chime in. One thing I wanted to give a caveat that the numbers on that slide with the pie charts was we're still kind of improving our sort of tracking ability to understand tests that come through ultimately to the lab, who the referring physician was and who actually performed the procedure. We're trying to capture that. There are, so, you know, we haven't actually broken that down, and I'd be a little bit careful to sort of confirm your extrapolation there, and I'll ask Dennis to chime in if you'd like.
You did note one thing, which is that we have test centers in Arizona that have been in place for over a year that are quite a bit busier than we have some that have just been getting off the ground, as we've accelerated growth in them over the last couple of months. I don't think we have yet the kind of data which I think you're seeking, which is sort of what is the productivity of a center. But I just again want to remind you and everyone that this is not sort of like a same store concept, right? The test centers are just like phlebotomy labs. I mean, they're just where the tests are performed, right?
Ultimately, I do think the more useful information, which I think will capture some of the trends that you're trying to seek here, Mike, is the breakdown between primary care physician referrals and referrals coming from institutions that are trying to build their own program. Right now, that number has been bouncing between about fifty-fifty between the two of them. I do wanna be cautious sort of not to get ahead of ourselves in terms of the kinds of extrapolations you're looking for. Hopefully qualitatively, that gives you a bit of a sense. Dennis, did you want to add anything to that?
Yeah. I would say that although that math is probably something that all of us want to ultimately do, the chunkiness of it per center doesn't lead to the predictive value that's needed for future forecasting of what these test centers can result. Some because of the newness of how long some have been operating, but we're still pretty early in the game to be able to put trend lines to that. I just-
One of the challenges, just to add to that, Mike, is that we even have some locations where we have, you know, specialty practices. We have a gastroenterology practice that's building their own test program. But it's more convenient for them if they have a Lucid test center in the vicinity. It's more convenient for them to send those patients to our test center. We're still kind of grappling with sort of a three-dimensional matrix here about who the operator is, who the referral is, where it's actually being performed to try to capture that data in a way that's useful to understand more of the underlying substantive, you know, issues here with regard to referral patterns and so forth.
Okay, thanks. I mean, the volume number looks pretty good, the 1,088. Just wondering, you know, on the backlog, you obviously have done a fair number. I don't know what the number is off the top of my head, but you know, test to date, since you started doing them and, you know, a lot of them obviously haven't been paid for, but yet at least. You know, do you have any feel for I mean, have any of them gotten to the point where, you know, it is sort of a write-off where you've gotten to that you put that little flowchart up there where you kinda got to that final denial stage, or, you know, are all of them still kind of potentially gonna get paid?
Just to give you a sense about how early we are in this process. You're right. If you kind of total the number of tests that have been performed, you include Q3, Q2, and I believe Dennis, right, half of Q1, here you're talking several, you know, over 2,000 tests have been performed and claims that have been or need to be submitted and worked their way through the process. As you mentioned, that process just started in August. We're just starting to see an initial trickle of payments and then initial denials. I don't believe we've seen any final denials. That would be way. I'm quite sure we haven't because that would be quite early, you know, for a claim that was submitted in August.
As I said, we've gotten paid on a few in the second quarter. Test claims that were submitted in August got paid before the end of September. The majority of them are still working their way through the system. We don't have really a numerator, much less denominator on the number that would lead to final denial. That'll take us a reasonable period of time to find out what that.
Yeah. Okay.
Okay.
That makes sense. I guess I forgot how early it was in the process. The ones that have been paid, you know, are those all coming from a single, you know, insurer, or are they coming from, you know, have you actually been able to get paid from multiple insurers at this point?
Yeah, yeah. From multiple insurers. We don't have the numbers yet.
Okay.
Again, it wouldn't really be meaningful to give you numbers yet, but no, it's not a single payer. We're getting them. As I mentioned, the most gratifying thing is that they're respecting the list price, not even the Medicare price, but the list-
Yeah
prices that we submit and are paying that at a standard kind of 50%-60% out of network payment with an average payment around $1,200-$1,300. I think we really need a little bit of time to see how that holds in terms of the price, in terms of the number of payers that are paying out of network. Frankly, ultimately for the near term, a useful metric that we're really looking forward to getting our head around, which is the percentage of the total claims submitted that get paid out of network. That'll be an important number for us in the near term as we're trying to lock down long-term contracts in-network.
Okay, great. Thank you.
Thanks, Mike.
Thank you. Our next question is from the line of Ross Osborn with Cantor Fitzgerald. Please proceed with your question.
Good evening, Ross.
Hey, guys. Congrats on the progress.
Hello.
Starting off, I guess given last quarter's update, that guidelines now include women, can you describe how the female population performed during the quarter and how you plan to drive awareness going forward?
We don't have a breakdown by gender yet. But you know, I think qualitatively, we're seeing men and women and sort of the proportions that you might see. I don't have a number to report to you. You know, we'll get a couple of things that we're noting, again, these are qualitative, that we are getting patients that are consistent with the guidelines, right. We're not getting the patients where someone's referring a 15-year-old without, you know, or a 21-year-old without GERD that we consider far removed from qualifying for guidelines.
It really does appear that the patients who qualify based on risk factors for guidelines is our typical patient, which again bodes well for us in our conversations with the payers, as you know, if they're seeing patients where they believe it's not medically indicated based on guidelines would be difficult. I don't have hard numbers for you, but I think the ratio between men and women is consistent with what we'd expect from the broader population.
Okay. No, that makes perfect sense. I guess thinking about next year as you continue to expand geographically, do you expect any staffing headwinds with getting nurse practitioners in your testing centers? If so, what are you doing to mitigate these risks ahead of broader commercialization?
I'm glad you asked that question. It has a good opportunity for me to sort of reiterate what our plan actually is. Our plan is not to continue to grow the test centers, the nurse practitioner group or the sales team through the year. Our plan, previously articulated, was to get to a level by the end of this year with 16 test centers and nurse practitioners sufficient to cover those test centers as well as 58 sales personnel. The 58 target will leak a bit into the first quarter of next year, but we've maintained that as sort of our plan.
In the context of our kind of strategic assessment and cash preservation mode, we believe that we'll be able to continue to show steady kind of mid-throttle test volume growth with that team as they get more experience in the field, and become individually more productive. You know, we may reassess that into the year as depending on sort of how some of these numbers play out with regard to reimbursement, amount of network payments and so forth. We're not ruling out the possibility that we could pivot from that stance. Given our current stance where we're very much focused on resource utilization and cash preservation, we're looking to keep those plateaued. Now, we still have a ways to go on both of those.
The answer to your question is that I think I've said this before. We've been very gratified despite the challenges with workforce labor shortages and workforce limitations at our ability to recruit both nurse practitioners and sales personnel. It takes time to interview. We're very picky. We have a very sort of robust process. We don't just sort of hire people without a very extensive process where they interview literally, you know, half a dozen people or more. It takes time, but we've been able to secure candidates, you know, high caliber candidates that we want. That's true also in sales.
Sounds great. Thank you for taking my questions.
Thanks, Ross.
Thank you. Our next question is from the line of Kyle Mikson with Canaccord. Please proceed with your question.
Good evening, Kyle.
Hey, Kyle.
high , this is Alex Vukasin on for Kyle Mikson.
Hi Alex.
Hi, like what it was. Just have a couple of questions for you so I guess the good place to start would be on the new high volume manufacturer Coastline. I just wonder if you could you just dive on it a little bit? More specifically, we're still feeling a bit capacity constrained before or just more so, just a preemptive measure prior to ramping up the business and this but we're just becoming an issue in the future. Thank you.
Alright, so if it's after the latter, so we were just planning ahead. We knew it would take a while, took about a year actually, there were a variety of ways. It's not a trivial thing to take a small batch manufacturing line and move it towards to do a high volume manufacturer where you know these lines are easily reproducible and you can, and you could rapidly escalate a capacity over time, so our team lead by Catherine Howard, do a great job of getting working their way through that, but it's all and it was all anticipatory. We also, we haven't shut down the small volume manufacturing because it's always a good idea to have a dual sourcing, because a variety of you know, you never know what, issues could arise but this is just planning ahead for the future line.
Got it. I know this is looking a little bit far, far ahead, but just thinking about 2023, can you provide us any color on, you know, maybe like, possibly like revenue breakdown, by, you know, customer type or any trends that you're seeing, you know, at the end of this year, possibly that could be going into next year? That'd be helpful. Thank you.
I think the only trends, and I'll let Dennis answer this, are really the ones we talked about, where we are getting some out-of-network payments. We're getting paid at that 50%-60% through the $1,200-$1,300 level. We're working through generating claims histories. You know, we're getting good quarter-over-quarter mid-single-digit growth. Translating that into sort of predictable revenue projections is gonna take us several more quarters, so we can get a sense as to what portion of claims submitted will get paid out-of-network and how we're progressing with regard to using our claim utility data to secure in-network contracts. I'm quite sure Dennis will concur with just leaving it at that. I don't think we have anything more we can provide.
No, that's exactly right. The predictive value is what we're striving for, and we just don't have that as of yet.
Got it. Thank you very much.
Great. Thanks a lot, Alex.
Thank you. Our next question is from the line of Ed Woo with Ascendiant Capital. Please proceed with your question.
Yeah. Congratulations on all the progress. Have you noticed any significant either increases or decreases in either, you know, nurse practitioner or medical supplies or any input costs or office space? Thank you.
Yeah. Sort of inflationary pressures. No, I mean, inflation's out there. I think, you know, we've generally had, you know, both, whether sales reps or, you know, the bulk of our team are sort of, you know, well-paid professionals. In terms of, you know, certainly in terms of our budgeting and our targeted expenses for personnel, or even for supplies, we've had supply chain issues which we've described before, where we've had to work around challenges with regard to supply chain. In terms of the from a cost point of view, I mean, there are. It is there, but it hasn't had a significant impact on our business moving, you know, in the past or even moving forward.
Dennis, would you agree with that?
Yeah, I agree. That the inflationary pressure for the delivery side of our test centers is not as sensitive given the margin level of the next patient coming in the door in that test. Even if salaries or rents did creep up as a percentage of the total revenue opportunity for us, it's still a small portion.
Great. Well, thank you for answering my questions, and I wish you guys good luck. Thank you.
Thanks, Ed.
Very good, Ed. Thank you. Operator, you have any more questions?
There are no further questions at this time.
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