Good day, welcome to the PAVmed second quarter 2023 business update Conference Call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star than 1 on your telephone keypad. To withdraw your question, please press star than 2. Please note today's event is being recorded. I would now like to turn the conference over to Michael Parks, Vice President of Investor Relations. Please go ahead, sir.
Thank you, Rocco. Good morning, everyone, and thank you for participating in today's second quarter 2023 business update call. The press release announcing our business update for the company and financial results for the three and six months ended June 30th, 2023, is available on the PAVmed website. Please take a moment to read the disclaimer about forward-looking statements. The business update press release and this conference call include forward-looking statements. 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 U.S. Securities and Exchange Commission.
For a list and description of these and other important risk factors or risks and uncertainties that may affect future operations, see Part One, Item 1A, entitled Risk Factors in PAVmed's most recent annual report on Form 10-Q, filed with the SEC, and subsequent updates filed in quarterly reports on Form 10-Q and any subsequent Form 8-K filings. As required by law, PAVmed disclaims any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions, or circumstances on which the expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements. I would now like to turn the call over to Dr. Lishan Aklog, PAVmed Chairman and CEO. Dr. Aklog?
Thank you, Mike. Good morning, everyone. Great to have you here. Thank you for taking the time to join us, to spend some time catching you up on the business side of things for Veris and Lucid. As you know, we did do a full Lucid call yesterday, and that call is on our website. I'll limit our topics of Lucid and focus more on Veris. Let's start with some recent highlights. On the Veris side, the Veris Cancer Care Platform is impacting care at early adopter practices. I'll give an example of how it's having that impact. We have a next generation version of the platform that's under development and will launch in early fourth quarter.
We are restructuring and expanding our commercial team under the leadership of our new president, Gary Manning, with the goal of accelerating patient enrollment and revenue from subscriptions in the second half. We've added two new strategic initiatives since his arrival. One is that we are building a module for the platform that focuses on biopharma and will serve as a companion digital platform to novel cancer therapeutics. More on that later. We're also upgrading the platform to serve as a Software as a Medical Device, with planned FDA submission in 2024, which will allow us to expand its functionality into clinical-- full, full board clinical decision support. The implantable monitor portion of our project is progressing well. That's heading towards FDA submission and commercial launch in 2024.
More details in the webinar from yesterday, but some highlights from the Lucid side of things. Quarterly test volume growth grew 20% quarter-over-quarter. We upgraded our revenue cycle management infrastructure and provider, as we highlighted yesterday. That's already had an immediate impact on both claims and payments and revenue in the first six weeks since we made that transition, and really feel like we're at an inflection point with regard to translating test volume growth into revenue. We have two prospective clinical utility studies that reached our first enrollment milestone and will be submitted for publication soon. We highlighted unprecedented results from the NCI-funded EsoGuard study that was released recently and highlighted that we executed our first direct employer contract, which offers EsoGuard as an employee benefit.
Let me just step back and have a couple of slides as an introduction to those of you who are not familiar with the PAVmed story. PAVmed is a diversified commercial-stage medical technology company. We operate in all three sectors, devices, diagnostics, and digital health. Our corporate structure is that we have two majority-owned subsidiaries that as of the beginning of this year, represent the entirety of the focus of our business. Veris Health, privately held digital health company with a cancer care platform and a smart garment, and of course, Lucid Diagnostics, a publicly listed Nasdaq company, which is focused on the early detection of esophageal pre-cancer. Again, let's start with Veris. Veris is a commercial-stage digital health company, we're focused on enhancing personalized cancer care.
There are two components, one of which is actively commercialized and one which we expect to commercialize next year. The cancer care platform consists of a patient smartphone module, as well as a clinician portal that's married to a VerisBox of branded devices to transmit physiologic data from the patient to their physicians. The mission is to utilize modern remote patient monitoring tools to improve care through the early detection of complications and establishing longitudinal trends and risk management. The business model is a software-as-a-service recurring revenue model. We have established RPM codes, so this is not a significant reimbursement hurdle for us. There are also additional revenue opportunities from enhanced technical support, clinical support, and when the implantable device becomes available.
We seek to leverage certain value-based models, particularly ones that are focused on oncology, like the Enhancing Oncology Model or EOM. On the commercial execution side, we have several early adopters. These are generally small to medium practices that are on the platform and putting patients on the platform. Our focus in the last quarter has been with customer integration support, streamlining the, and making more efficient the processes for the for practices to integrate this within their operations, within their electronic health record and billing. All of that's going quite well. We have received positive feedback and have used some of those-- some of that feedback to incorporate features into our next generation platform, which is actively under development right now and will launch by the early part of the fourth quarter.
We are restructuring and expanding our commercial team. Gary Manning, again, has taken the lead on that, and we look to do so in the second half of this year to drive commercial expansion and revenue from subscriptions. That's the best way, as I did yesterday with Lucid, to describe how the system works and that it's real, and that patients, that it's having an impact on cancer care. I thought I'd highlight one particular example that shows that remote patient monitoring can prevent adverse outcomes and save lives. So there was a patient, Dave. He's a 71-year-old male, unfortunately, was diagnosed with bile duct cancer. He's undergoing aggressive systemic treatment at a Veris client, an oncology practice in Southeast Pennsylvania.
He was selected to be enrolled on the Veris platform, given that he had a high- risk of complications. He received, as you can see on the right there, the VerisBox with the Bluetooth-connected monitoring devices, and the platform was loaded on his smartphone. Really, we see the Veris platform as a sentinel, as a warning system that allows the patients to highlight abnormalities, either through their symptom reporting or through physiologic changes that are detected on the devices. The patient self-reported that his belly hurt.
You can see how he would do that on the, on the, on the right there, on one of the screens that has quite sophisticated symptom reporting that has you rate it, time, time period, just like a physician or a nurse would ask you. The next day, the next day, the nurse noted on the platform, you can see the example there, from the actual patient. She noted that he reported a symptom. That's the bottom little red circle there that shows that he reported symptoms of belly pain, and he rated it a two as moderately severe. She also noted that the heart rate and the oxygen saturation were changing in a way that was concerning to her.
You can see the green lines for the heart rate going up and the green lines for the oxygen saturation going down. Given those triggers, she contacted the patient through the telemedicine portal that's built into our system. She assessed the patient, felt that it wasn't an imminent emergency, but that this was potentially heading in a, in a serious direction, and educated the patient on the next steps, including what the thresholds would be in terms of symptom progression that would necessitate him heading to the emergency room. Based on that, on that assessment and that education, the patient's symptoms did rapidly progress later in the day, and he was admitted to the hospital via the emergency room.
He was diagnosed with an acute bowel obstruction, but fortunately, it was early enough in the process that it could be treated with a non-surgical stent, and he had a short stay in the hospital and was discharged. Really, this is a classic example of how the platform enhances care. The early warning and intervention of an actual complication of these high-risk cancer patients worked flawlessly, and it prevented very likely progression to perforation, high-risk emergency surgery, and potentially death. It also prevented any delay in cancer in the cancer therapy. If he'd required surgery, then all treatment would have been halted until the, he had, he had healed from the surgery. We also have very solid documentation that this is a good example of how it drives value.
Based on the DRG codes of hospital expenditures, estimated that the, the hospital, the system, the payers, saved between $10,000 and $24,000 by getting the early, early notification of this complication. Also, the infusion therapies of the treatment is a significant, is a major source of income for the practices, and there was no loss of that practice income for the for the physicians. These value-based programs that I mentioned, like EOM, they depend on preventing complications, preventing hospitalizations, and shortening stays if hospitalizations do occur. Clearly, this had an impact on that and would have been a valuable contributor to the EOM calculations. As I mentioned, we have two new initiatives that, that are coincident with Gary Manning starting on, on as their president, and we're really excited about both.
The first one is what we're, what we're currently calling a biopharma companion digital platform. The idea here is to expand the Veris platform to include a module that focuses on, biopharma, therapeutics. We'll target biopharma companies that are developing novel cancer therapeutics and provide them with a long-term patient monitoring solution. This patient monitoring solution will be tightly linked to the therapeutic. It'll start in the early clinical stage, during the early clinical trial, where the patients will be monitored during these therapies, which again, can have significant complications. That will continue all the way through regulatory approval and full commercialization. The analogy here is something that, that is quite common, and it's become common over the last decade and a half, which are companion diagnostics.
Where a therapeutic drug, or biologic is linked to a diagnostic test, both during the development as well as during regulatory clearance, and they become intrinsically linked for the long- term. The opportunity here is, includes providing support for clinical trials and post-marketing surveillance, enhancing safety by reducing adverse events. It's, it's, it's useful for the companies to be able to complete their trials with monitoring, to prevent complications, just like the complication that we saw in the previous example of the patient. That will lead to expedited regulatory filings, lower regulatory hurdles, more likely clearance of with expectations that FDA would clear these devices, clear these therapeutics, contingent on the patient being monitored as they were during the trial.
That has the, it also has the opportunity of accelerating speed to market and commercial expansion. We see these as long-term commercial partnerships with the biopharma companies, and an entirely different and new source of revenue, and an entirely different business model. Next slide. The other important strategic initiative that we're getting started on this quarter is our transition from of the Veris platform to a Software as a Medical Device. The FDA categorizes a software used in healthcare in two, two , two primary ways. Right now, the Veris platform is considered a Medical Device Data System . All it does is displays medical data for the clinicians to see it. Again, we saw with the example where the nurse saw the heart rate and the oxygen saturation, we did not, we did not...
We alertly provided a sense that it was high based on color coding and based on thresholds that the clinicians provide. There's no built-in decision-making or analysis that goes into that, and that allows us to operate it under this lower regulatory hurdle. For something to be a Software as a Medical Device, its intended use is actually for diagnosing and treating patients, and it provides additional clinical, active clinical support or decision-making. We've decided that we're gonna launch a program to upgrade the Veris platform from an MDDS to a FDA-cleared Software as a Medical Device. What we'll do, what'll happen after establishing that foundation is it will provide us with unlimited potential to grow the platform into a full-bore clinical decision support tool.
Instead of simply displaying medical data for clinicians, which of course is valuable, and we've seen that already, we'll be able to provide more sophisticated thresholds, alarms, alerts, heuristic algorithms to provide effective triage. The patients at the top of the list will be ones that have been calculated to be at greatest risk for having complications based on various algorithms. A whole, blue ocean area called digital biomarkers, where AI and machine learning models are used for patient risk profiling. Those are all exciting horizons that we're looking forward to growing into. In order to do that, we have to make that transition for it to be a Software as a Medical Device.
The key steps, initial steps are we are incorporating key features in this next-generation product that will allow us to do so. We'll be initiating once the next generation is launched, we'll be initiating validation testing to support FDA 510(k) submission as a Software as a Medical Device next year. Really exciting initiatives that we're moving forward on. Final update on the implantable monitor. If you recall, this is to extend the power of the platform and ensure 100% compliance with a remote patient monitoring billing requirement. Just as a reminder, with the remote patient monitoring codes, in order for the physician and the practice to bill for it, the patient has to actively measure various parameters, weight, blood pressure, oxygen saturation, et cetera, at least 16 days a month.
With the implantable device, that'll guarantee that it does not depend on the patient compliance on 100% compliance with that, RPM billing threshold. This consists of an implant, an implantable monitor. As you can see on the bottom right there, as a standalone monitor, and it has the... a little divot in it, which allows a, an existing off-the-shelf, chemo port, that's the purple item there, to kind of snap in and allows them to be implanted at the same time, concurrent with the initiation of chemotherapy. It'll have a variety of features. It'll measure, continuous cardiac monitoring activity.
It'll have an event monitor, where the patient can say I'm having some symptoms that could be correlated to the physiologic parameters, temperature, respiratory rate, and it has a whole full Bluetooth connectivity to their smartphone. We've had multiple successful FDA pre-submission meetings that seek feedback on various design features that have occurred over the last couple of quarters. That's all going very well, as is the actual development work with our two , our two manufacturing and RD engineering partners, and we're looking to target FDA submission and commercial launch next year. That's it with Veris. Just two real quick slides to highlight some of the, the, the key points that and accomplishments that we wanted to, as we spent more time diving into more details yesterday.
Again, we show very nice, steady, double-digit quarter-on-quarter growth in EKG testing volume, with 2,200 tests performed in the last quarter. A significant portion of them, continuing to be the high-volume testing events, at firefighter departments and elsewhere. Also, just wanted to highlight the results of the BETRNet study. This is a study that was whose results were recently released. It's a consortium of academic medical centers, leading academic medical centers in the area of esophageal disease, funded by the National Cancer Institute. The results have been posted on a preprint server and is available on PubMed, and it's been submitted for peer review to The American Journal of Gastroenterology.
The results demonstrated that EsoGuard, when compared to both the gold standard of endoscopy, detected 100% of the cancers, 180% of pre-cancers, and 85% overall, with an estimated negative predictive value of 99%, which is the threshold that you need in order to be an effective test to make sure that you're not missing any positive patients.
I, I highlight these results relative to results of other early cancer detection targets, not really to suggest that it's a head-to-head comparison directly, but to really highlight what the standards are for these other successful or imminent tests that are getting a lot of attention, what the target performance is for us, relative to what they are for, they, they have been for these other successful tests. As you can see, at 100% cancer detection, we're well in the range and above, frankly, where Cologuard is, even in the newer reported results. The colorectal blood test from Guardant substantially lower than that, but still deemed to be sufficient for it to achieve FDA clearance as well as payment from Medicare.
Although, the poor highlight of that is that that 82% number is heavily dominated by later-stage cancers, and the rate per stage 1 cancer is quite poor at 55%. I'll note that all of the cancers in the BETRNet study for that EsoGuard picked up were all stage 1 cancers. The most striking difference is EsoGuard's ability, really, and this is where we describe this as unprecedented, unprecedented, its ability to detect pre-cancer. Cologuard does just under 50%. The blood tests have essentially no meaningful ability to detect, to detect pre-cancer, while EsoGuard is doing so at the greater than 80% range. For colorectal cancer, that, that can be reasonable in that stage 1 cancer is curable, but for esophageal cancer, we don't have an option.
We actually have to pick up pre-cancer, because the mortality rate for stage 1 cancer in the esophagus is very, very high. I'll leave it at that and hand over the baton to Dennis.
Thank you, Lishan. For our summary financial results for the second quarter and first half of the year reported in our press release that was published last night. On the next three slides, I'll emphasize a few key highlights from the quarter, but 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 on Monday afternoon, and is available on the PAVmed website. Slide 17 is our balance sheet comparison. It's demonstrates cash of $37.2 million, which reflects a sequential burn rate of $12.1 million. This represents a $2 million improvement over the first quarter and a $5 million quarterly improvement over the fourth quarter of last year.
These improvements are related to the cost control initiatives we put in place at the beginning of the year. Obviously, that cash balance does not reflect the remaining $10 million draw available to us under the securities purchase agreement that was signed in March of 2022, nor other resources available to us at both the PAVmed and Lucid entity levels. On a pro forma basis, including the remainder of the securities purchase agreement and assuming the net burn rate is sustained at this level, our runway is about a year. Furthermore, as cash collections continue to accelerate, and as we'll talk about, in a second, this can further throttle the burn rate for the upcoming quarters. Vendor payables are flat sequentially. Other current liabilities show an increase of $1.6 million.
The largest increase here is our annual renewals of our insurances, and they get paid over the next year. The convertible note, a net sequential decrease of approximately $1.3 million, is largely related to debt repayments via conversions to common stock during the quarter. Other long-term liabilities are from capitalized leases related to our lab and other offices, office spaces. Shares outstanding, including unvested restricted stock awards, as of today, is 111.4 million shares. The GAAP outstanding shares of 108.5 million are reflected on the slide as well as on the face of the balance sheet in the Form 10-Q. On the next slide, slide 18, compares this year's second quarter to last year's second quarter, and similarly for the six-month totals on certain key items.
Trust you'll review the information and my comments in light of the cautionary disclosure in the bottom of the slide about supplemental information, particularly non-GAAP information. The SEC makes sure I say that. Revenue for the second quarter largely reflects Lucid actual cash collections for the quarter, for insurance reimbursable claims, plus invoiced EsoGuard tests from the Veterans Administration, plus initial billings for the Veris Cancer Care Platform. As detailed in our Lucid quarterly call yesterday, we highlighted the discussion that began on our first quarter call in May regarding the major change and upgrade we made to Lucid's Revenue Cycle Management company.
We determined that the best way to manage that transition was to stop submitting claims for reimbursement at the beginning of May to allow for Quadax, the RCM, to come on board, which they did in mid-June, and more effectively handle processing and reporting of the claims we had in hand. Far, in just a short period of time since the beginning of third quarter, which is July first on out, collections from the third-party reimbursement claims have tripled what was collected in the entire first entire previous quarter. The second quarter Veris revenue reflects the initial payments patients, equivalent to about 90 patient months, put on the platform for each of the first two onboarded cancer care centers during the initial customer acceptance processes that included validation, customization, integration with their respective EHR systems.
Generally, a heavily controlled and very intense pressure testing of the platform as it relates to clinicians relying upon the Veris platform information, the speed of connecting patients and clinicians, the ability to effectively communicate with and update to the client's electronic health records and other patient care-related systems. Obviously, the platform is performing as intended, as it is already generating patient case reports that demonstrate life-saving, saving capabilities through remote patient monitoring, as Lishan detailed in his prepared remarks. With regard to the prior year revenue, as we look at the next slide. You'll recall that there was a fixed monthly fee received from a third-party lab that we used before setting up our own lab, and that agreement terminated in February of 2022.
Lucid's revenue recognition, a key determinant, is the probability of collection, and therefore, due to the fact that we are in the early stages of our reimbursement process, 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 context of GAAP's ASC 606 revenue recognition guidelines. As for the Veris revenue, we expect to continue to recognize revenue on an as-incurred and as-invoiced basis, subject to normal GAAP rules. A couple of comments on GAAP and Non-GAAP OpEx, as well as net loss. The presentation shows year-over-year comparisons, but I'm going to highlight some sequential changes, which are more indicative of where we're heading for the balance of the year.
Our second quarter GAAP OpEx and GAAP loss is lower sequentially by more than $4 million each, reflecting a 20% decrease sequentially for each measure. Our second quarter Non-GAAP OpEx is lower sequentially by $2.3 million and $4.8 million from the fourth quarter, 15% and 27% reduction sequentially. This reflects the impact of the cost controls we initiated at the beginning of the year. Our second quarter Non-GAAP loss per share is $0.09, a decrease of about $0.01 from the first quarter and an improvement from a loss of around $0.15 in the fourth quarter. Slide 19 is a graphic illustration of our operating expenses as they're presented in detail in our press release.
The second quarter sequential decrease was led by approximately a $1.5 million decrease in G&A and a $1 million decrease in R&D. Sales and marketing expense was relatively flat, and the relatively small cost of revenue increase is largely attributable to an increase in the test volume for the quarter. Cost of revenue primarily consists of Lucid lab supplies and fixed lab costs, with a much smaller amount attributable to the delivery costs for the Veris Health Cancer Care Platform. I'm gonna give you a few more stats that we shared yesterday on our call related to the improvements that we're realizing on the Revenue Cycle Management company.
Just since they took over on May first and onboarded claims beginning in the middle of June, from May first to August fourteenth, including all of the backlog that existed until they came on board, they submitted claims of over 2,100 claims. Of those claims, just under half have been adjudicated by the insurance companies already, 943 claims. That resulted in an allowed amount, essentially an affirmation of the payment obligation, of 349 of them, 37% of them. Telling in that is the allowed amount came in at $1,890, essentially validating our payment rate established by Medicare.
We're seeing speed of submitting claims, we're seeing speed of adjudication, we're seeing speed in terms of the allowable claims and the allowable claims at a significantly higher rate than what we've even reported in our previous quarters. Whether that 37% success rate continues or continues to improve, Quadax, the new RCM manager, is demonstrating significant efficacy as well as data reporting that's actionable, including those that are adjudicated and initially denied, putting them into their appeals process, which they are just revving up now. They have about 200 appeals of this group in their process, which the number one reason for denial is medically not necessary. We know the two society guidelines establish the risk factors, and these patients only get a test if they meet those risk factors. We believe that appeals process.
... will be helpful in two dimensions. One, collecting more money, two, becoming such an annoyance to the chief medical officer that it'll raise to their level of attention, therefore, similar to other contracts we entered, move towards in-network as part of our two-fold clinical utility data plus claims history, driving improvement in the reimbursement process. With that, operator, let's open it up for questions.
Thank you. We will now begin the question and answer session. To ask a question, you may press Star, then 1 on your telephone keypad. If you're using a speakerphone, we ask that you please pick up your handset before pressing the keys. If at any time your question has been addressed, and you would like to withdraw your question, please press Star then 2. Today's first question comes from Frank Takkinen with Lake Street Capital Markets. Please go ahead.
Good morning, Frank.
Hi, Frank.
Hey, good morning, Lishan, Dennis . Thanks for taking the questions. Congrats on the progress. I'll start with one on the biopharma cancer care platform that you guys spent a fair amount of time talking about today. I don't think I heard you guys talk about a timeline on it, but maybe walk through when we could see that develop, when we could see what needs to occur from a regulatory process, if anything at all, and when we could see that maybe launch live?
Yeah. Yes, thanks, thanks for giving the opportunity to highlight that. I think if you recall, Frank, this was an area that we had, had, had sort of on our horizons as a strategic, as a strategic goal for some time in the future. With Gary coming on board has given us the opportunity to do a deeper dive, and we realized that we have the opportunity to do two things that, that were different than before. One is to move the timelines much, much quicker than I had, than I had expected. Two, to extend the, the value of the proposition, not just for clinical trial support, but extending it as a full companion technology to the, to the diagnostic. We are just scoping out... The reason why it's going to start, well, just to backtrack a sec.
The reason why the timelines are going to be, are significantly shorter than we had originally planned, is that it's clear that we can add it just simply as a module on top of our existing platform. It doesn't require a bottoms-up, sort of, entirely new structure. Once that became clear in consultation with our, our really outstanding software development partner, Loka, that process has started. We're scoping out the project to figure out what, how much, what the design structure will be, but since it'll be a module within it, we don't expect the timelines to be significant. We're not giving sort of real guidance in terms of when we expect it. We don't have full visibility yet, but we're talking on the order of, you know, months or quarters, not, not years.
Perfect. That's helpful. Maybe just to stay on that topic, could you talk about what a business model could look like there once you start to sign partnerships with biopharm companies?
Yeah, I mean, this is entirely different, right? Here, the value to the pharma company is, is real, right? I mentioned all of the potential things. If you take, for example, you know, the one of the more expensive immunotherapies, like CAR T therapy, for example, is $1 million per patient treatment. There are significant complications, cytokine storm and other things that, that come along with that. Having the, the value to the, to the, to the biopharma company of having a established platform that can not only monitor the patient during the clinical trial and establish the, the safety and improve the safety profile of such a drug, but also do so after clearance in the market is significant.
So we expect that the business model there will be to capture, as a service arrangement with the pharma company for the services provided during the development of the, during the clinical trial, during the development and clinical research phase, and then, some additional structure around how the platform will be utilized in conjunction with the drug on, on more of a subscription basis. All very much tightly tied with the, with the partner pharmaceutical company, so that our platform and the, the drug are, really intimately linked for, for, for the foreseeable future.
Frank, eye-opening on this topic is if you have a $1 billion-a-year drug, every month that you allow them to get into the market, that opportunity cost that they lose is about $80 million a month. If we can save them a month or three, it is a significant opportunity for them to couple this as a companion to get that on the market sooner, to be able to monitor safety of its performance.
There's a lot of room there, as you might imagine. If you've got a $1 million therapy, There's, there's a lot of room there to establish value and pricing of the value associated with having a companion platform that can improve the results.
Got it. That's helpful. Maybe for my last one, I'll switch over to the Lucid business. With the clinical utility studies being submitted for peer review by the end of the month, I believe that checks the last primary box that CMS presented to you, related to guidelines, utility, and validity. With that, I assume that you can push forward that CMS establishment, finalization of that establishment pretty quickly, and then, maybe just extend that thought into private payers too, and when we can start to see those come on based on this utility data.
Yeah. I'm going to kind of reverse your question. On the private side, it's very straightforward because it each, it's each individual payer and our ability to have sort of, you know, less structured conversations with regard to the sufficiency of the data, the results of the data, what additional data they might need, et cetera, can literally start from when the time that it was posted on the preprint server, even prior to peer review. So that's great. I mean, you know, with the proportion of our patients being over 80% commercial pay, we see, you know, really immediate opportunities to have an impact on coverage from the results of those 5,500 patients.
Things are obviously are more kind of rigid on the CMS side, where what would likely be the case is we would take that data and try to engage with Ventas to understand if it meets the, if we believe it meets the thresholds for that were outlined in the, in the Local Coverage Determination. We have a strong sense that it will, because as you recall, the one meeting we did have prior to the draft LCD being published was in fact focused on clinical utility. The plan, certainly as we had it, was consistent with what they articulated their expectations to be. I, I don't, I don't expect that as soon as this is published, that we'll sort of put out the technical assessment and submit it and sort of roll the dice in that regard.
My, my, my sense is that we'll, we'll try to have some engagement with them and get the level of confidence before doing that.
Okay, that makes sense. I'll stop there. Thanks for taking the questions. Congratulations.
Great. Thanks.
Thank you. Our next question today comes from Edward Wu with Ascendiant Capital. Please go ahead.
Yeah, congratulations on the progress you made. My question is on the Veris sales force. You said you guys are restructuring and expanding it. Is there a target size for the sales force? In terms of geography, are you guys having a nationwide reach, or is there a focus on a certain region of the country?
Yeah, great, great, great questions. We're not focusing on individual regions. We have initially focused on smaller practices where the hurdles in terms of infrastructure, IT infrastructure, integration, and so forth, are lower, although we are having active discussions with several large academic cancer medical centers. We're gonna start small and build as we go. The, the current plan is, is for two sellers, and we're actively interviewing for those for the second half of this year, and then we will increase that as, as we go as we get traction along the way. two , two sellers plus, plus Gary for this quarter, and then we'll, we'll look to expand further next year.
Great. Then as you guys, you know, start to focus on this, you know, biopharma program, will it require a different type of sales force, or can you use your existing salespeople to try to go into that market?
Yeah, another great question. My sense is that it'll be somewhat different, but very similar to, let's say, like on the Lucid side, the difference between sort of the in-the-trenches, sales folks who call on primary care practices and specialists and so forth, and then those that focus more on strategic accounts. This would be more along those lines. The... frankly, at the beginning, much of that will happen at the most senior level, with Gary being the primary person to inter-interface with the biopharma companies around this, around this opportunity.
Great. Well, thanks for answering my questions. I wish you guys good luck. Thank you.
Thanks, Ed. Thanks. Have a good day.
Thank you. Our next question today comes from Ross Osborn at Cantor Fitzgerald. Please go ahead.
Hey, Ross. Good day.
Hey, good morning, everyone. Thanks for taking our questions. Regarding commercialization of Veris, has New Jersey Cancer Care expanded the use outside of the initial group of patients? As a follow-up, given this was launched in February, can you provide average use time per month in order for us to better understand the revenue potential?
Okay. Well, let, let's break that down. They are adding patients to their platform, as I, as I sort of hinted in the patient example, even though that wasn't from their group. The general approach has been to identify a cohort of the highest-risk patients to bring on the system first. As I, as I've sort of said, we've been focused the last couple of quarters on making sure that, making sure that we, you know, all of the technical aspects to make sure that when the patients get their device, that they are transmitting data appropriately, that they're doing so in a way that will achieve high, high levels of compliance.
That the physicians are able to track their time on the system to make sure that they can appropriately bill under the various codes. It's really critical that, that all of those, all of that is sort of humming along and, and, and running on all cylinders. We've been really focusing our resources on that at the sites that we currently have, and that's, that's working well. I said, there's been some, there's been some feedback that we're incorporating into the next generation device, but, but that's, that's, that's working well.
With regard to compliance, our compliance is, you know, even though we sort of, point out that the implantable platform will be a boost in compliance, we're, we're getting nearly 100% compliance, patients who are reporting the minimum of 16 days a month of parameters in order for the practice to bill. The hurdles with the practice billing were more around sort of documentation and making sure that we have a streamlined way for them to document their time, and that's, that's starting to, to get, properly fleshed out. I think that covers the various components of your question. If I haven't, please let me know.
No, that's perfect. Thank you. Then, just a quick second question. You know, ahead of the next generation launch, can you talk about how you're marketing that offering, maybe to larger practices or institutions?
How we're marketing the implantable device?
Yes.
Gen 2. Oh, the gen 2 version of the software platform. Sorry, I just wanna make sure I'm talking about the right product.
Well, both would be great if you can.
Oh, okay. Sure. Yeah. The next generation software platform is really just incremental improvements that reflect the feedback that we've received from practices. That'll just be sort of smooth upgrade of the new generation device. We're not marketing that, frankly, any differently. The implantable, device won't be available for next year. We still don't have a hard, date to provide you yet. There's still some feedback back and forth with FDA as well as some, timing, related, elements with our contract manufacturing vendors. Once we do launch that, we haven't really articulated our full, externally, marketing plan. There's still some variables that we have to kind of decide with regard to are, are we gonna charge for the device? How much are we gonna charge?
Are we gonna charge a premium relative to existing ports and so forth? That's all still, still to be determined because it'll depend a lot on the valuable real-world information that we'll garner from the software platform. In terms of the mechanics of that, how well is that-- how well are we doing in capturing the full revenue opportunity from the remote patient monitoring and so forth? That data will be essential for us to find the sweet spot as to where-- how we position the implantable device to enhance the commercialization of the software platform and to work in synergy with that. We're holding off on, on finalizing that until we get more commercial experience on the platform, and the, the timing of that will work out just fine.
Thank you.
Thanks, Ross.
Thanks, Ross.
Thank you. Our next question comes from Anthony Vendetti with Maxim Group. Please go ahead.
Anthony, good morning. Anthony.
Good morning, Dennis. Good morning, Lishan. Yeah, just to follow -up, and I know we've spoken about the, the biopharma opportunity, and, and it sounds certainly very promising. Is, is the 510(k)... Let's say the development takes two months or two quarters, and you, you finish that by end of this year, beginning of next year. Is, is would this be a, a, new 510(k)? Obviously, probably the predicate device would be your device with the software-as-a-service added on, or would this just be an amendment to, to include software-as-a-service?
Yeah. Okay, let's, let's, let's kind of break that down and make sure we're talking about the, the equity. First of all, the biopharma platform does not require us to transition to a Software as a Medical Device. The biopharma platform is, it would simply be an extension of the current MDDS functionality, which is just reporting of data, but doing so in a way that's, that, structured to facilitate clinical trials. That's, that's software work that's gearing up to get started, and we don't have a timeline as to when that'll be completed, but it doesn't have an additional regulatory hurdle, and we think it can be done, you know, quite expeditiously.
We'll have at least a, a first-generation product that we can show to, to pharma companies in the not-too-distant future. That's, that's just to make sure that that's different than what I articulated as our second strategic initiative, which is to upgrade the current MDDS designate, FDA-designated version of the platform into one that is officially a software as a medical device. We don't... Our, the, the, the predicate is not our system, because our system is not a 510(k). Our system is operating right now as an MDDS. There are numerous other predicates that we've already identified that will serve well, and this will be a new 510(k) for the software as a medical device.
The steps required to do so are all the usual validation steps that, that's required for software as a device. Does that make sense?
Yeah, sure. No, that makes sense. Do you think, you know, based on the comments, did you say you would probably be looking to submit that in the beginning of 2024?
Yeah, I think sometime by the mid, mid portion of 2024. We don't have full visibility yet. We, we don't have the scope yet of the validation testing. This is a new initiative. We'll, we'll, we'll need to have some precepts with FDA to, to make sure that we have the validation plan and, and the predicates and so forth well in line. I would just maybe pencil it in midyear next year as a, as a target, but that's subject to our interactions with FDA.
Okay. Obviously, you, you pointed to some examples of CAR-T being one, but what the, you know, potential uses of this would be in terms of monitoring the patients, and then also making it as a companion diagnostic with other therapies, whether they're current ones or new ones being developed.
Right.
When you, when you put that all together, have you come up with an approximate TAM? What, what, what, what do you think the, the total addressable market could be?
Yeah. Let, let me just answer the qualitative question first. There really should be no limitation with regard to the scope of cancer therapeutics that would be applicable here, right? Because, you know, essentially every therapy that you're, that you're offering, whether it's immunotherapy, chemotherapy, oral, IV infusions, they're all associated with meaningful complication rates that theoretically could be mitigated by, by more intensive monitoring. We don't really see, see any limitation with regard to that. With regard to what your, your, the, the distinction you made between new and existing drugs, I think our focus at, at the beginning will be with new drugs, because the link to the software platform will be much stronger if that link was established during the development and during the clinical, during the clinical development phase and part of clearance, right?
They're pretty much stuck at the joined at the hip, and there's no separating them. There is certainly an opportunity as well to take existing drugs and potentially combine them. You know, that happens, as you know, on the diagnostic side, you know, where generic drugs get paired with a companion diagnostic and suddenly become a proprietary drug that can garner a premium. We haven't really explored that in detail, but there's certainly, that would be part of the opportunity.
And in terms of a numerical, TAM, I, I look, it's, you know, it's obviously, you know, very, very large because the, even if you take a small, low- single-digit percentage, that can be attributable of the, of the, cost or price of the drug, that can be attributable to the value of, of, of linking it with a digital health platform to improve safety, that's a very large number. I'll just leave it at that.
Yeah. No, I know, I agree with that. Just so maybe just, just lastly, remote monitoring, you know, it's not a new idea. Your device may very well be, but in terms of what you see currently in terms of competition, what would be the, do you believe, the closest competitor to the Veris platform?
Yeah, I won't sort of call out individual companies, but there are companies out there that are doing generic remote patient monitoring. There's really no, no sort of hurdle or barrier to entry for that. There are some that are digital platforms that are focused on cancer. There's one that's, that combine the two, in a way, in a limited way, but none of them are doing so in as tightly linked a fashion as we are. Once we launch the implantable device, which has intellectual property associated with it, that will be a meaningful barrier to entry.
Most of what we see out there is somewhat generic, somewhat focused on patient engagement, as opposed to having a clinician platform that is highly, that is designed to be highly sort of efficient and integrated with clinical practice. Our platform is designed by a radiation oncologist, taking the lead on that, and the feedback that we've gotten from the practices that we've called on, has been very, very positive with regard to how it can, how it integrates within the practice of an, an oncologist. Once we have the, the implantable, that will be a, that, that'll be a meaningful barrier, for others, and obviously the value added from that will be, will be significant.
Okay, great. Very helpful. Thanks so much. Appreciate it. I'll hop back into you.
Great. Thanks, Lishan.
Thank you. Ladies and gentlemen, this concludes our question and answer session. I'd like to turn the conference back over to management for any closing remarks.
Great. I'd like to thank all of you for your attention and for spending the time with us this morning and for all the excellent questions and discussion. I'd encourage you to keep in touch with us by contacting Michael Parks at mep@pavmed.com with any questions or comments, and following us on social media and our website along the way. Thank you very much, and look forward to a good day. Bye.
Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.