Hi everyone, welcome to your last day of the J.P. Morgan Healthcare Conference. My name is Blair Roth, I'm an associate in the Healthcare Investment Banking team. I'm pleased to introduce Sera Prognostics today with Zhenya Lindgardt as the presenter. Please prepare your questions throughout the presentation, and there will be time at the end to ask. Thank you.
Good morning everyone. I am excited to be presenting today because we've got a lot of exciting news to share about what Sera has been up to. Sera is the pregnancy company, and we aim to transform maternal care and specifically address preterm birth. Preterm birth, unfortunately, is a persistent and intractable problem globally and specifically in the United States. About one out of ten babies are born too soon and account for about a third of neonatal deaths. In the United States, sadly, we've not made a ton of progress in the last ten years. According to March of Dimes, the preterm birth rate on average in this country has increased from 9.4% in 2013 to about 10.4% in 2023. It doesn't seem like high numbers. However, that amounts to about double-digit CAGR over those ten years. What is happening and why is it so difficult to address?
We'll talk about that in the presentation and what can Sera do with our PreTRM test to change that. Before we dig into it, what is preterm birth? Preterm birth is defined as birth of a baby before 37 weeks of gestation. There's a lot of weeks in pregnancy before 37th week, and the birth in every week is not the same. Birth before 28 weeks of gestation, unfortunately, carries a ton of health risks for the baby. Actually, more likely than not, the baby is either not going to make it, as you see on the graph on the left, or will have major health complications. If the baby is born after 28 weeks of gestation, the complications are likely minor, but overall, it's still a frequently tragic and devastating event for the whole family.
If you look on the graph on the right, the health complications usually are addressed in the NICU, and the NICU stay for some of those earliest born babies is months long. As you see here, for 24 weekers, it's usually over three months, sometimes four. And payers typically call these babies million-dollar babies because the cost of the NICU in the United States is between $4,500-$20,000 dollars per day. Per day. So it multiplies very, very quickly. And of course, the cost per day depends on the number of equipment used, the surgeries that may be required, procedures. So that's what creates a significant cost to the system. As a matter of fact, these 10% of babies that are born premature account for 61% of neonatal costs.
On this graph, you see that a full-term baby cost to the system is a lot lower than, for example, a very premature baby born before 28 weeks, and the average cost of prematurity per preterm birth is about $65,000, and the lifelong health expenditures for a premature baby are about ten times those of a healthy full-term baby, so what makes this such a difficult problem to solve for our healthcare system? It's because about half of the women who will end up giving birth prematurely are not known to the system. There are no known risk factors that can definitively determine that a woman will give birth prematurely. We for sure know that risk factors like smoking, obesity, and some clinical conditions will have an increased risk in pregnancy, but they don't necessarily qualify the woman for a higher level of care to prevent premature birth.
It's only two factors in the United States that are in the guidelines that qualify a woman for a higher level of care. One of those is previous preterm birth, so history of preterm birth. But of course, for first-time moms, that risk factor is not available for a clinician to take into consideration. And the second one is short cervix, which is very low prevalence. Fewer than 2% of women present pregnancy and have short cervix. So 88% of pregnancies overall are considered low risk, even if they have some risk factors for elevated risk for preterm birth, but they go through standard offering of care. ACOG, which is American College of Obstetricians and Gynecologists, stipulates that in order for a screening test to be viable and valuable for the guidelines, it needs to be cost-effective, feasible to be implemented, and accessible to all patients.
The answers that we can offer with our PreTRM test are based on proteomics. It's a science that allows us to take a look at the blood and the proteins that are expressed in the blood during pregnancy, and it allows us to see the health of placental function, an organ the body builds specifically for that pregnancy and is impacted by both the health of the mom, but also environmental conditions and many other factors in order to read how healthy the trajectory of the pregnancy is. Specifically, of the 300 proteins Sera mapped that appear during a pregnancy, we singled out two: IBP4 on the left and SHBG on the right. The insulin-like growth factor binding protein allows us to see how well the nutrients are getting to the baby.
Sex hormone-binding globulin shows us if there is any indication of inflammation or infection that is happening during the pregnancy. It is not the absolute amount of the protein that we found is critical to predict preterm birth. It's the ratio between these two proteins. These graphs will show you how these proteins present in women that will deliver at term and those who will deliver prematurely. Our IP is focused on looking at the readings of the proteins in the blood of a pregnant woman and seeing if the ratio indicates high likelihood for preterm birth based on the ratio between these two proteins. Our blood test has been validated by a paper study, which was the Editor's Choice of the American Journal of Obstetrics and Gynecology in 2016, with over 5,500 patients to develop this validation curve.
It is highly predictive of spontaneous preterm birth in pregnant women and is done with a blood draw in the second trimester, early in the second trimester, between weeks 18 and 20 of pregnancy. It was specifically designed to be accessible and achievable to all. The sample kits are small and require ambient shipment. We provide them to physicians' offices, and moms can order the test kit online to be shipped to their homes. The kit contains a simple lancet for a finger prick and an envelope to ship the sample back to our central lab in Salt Lake City, and we deliver results to the physician or mom in three to five days. The test report shows very clearly if a mom is at higher risk for preterm birth.
That red bar in the middle, called higher risk, is what will tell the physician and the mom that action is required. The threshold of what signifies higher risk for preterm birth and not higher risk for preterm birth is if a woman reaches over two times the standard rate for preterm birth. So what can a physician do about it if the mom tests for higher risk for preterm birth? We teamed up with specialists in maternal and fetal medicine who helped us develop a three-pronged intervention bundle, which includes care management, which is a structured nurse call weekly, starting in week 24 of pregnancy until delivery, the low-dose aspirin daily, and vaginal progesterone applied daily. We validated this intervention and the screen and treat approach in two clinical trials that just completed.
First, a historically controlled study in 2024 called AVERT, which was published last July on the front cover and in the Diagnostics Journal, and the second, a PRIME study that just completed, which we were very excited to be accepted for a late-breaking presentation at the Society for Maternal-Fetal Medicine Conference in two weeks' time. We're excited because the abstract for that presentation was made available publicly by the Pregnancy Journal last week, so we're able to highlight the key results of that study with you today, but before I dive into both of these studies, it's really critical to mention that both of these studies had the same co-primary endpoints: the health of the baby and the hospital length of stay, and both studies met successfully and very significantly both primary endpoints, so let's dig into the AVERT study.
The study was conducted in ChristianaCare, and we specifically picked that center to team with to show that the test works in diverse populations. And 26% of moms in that study were Black moms and controlled it with historical 10,000 births in that institution in the previous two years. So the first outcome that we wanted to highlight is a reduction of the hospital length of stay as the key outcome of the fact that the babies, upon being screened and treated for preterm birth, for higher risk for preterm birth, get born later, healthier, and get out of the hospital sooner. So here on the graph, you see that the neonatal length of stay for babies that were in the prevention arm was about seven days shorter than in the control arm. The health of the baby we measured with a composite index.
Because there are so many different complications and health conditions that babies face when they're born prematurely, from respiratory distress to significant impact on their heart, lungs, etc., and longer-term complications, we used an index that combined all of these into a five-point scale, zero being a perfectly healthy baby and four means the baby didn't make it. For levels one to three, they include differing levels of mild and severe health complications. We specifically measured in this index, that's abbreviated NMI, level three and above, so severe complications and death. In AVERT, we demonstrated an 18% reduction of severe morbidity for the babies. Very, very exciting, of course, for the families and for the doctors who are treating those moms.
To illustrate, if you deploy AVERT results to two moms who have similar, for this illustrative example, underlying health conditions and what would happen with their pregnancy and their baby, you can see a Mother A who did not get the PreTRM test and Mother B who did get the PreTRM test. You will see that while the underlying conditions are the same, one gets standard of care, which basically is the standard approach to low-risk mom, and the mom on the right gets the weekly nurse calls, the low-dose aspirin, and the vaginal progesterone. There is a two-and-a-half difference in the weeks of gestation between the two moms, as demonstrated by AVERT for babies born before 32 weeks of gestation, which is a pretty incredible improvement and consequently fewer health outcomes or poor health outcomes for the baby of Mom B.
As a result, the baby of Mom B goes home a lot sooner because AVERT showed that for babies born before 32 weeks of gestation, we saved a whopping 28 days in the NICU. 28 days is nearly a month sooner than a baby can go home and grow with the family. I won't go through this very busy slide of a lot of additional important outcomes that the study measured, but I will highlight that the previous results are measuring the most severe top 10% of births, because of course, most babies who do get born have only a couple of days of stay in the hospital and are healthy. So that's why we wanted to focus on just the most hard-hit by health complications and long hospital stays.
Of course, a lot of investors, analysts, and physicians asked us, well, what about the whole Intent to Treat population? So that's what you see in this graph. It shows that the results hold strong even for that population when you add back all of those moms who may have chosen to forgo treatment but still knew that they were at higher risk for preterm birth. I also want to highlight this middle section of the bottom graph that highlights that we improve rates of preterm birth specifically. And if you look at all of the sliding bars, they improve for every dimension the earlier the baby is born. So in short, PreTRM tests, test and treat strategy works better for those babies that are most at risk for very early preterm birth and very severe complications and death. Let me move to PRIME. PRIME is our pivotal study.
It's a breakthrough study that enrolled 5,000 patients before DSMB recommended halt of the trial for success in December of 2023. These are the 19 centers we partnered with over several years to deliver on the study. We designed the study very similarly to AVERT with the same co-primary endpoints, with one substantial difference. We did a prospective control arm. So patients were recruited, consented, and stratified into a control and prevent arm. Both arms were given a PreTRM test, except the control arm, neither the physician nor the mom knew the result of their test. In the prevention arm, both the physician and the mom were shared the test result, and the mom was presented with an option to consent to the treatment bundle. About two-thirds of moms consented to that treatment and proceeded to deliver.
We call the group of those moms who consented to treatment modified intent to treat, and we call the group of moms who were in the prevention arm but did not consent to treatment and consented the full intent to treat arm, and we analyzed both of those. I know this is a nice chart, but these are the results as an excerpt from the abstract, and we look forward to sharing with the full community after our principal investigator, Dr. Brian Iriye, presents these results at the Society for Maternal-Fetal Medicine Conference at the end of January on February 6th, so please join us for that webcast where we will do a detailed, or specifically, Dr. Iriye will do a detailed walkthrough of all of the results, so I'll just share a couple of key highlights that you can find in these tables.
First, on the left, these are two co-primary endpoints. They are specifically analyzed for the modified intent to treat, so for those moms who accepted treatment. And as you see, for reduction of health complications for the baby, the NMI, we achieved an even stronger result of a 25% reduction in health complications, over 18% that was found in AVERT. And for neonatal length of stay, or NICU LOS row, we achieved an 18% reduction in hospital length of stay for the modified intent to treat group. So very powerful results, both statistically significant. We're very, very excited about them. In table number two, just like in AVERT, I wanted to share with you the full intent to treat group results, and they are very, very strong.
I will highlight not just the composite index of the health of the baby NMI and the hospital length of stay, but also the NICU length of stay, and importantly, NICU admission. In the top part of the graph on the right, you will see that we've achieved 22% of NICU admission reduction. It's incredibly powerful. We basically kept one out of five babies from going into NICU altogether because they were born later, healthier. The difference in the top part and the bottom part of the table on the right is we filled in those cases that were lost to follow-up with multiple imputations, which is a statistical method that brings in the data to pressure test that the results stand, and they do. So you see here in the bottom part of the table, it shows still the same 20% of NICU admission reduction.
Very, very powerful results, and they need to be taken together, not just the fact that we kept babies away from the NICU, but those babies who did make it into NICU had 8% fewer days in the hospital. With that excitement, I wanted to highlight another important metric that will be critical for our payers and, of course, all of the regulators who are looking at this potential breakthrough solution to this intractable problem. And that metric is called number needed to screen. Basically, this metric points to how many women need to be screened in order to either save a NICU day or to avoid a NICU admission. First, let's take a look at the NICU admission.
While we didn't report that number, NNS, number needed to screen to avoid a NICU admission, because the full data set for PRIME has not been shared yet, but we can estimate it based on the 20% NICU admission reduction and the average length of NICU stay reported by the National Bureau of Statistics. So for Sera PreTRM test, it is 40. So 40 women need to be screened with the test and be given an intervention in order to prevent a NICU admission. We wanted to compare it to best-in-class tests that are already in the guidelines, already reimbursed and widely adopted. And those two tests are transvaginal ultrasound, which is in guidelines to monitor women for potential preterm birth, and Glucola test, that pretty disgusting tasting sugary liquid that every pregnant mom needs to swallow in order to test for gestational diabetes.
The number needed to screen for those two widely adopted, universally, I would say, adopted tests is 50 and 150. So substantially higher, and the lower the NNS is, the better, substantially higher than the number 40 for PreTRM test. The number needed to screen, as we reported from our AVERT study for avoiding a NICU day, is four. If you think about it, that's a pretty powerful economic case for payers. You need to screen just four women to save between $4,000 and $20,000 for each pregnancy. What payers asked us to show them is what, for my plan, the savings could look like on cost of care if I deploy the screen and intervene strategy. We took our model and plugged in five million covered lives. How many women will become pregnant? How many women will receive the test?
How many women will screen positive for higher risk and accept interventions? What the interventions will cost and what will be the savings on hospital stay and care? And we arrived to nearly $15 million savings per year for this plan. So as you can see, it's a very, very powerful economic case for deploying the strategy. We hear phenomenal feedback from the physicians who have been early adopters for us. For example, Dr. Barbie Phelps-Sandall, who's been with us for a few years now, shared a very powerful story of her patient who used PreTRM test and scored very high for potential preterm birth. Dr. Sandall worked very hard over the next four months to bring her patient's baby to full term. And it so happened that this mom had a friend who had a baby in the NICU.
When you're faced with such a tragedy with your friend, she was incredibly grateful to have the extra care, extra attention that her friend did not receive, and she was able to have her baby at home with her. Where do we go from here? Of course, the first thing we want to do is to ensure that the results get published and our 19 PIs are working diligently on that submission. Second is we're aiming for an inflection in our commercialization path. Now that we've got this incredibly strong data, it will be a catalytic event to a lot of our go-to-market activities. We're going to start engaging with payers and make sure that they understand the economic case and the clinical case for better care for moms at higher risk for preterm birth.
We will continue engaging with guideline-setting bodies as needed to make sure that they have what they need to appropriately introduce this innovation to the full community. As you know, last year, FDA started overseeing LDTs. So while we have all of our approvals for CLIA and New York State, we will continue being on the lookout of how the FDA oversight stays or gets changed with the new incoming administration. And last but not least is we will continue generating evidence. We're about to launch an investigator-initiated research program, and we're about to launch some real-world evidence studies to keep the great data coming. So what does it take for us to reach commercial inflection point? Number one, of course, is awareness building. We are alone in this space with a solution that works in preterm birth space.
There are some tests in development, but none have showed data and are in the market for preterm birth. So we have a lot of work to do. It's cut out for us in terms of bringing the cutting-edge data we produced to all of the physicians. We want to make sure that we engage with not only all of the commercial payers and fee-for-service plans that typically are the first ones to adopt such innovations, but also state Medicaid agencies. There are a lot of states in this country who are hard hit by preterm birth, like Louisiana, like Georgia, who are potentially forming working groups to address this challenging problem for them where preterm birth rates reach over 15%. And we hope to have pilots with some of these state Medicaid agencies to show them what preterm screen and treat strategy can do for them.
Last but not least, as we get green shoots from the guideline-setting bodies and their position on where do they think this test fits into the care pathway, of course, we will double down on the commercial efforts on the ground to reach every physician. We frequently get asked, "So when will this test be included in guidelines?" The short answer is we don't know. However, there are precedents we wanted to highlight that pivotal breakthrough RCTs can move the guidelines quickly. Specifically, antenatal steroids and treatment for chronic hypertension in pregnant women were presented at Society for Maternal-Fetal Medicine meeting, just like we would. Then the peer-reviewed publication came out a few months later, and the guidelines were changed in both of these cases within months post that. To contrast, I wanted to highlight NIPT, which is also in our space, neonatal screening.
For them, it took many more years and many more pieces of evidence. As a matter of fact, 87. However, important to note that it was still based on one pivotal RCT and 86 other lower-level robustness evidence like RWEs. But for them, it took over five years to get into guidelines. So for us, we don't know which part of the spectrum we'll be on, maybe somewhere in the middle, but we'll do our part to make sure we'll continue bringing all of the evidence to the guideline-setting bodies so that they can form an opinion and help us bring this information to the clinicians. What is unique about Sera is our strong financial positions. We have cash well through 2027.
We've been very careful with our operating expenses on an annual basis and want to make sure that we invest behind the wins and not in front of the wins. So for example, as we get reimbursement, as we get green shoots on collaborations with Medicaid agencies, we will double down in those states to reach density of adoption of the PreTRM test and treat strategy and then use those business cases to go from geographic area to geographic area to scale with high ROI on our commercial spend. We have a great team. Please reach out to us with any additional questions. And we're really committed to making sure that as many babies survive and thrive with our help. And I'm open for questions.
Oh, thank you. Yeah, I would be interested in what kind of technology you are using for the detection of these two proteins.
Great question.
We're using mass spec technology. Now, we don't have to stick with it. As we scale to millions of tests, we can evolve and transform the test to be on varying platforms or become an immunoassay. But for now, we are sticking with mass spec. It's very accurate and effective for the test.
Okay. Can you talk about your conversations with payers, both public and private, and what would need to happen to get them to reimbursement?
Great question. Of course, a peer-reviewed publication of this pivotal RCT PRIME will be an absolutely critical event. All of the policy directors will require that to issue positive coverage. Of course, we're talking with them. They know about our research and some of the key national payers.
We already have meetings scheduled with them as soon as data becomes public to educate them on where we are and how this strategy can significantly reduce their cost of care for their maternal service lines. Specifically, we think that it is some of the fee-for-service commercial plans, regional plans that are in the areas that know us, could be the first ones to cover the test. But surprisingly, we've had pretty positive conversations with public payers. Some state Medicaid agencies engaged with us and proactively shared with us what would it take for us to get onto Medicaid coverage. So that, to me, is a really, really good sign that we're on the radar and we have a pathway to reimbursement. Oh, there's one more.
Oh, no, please go.
Yeah, maybe just a short comment.
I think it's very helpful how you presented the economics and cost efficiency behind this diagnostic testing because I also believe that diagnostic testing can help to save money in the healthcare systems. But I also have a technical question. Did you calculate the positive predictive value of your test?
So it depends on from which study. We will absolutely aim to refresh all of that. We did calculate it from the paper study, and I'm happy to share that. You can find it on our website. But of course, as the test evolves and new data becomes available, we will refresh it and put it on the website. I want to add something on the economics. There's something unique about screening for pregnancy and specifically proteomics for preterm birth. It's the certainty that the mom will deliver birth and the costs of delivery will be incurred.
Unlike genetic testing, unlike other screening tests, even let's use Cologuard as an example, the payback for the preventative screening may or may not come for years, potentially, or ever. In this situation, the payer pays for the test and the mom will deliver in six months or so, hopefully more like six months as opposed to two months, and that's what we're working towards. So the certainty of cost savings is something that is truly unique in this area. And that is based on clinical outcomes, not the PPV, NPV, sensitivity, specificity, which is typical, of course, to evaluate a diagnostic test by.
But for us, we keep bringing it back to, well, what are the clinical outcomes and what are the economic outcomes we've seen in this area where there are no precedents of tests with any sensitivity, specificity other than what's in the guidelines, which is the transvaginal ultrasound. And you have interventional consequences as well.
Exactly.
Exactly right. Thank you for the question.
How do you increase awareness of your products and their benefits and spur adoption by more physicians to get it pushed out by more thought leaders?
Well, we hope the guidelines committees and the societies will help. But of course, we'll do our part. A lot of physicians are getting their information online these days. So partnering with digital platforms that provide high-quality peer-reviewed information on preterm birth, on innovations, and using our latest research to put there will be our first go-to approach.
Presence at conferences, regional events, we will do it all because there are over 40,000 OBGYNs in this country and 4,000 MFMs. So we've got a lot of people to educate.
On that, can you talk about your investment in your sales force and go-to-market strategy that way?
Definitely. So I mentioned our plan to invest behind our wins. So we have about 15, 16 people in our commercial department now. We will see the speed of market adoption and reaction based on our data in the next few months, and we will work on two different scenarios. One is we continue our targeted deployment of adding salespeople and MSLs in specific states where we go deeply to reach density of adoption and have the broad education campaigns running to all of the physicians.
If we go faster on getting, for example, a national payer on board with reimbursement, we will accelerate build-out of the sales force or do so with a commercial partnership to go much more aggressively to educate the community with feet on the street. So we were working through a couple of scenarios on how many sales reps we might add by the end of the year.
Awesome presentation.
Thank you.
Great stuff. Thank you. I learned a lot. One question. Thank you. Okay. Your commercial strategy is focusing on United States first, as I can see. It makes sense you're here.
But when you think about countries where, as they have more consumption per head per capita in terms of government consumption, expenditure per capita for healthcare, does it make sense to think of going beyond the United States to other countries where maybe it would be easier to get government looking at that as a means to save a lot of money?
You're absolutely right. We've been working now for some time on Western Europe, Japan, some of the key countries, your usual suspects where they spend substantially on maternal care, and that's a big focus. I will also add those tend to be the countries with single payer systems where it's frankly much, much easier to get reimbursement. The reason we're not quite there yet is we wanted to make sure that for the price realization we can expect in those markets, we will be very profitable.
So we are, for example, developing an immunoassay for serum blood collection for launch in Europe, and we are securing manufacturing partners and collaboration partners in order to enter those markets. So we'll keep everybody updated, but we're not ignoring those markets. We're preparing and putting all the bricks into the foundation of successful global presence with, of course, not letting our eye off the ball of United States. You're aiming for a 2025 spring release of data for your PRIME study. What do you view as the most important things that may come out of the PRIME study, and what are the metrics we should think about in terms of it being considered more or less positive than you would hope? I would say because AVERT and PRIME hit the same endpoints very successfully, beyond those, I would highlight two.
One is the NICU admission reduction, which is so, so, so powerful. I mean, getting one out of five babies out of the NICU altogether is phenomenal, and the second one is the number needed to screen. We want to emphasize that because United States Preventive Services Task Force, which is a preeminent guideline-setting body, they are the ones who recommend the tests even after the professional society. They set the bar basically on what good looks like, so to me, reaching 40, and this is an estimate, so we'll see what the final number looks like. But to me, anything below 50 would be great news for that.
Okay. I think we are at time, if that's correct, so thank you so much. Thank you so much, everyone.