David Saxon

David Saxon followed up on the gross margin impact of higher-cost inventory, asking how long it would take for this inventory to clear and for underlying unit costs to normalize. He also inquired about the traction and early success stories from the commercial pivot, seeking insights into what gives management confidence in a back-half recovery.

Answer

CFO Mark Wilterding stated that the higher-cost inventory is transient and will be worked through over the course of the year, impacting Q2, Q3, and Q4. President and CEO Dr. Ron Kurtz noted early success stories from the commercial pivot, where teams focused on individual practice needs through structured programs, expressing belief that this will continue as they expand to more clinical sites.

David Saxon asked about the timing for engaging innovative channel partners on repeat monitoring, whether it can be standardized, and if internal data supports the value of repeat monitoring.

Answer

Quentin Blackford, President and CEO, explained that discussions on repeat testing vary by partner (e.g., every 12 months vs. every three years) but generally focus on some form of repeat monitoring, driven by the need to confirm diagnosis and treatment efficacy. He noted that payers are recognizing the cost benefits, potentially leading to annual monitoring for risk assessment, with compelling cost reduction data expected to be published later this year.