Insight Molecular Diagnostics - Q2 2024

Transcript

Operator (participant)

Thank you for standing by. My name is Rochelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Oncocyte second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session.

If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. You may also submit a question via the webcast by clicking on the Q&A button on your screen. I would now like to turn the call over to Jeff Ramsden from PCG Advisory. Please go ahead.

Jeff Ramson (Head of Investor Relations)

Thank you, Rochelle, and thank you to everyone for joining us for today's conference call to discuss Oncocyte's second quarter 2024 financial results and recent operating highlights. If you've not seen today's shareholder letter, please visit investors.oncocyte.com to read it. Today's prepared remarks build upon the information already shared in this robust letter. Before turning the call over to Oncocyte President and CEO, Josh Riggs, I'd like to go over our safe harbor statement.

The company will make projections and forward-looking statements regarding future events. Any statements that are not historical facts are forward-looking statements. These statements are made pursuant to and within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995.

We encourage you to review the company's SEC filings, including the company's Forms 10-K and 10-Q, which identify risks that may cause future actual results or events to differ materially. Oncocyte expressly disclaims any intent or obligation to update these forward-looking statements, except as otherwise may be required under applicable law. Finally, we'll be taking questions today on the line from our covering analysts, as well as written questions from our investor community. I'd like to now turn the call over to Josh Riggs.

Joshua Riggs (CEO)

Thanks, Jeff. Welcome, and thank you for tuning in. We have on the call with us today our Chief Science Officer, Dr. Ecki Schütz, as well as Chief Financial Officer, Andrea James. It's great to be able to announce the successful commercial launch of GraftAssure with our initial beta customers. We had confidence going into launch, but you never really know until your product is out in the field, and the feedback that we're getting is exceeding our expectations. As we started our pivot last year, we said we were going to do three things: We're going to keep our cash burn low, produce a product, and welcome a channel strategic partner. We've done all three, and we are thrilled with the partnership and investment from Bio-Rad.

Those three pillars set us beautifully- set us up beautifully to meet the commitment made earlier this year to launch our GraftAssure research product in Q2, which we are happy to say that we met. Going forward, we expect to maintain a capitalized business model, focus on site adoption in the U.S. and Germany, and deliver an IVD product to the market. Success in all three sets us up to disrupt the transplant testing market and deliver exceptional margins.

Our Head of Commercial and I have been out in the field talking with customers and exploring more partnerships. It's just like a flower that keeps opening up. The more we engage with the market, the more it's responding. We believe that over the next few years, our research product will double or triple the amount of research done using donor-derived cell-free DNA.

This biomarker has been clinically accepted and is nearly standard of care, and yet you don't see an explosive growth in research. We believe this is reflective of how the central lab model, which we aim to disrupt, has not been able to fully support the research community and all the questions that they want to ask. We know that there are a lot of these questions that are going unanswered today.

Putting a research tool out there in the field and giving research institutions around the world access to it meets a real market need. One of our early adopters is studying pediatric transplant patients, and sadly, there's a paucity of research in this space, and seeing one of our first centers jump in feels really good. Empowering research not only serves the market more broadly, but it also creates new opportunities for Oncocyte, including in pharmaceutical research use.

You can see the early innings of that with the Phase 2 clinical trial by HI-Bio, which used our VitaGraft Kidney assay to monitor for responses to their anti-CD38 therapy, the results of which were published in the New England Journal of Medicine. Since then, a second publication has shown the ability to monitor for response to a second anti-CD38 therapy for antibody-mediated rejection.

In this case series study, patients were given daratumumab off-label to treat antibody-mediated rejection, and VitaGraft Kidney was able to identify that the drug was working with a simple blood test. In addition to these publications, you may have seen in the shareholder letter that in the second quarter, we signed an agreement to be the provider of dd-cfDNA testing for a Phase 2 trial in AMR with a European biotechnology company.

We think that this speaks to our growing market leadership and research partner of choice. You know, before I go on, there's an important real-world human element here to consider regarding the partnership with Pharma. Many kidney transplant recipients experience antibody-mediated rejection, and when that happens, you know, historically, there are not a lot of options for doctors or the patient.

They may lose the organ or go back on dialysis or even eventually die, and it's a serious problem. We're humbled by the opportunity to support pharmaceutical companies as they study ways to solve that problem and turn organ rejection from a potential death sentence into a manageable condition. Of course, detecting antibody-mediated rejection very early, which data has shown that our technology can do, will be very important to solving this problem once drugs are available that can treat the disease.

Even though we are a small company, and we are still largely pre-revenue in transplant, we sit upon an established body of science and more than 10 years of research in the field. We have long been out in front with the clinical data that we are generating. We're excited, as you saw in the shareholder letter, that for the first time on July eleventh, researchers outside of Oncocyte began using our commercial RUO research technology, GraftAssure.

It's a major effort for labs like this to bring up the workflow. It's a significant investment of time and resources, and they don't take it lightly. They are signing up because they believe in what we are building. We believe that these labs are exhausted by the send-out only model, and they want to work with us in building an IVD technology.

They want an IVD test so that they can detect transplant rejection quickly and easily on-site, and they want to be able to run that test alongside routine tests. They, like us, believe in the power of democratized access to technology. In our launch program, they start with some sample product to get comfortable using the assay before switching over to revenue-producing product.

As we pointed out in the shareholder letter, we are about six weeks into the commercial launch of GraftAssure, and we have transplant centers that represent nearly 25% of the U.S. transplant volume in our funnel, and roughly the same percentage in Germany, our two key launch markets. This is exceptional and much faster than we would have expected with an RUO product.

The market enthusiasm for GraftAssure has given us the confidence to make some incremental investments in the back half of the year to support commercial launch and the FDA submission process for the IVD product. These investments include FDA compliance software engineering necessary to generate a test result, consumables to support the FDA submission, as well as an inventory build to bring customer sites up.

We aim to hold our cash burn in Q3 and Q4 relatively in line with what you saw in Q2. Our product development team expects to deliver a completed data package to the FDA by summer next year, and depending on how quickly the FDA is processing submissions at that time, the earliest we could expect a positive coverage decision is in late Q4. We enjoy bench strength to support us in the IVD process, which is why I have invited Ecki to the call.

He is here to help address any questions you might have today on the details of the FDA approval process. It's going to be a lot of fun in the next couple of years. We have a lot to execute, but we are dedicated to democratizing access to novel molecular diagnostic testing, improving patient outcomes, and creating substantial shareholder value along the way. Now, I'd like to introduce a newcomer to our earnings call.

We welcomed Andrea James to Oncocyte in June, and she has hit the ground running. Some of you may know Andrea from Tesla or Axon. I'm thrilled to work with Andrea, and we are already benefiting so much from her insights, particularly when it comes to building and preparing for explosive growth. She is delivering decisive, analytical leadership and heterodox thinking to our team, and I'm delighted by the partnership.

I've asked her to tell you why she came to Oncocyte. I think it was a great achievement for us to be able to attract her, and I think she sees in Oncocyte what we think the world will see over time. As some of you know, Andrea has a history of being ahead of the curve. Andrea?

Andrea James (CFO)

Thank you, Josh. Hi, everyone. It's great to be here, and some of you may know me from Axon or Tesla or the sell side before that. As Josh said, I joined Oncocyte to help build and scale the company. There were four primary factors that drew me to Oncocyte: mission, timing, strategy, and team. First, the mission here is attractive, and it reminds me of what we had at Axon, which is to save lives.

You'll notice in the new investor presentation we published today, that we've synthesized our mission very succinctly as follows: to democratize access to novel molecular diagnostic testing to improve patient outcomes. We have an opportunity to do a lot of good with our technology and to do it quite soon, which brings me to timing. Where we are in our commercialization journey was very attractive to me.

When I started talking with the company this spring, I learned that Oncocyte was just on the cusp of commercializing a product with more than a decade of history of development behind it. My background is in tech and finance. I don't have a background in healthcare, and I wasn't interested in going to a company where it would take 10 years to bring a product to market.

So thank you to those of you on the call who have worked for 10 years on this product. In addition to timing, I found the strategy to be highly compelling. I'm very much attracted to this strategy of selling diagnostic tests at software-like growth margins via a business model that is disruptive to the industry. We have the potential to be an asset-light, high-margin company that can scale quickly and eventually become quite large.

The analyst and the investor in me has always appreciated businesses like that, and my guess is that many of you do too. Third, I was drawn to the quality of the team. We enjoy having world-renowned scientists in this company, including our Chief Science Officer, Dr. Ecki Schütz, who's on the line today. These scientists have extensive experience developing cell-free DNA products, developing immuno-oncology products, and with obtaining regulatory approval to sell diagnostic test kits.

This world-class expertise has created IP that we expect will support compelling margins. Josh Riggs, who is sitting here beside me in Irvine, California, is a deep subject matter expert. He exhibits a clear ability to make important decisions with a high degree of clarity. The company's pivot over the past few years has not been easy, and I admire the combination of smarts, integrity, and grit.

It also helps to be a CFO stepping into a culture that already enjoys strong financial discipline. Of course, it was born of necessity, but I knew that this could be a great partnership. That muscle of fiscal discipline will remain strong, and it will support future operating leverage. Okay, so the strategy makes sense, and the team punches above their weight. Now, the question is, how will this strategy play out?

I saw three things that point to a company that is potentially in the early innings of success. First, we have great indications of product-market fit. The interest we are already gaining with GraftAssure is pretty exciting. What's amazing is that research centers are proactively reaching out to Oncocyte to get access to the transplant diagnostic, even without forward sales reach from us.

Wouldn't it be great if we could invest more in that sales muscle and go faster? Second, the strategic investment and partnership with Bio-Rad really, really is a big deal. This company's channel partner is also its second-largest investor. And third, the scientific validation has many proof points, the most recent of which appeared in the May 2024 publication of the New England Journal of Medicine. It was clear to me that Oncocyte is focusing on a scalable, high-margin product that fills a clear market need and is selling it into pre-built channels. This adds up to the potential to be a big winner. Now, to be clear, I also came in with eyes wide open.

While I knew some of the investors in the company, and I was aware of their strong support, and while I was impressed with the management team and the board, it is also true that we are a tiny company, our trading volume is still small, and we have a weak balance sheet. All of this is solvable. What was also clear to me from my prior background is that investors will provide money to companies with certain characteristics.

These characteristics include the ability to move fast and capture opportunities, the ability to manage risks and retire them, and a compelling value proposition in the customer market, and this is where we are. The opportunity over the next 2-3 years is very large. In the near term, we have the opportunity to capture market share by selling a known bio, biomarker test into the transplant diagnostic market.

We also have a compelling opportunity over the 5- to 10-year period, which is a period I've always focused on with companies such as Tesla or Axon. Over that timeframe, it is not unreasonable that we could become a $1 billion company. That potential is why I am here. We have a compelling story to tell, and I'm here, eager to help tell it, as well as guide it.

As far as telling that story, you can see that with this earnings report, we are introducing a shareholder letter. We are also publishing a new investor deck that explains why we are investing in molecular diagnostic testing, and specifically in developing test kits versus developing an in-house clinical lab model.

In these materials, we presented a graphic that is intended to help you understand why we are so excited about our beta customers that we are bringing up online as we speak. In the graphic, we show a projected revenue build that assumes we get FDA approval to sell an IVD product in late 2025 and assumes that the customer transplant center eventually switches from sending out their clinical tests to managing their patient populations in-house.

Now, there's a reason why we do a forward-looking statement disclaimer on all projections, and that is because there are no guarantees. But we also felt that it was important to share our view of what we are building from where we sit today. You can count on us to be transparent on our growth journey, and that includes transparency not only about the opportunities, but also about the risks.

As for the numbers we reported in the quarter, they're in the shareholder letter, and you don't need me to read off of tables for you. The one thing I would highlight is that our April fundraise was very successful. We had participation from new and existing investors, including our first corporate partner, Bio-Rad, and it was done at market with no warrant coverage and no discounts.

dThis speaks to the fact that we have a real market opportunity to go after and that others in the capital markets are starting to see that opportunity. I'd also highlight that with the preferred stock redemptions in April, we now enjoy a streamlined capital structure with just common stock and no debt or preferred stock, which hopefully excites you as much as it does me as we hit an inflection point.

We truly value our partnership and relationship with the investment community, including our analysts and shareholders, so thank you for joining today, and we look forward to welcoming more investors over time as we grow. The opportunity set that we face is exciting. Day by day, our path to revenue is steadily being de-risked. Once we are capturing that revenue, we think you'll be pleased with the leverage in the business model itself, which is both high gross margin and capital light. Okay, so now we welcome your questions. Go ahead, Jeff. Do we have any questions in the queue?

Jeff Ramson (Head of Investor Relations)

We do. Rochelle, can you allow the verbal questions?

Operator (participant)

...Certainly. As a reminder, if you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. You may also submit a question via the webcast by clicking on the Q&A button on your screen. Your first question is from Mike Matson with Needham. Please ask your question.

Speaker 6

Hey, everyone. How's it, how's it going today? This is Joseph on for Mike.

Joshua Riggs (CEO)

Life's good, Mike. Thanks.

Speaker 6

Yeah, this is, this is Joseph on for Mike, but just quick question on VitaGraft, to start it out. I saw in the press release that you talked about increasing throughput at the, at the CLIA lab. Just kinda wanna get an understanding of where this test stands. I assume volume hasn't started yet, but maybe you could dissect that a little bit. Maybe this prep work, what, what are you kinda aiming for, for, for volume for this test? And, and then obviously, liver is still under review at CMS, so if you could give an update there, that would be helpful.

Joshua Riggs (CEO)

Sure. Yeah, no, thanks for the question. I think what we've done is, you know, expanded our capacity in the lab in Nashville. So we're talking about, you know, an investment that we're making into, into that lab infrastructure. It's primarily to support the, the extra work that's coming at us for the FDA program. So that's, that's just about the, the amount of samples and the amount of, data that we need to generate, to support the FDA submission. And so that's really more of a capital spend to support that effort.

We've largely pulled back on most of our commercial efforts towards the LDT service product and put all of that energy into, you know, working on the site placements, where we've just kind of had an overwhelming response and, you know, needed to pivot our commercial team more towards, you know, activating sites for the RUO product.

Speaker 6

Okay. Yeah, that makes sense. So I guess maybe just to ask another question on that, as we look at-

Joshua Riggs (CEO)

Mm-hmm

Speaker 5

... the chart, I guess, you provided, for the beta path, in terms of just material revenue before that inflection point, I guess, estimated inflection point around, you know, second half 2026, is there anything that we should start baking into our estimates, or is the next really material driver IVD, you know, VitaGraft for kidney?

Joshua Riggs (CEO)

Yeah, it's, you know, with, with a low burn, every dollar of revenue feels material to us. But, you know, with, you know, with the RUO product, I mean, you know, it's, it's gonna be modest revenue, and it's hard for us to gauge that because this is a new product for the industry. They haven't had anything like this.

So we could be pleasantly surprised by, by the orders, but I think we're, we're, we're gonna keep those expectations modest for now until we get confidence that, that it's gonna be much above. And I think we do a good job in that, in that graphic, kind of highlighting that there's a relatively slow burn of revenue per site for the, for the RUO product.

Then it, as you pointed out, it really kicks up once we have an IVD product out there.

Speaker 6

Okay. And then maybe just final question, just as we look forward-

Joshua Riggs (CEO)

Mm-hmm

Speaker 6

... for these next couple of years. In terms of site adoption and cash burn, you're just, you know, kind of wondering how you, how you're level setting that, if you're more looking at just finding the strategic centers and, you know, and planting relationships there, or if it's gonna be a slow buildup of customers there over time.

Joshua Riggs (CEO)

Thanks. You know, I, I would say one advantage that, that we have in, in transplant is an exceptional concentration at the top. You know, so, I mean, transplant is a relatively complicated surgery, and so it tends to aggregate at, you know, the higher end academic centers.

You know, that's both here in the U.S. and Europe and around the world. And, and so, you know, any one of these, you know, top 100 centers, you know, feels meaningful to us because, you know, the top 100 here in the United States do 80% of the transplant volume or better. And so, so I guess if I'm gonna answer your question, I think when we get to 10 to 15 to 20 sites, we will have picked up a very meaningful percentage of, of that, of that local market opportunity.

I think that's what we're excited about, you know? When we look at our funnel today, I mean, you know, 25% of the U.S. transplant volume is represented there. And so, I mean, all of these guys feel strategic to us.

Speaker 6

Okay, great. Yeah, that's, that's, that's all super helpful. Thank you very much for taking our questions today.

Joshua Riggs (CEO)

For sure.

Operator (participant)

Your next question comes from the line of Mark Massaro with BTIG. Your line is open.

Speaker 5

Hey, guys. This is Vidyun on for Mark. Thanks for taking the questions. So as it relates to FDA approval, could you just remind us of any interim milestones, what publications and studies you're expecting to leverage to get there? I think in the press release, the Q-Sub was mentioned. And then I believe-

Joshua Riggs (CEO)

Mm-hmm

Speaker 5

... FDA clearance in late 2025 sort of represents your bull case, but just can you give us a range of-

Joshua Riggs (CEO)

Yeah

Speaker 5

of the timing of that?

Joshua Riggs (CEO)

Sure. You know, I'll take some of the timing question, and then I'll ask Ecki to talk about the milestones that he has in front of him. I think, you know, we. I think we're, as you might guess, we're very hopeful that the FDA will move quickly, and we don't, we don't really control that process. But, you know, we're gonna give ourselves the best chance we have to get through by the end of 2025. That may drift into early part of 2026, you know, just depending on how quickly the FDA is processing things at that time.

But, Ecki, if you could, you know, just talk a little bit about the key milestones that you have in front of us, you know, the Q-Sub, and then what you guys are doing, from a product development point of view, and where you hope to be kind of going into next year.

Ekkehard Schütz (Chief Science Officer)

... All right, thank you, Josh. So our Q-Sub is planned like perhaps in 6-8 weeks from now. We are right now putting all the material together. I would say we are 50% there. We are going to start, I would say, the revision process next week. So we are all going into that and revise it by all the needs.

And it's a pretty formalized process where you are just presenting your intended use, you are presenting the method or the assay, and you are presenting what kinds of studies, like analytical validation, clinical validation you are planning. And then you ask the FDA question, "Are you fine with that? Is our analytical validation according what you are looking for?

Is our clinical validation according what you are looking for?" And then we hope to get good answers. We had made actually pretty good experience with the FDA when we did our BDD submission last year. They are very cooperative, and so they are really trying to work with you and not against you, which I really appreciated.

So bottom line, that they have some time to tell us, "Okay, this is okay, this might be perhaps this or that detail," something where we want to have a modification, which at the end of the day, helps us for the design and planning of our IVD endeavor. That said, also, this IVD route is a very, very formalized way of putting documents and data together.

It starts with phase one, which is design, planning, and inputs. So you are completely put together how your design should look like, and have all the inputs in there, like, "Okay, what are we going to achieve? What is our target?" And that's something we want to get finalized by, in actually six weeks from now.

So we want to have that phase done in six weeks. And from there, you are getting into the second phase, which is development and design output. So from there, you are developing everything like work packages, what you want to do, how you want to do that, which study, and so forth. And then the design output, it means you are controlling that what you have put into your design document really can be achieved.

So that's the second, so-called phase gate. And then the third phase is verification and validation. That's where we are going to do an analytical validation and clinical validation with the, at that point, locked-in final product. And this we have planned to get accomplished by Q4 2025/Q1 2026. So that's the entire plan.

It's a lot of writing documents, and just show the FDA that you have thought about everything that needed to be thought about, and that you are not just getting some data randomly put together by chance. The entire idea behind that is starting with the so-called design control. Everything needs to be set from the very beginning, and then you are just working along what you have planned.

Speaker 5

Perfect. Understood.

Joshua Riggs (CEO)

Thank you, Ecki.

Operator (participant)

and then-

Joshua Riggs (CEO)

I just want to make one comment on-

Operator (participant)

Yes, go ahead.

Joshua Riggs (CEO)

I think you followed up with just one quick comment. Yeah, one thing that we've been pleasantly surprised with is kind of the warm reception to the IVD program we felt from the community. You know, one of the questions we're asking these sites as we're bringing them up and we're moving them through the funnel is, "Hey, are you interested in participating in the IVD program?"

And it's just kind of been overwhelmingly positive. I think these centers want to help us, you know, get the samples together. They want to help us with the reproducibility studies. And so it's really feeling like a community effort here to push the IVD process along. So I think we're overwhelmed by the positive support that we're getting from the community.

I think there's just a general excitement that they're going to have access to this technology, and they get to, they get to help make it happen.

Operator (participant)

There are no further questions from the line at this time. I'd like to ask Jeff to see if we have any questions from the webcast.

Jeff Ramson (Head of Investor Relations)

Yes, we do have a few, actually. Thank you. Josh, Andrea, how do you calculate the $1 billion transplant testing market opportunity, and how does Oncocyte plan to capture its $1 billion market opportunity?

Joshua Riggs (CEO)

I mean, it's a good question. I think we put this out, I think, in our investor deck. But, you know, we've got an estimate of somewhere around 3-3.5 million testing opportunities globally. And, you know, that number, you know, we're obviously multiplying that by a mix of our RUO product and our IVD product, you know, where we expect to be IVD in the U.S. and Europe, and then probably say RUO, rest of the world. You know, that market's growing, at least according to current estimates, about 9% a year. So, we see the $1 billion as a relatively conservative estimate of what the market opportunity is.

You know, we're not gonna move that up until we have a chance to do more price discovery. This is just something that's hard to do until you actually have the IVD product out there and know what you're gonna get reimbursed. So we're erring on the side of being conservative there. You know, from a market capture point of view, I think we've talked about this a good bit, but, you know, it's democratization, right? It's giving people access, and it's meeting the demand where it is, which, you know, right now the demand is at the local center, and they don't have access to a techdnology that works for them, today.

Operator (participant)

Yeah. Do you wanna add just a little bit about that $1 billion total addressable market is based on the current clinical indication?

Joshua Riggs (CEO)

Oh, yeah. I mean, you know, I think the most exciting thing for us that's come out of the past, you know, two or three months is, you know, the, you know, the work that's being done on, like, the anti-CD38 drugs, where they're really meeting an unmet clinical need from a, from a pharma point of view. And that just opens up kind of just these significant monitoring opportunities.

So therapeutic efficacy monitoring, like, is the drug working? And then also recurrence monitoring. And we're seeing a lot of this in oncology right now, and there's just an enormous amount of value creation that's happening in the oncology space, you know, just kind of like on that therapeutic efficacy and, you know, recurrence monitoring. And we're, we're starting to see that emerge, here in transplant.

And so we've got our fingers crossed that, you know, these trials will continue to be successful, so that, you know, patients have an option, instead of just, you know, losing their organ. And I think that creates... That's an incredible tailwind for us, because we're out in front there. And so I would say that easily expands the market opportunity that's in front of us.

Jeff Ramson (Head of Investor Relations)

Very good.

Ekkehard Schütz (Chief Science Officer)

If I-

Andrea James (CFO)

Good.

Ekkehard Schütz (Chief Science Officer)

Just add-

Jeff Ramson (Head of Investor Relations)

Sorry. Sorry.

Ekkehard Schütz (Chief Science Officer)

If I may, I would just-

Andrea James (CFO)

Go ahead

Ekkehard Schütz (Chief Science Officer)

... add to what Josh, Josh was saying, to make it really clear, what the new situation that we have created is. I recall an airport meeting like, eight months ago, where we were talking, how much would you use the test in a high-risk population? And most of the people were saying, "Why should I? We don't have any therapy. Why do I wanna know?" And this has dramatically changed.

Now we have the first working therapy for chronic active antibody-mediated rejection. And it's not only something where we can show our test is perfect monitoring, it's also a huge, huge relief for patients who are suffering. Because earlier than that, there was no therapeutic option, and the organ would ultimately be lost, and now we have a therapeutic option.

Our contribution is really to show that people are going into this disease earlier than we can do it with standard of care, and-

Joshua Riggs (CEO)

Great. Thank you, Ecki.

Jeff Ramson (Head of Investor Relations)

I have one other question, Josh.

Joshua Riggs (CEO)

Okay.

Jeff Ramson (Head of Investor Relations)

How does Oncocyte envision building recurring revenue streams when most diagnostics currently are performed episodically on an as-needed basis? Oh, sorry.

Joshua Riggs (CEO)

Yeah, I would say, you know, the transplant is, you know, inherently a recurring revenue opportunity because, you know, these patients are, you know, living with their organs, you know, hopefully, you know, for 10, 12, 15 years or better.

And unfortunately, though, there's a high rate of rejection, and so there's just inherently a number of touch points over the life of the patient, you know, where the physician just needs a non-invasive way or a minimally invasive way, you know, to check on that organ. And I, you know, we, along with, you know, the other players in the space, are kind of, you know, meeting that need. And so I think it's just inherent to the product and the industry that we're in.

Jeff Ramson (Head of Investor Relations)

Got it. Okay, great. There's no more questions. Rochelle?

Operator (participant)

Currently, we don't have any questions from the line, but once again, if you wish to ask a question, please press star one on your telephone keypad.Thanks, Rochelle and Jeff. I guess we'll give it maybe, like, five seconds here, pregnant pause, and then maybe Josh will close us out.

Joshua Riggs (CEO)

Okay, guys, you know, thanks to everybody for joining us today. I mean, we're obviously excited about where we're at as a company. It feels great to be out in the field with a product, engaging with the research community, and just feeling a groundswell of support. So we look forward to updating you guys on our progress and, you know, capturing these sites across the United States and across Europe. We'll have some very exciting things to announce here in the future, and, you know, thanks for playing along.

Operator (participant)

Thank you. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.