Good day, and thank you for standing by. Welcome to the Biodesix Fourth Quarter and Year-End 2022 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers presentation there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded.

I would now like to turn the conference over to Chris Brinzey. Please go ahead..

Thank you, operator, and good morning everyone. Thank you for joining us today for a discussion of Biodesix fourth quarter and year-ended 2022 business highlights and financial results. Leading the call today will be Scott Hutton, Chief Executive Officer. He will be joined by Robin Harper Cowie, Chief Financial Officer.

After the prepared remarks, we will open the call for Q&A. An audio recording and webcast replay for today’s conference call will also be available online as detailed in the press release announcement for this call. Today, we issued a press release announcing our business highlights and financial results for the fourth quarter and year-ended 2022.

A copy of the release can be found on the Investor Relations page of the company website. Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, and the competitive nature of Biodesix industry.

Such forward-looking statements and their implications involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected.

The forward-looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the Risk Factors section and elsewhere in the company’s annual report on Form 10-K for the year ending December 31, 2021 filed today with the SEC.

Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company’s press release issued today and in the company’s filings with the SEC. I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott..

Thank you, Chris. Biodesix is a patient-centric, mission-driven lung disease diagnostics company with a mission to unite physicians, patients, and biopharma to transform the standard of care and improve outcomes with personalized diagnostics.

At Biodesix we build a comprehensive portfolio of precision diagnostic test to support clinical decision-making across the lung cancer continuum of care.

Our core lung diagnostic testing portfolio ranges from the initial risk assessment of lung nodules with the Nodify lung testing strategy, to post cancer diagnosis, treatment guidance and monitoring with the IQ lung testing strategy. Nodify lung consists of two blood-based proteomic test.

Nodify CDT and Nodify XL2, which are used by physicians to assess the risk of malignancy of a lung nodule. IQ lung consist of three blood based tests, the GeneStrat NGS genomic test, the GeneStrat-ddPCR-targeted genomic test, and the VeriStrat proteomic test.

Offered as options within the IQ lung testing strategy, these three tests are used to inform treatment decisions and monitor for the rise of resistance mutations, while patients are on therapy.

All five tests in our core lung diagnostic testing portfolio are covered by Medicare and we believe we're the only diagnostic company with five on market tests for lung cancer, all with Medicare coverage. 2022 was a productive year for bioethics. And I'm extremely proud of our team's performance.

In 2022, we experienced a significant increase in adoption of our core lung diagnostics business growing test volume by 54% and revenue 57% year-over-year. In fact, our Nodify Lung testing volumes have more than quadrupled over the last two years.

In addition, we continued to produce compelling clinical utility data, expand reimbursement coverage, including Medicare coverage of our Nodify CDT test and new private payer coverage policies for our Nodify XL2 test. This strong performance and positive momentum gives us confidence heading into 2023.

The Biodesix sales team was able to return to the field and actively engage with healthcare professionals. I stated at numerous times, the value of our tests and the quality of the Biodesix team would be clear once we are able to get in front of customers on a day-to-day basis. I believe the momentum we demonstrated in 2022 supports my statement.

Revenue from our high margin core lung diagnostics business in 2022 was $29.3 million, an increase of 57% over 2021.

This growth has been driven in part by sales team access turning to pre-pandemic levels, our sales force effectiveness, as well as physicians and care teams refocusing on those patients that were a priority pre-COVID and should remain a top priority.

In 2022, we also saw the positive impact from our team's efforts to expand reimbursement across all five of our tests.

We announced several important reimbursement milestones, including Medicare coverage for our Nodify CDT lung nodule test and the signing of a Federal Supply Schedule Contract that expands coverage on all five of our tests to the approximately 9 million veterans in the U.S. Department of Veterans Affairs and Military Health System Medical Centers.

This past December, we announced our first four private payer coverage policies covering our Nodify XL2 test. These were from Blue Cross Blue Shield of North Carolina, Blue Cross Blue Shield, South Carolina, Blue Cross Blue Shield, Kansas City and the capital district physicians health plan in New York.

In total, these new private payer coverages added approximately 4.5 million covered lives for Nodify XL2 and are in geographic regions of the country where the incidence of lung cancer is extremely high.

As you consider the impact, remember these coverage policies came in at the very end 2022 and did not contribute to 2022 results, but are expected to begin contributing in 2023. Broadening reimbursement coverage remains an important part of our growth strategy and we continue to target resources on a prioritized basis to generate the highest return.

We can confidently say that we're making progress on this front and we expect to have additional updates for you in the coming months and quarters. We also continue to support and invest in data generation to demonstrate and reinforce the clinical utility of our test.

As well, as looking to sign meaningful collaborations to further drive adoption and growth of our entire core lung diagnostic testing portfolio.

In 2022, we shared data on our on market test and portfolio of pipeline test at multiple medical society meetings, including data on our primary immune response test currently in development and VeriStrat at the International Association for the Study of Lung Cancer Meeting, in data on Nodify XL2 at the American Thoracic Society and American College of Chest Physicians meetings.

At the recent Society for Immunotherapy of Cancer, 37th Annual Meeting held in November, we presented new interim data from the INSIGHT Study, highlighting the ability of our VeriStrat test to stratify immune checkpoint inhibition treatment response in patients with advanced non-small cell lung cancer.

The new data included a total of 3,040 patients and confirms how a biomarker driven strategy can help determine optimal treatment approaches for those patients treated with immunotherapy regimens.

Looking to 2023, we anticipate several updates on studies we're conducting that will build upon and support the clinical utility of our [Nodify Lung] [ph] and IQ Lung testing strategies.

Specifically, we anticipate sharing additional data and updates from the oracle and altitude studies both evaluating the performance of our Nodify Testing strategy and updated data from our INSIGHT Study assessing the clinical effectiveness of VeriStrat, our proprietary blood based proteomic immune profiling test.

Moving to our biopharmaceutical partnerships and service business. In the fourth quarter, we reported revenue of $1.4 million for the quarter, which nearly doubled from what we reported in the third quarter and was flat to the fourth quarter of 2021.

We ended the year with $9.2 million under contract, but not yet recognized, which is a record for the Biodesix team. While we're encouraged with the recent results, the challenges our pharma partners continue experience remains. And they're still clearly slowing and in some cases delaying projects beyond our originally expected time lines.

We believe that despite the well-known challenges to biopharma services that are being broadly discussed throughout our industry, the approximate 30% increase in dollars under contract over last quarter is a good leading indicator for progress and growth to come later in 2023.

Our ongoing efforts and advancements in explainability and transparent AI provide what we believe are unique insights and clarity to healthcare professionals and biopharmaceutical and academic research teams by providing the ability to identify key biological mechanisms driving specific outcomes for patient subgroups that may require a different approach or different treatment.

I've said it before and cannot reiterate it enough. Lung cancer kills more people in the U.S. annually than the next three deadliest cancers combined, breast, prostate, and colon cancer. Time matters when treating these patients.

We pride ourselves on Biodesix ability to discover, develop, and commercialize a broad range of tests that can quickly provide critical results and insights back to healthcare professionals and care teams with best-in-class testing turnaround times for all tests to improve patient outcomes.

With our strength and financial position along with the products and team in place, we're confident in our ability to drive continued strong test volume and revenue growth in 2023 and beyond. Now, let me turn it over to Robin to review the fourth quarter and year-end 2022 financial performance.

Robin?.

Thanks, Scott. Fourth quarter total revenue was $9.6 million, 33% increase over the prior year. Full-year 2022 total revenue was 38.2 million, a decrease of 30%, driven primarily by the expected decline in COVID testing offset by growth in our core lung diagnostic testing.

Core lung diagnostic revenue in the fourth quarter was 8.2 million, compared to 5.4 million for the fourth quarter of 2021, an increase of 51%, and a decrease of 10% over the third quarter 2022.

Third quarter 2022 included 1.5 million in cash revenue from tests performed in prior periods, largely as a result of the positive coverage decision by Medicare for Nodify CDT. If we exclude the 1.5 million cash revenue from the third quarter, fourth quarter 2022 grew approximately 600,000 or approximately 8% over third quarter 2022.

Revenue growth continues to be driven by our five core lung diagnostic tests. In the quarter, we recorded total test volumes of approximately 7,100 versus approximately 6,500 for the third quarter 2022, a 10% increase, and approximately 4,400 for the fourth quarter 2021, a 61% increase.

The growth in test volume was primarily driven by our Nodify nodule management lung testing, which includes Nodify XL2 and Nodify CDT, offset by what is starting to appear like the new and more significant holiday seasonality than we saw prior to the pandemic.

In addition, we were expecting significant additional cash revenue in the fourth quarter from Medicare Advantage claims from tests performed in prior periods, but those collections were delayed and are now anticipated to occur later in 2023.

Biopharmaceutical Services revenue was 1.35 million in the quarter, compared to 664,000 in the third quarter of 2022, an increase of 103% and flat to the 1.36 million in the fourth quarter of 2021.

As a reminder, this business can fluctuate due to several factors, including contract timing and project execution, but in this instance reflects the continued delays in prospective clinical trial timelines and shipping of samples needed to complete the projects and recognize revenue.

As Scott mentioned, we entered 2023 with a record $9.2 million contracted, but not yet recognized as revenue. These dollars are tied to multiple agreements with different timelines and will be recognized as these projects are executed.

COVID testing revenue in the quarter was negligible and as we have guided should not be modeled to contribute to revenue in 2023. We have consistently projected that COVID testing as a percentage of revenue would decline significantly and with the upcoming end to the public health emergency, we do not plan any revenue from COVID testing in 2023.

Gross margin percentage in the fourth quarter of 2022 was 66% versus 65% in the prior year quarter. Current gross margin trends reflect the growth in our core lung diagnostic testing business and receiving Medicare coverage for our Nodify CDT test.

Gross margin as a percentage of revenue for the full-year 2022 was 63% versus 44% for 2021 and reflects the growth in the higher margin lung diagnostic testing business and decrease in the lower margin COVID testing revenue.

Looking into 2023, we expect the overall gross margin percentage to continue to increase as a result of several factors, including the benefit of the Medicare coverage for Nodify CDT tests, the benefit of recently announced commercial payer coverage decisions for Nodify XL2, as well as additional commercial coverage as we move through the year, and the operational efficiencies resulting from the growth of our GeneStrat NGS test, which was fully launched in 2022.

Overall, operating expense, excluding direct costs and expenses was 20.2 million in the fourth quarter 2022, compared to 16.4 million for the same period of 2021. Total operating expenses, excluding direct costs and expenses for the full-year 2022 were 74.6 million versus 64.9 million in 2021.

The increase in operating expense for both the quarter and for the year is primarily from increased sales and marketing expense from the hiring of new sales team members, increased travel related costs due to the return to pre-pandemic access to physicians and increases in other non-employee related costs.

Other operating expense for the fourth quarter 2022 includes 2.1 million in non-cash stock compensation expense, as compared to 1.3 million during the fourth quarter 2021. For the full-year 2022, non-cash stock compensation expense was 6.0 million, compared to 4.9 million for the full-year 2021.

Net loss for the full-year ended 2022 was 65.4 million, compared to a 43.2 million net loss for the full-year 2021. The net loss for the fourth quarter 2022 was 20.3 million, compared to a net loss of 13.3 million for the fourth quarter of 2021.

The increase in net loss for the quarter included the increase in non-cash stock based compensation, a one-time 4.0 million charge related to the extinguishment of the Silicon Valley Bank and Chicago Venture Partners term loan, and the increase in costs from the expansion of our commercial team and efforts.

We ended the quarter with 43.1 million in unrestricted cash and cash equivalents as compared to 15.2 million in unrestricted cash and cash equivalents at the of the third quarter 2022, an increase of 27.9 million, which includes the following key components.

37.9 million in net proceeds from a successful equity offering completed in November and an additional 1.0 million in net proceeds from our existing equity facilities throughout the quarter. 27.9 million in net proceeds from the term loan completed with Perceptive in November.

23.9 million of those proceeds from the November 2022 transactions were used to extinguish outstanding debt with Silicon Valley Bank and Chicago Venture Partners. 4.1 million for Silicon Valley Bank principal rebatement, prior to extinguishment and contingent consideration.

After considering the items above, our cash burn for the quarter for all non-financing activities was approximately $11.0 million, consistent with prior periods.

As of December 31, 2022, the company had remaining available capacity for share issuances of approximately 29.5 million under our at the market facility and up to 46.9 million under the Lincoln Park Capital facility each subject to the applicable limitations of the underlying contracts.

Overall, we executed very well on our financing strategy and we exited 2022 in a stronger financial position. We will continue to focus on revenue growth and driving additional cost savings measures that will positively impact 2023. Turning now to our 2023 guidance. We project total revenue of $52 million to $55 million.

Our guidance assumes strong year-over-year growth in our core lung diagnostic testing business, driven by improved contribution from our larger commercial organization, broader reimbursement of our five on-market tests and expected increased utilization of all of our tests by physicians, as well as modest expected growth in our biopharmaceutical services business.

Our guidance does not project any COVID-19 revenue for 2023. In 2022, we recognized 33 million in revenue, excluding revenue from COVID-19 testing. The mid-point of this guidance represents approximately 60% annual revenue growth as compared to the prior year core lung and biopharmaceutical services revenue. Now, let me turn it back to Scott.

Scott?.

One, we've established an exceptionally strong double-digit growth trajectory post-pandemic, driven by our lung focused sales team; Two, we're expanding reimbursement on our on-market test with multiple coverage decisions from Medicare and private payers that we anticipate will contribute to our 2023 growth.

Supporting this effort, we continue to successfully expand the growing body of clinical data to support the clinical utility of all five of our core lung diagnostic tests; Three, we've established strong gross margins, which continue to improve with the scaling of our core lung diagnostic testing and reimbursement; And four, we exited the year with a strong balance sheet to support our focus on near-term revenue drivers with a cost disciplined approach.

With that, I'll turn the call over to the operator for questions..

Thank you. [Operator Instructions] Our first question comes from Kyle Mikson with Canaccord. Your line is open..

Hey, guys. Thanks for taking the questions. Congrats on the year and great quarter. So, maybe just starting with the guidance, solid outlook, great core growth here.

If we think about like a breakdown of some of these tests and segments, I was just curious if you talk about like will Nodify revenue growth faster than this aggregate growth rate on top line, the forecast like 60%, so just curious about Nodify in particular? And then how material is the NGS test, the GeneStrat NGS test going to contribute in 2023 given its place in IQ Lung is kind of expanding? And then finally, I guess like you mentioned modest growth in biopharma services, but how should that kind of progress throughout the year? Are you thinking like most of that revenue in the fourth quarter or third quarter? Thanks..

Yes. Good morning, Kyle. Thanks for the question. Yes, as you know, Nodify XL2 and Nodify CDT really are the largest addressable market that our tests participate and play in. So, huge opportunity because we've just launched these tests recently, we still have a modest and low penetration into that market.

So, yes, we anticipate stronger and greater growth for Nodify Lung in 2023 and are really excited about the opportunities we have there. You referenced our NGS test. You may recall we launched that a little over a year ago to complement our ddPCR GeneStrat test and our proprietary VeriStrat test.

We've seen month-over-month quarter-over-quarter growth and progress with the NGS test. We still are not disclosing breakdown of individual test volumes, but we're really excited to see adoption and uptake.

IQ Lung offering treatment guidance for those physicians looking to provide the best and optimal treatment for patients with cancer really is been received well and we're getting a lot of positive commentary, mostly around our quick and rapid turnaround time. As you may recall, we're returning all three of those test results within 72 hours.

And then lastly, on the biopharma front, biopharmaceutical samples and in-bound testing opportunities continue to remain lumpy. Towards the end of last year, we commented that we had a record number of dollars under contract. We've highlighted how that's continued to grow.

So, we're exceptionally bullish about the opportunities with our biopharmaceutical partners, but you're spot on. We're anticipating a stronger contribution in the back half of 2023 than the beginning. We currently are receiving record in-bounds in terms of request for proposals, and contracting opportunities.

So, we think that business is going to continue to scale and grow. We were very bullish about the contributions in the latter half of this year, and transitioning into 2024.

Is that helpful, Kyle?.

Okay. That was great, Scott. Thanks so much. And maybe just continuing on that note.

I mean, this again, kind of a tough thing to provide here, but would you be able to quantify the prior period Medicare Advantage revenue that you expected, but did not recognize in 4Q, just kind of wondering how you're going to recognize that in 2023? And then also the contribution from the Federal Supply Schedule Contract with the VA, how material are these kind of components [indiscernible]?.

Yes. The anticipated Medicare Advantage collections will be recognized as cash in the period that they're collected. So, the way we do the revenue recognition, we look back about – we look back six months, we look at our history of collections, we estimate based on that history of collections, how much we expect to collect from each payer group.

And so, the impact is actually two-fold. We actually have the cash revenue and then once that's collected will also positively impact our accrual revenues. As I said, we're expecting that later in the year. So, expect that to contribute third quarter, fourth quarter.

Likewise, with the VA, as we mentioned, the VA fee schedule is really, sort of a license to hunt. Provides great opportunity for us to help improve the lives of veterans. As you know, VA serves 9 million veterans and 900,000 of which are increased risk for lung cancer.

We think our tests can greatly help with the nodule management and treatment guidance for our veterans, but it is a step-by-step process. So, while we do have some revenue built into the 2023 guide from the VA, it's sort of a slow build..

Okay. That was great. Thanks, Robin.

And Scott, just a quick one for you, on the BEACON-Lung, I noticed that that study suspended to assess the [recruitment facility] [ph], like what's the status there? Is there an update you can provide with that study?.

Yes, great question, Kyle. Yes, BEACON-Lung as you may recall was in partnership with ALCMI, which is the research arm of the largest patient advocacy group for lung cancer and a number of academic institutions and the original goal there was to assess – continue to assess and validate our primary immune response test.

As we came out of the – or as we worked our way through the pandemic and came out of the pandemic, we had exceptionally slow enrollment. And so, instead of continuing to, kind of grind it out, we decided to hit pause on that trial.

And really work with ALCMI and those academic institutions to continue to revisit really the protocol and their interest in enrollment. We know that we're not the only company out there to run into difficulty enrolling patients throughout the pandemic, but we're also trying to be very mindful of our capital structure, our cost and spending behaviors.

And so, we're going to continue to re-evaluate all of our clinical studies. We don't think that slow enrollment and extending studies or trial length by months or quarters is the right thing to do. So, with this one more to follow in coming quarters. We'll continue to reevaluate it. But for the near-term, BEACON-Lung is on hold. Yes.

Kyle, you brought that up. I would state maybe a contradiction and so that others understand not all of our trials have been negatively impacted. You may recall, altitude our prospective randomized trial for Nodify lung. We've had three consecutive months of record enrollment there and are back on track with that.

So, we really think it's kind of spotty and we're evaluating each one of our clinical trials and studies individually..

Yes. Okay. That was great. Appreciate that. Finally, just a last one on the Diagnostic Cortex and really the company's leadership and kind of AI driven diagnostics.

I was curious, Scott, if you can provide maybe some thoughts on using something, kind of topical right now, generative AI diagnosis or improved the accuracy of precision of testing and, kind of the decision making from a clinical perspective and now taking a step back obviously to reality, I guess, how are you guys planning to optimize the Cortex, the platform in 2023, given some of the work that you've provided in recent years with shopping values and other AI concepts? Thanks..

Yes. Great question, Kyle. I think everybody could agree that AI right now is top of mind. It's driving a lot of the conversations out there in terms of future potential to help guide and treat patients.

We're a big supporter of that as you know and referenced, we're really proud and haven't shared much, but we've been working in AI and machine learning for 12 plus years. And so, we think we're pretty well experienced at it, but we also know that there's still a lot to learn that the space is changing rapidly.

We're going to continue to collaborate and partner with as many people as possible to stay at the forefront. I think you're spot on. I think when we've talked historically about multi-omics test, we've been very focused on the use of genomics or proteomics.

I think now with the addition of radiomics, I think you can also add an AI component, and I think the multi-omics opportunity with AI is completely different than what it's been historically. So, we think we're well-positioned.

Again, we think our rich history and track record of success and experience puts us in a pretty strong position to continue to innovate and develop on that front. I think it's too early to really tell and guide us to what may be next from the industry perspective.

But most importantly, as you think about it from a patient perspective, I think we're moving in the right direction to really truly start to introduce personalized medicine where patients can get the treatment that's best for them in a timely fashion based upon the utilization of machine learning and AI.

And I fully expect that Biodesix will play a role in that..

Great. Okay. Really interesting. Thanks guys for taking the time..

Yes. Thanks, Kyle..

Thank you. Our next question comes from Tejas Savant with Morgan Stanley. Your line is open..

Hello. This is [Yuko] [ph] on for Tejas. Thank you for taking our questions.

Maybe to begin, can you provide your thoughts on cash burn in 2023 and levers that you have to dial it up or down depending on the base business trends? And then what would be the – on the agenda as you seek to flex up or flex down those investments?.

Good morning, Yuko. As we've said for several quarters, cash, our balance sheet strength is of critical importance to us and I'm sure everybody else out in there in the industry. We have several levers that we can pull to either ramp down or ramp up spend. Our focus is on near-term revenue growth.

So, as Scott mentioned, keeping very close eye on all of our studies and projects that are geared towards longer-term revenue growth. We can ramp those down to slow spend, but also as we're seeing increased revenue growth and greater opportunities.

We have opportunities to add to our commercial organization to really focus in on those areas that are growing maybe more quickly than other areas to try and speed things up. So, it's really a – we're consistently monitoring the situation and trying to right size our investments to minimize our burn and maximize our revenue..

Yes. Yuko, I would add to what Robin said, just as a reminder with five on market tests all with Medicare coverage and four of them with private payers and the fifth hopefully soon to have private payer coverage. We're really excited about our ability to positively impact patient’s lives.

And so, we really have tried to channel our time, our interest, and our investment towards that commercial expansion. We know that we haven't really shared to date our path to profitability, but we think that's key.

So, I think what you'll continue to see is a very intentional and prudent scale back on those items that can't positively impact revenue growth in the near-term..

Got it. That was really helpful color.

And then I was wondering if you could provide a little more color around the biopharma backlog mix? Are these large or small pharma companies? Are they earlier or later stage trial retrospective or prospective? What is the degree of client concentration?.

Great question, Yuko. It really is a nice mix of all of the above, right. We've got a good blend of, what I'll call major large biopharmaceutical companies, many of which we've worked with and collaborated with over a number of years.

So, that's really encouraging because you see the momentum build and they continue to investigate and study those drugs and the test opportunities and assay opportunities we have. So, those are exciting to us, but I referenced earlier to Kyle's question, that we've got a record number of dollars under contract.

We also have the largest in-bound request for proposals, kind of occurring over the last few weeks. So, for us, we think there's a nice blend of both prospective and retrospective opportunities. We think it's also a nice blend, as you said, between large and small biopharmaceutical companies.

And then we also look at that portfolio and say what's the blend between genomics and proteomics as a multi-omics company. Historically, the majority of our testing has been more genomic. And that remains the case both under – dollars under contract and those requests were proposal, but we're also seeing a nice increase in proteomic interest.

So, we think there's a good balance there. I think when we look at what's going on, we're also monitoring clinical studies, what's going on with them. [Technical Difficulty] had recently canceled or closed the study. That was on the smaller end and that was one of the smaller biopharmaceutical companies and contracts we had.

So, not a huge impact, but any of those retrospective samples we look at and say, it’s really about getting the sample, getting access to those in a timely fashion. Prospective studies that are negotiated this year, obviously, those are dollars that have been budgeted and prioritized by those pharmaceutical companies.

So, we think we've got a nice blend. The dollars under contract gives us great excitement and enthusiasm about the long-term potential. So, really, we're looking for a big year on the biopharmaceutical front.

And it's nice to, kind of put as much distance between the pandemic as we can because we think that was a big disruptor to biopharmaceutical studies..

Great. And thanks, Scott.

And if I can squeeze one more in, with ALTITUDE data expected this year, assuming success, do you anticipate that to serve as an upcoming inflection point for the CDT XL2 adoption?.

That's a great question. We definitely believe that it can. It may be presumptuous for us to speculate on how impactful it can be, but it really is a first of its kind and first-in-class prospective randomized study. There has not been a study conducted like this with pulmonologists focused on lung. So, for us, we think that that sets the standard.

Now, obviously, we'll look at what the performance readouts look like. But we do think that that can benefit us both with commercial adoption, payers, and then don't want to speculate too much, but as we look forward longer-term towards guidelines and impacting decision making, we think this will be one of the key leading indicators of that.

So, we're very bullish on the study. I referenced earlier with Kyle's question, the last months, we've had record enrollment. If we continue to maintain that, I do think there will be an opportunity for an interim analysis this year, but it's really going to be dependent upon the number of patients we can enroll in the first half.

And I think the optimal time for us is usually going to be around that October, November timeframe when we're at the American College of Chest Physicians Annual Meeting..

Thank you very much..

Thank you, Yuko..

[Operator Instructions] Our next question comes from Andrew Brackmann from William Blair. Your line is open..

Hi, Scott. Hi Robin. Good morning. Thanks for taking the question. I joined a little late, so apologies if these have been addressed.

But obviously, you guys have done a really nice job on the Medicare and sort of government side of things with payer wins, but can you maybe just sort of talk about some of the commercial plans in those conversations, just sort of give us a temperature check on how those conversations are going with private payers? Thanks. .

Yes. Thanks, Andrew, and good morning. Yes, the private payer conversations are going quite well.

I think, we're focusing more heavily on our newer products, Nodify XL2 and Nodify CDT, although absolutely having conversations on the IQ Lung front, but we've noticed an interesting dynamic with private payers around the nodule management products in that they are absolutely seeing a need.

So, they know that patients are being diagnosed later stage and that's bad for the patient, of course, but very expensive for the payer. And they also understand that there are unnecessary and ineffective interventions occurring. So, definitely seeing the utility benefit for these tests.

And I think that the latest successes that we've announced the first four and then continuing success out in the field really validates the view of the utility. So, I would expect it continues to see coverage policies roll in for Nodify XL2 validating that utility statement.

And then now that we have Nodify CDT coverage from Medicare starting to see some private payer coverage for Nodify CDT this year..

Andrew, did you get that? Are you still with us?.

Looks like we might have lost Andrew..

Operator, I think we dropped Andrew with William Blair.

I don't know if there are any other additional questions?.

There are no other questions in the queue. This concludes today's conference call. Thank you for participating. You may now disconnect..