Release Date: March 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Lucid Diagnostics Inc (NASDAQ:LUCD) reported a strong finish to 2024 with significant advancements in sales channels and reimbursement milestones.
• The company achieved a record quarterly test volume of over 4,000 tests, surpassing their target of 2,500 to 3,000 tests per quarter.
• Lucid Diagnostics Inc (NASDAQ:LUCD) secured its first positive commercial insurance coverage policy with Highmark Blue Cross Blue Shield of New York, setting a precedent for future engagements with commercial payers.
• The National Comprehensive Cancer Network (NCCN) included a section on screening for esophageal pre-cancer in their clinical practice guidelines, aligning with existing guidelines and supporting the use of non-endoscopic biomarker testing.
• The company strengthened its balance sheet with a long-term debt refinancing and a registered direct common stock offering, extending their financial runway past upcoming key reimbursement milestones.

Negative Points

• Revenue for the fourth quarter was $1.2 million, which was relatively flat compared to recent quarters.
• The company's quarterly burn rate was $10.1 million, although this was lower than the average burn rate for the four preceding quarters.
• The effective average selling price (ASP) per test was lower than expected, around $300, due to timing of payments and elongated collection periods.
• A significant portion of reimbursement claims are still being adjudicated, with some claims being denied as not medically necessary or requiring prior authorization.
• The company is still in the early stages of its reimbursement process, recognizing revenue only upon actual cash collections rather than when the test report is delivered.

Q & A Highlights

• Warning! GuruFocus has detected 3 Warning Signs with LUCD.

Q: With the record test volume and progress in reimbursement and concierge fronts, how should we think about the volume metric going forward? A: (CEO) We remain conservative on test volume despite the record quarter. Our focus is on revenue rather than test volume. The progress with Highmark and Blue Cross Blue Shield of Rhode Island sets a good precedent for expanding commercial coverage. We aim to allocate resources where we have coverage, but the focus should be on revenue in the next quarters.

Q: The effective ASP seems low at around $300 per test. Could you explain why and how we should think about it going forward? A: (CFO) The low ASP is more about timing of payments rather than a reflection of payment amounts. The allowable amount from insurance companies is consistent, but collections are elongated. We have a growing backlog of claims exceeding $15 million. As we move to contracted revenue, ASP should stabilize and potentially increase.

Q: Can you discuss the significance of the $8 million NIH grant for studying e-cigar in patients without GERD? A: (CEO) This grant could significantly expand our addressable market. About 40% of at-risk patients lack GERD symptoms, potentially adding 20 million patients for screening. The NIH study aims to validate this, and preliminary data suggests a significant prevalence in non-GERD populations.

Q: How does the NCCN guideline inclusion help Lucid Diagnostics? A: (CEO) NCCN inclusion is significant as it is a key indicator for commercial payers. It validates esophageal pre-cancer screening and aligns with AGA and ACG guidelines, supporting non-endoscopic biomarker testing as an alternative to endoscopy. This inclusion aids in securing positive policy coverage decisions.

Q: If Medicare coverage is approved, how will it impact your sales strategy and revenue recognition? A: (CEO) Upon Medicare approval, we will aggressively target Medicare populations, leveraging existing resources and potentially increasing sales efforts. (CFO) With a positive policy, we can recognize revenue upon report issuance rather than waiting for collections, enhancing cash flow and financial stability.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.