Cardiff Oncology Inc (CRDF) 2015 Q3 法說會逐字稿

Good day, and welcome to the Trovagene Third Quarter 2015 Financial Results Conference Call. (Operator instructions) Please note, this event is being recorded. I would now like to turn the conference over to Mr. Stephen Zaniboni, Chief Financial Officer of Trovagene. Please go ahead.

Thank you for joining us on our third quarter 2015 conference call. Trovagene is focused on developing and commercializing our Precision Cancer Monitoring platform, which quantitatively detects DNA mutations in urine with very high sensitivity. Our platform provides oncologists with important clinical information that can guide treatment decisions by determining a patient's mutational status, response to therapy, and resistance to treatment over time.

The body of clinical evidence supporting our cancer monitoring platform continues to grow, as additional results from our clinical study collaborations and case studies from physicians using our technology, become available. These efforts will support our commercialization program, which was initiated earlier this year.

The benefits of our PCM platform are becoming apparent, with data presentations at several major clinical oncology meetings this year, and additional manuscripts to be published in peer review journals. Our intellectual property estate, protecting our technology, is strong and growing, and includes methods of extracting, purifying, amplifying and detecting circulating tumor DNA in both urine and blood.

Before moving on, I must remind you of the risks inherent in our business, and ask you to consider the following information regarding forward-looking statements. Statements in this call about the Company's expectations, applications of its technology, markets, launch of tests, and other statements that are not historical facts, are forward-looking statements within the meaning of Section 27-A of the Securities and Exchange Act of 1933, and Section 21-E of the Securities Exchange Act of 1934, and are based on management's current beliefs, assumptions, estimates and projections. Actual results may differ materially from those projected in the forward-looking statements for various reasons, including risks associated with product and diagnostic test development, government regulation, market acceptance, limited commercial experience, dependency on key personnel, obtaining health insurance reimbursement, obtaining financing, and other factors discussed in the Company's periodic reports filed with the SEC.

With that said, the format of this call will be as follows. First, our Chief Executive Officer, Toni Schuh, will review our recent accomplishments and discuss the potential of our technology to change the standard of care for cancer treatment. Next, Matt Posard, our Chief Commercial Officer, will talk about our pilot adoption program and the planned build out of our commercialization efforts. Mark Erlander, our Chief Scientific Officer, will provide updates on both our R&D and clinical development programs; and finally, I'll summarize our financial results for the recent quarter. A question-and-answer session will follow the call. I'll now turn the call over to Dr. Toni Schuh, Trovagene's Chief Executive Officer.

Thank you, Steve. We are continuing to develop our Precision Cancer Monitoring platform to become a broadly-applicable, premier clinical solution to improve the management of cancer patients. During the third quarter, our primary operational focus has been the clinical experience program, launched earlier this year. Beyond the clear indication of strong physician interest, we focused during the quarter on execution and value parameters, evaluating the process of clinical sample collection and submission, operational readiness of our high-complexity CLIA laboratory here in San Diego, and importantly, the clinical utility recognized by physicians using our tests.

We are now compiling case reports from this program which form, together with clinical data and health economic assessments available, the foundation of an introductory dossier to support our reimbursement program with payers beginning this quarter. This will be a continuous effort which we expect will begin to bear fruit towards the latter part of next year. We are very pleased with the progress of our clinical experience program, and Matt Posard will provide more detail on this subject later in the call.

Let me take a moment and review a few of our important highlights in the fourth quarter. First, I mentioned our successful fund raise in July, with gross proceeds of approximately $43 million, and resulting cash position of $74 million at the end of the third quarter. With this funding the Company is appropriately-resourced to support our key strategic programs. These include clinical data generation and publication, technology and product development, and commercial launch activities.

Second, we entered into a technology transfer deal with Alberto Bardelli at the University of Torino, Italy, resulting in the formation of TRI, or the Trovagene Research Institute. Alberto is an internationally-recognized leader in the field of detection and characterization of circulating tumor DNA, and we are fortunate that he has agreed to join us to oversee the activities of TRI as its scientific director.

Why is TRI important to Trovagene? First, Dr. Bardelli's affiliation with us provides important validation of our platform and its game-changing potential. His research team strengthens our scientific capabilities and can enhance our platform, as we expand mutation coverage and configure new PCM platform products.

The technology that we licensed under the University of Torino agreement provides additional product opportunities and intellectual property. Finally, our strategy around TRI, its technologies, and its industry relationships, opens the door to new pharmaceutical and R&D partnerships.

To summarize, TRI provides us with a European presence, and the technology complement, and enables us to compete in the attractive translational clinical services and research market. This is expected to result in new revenue streams and increase the overall opportunity for our PCM platform.

This provides for a smooth transition to the third highlight, namely the clinical data we recently released in collaboration with Clovis Oncology. Here, we again demonstrate the very high clinical sensitivity of our asset platform, our ability to track tumor dynamics and response to therapy very fast, and the identification of driver mutations when the tissue biopsy is insufficient. With two first-in-class therapies designed to target emerging T790M mutations in lung cancer patients expected to enter the market early next year, we believe that our technology platform has potential to add significant value when tissue biopsies are unavailable to confirm T790-positive status.

In addition to detecting this resistance mutation, we believe this new important market in lung cancer therapy will provide an opportunity for us to demonstrate the clinical utility of monitoring treatment response in those patients whose mutational status has changed.

Going forward, we expect to release data from up to 10 clinical studies across several major cancer types, including lung, colorectal, melanoma, and pancreatic cancer. Results from these studies will be presented at major medical conferences throughout 2016, and in partnership with our collaborators, such as Clovis, M.D. Anderson, Memorial Sloan Kettering, US Oncology, City of Hope, UCSD and others. We will keep you informed about expansion of our clinical program in support of our ultimate goal, to deliver a new standard of care that incorporates non-invasive cancer monitoring. Clinical data presentations, manuscript publications, commercial progress, and reimbursement traction will all be coordinated to continue supporting a smart and controlled introduction of our Precision Cancer Monitoring solution into the oncology community in 2016. I'll now turn the call over to Matt Posard, our Chief Commercial Officer, to update you on our commercialization program.

Thanks, Toni, and hello, everyone. On our second quarter earnings call, I communicated that our pilot commercial launch was off to a strong start, with physicians signing up for a clinical experience program significantly ahead of expectations. I emphasized that this launch was a limited and highly-controlled rollout, intended to test the market and guide our decisions regarding the timing, investment, and tactical plans for the eventual scale-up of our commercial efforts. Today, I'll review the goals and provide details on the results of our pilot commercial program, which has now concluded.

While the pilot exposed areas where some adjustments are needed, it also validated that our products and services are ready to serve a large, unmet need for oncologists and their patients undergoing therapy. Given the experiences and data that we collected from this program, I am confident that we are now ready to expand our market development and selling activities. After I review the pilot program results, I will also give you an update on our plans for the build out of our commercial organization as we head into 2016.

Recall that five distinct milestones underlie our commercial strategy. To review, those milestones are: one, generate physician interest in our product; two, change physician behavior resulting in the submission of clinical samples; three, demonstrate operational readiness in delivering results and support to our customers; four, demonstrate clinical utility such that physicians see meaningful clinical benefits from our service; and five, obtain third-party reimbursement for our products. I indicated on our last call that our pilot launch program would address the first four of these milestones. I will now recap the results against the first four milestones and share our progress on the fifth milestone, regarding reimbursement.

In terms of clinical interest, we originally set an initial 60-day goal to sign up 30 physicians through the end of June with our four newly-hired market specialists. On day 12, we achieved our goal, and by day 60 we signed up 171 physicians to trial Trovagene's PCM platform in their practice. This represented a 500% increase over our initial objective. With better-than-expected clinical interest generated, we then focused on our field-based market specialists' time on converting those signups to actual urine sample submissions.

Given that shift, we expected physician signups would slow while the number of samples would begin to ramp. As we move into the next phase of our commercial rollout, we now have over 240 clinicians signed up to use our PCM platform. So far, we have seen up to two months from the time that physicians sign up for the program to the time that they submit their first sample. This is primarily due to patient scheduling and the ability of our sales team to schedule follow-up visits. Because of this, there are some physicians who have not yet sent in their first sample.

We are making adjustments to address these factors which we believe will accelerate the rate of physician conversions. Nevertheless, the physicians that are actively using our assays are providing us with a pipeline of information with respect to the real clinical need and the utility of our tests.

With regard to our second goal, converting physician interest into samples, we received orders for 295 tests through September, which marked the end of our pilot program. One of our four pilot territories alone generated 135 tests in the third quarter, validating our ability to drive conversion and giving us confidence to move to the next phase of the build out of our sales organization.

As for demonstrating operational readiness, we have exceeded goals for turnaround times and quality control. Through September, our CLIA laboratory is issuing reports to physicians within seven days on average, a significant accomplishment considering that our service commitment is a 14-day turnaround time. Our rate of received samples that do not meet our acceptance criteria is now at about 12% year-to-date, which is often due to sample volumes that are submitted below the amount specified for our tests. When this occurs, we send new sample collection kits to physicians so that they can obtain a new sample at the indicated volume. Another positive sign is the growing number of requests from physicians to ship our urine collection kit directly to patients' homes for self-collection.

Lastly, we are beginning to see the number of billable samples grow due to the number of physicians beginning to conclude their trial period. We are particularly pleased by a growing base of physicians graduating from our CEP program and converting over to routine clinical and billable samples. Keep in mind that most of the CEP physicians are still evaluating our service by monitoring their first patient, which could take up to three to four months. Despite this expected trial period, we've already seen roughly 20% of physicians convert from our CEP program to the submission of billable samples.

Today's number of billable samples, again from our small, controlled pilot program, is approaching 100. These initial billable samples are important, as they are a starting point for our team to actively negotiate with health insurance companies for premium reimbursement. As the clinical evidence and physician adoption grows, we will be strengthening the justification for payment to third-party payers, which we expect to be an ongoing effort. Numerous compelling clinical case studies are emerging among several physicians, expressing interest in becoming advocates for Trovagene's technology. In fact, we have also begun the process of building our inaugural speakers bureau and clinical advisory team.

I'll end my prepared remarks by detailing our plans to expand our commercial infrastructure as we leverage the learnings from our pilot program. The circulating tumor DNA liquid biopsy market is clearly still in its infancy, so the need to have a team deeply experienced in commercializing new technologies to the oncology community is critical and gaining acceptance. As such, we have determined that new key hires were critical as we build the commercial team. We've recently hired Brad Runge as our new VP of Sales, who brings many years of experience in commercializing new products in oncology from both the pharma and diagnostic industries. We also have hired senior professionals for such roles as national account sales, marketing communications, reimbursement and market access, and a new leader of our medical science liaison team.

Additionally we're actively recruiting to increase the number of market specialists in the field, with plans initially to expand coverage to six territories. We expect this new wave of hiring and training to be completed by the first quarter of 2016. Within the targeted territories, we will closely monitor our progress with respect at gaining reimbursement from third-party payers, and once the ratio of payments and tests processed meets certain levels, we will then continue to expand the number of field representatives and territories covered.

I'm encouraged by the progress we've made with our initial commercial efforts, and the work we have done so far to empower oncologists with real-time genomic information in their practice. I look forward to keeping you informed on future calls regarding our commercial progress. I will now turn the call over to Dr. Mark Erlander, to review our R&D and clinical study programs.

Thanks, Matt. The third quarter was a busy time for our R&D team and our clinical study programs. We launched our European subsidiary, the Trovagene Research Institute, and sponsored data presentations at six medical and scientific conferences. Regarding clinical data, we demonstrated various clinical applications of our Precision Cancer Monitoring platform. For example, at the World Conference on Lung Cancer, we showed the ability to closely monitor urinary EGFR mutation load in a patient who was withdrawn from treatment due to drug toxicity, and was then re-treated with a drug at a different dose. Urinary ctDNA revealed clear evidence of drug activity upon re-treatment, and predicted treatment response months in advance of imaging.

At the ESMO meeting in September, our study results demonstrated assessing baseline KRAS mutation levels in pancreatic cancer patients, and monitoring the mutation during treatment can be an important predictor of therapeutic response and overall survival. At the ECD Global Alliance Conference, we showed real-world data from our clinical laboratory, confirming that about 60% of patients with histiocytic disease have the BRAF mutation, and treatment of these patients with a BRAF inhibitor can provide a life-changing therapeutic option.

And just last week, clinical study data with our pharmaceutical collaborator, Clovis Oncology, was presented at the AACR-EORTC-NCI triple meeting. These data validated the high clinical sensitivity of our EGFR assay and the ability to identify patients with the T790M mutation when tissue biopsy missed the signal. In these results, we achieved clinical sensitivity of 93% when urine samples were submitted in the range of our stated acceptance criteria, and we expect to report data from this same study in the first quarter of 2016 with over 140 additional patients.

The results from these studies indicate the practical uses of our PCM platform in clinical testing. Several case studies that have arisen from our early commercial efforts are confirming these utilities in real-world settings. I will briefly describe two cases from physicians who have used our tests, representing examples that we are developing for use in our opinion leader development and peer-to-peer educational initiatives.

In the first case, repeated biopsies failed to confirm the T790M mutation in a lung cancer patient that was progressing on first line EGFR targeted therapy. Our urinary ctDNA assay detected the presence of T790M, which enabled the patient to enter a clinical trial and receive T790M inhibitor therapy. Since receiving treatment, the patient has shown good symptomatic and radiographic response. In another case, our ctDNA assay was used to establish baseline levels of the BRAF V600E mutation, and to quantitatively monitor mutational load for response to treatment with a BRAF inhibitor. Monitoring urinary ctDNA showed a significant reduction in BRAF V600E mutation load, and demonstrated response to therapy much earlier than subsequently observed response with radiographic imaging. These two cases demonstrate the clinical utility of our testing in two major areas. First, as an alternative to tissue biopsy for mutation detection, and secondly as a tool to monitor early and durable response to therapy. In both of the above cases, our PCM platform demonstrated impactful clinical benefits for the physicians and their patients.

In addition to case studies such as these and our clinical data presentations, we remain on track to submit three manuscripts for publication by year-end with additional submissions in the first half of 2016. We believe that publications of our study results in peer review journals will help support our ongoing commercial efforts to build physician demand and health insurance reimbursement for our Precision Cancer Monitoring platform.

I would now like to offer you some brief points on our recent formation of the Trovagene Research Institute. After announcing the establishment of this European subsidiary in September, we have quickly moved to integrate the technology, R&D capabilities, and people that make up TRI with our scientific and clinical teams in San Diego. Significant work is already under way, in which our teams are focusing on developing new products and technologies to complement our PCM platform. The primary near-term goals of TRI are first, to enable Trovagene to offer a full line of products and services for the detection and monitoring of disease in metastatic cancer patients; secondly, develop additional proprietary methods and intellectual property to support our technologies; and finally, to establish a clinical laboratory in Europe to process samples for clinical trials, translational research purposes, and eventually to serve the European diagnostic market.

We are all very excited to be working with Alberto Bardelli and his team from the University of Torino, and we plan to announce more about this collaboration and its potential product and service offerings in the coming quarters. Thank you for your attention. I now turn the call over to Steve Zaniboni, to provide details on the recently-reported quarter.

Thank you, Mark. Financial results for the three months ended September 30, 2015, are as follows. Trovagene reported a net loss of $2.7 million, or $0.23 per diluted share, as compared to a net loss of $5.4 million, or $0.28 per share, for the same period in 2014. Operating expenses were approximately $6.5 million, as compared to $4 million for the same period last year. The increase in operating expenses can be attributed to the expansion of our commercial team and marketing programs, as well as an increase in research and development costs incurred in connection with the validation of samples in our clinical collaborations.

A non-cash gain from the change in the fair value of derivative instruments was $4 million in the third quarter, as compared to a loss of $1 million for the same period in 2014. As our stock price changes, the accounting liability for certain derivative instruments changes as well, resulting in a non-cash change to our net earnings under generally-accepted accounting principle rules.

The net cash used from operations in the recent quarter was $5.1 million, which is within our current budget estimates. Diluted weighted average shares of common stock outstanding used to calculate per-share results increased to 29 million shares from 19 million shares in the prior-year period, due primarily to the common stock offerings of approximately 5.1 million shares and 4.6 million shares that were completed in February and July of 2015, respectively.

As of September 30, 2015, Trovagene had cash and cash equivalents of approximately $74 million, compared to $27 million on December 31, 2014. We believe that our current cash position is sufficient to fund operations into 2017.

In conclusion, Trovagene is well-positioned to leverage its investment in its intellectual property, clinical study and commercial programs, and its collaborations, to build a better clinical pathway for cancer monitoring. This concludes our prepared remarks. Operator, we are now ready for the question-and-answer session.

(Operator instructions) Our first question comes from Bryan Brokmeier of Cantor Fitzgerald.

Hi, good afternoon. Matt, I believe you indicated that you brought on a reimbursement expert. What are some of the key activities that this person needs to do when they get up and running?

Hi, Bryan. There's a couple of things we're going to prioritize this individual to do. The first, obviously, is to put together a strategy that we can roll out to private payers and start paving the way for national reimbursement. The person is also going to be putting together the justification packets, and over the course of the pilot program we've been building individual justification packets by patient. And so, we think we have enough for this individual now to start leveraging all of those learnings, and starting to put together more of a system-wide justification. The person is also going to be bringing on a team. We do intend to seek this reimbursement in-house as opposed to porting it out to some other company. And, beyond that, we'll probably give you updates. The person's only been in their seat for a few weeks now, so we'll give you more information on the next call.

Okay, and you also talked about the pilot program, some exposed areas in the pilot program, where you had changes that are needed. Can you elaborate a little bit on what some of those changes are, what some of the weaknesses of the pilot program were, that you're making changes to?

Sure. So, what we found was -- I think I talked about this back in August -- the receptivity among the physicians in terms of positive response was much, much higher than we originally had planned. But, what we -- I think we're a little bit more bullish on, going into the pilot than we were after the pilot, was whether those physicians would automatically follow up by sending us samples without a follow-up visit. And that didn't happen at the level that we had originally planned for. So, one of the adjustments we made was when we started going into physician offices for the first time in the later part of the pilot, we made more use of that time, and we made sure that we gained commitment from that physician in those visits rather than have to wait 30 to sometimes 90 days for a follow-up visit.

We also obviously, and this is probably not a surprise, we modified how we were positioning the product to make sure that per a specific profiled physician, we would get to the essence of what the product did that met their needs, and that varied based on whether they were a lung cancer-treating oncologist, or whether they were treating other types of cancers. And then, lastly, the profile of the sales professional, we found, in all cases didn't always meet up with the needs of the marketplace, and so we made some adjustments there, also.

Okay, thanks. And then, just lastly, do you have a sense for what the market is for T790M inhibitors, and how Trovagene can play a role in that market?

Well, I don't have exact numbers for you, Bryan, but I can tell you it's the most popular requested marker of the doctors that we're in front of, and that may actually be because we have the strongest data set supporting that product. We tend to think it's probably because it's the biggest buzz in terms of the new inhibitor drugs that are expected out next year. But, we obviously think it's a very large market for us, and it tends to be the product we lead with when we're in front of lung cancer doctors.

Okay, thank you very much.

Our next question comes from Dan Leonard of Leerink.

Thanks. First off, Toni or Mark, can you elaborate on your efforts to enter the translational research market and court more pharmaceutical companies?

Hey Dan, how are you doing? So, we have, I think, two key initiatives there, or see two angles there. First, the ability to detect response to treatment early, meaning the ability to provide a fast response marker, that is a novel tool for modern clinical trial designs. You read these days a lot about basket trials, about umbrella trials, where patients actually may not even receive standard of care, and rather go on targeted treatment right away. For these types of trials, it's from an ethical perspective, nearly mandatory that you assess non-responding patients fast. And we can, we have a very powerful tool for this in hand. The second aspect of the translation market is what is more traditional, what is already known, is that you look in patients that are under treatment with broader multi-gene panels, so that you have a better idea when they fail treatment, you have a better idea what the underlying resistance mechanisms were, and that's where Alberto Bardelli and TRI come to the play.

And is this something you expect to gain more traction on in a period of three months, six months, twelve months? Any quantification you could offer?

We believe that this is going to be, in 2016, a meaningful activity for us.

Okay. And then, a question for Mark. Mark, on the partnership in melanoma on immunotherapy, can you clarify -- is your testing intended to predict response to therapy, or monitor response to therapy, or some other indication in that disease state?

Hi. Yes, hi, Dan. Yes, it's actually just to monitor immunotherapy response. It's really using the circulating tumor DNA, in this case the BRAF V600E, as really a measurement of the amount of tumor mutational copies or load in the patient through the course of immunotherapy, and to really be able to demonstrate that this can be used as a clinical tool to determine when and -- when a patient is responding to immunotherapy, or if they are at all.

Okay, thanks, and my final question for Matt -- Matt, as you transition physicians from the pilot program to billable samples, how are your salespeople communicating potential patient responsibility when they're getting a billable -- submitting a billable test sample?

You mean with regards to patient privacy? Is that what you mean?

No, responsibility in terms of out-of-pocket costs, if their insurance doesn't cover it?

Oh, okay. I misunderstood. So, at this point, the policy of the Company is to pursue insurance from the patient, and depending on the patient's insurance program, in some cases that may be a copay. But, at this point, we're just following what the insurance policy directs us to do.

Okay, thank you.

Wait, I'll just add, we have -- you know, for patients that are in financial need, we have an assistance program that at this point we haven't had to trigger yet, but that policy is on our website and we make that known to the physicians.

Understood. Thanks.

Our next question comes from Paul Knight of Janney Montgomery Scott.

Hey guys, this is actually Bill March on behalf of Paul. How are you guys doing?

Hey Bill, how are you doing?

Good.

First question for Toni, if you guys could just maybe talk a little bit more about R&D development, and then how the formation of TRI and integrating Dr. Bardelli's work within the PCM platform fits in your development pipeline? Are you guys going to be focusing more on additional oncogene mutations, or maybe just expanding the current offering platform?

So, as you know, Trovagene has been from the beginning, highly-focused on providing maximum-sensitivity assays with good quantitative performance, for those mutations that are clinically well-understood, that are clinically-validated, and where actionable information can be provided. We believe that these mutations are different from let's say any mutation, because you must not miss them. Right? You must not miss a BRAF V600E mutation, if it is then there. You must not miss an EGFR 19 deletion if it is there, because it has such critical importance for the patient management. That has been the focus of Trovagene today.

Now, having said that, it is clear that as a patient progresses in their disease, eventually you will not observe the additional well-understood mutations any more that could allow you to develop a treatment plan going forward. You will eventually be reaching the end of the ladder, so to speak. And at that point in time, a find it assay, a multi-gene sequencing panel where you sacrifice analytical and clinical sensitivity on the one side for a broader focus on the other side that allows you to then, frankly, develop a more scientific rationale, what you could do with this patient at that late stage of disease. So, in order to complement that ability as well, we have entered into the partnership with Alberto, and where this then converges what you eventually want to do, you eventually want to be in a position to say, if I observe a mutation in a patient, no matter what mutation it is -- if it is -- it's an oncogenic mutation -- I want to be able to assay this specific mutation with elevated sensitivity and high quantitative capability, very fast. Meaning, I need to be able to bring that assay online very, very fast, on demand. That's where the convergence occurs. That's essentially our product roadmap.

Got it. Could you maybe just expand upon that in relation to maybe the lung cancer offering, and how you guys think your test is positioned in that market, especially, in light of the couple of tests coming online next year for T790M?

Yes. So, I mean, if you look at the paradigm of lung cancer disease, you walk through it, the patient is diagnosed, and then the first question is, is there an EGFR activating mutation? If that question is answered, if you find yes, there is one, then there will be no further question asked. The patient will receive anti-EGFR treatment, will be put on Tarceva. For this first question, we have extremely sensitive assays developed, and we have at least shown for the T790 mutation, there is no reason to believe that this is not the same case for the EGFR activating mutations shown, that we can add significant information to biopsy here, to tissue biopsy.

Now, the patient is treated with a conventional EGFR inhibitor, and requires continuous monitoring for the emergence of resistance. That's where our T790 assay comes in, and when you then see -- and that's true for both cases. When you decide to treat the patient with an EGFR inhibitor, you can use the EGFR activating mutation to very fast determine therapeutic benefit, and when you then see the T790 mutation emerge, you can use that very mutational assay also to determine very fast therapeutic benefit from the T790 inhibitor, and you can actually at that stage, even use the original activating mutation to confirm that you are not treating only a part of the cancer, that you're treating the original disease and the resistant disease that you're treating both. And, eventually, this patient will then unfortunately also under T790 inhibitor, progress, and that's where then a multi-gene solution would come to play. That's the paradigm.

Why do we believe we are very strongly-positioned in lung cancer? Well, from the description or explanation I gave you, it is already becoming very clear that this requires repeated testing, and to have a non-invasive test that you can perform at home is a significant compliance factor here. Second, it has become clear, I think, in my statements again and again, that this is all about sensitivity, about clinical sensitivity, and your clinical sensitivity improves with the size of your sample, and frankly, also the frequency of your sample. And again, particularly, there, the ability to track urinary-circulating tumor DNA provides you with a major advantage. And I think we have so far shown consistently, across a range of cancers and across a range of mutations, and across a range of treatment scenarios, that we achieve very, very high clinical sensitivity with our platform.

Great, and then just one for Matt. Matt, could you maybe talk about of the roughly 300 tests that you've received so far, a breakdown between maybe, rule-in, rule-out, monitor, daily testing, and then as you look at the percentage of clinicians who have converted to billable samples, is there any common theme amongst them?

Sure. So, I gave some ratios on this in August, and believe it or not, they continue to hold true, and that is about a third of those tests are what we would just call diagnostic, they just want to rule in or rule out, and the other 70% is monitoring. When we actually queried the people who ordered just diagnostic, it seemed as though at least half of them were ordering it just to get confidence in the test before they went on to monitoring, which they saw as more of a commitment, being once a month with a specific patient. So, when we actually collectively asked physicians how to characterize their interest, is it really just an easy test to be used in lieu of a tissue sample, almost all of them say no, actually, the interest for us is monitoring, particularly when these new therapies are being administered.

Great, thanks for the help, guys. Have a good evening.

You bet.

(Operator instructions) Our next question will come from Bill Quirk of Piper Jaffray.

Yes, thanks, good afternoon, everybody.

Hi, Bill.

Hi, Bill.

Hey, how are you doing?

So, first question is, on the 100 billable samples thus far, is that a kind of current number, or is that through the third quarter? How should we think about, I guess, that transition?

Bill, I'll take that, this is Matt. I think that number is through the end of October, and the 100 is a mix of physicians that went straight to the Trovagene technology with a billable sample, and bypassed the CEP program, and as I said in my remarks, about 20% of the CEP physicians have already converted over to provide us billable samples. And a few of them actually were the BRAF test that was commercialized last year. So, that's kind of the mix.

Okay, got it. And then, with respect to the comment about 12% of the samples coming in couldn't be run because they weren't submitting the appropriate volume, is there any way -- I'm assuming it's relatively straight forward to try to either modify the sample collection device, or put some sort of notification in there, to make sure that the patients are indeed submitting the appropriate volume?

Yes, you're -- that's a great question, and we're doing all those things. In some cases, it's just patient education. In other cases, it happens to be the time of the day that that patient was at the office, and the amount of urine that they were able to void at their appointment. And, in some cases believe it or not, the size of the current collection kit sends the signal to them that they don't have to fill it to the 100 ml line. And so, we're looking at ways to actually replace the kit with a larger kit, and the educational efforts that we've already deployed are resulting in more compliance on an ongoing basis with those clinician offices. So, we're looking at all those metrics.

And so, there isn't any specific requirement, Matt, that the patient should be coming in for first void urine? It could be throughout the day?

Currently, we're taking samples at any time in the day, but we are running behind-the-scenes studies to answer exactly that question. You can imagine, it's one of the top two questions we get, either from clinicians or from other scientists at conferences. When is the right time to collect that void, and does it actually change hour-to-hour? And so, we're doing those studies through Mark's group right now.

Bill, this is Toni. It's also, you know, it goes down to such trivial detail that when a patient has a physician's visit planned, and is not aware that they might have to give a urine sample, then they might choose to go to the bathroom before they come to the visit. But, if the patient is told that it would be desirable for them to be able to deliver a urine sample, then they change that behavior. It really goes down to this, to these merely trivial, but important, details.

Got it. Understood. Thanks a lot, guys. Appreciate it.

Next, we have a follow-up question from Bryan Brokmeier of Cantor Fitzgerald.

Hi, thanks for taking the follow-up. Mark, you indicated during your prepared remarks that you had one case study in which a patient had tested negative for T790, T790M in the tissue biopsy but then they tested positive in the Trovagene assay and were allowed to participate in the clinical trial for the T790 inhibitor. Do you have any sense for where tissue biopsy misses, or how often tissue biopsies miss the T790M mutation? And so, what opportunity -- how often there could be a benefit, and what sort of future benefit there is to patients from using Trovagene's assay?

Yes, I mean, that's a great question, and we are looking at that right now with our Clovis data set. It's not insignificant, let's put it this way. At this point, it really is in the range of 20%, somewhere in there, at least, and we will have a much more, better idea as we increase the number of patients in the study. But, even the data that we reported just a couple days ago in Boston at the triple meeting, this is really an important point that the circulating tumor DNA really, in our urine-based testing that we demonstrated, that you really are able to pick up the mutations where a tissue biopsy just clearly is insufficient.

Or, just to make this clear, Bryan, that this is clearly stated, by using a circulating tumor DNA test for urinary circulating tumor DNA, you could add an additional 20% of T790-positive patients.

Right. Yes.

Okay, guys, great. Thanks a lot.

This concludes our question and answer session. I would like to turn the conference back over to Dr. Antonius Schuh for any closing remarks.

Well, thank you, everybody, for your interest in Trovagene, and as we described here, continuing to make good progress with our Precision Cancer Monitoring technology. Watch us, and you'll hear more good things from us. Have a good day.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.