Renalytix Plc - ADR Stock

Good afternoon, and welcome to the Renalytix Plc Investor Presentation. [Operator Instructions] Before we begin, I would like to submit the following poll. I would now like to hand you over to CEO, James McCullough. Good afternoon.

Good morning and good afternoon. Thank you all for joining us. I'm joined by Renalytix Chief Technology Officer, Fergus Fleming, the Chief [indiscernible]; and as everyone knows, our Chairman, Julian Baines. So we'll all be here to answer questions after the presentation.

Today's review is going to be focused on three critical issues: our strategic pivot to partnered national distribution with Quest Diagnostics, our balance sheet removal -- excuse me, our balance sheet renewal with new equity and our debt balance to 0 and future catalysts that we expect to come up. Renalytix in brief, for those of you that don't know, we were founded in 2018 out of research from Joslin Diabetes Center in Boston and Mount Sinai Icahn School of Medicine in New York City.

We are in the business of developing risk assessment tools. This is prognosis, and it's critical in large chronic disease areas to understand specifically where your disease is going in large population diseases like kidney and cardiovascular disease understanding that equation early so that your physician and you can get on top of it, and you can change the course of those diseases.

Our first product, our lead product is kidneyIntelX.dkd, which is many years in development. It is an advanced algorithmic test, which takes both blood proteins and also clinical data out of a patient's record into an algorithmic calculation that provides early prognosis for chronic kidney disease and specifically what's going to happen to it with a great deal of accuracy, and we'll be talking about that extensively.

KidneyIntelX, we've spent a long time designing and understanding how an advanced algorithmic test can be reported very simply and powerfully to physicians and to patients to get maximum result. This is a very large population that we're targeting globally. In the United States, we estimate there are between 15 and 20 million patients that have both diabetes and kidney disease who are eligible for KidneyIntelX prognosis or early risk scoring.

And what happens is patients give a one blood draw tube, which ends up in our laboratory for processing. We also access specific clinical information. All of this goes into, again, the advanced algorithm and produces a very simple report where we score patients low, moderate or high. And we're scoring low, moderate and high for kidney disease progression. And this becomes a critical issue, especially early on in the disease state, where if you understand that you are at risk and your disease is moving, there are a lot of things that you can do from new therapies to specialist referral.

We spent the better part of 7 years getting through a whole sequence of critical milestones for a broad-scale diagnostic standard adoption, including a 4-year process with the Food and Drug Administration, which required a significant amount of clinical data to be generated and a lot of iteration because we were breaking new ground here with this advanced algorithmic testing in this particular space. We spent several years then presenting the case to Medicare, which is the largest insurance company in the United States. It's the government-run insurance company that covers just over 70 million patients.

Everybody is eligible in the U.S. for Medicare over the age of 65, which is where the majority of our diabetic kidney disease target patients reside. And we were able to secure a Medicare reimbursement price of $950 per reportable result, which we were very pleased with. And that's in large part because of the clinical benefit and the health economics benefit, which understanding progression of kidney disease early provides.

And we are also very pleased to be included in the international clinical practice guidelines known as KDIGO, which talk about the use of KidneyIntelX in the space. So we have FDA, Medicare and guidelines. All of these are critical very difficult pathways to get through. We're now complete, and we are commercial in the United States, and we have now processed just over 15,000 clinical reports for patients using KidneyIntelX.

And the KidneyIntelX risk score is not trivial. This is the basis for the entire change that we're looking to introduce. If you score low by KidneyIntelX, your chances of progressing with your kidney disease and diabetes are very small. In fact, in this particular data set, which was the FDA validation data set, we saw no patients that progressed with kidney disease in this particular presentation data set to FDA.

Conversely, if you are high risk by KidneyIntelX, you have an 18-fold greater chance of experiencing significant kidney function decline, which can lead to kidney failure, can lead to other horrible problems that come up. So this is not a trivial differentiation. And just to put one more point on it, if you do score high by KidneyIntelX, you have a greater than 2/3 chance of progressing towards significant kidney function decline.

So this equation, especially at the front end of the disease where we can get on top of this early at primary care, generalist physicians where patients are seen at early stages of disease can be very powerful in terms of bending the curve of the consequence of this disease. And there are new therapies and treatment strategies, which are available if you understand this baseline equation.

And the cost of not understanding this baseline equation of disease progression early is quite staggering. And this is one of the reasons we got into this whole disease space in 2018. The numbers are breathtaking. In the U.S., 130,000 people went on dialysis, which is the treatment for kidney failure in 2025. The cost for dialysis in the U.S. can range anywhere from $60,000 to $70,000 to well over $100,000 annually, staggering amount for a patient population that unfortunately continues to grow.

And this is reflected in the social contract. So with Medicare, again, the largest insurer in the United States, close to 25% of the annual Medicare budget is spent in chronic kidney disease, which includes dialysis and end-stage disease. That comes out to about $141 billion a year. So there's a better way to do this. We believe KidneyIntelX is part of that equation. And this is a global equation.

For those in the U.K., we are looking at an estimated disease cost annually for a kidney disease, which is exceeding $10.9 billion. So not a trivial equation, and we need to address this, so this will continue to become an unsustainable issue. And when we take a look at what KidneyIntelX actually does, we now have the luxury of having looked at KidneyIntelX across thousands of patients in many different clinical settings, including large hospital systems, small physician practices in different types of patient phenotypes and the results are impressive.

When you introduce early prognosis, advanced prognosis, KidneyIntelX, when you introduce this early risk assessment into the clinical environment, we see impacts on blood sugar. We see blood sugar improving. We see blood pressure improvement. We see a reduction in urine protein, and I'm going to get to this in a minute, but the simple test for kidney disease diagnosis is called uACR, Urine-to-Albumin And Creatinine Ratio. And we see an impact on the protein that's measured by uACR when we introduce KidneyIntelX into the clinic.

And then just recently, we have published a very large study in 2,700 patients. It's a multicenter, multiyear study in a high-ranking journal, Diabetes, Obesity and Metabolism that came out in June of 2026. And it went right to the outcomes issue where we're seeing improvement in kidney function with the introduction of KidneyIntelX and follow-on treatment. And we also see patients moving into a lower risk category, which is wonderful.

So we know when we put KidneyIntelX into the clinical environment, it's highly actionable. Physicians understand it, patients understand it, and now there are a whole sequence of things we can do now that we've enabled a very accurate, precise risk assessment early on in the disease process. That's advanced prognosis. So the question now becomes, how does this become a national standard and also a global standard.

And this is where Quest Diagnostics in our agreement, which just been announced in September comes in. This is an extraordinary inflection point for Renalytix. It represents the ability to get out the word and access nationally, and it does it with a leading player in the industry and the best brand name for clinical diagnostic testing. And just so everybody understands Quest Diagnostics is a very large organization. They generated approximately $11 billion in revenue in 2025. They service about 1/3 of American adults and they get out to about half of all U.S. physicians.

So it doesn't get bigger than this. And we're just delighted that we are able to put ourselves in a position to collaborate at this scale. And just to put a point on this, this is one agreement. It is comprehensive national reach. It solves a sequence of problems for a small diagnostic company with a very innovative fully commercial technology, KidneyIntelX. And the scale is for us, just staggering.

So again, KidneyIntelX in the first quarter likely of 2027 will be uploaded and available to 50% of all U.S. physicians. That's roughly 500,000 U.S. physicians and half of all U.S. hospitals. That's about 3,000 hospitals nationally. Importantly, patients will also be able to give that 1 tube blood draw, which we require. That's what makes KidneyIntelX precision medicine is it's your blood and your disease. They will now be able to access over 2,000 patient service centers to have their blood drawn. And these service centers are located all across the U.S. in convenient locations.

I have been to many Quest Diagnostics service centers. This is a standard part of our general care in the United States, often where we go for annual blood draws as part of our annual physical. And one thing Quest has done brilliantly is they have also created this national infrastructure of 6,000 in-office technicians to do blood draws phlebotomists throughout the country. So one of the critical issues that we have faced, obviously, is getting access to the blood and the logistics. But the #1 issue that the Quest infrastructure deal eliminates for us is patient identification.

And we go back to the humble uACR test. This is the simple urine test, which measures albumin and creatinine and is the simple test for diagnosis of kidney disease. And for many, many decades, we have been woefully underutilizing this very powerful and simple test. It's not expensive. It's only a few dollars. But that has all begun to change over the last couple of years and most dramatically over the last 2 years.

And so the uACR test is critical. It is one of the values that we use. There are 6 values we use in the KidneyIntelX algorithmic calculation for risk. uACR is one of the critical lead-ins for KidneyIntelX. uACR is the diagnosis which occurs and that will require a prognosis. In other words, now that you have kidney disease, what does it mean? Is it advancing? Is it staying still? Should we be treating it now? Should we be treating it aggressively?

These are all questions that KidneyIntelX prognosis, KidneyIntelX risk assessment provides to the physician in that very simple low, intermediate, high, that stoplight format once somebody tests positive for kidney disease and diabetes. The other thing that Quest Diagnostics provide us is seamless ordering and sample acquisition. This has been one of our major struggles over the last couple of years. We have a lot of experience in trying to get patient blood samples and transporting them into the laboratory.

It's very costly for us with Quest. All of that gets worked out very simply. It's easy for the patient. They can walk into any of the blood draw service centers or that Quest offers or they can interact with one of the phlebotomists in the office. It's easy for the doctor. So KidneyIntelX can now be ordered through the Quest National System, the electronic requisition system, which is familiar to the physician, especially to the primary care physician. It's widely used for everything from cholesterol tests to PSA tests.

So the doctor can now order directly from the system to which they are accustomed and using on a consistent basis. And of course, it's very easy comparatively now for Renalytix. It makes it simple for us now to receive samples directly to our laboratory, and we will remain the laboratory that runs the test. And we will also remain the laboratory that bills the test to insurance and recognizes that top line revenue. I'll get into that in a minute.

So again, the Quest infrastructure puts us in a totally different position in terms of understanding, where is the patient who has kidney disease. And then once we know that, from a sample ordering, a blood sample -- from a KidneyIntelX ordering, a blood sample transport and acquisition process, it becomes seamless. Easy, easy. That's the key.

And the effect is immediate. We do -- this flows into the Renalytix business model. We will recognize significant operating cost savings, margin improvements here and, of course, near and dear to everybody's heart around the issue of dilution and capital need, we are now putting ourselves in a position where we have a relatively limited need for additional capital because we're not going to have to go out and build a very expensive direct-to-physician sales infrastructure, which includes a national sales force, customer service, et cetera.

So overnight, in effect, we get national distribution. We deal with the logistics and sample acquisition issue, and we also have a very strong patient identification component in one agreement. So significant impact for us and a major strategic pivot. Timing is everything, and we could not have done this agreement a few years ago. But now we're in a kidney groundswell.

And this is a function of a number of factors, one of which is the cost. We cannot afford as a society anymore to ignore chronic kidney disease progression, and we cannot afford to ignore the relationship between kidney function and cardiovascular and metabolic health. These things are all tied together.

Renalytix and KidneyIntelX is a cornerstone into the chronic kidney disease, cardiometabolic space. It all comes together. And we're now seeing that a lot of resources are being invested into the kidney space from different directions, starting with large pharma who see a very large market and a big need and new drugs have recently come on to the market.

And what we've seen now is a rapidly expanding diagnosis testing base. So back to that uACR, right, that simple urine test, urine testing is now growing precipitously. And that is one of the key lead-ins, which will pave the road for KidneyIntelX prognostic testing. And I just about fell off my chair in 2026 when I was watching the U.S. Super Bowl and on came this particular advertisement featuring uACR.

And Alex, if you could load this video because I think this really hits it on the head and gives a visceral inspection of what's going on for kidney disease diagnosis.

[Presentation]

So there we have a kidney disease is now sexy. It is two women flying in a helicopter discussing the need for kidney disease diagnosis and again, this should be watched across the country around the world because if you do understand that you have kidney disease, especially kidney disease and type 2 diabetes, which many, many people have into the millions, there's a lot you can do about it. And it's critically important you understand what your risk is, what your prognosis is, that's KidneyIntelX, and it's critically important you understand it early because an ounce of prevention is worth a pound of cure.

We are with KidneyIntelX enabling preventative medicine across this huge population, and we are now riding the wave of what is an expanded uACR diagnosis, new drug therapies and a focus on governmental cost control in an unsustainable space. So -- and the other thing is that kidney disease is also now linking into the American and the global heart disease population. So last year, the American Heart Association now started recommending kidney disease testing to its cardiologists. So we are a cornerstone.

We are the first to offer precision medicine testing for kidney disease prognosis, and we are the only FDA-approved Medicare reimbursed tool to be able to do that. And through Quest, Quest is running millions of uACR tests and growing and obviously riding off the same way that we are with large pharma. This provides us with a direct key linkage for patients who are in need of KidneyIntelX advanced prognosis.

So it's coming full circle. The road to Quest supported orders is complicated. Quest is a very comprehensive, large, complicated system. We're very humble when we approach this, and we want to get it right, and we want to get it right the first time. So first of all, it's important for investors to understand that there was a significant amount of diligence, which was conducted by Quest into Renalytix and KidneyIntelX. We started discussions in earnest in January towards an agreement.

We completed it in record time. 9 months is actually quite quick. And during that period, there was comprehensive look at data, intellectual property, things like voice of customer, understanding what do physicians think of KidneyIntelX, physicians using KidneyIntelX or not using KidneyIntelX, what would it mean if it were available on a broad-scale basis.

And fortunately, the conclusion was that this was worthy of putting into the Quest leading brand name on a national basis, and we were able to announce our infrastructure agreement in September. Since then, we have been engaging in a very direct and comprehensive work stream to get KidneyIntelX uploaded into the large Quest and complicated Quest system.

Team members have been assigned and are communicating in sales, IT, product management. This is not a trivial implementation, again, but we're going to get it right, and we're going to do it well. And we will keep investors informed as we move through stage gates. Ultimately, we want to have a launch a national launch in Q1 of 2027. So that will amount to announcement out to Quest physician ordering base across the U.S. and the ability of patients to give blood at all of the different locations and physicians to order directly through the Quest system.

That, again, is going to be a significant launch, especially for us. And we're targeting 25,000 KidneyIntelX tests in 2027, much more down the road, but this is a very significant launch and a significant start and should have a major impact on revenue inflection inside of Renalytix. In order to handle this type of volume, we've started reconfiguring our laboratory in New York City for rapid upscale and processing. Fortunately, we have people who have done this before. I myself have done this before.

So there are a few things that are easy low-hanging fruit for us to be able to get to that 200,000 tests per year capacity in 2028. One of those things is we've moved to a new laboratory location, which has over 3x the capacity of our other laboratory location in New York on Canal Street. We are now in Long Island City. And it's wonderful. We have 3x the capacity for 1/3 of the cost. So it's a great place for us to be.

We are introducing an element of automation, which is critical to continue our outstanding quality control. We're very proud of our quality control in our laboratory. The automation will help us maintain that as we start to scale up. And good news for all of us is this is not going to cost a lot of money to do this. So there are a few very direct specific steps that we can take to get to this level of high-volume quality testing as we move through volume growth. We're going to try to pair any increase in overhead, limited increase in overhead directly with volume.

So this is a scalable variable plan, which puts us in a position to be able to support a national rollout with a leading player in the business. And as part of that, obviously, concurrent with the Quest deal, we're very fortunate to have strong institutional investor support from our United Kingdom investors. Thank you, who have been there with us the entire journey and also to some of our new U.S. institutional investors who've seen this opportunity and have stepped into the game.

So we were fortunate to be able to complete a GBP 10.5 million new equity offering at a 40% plus premium to the trading price, very strong institutional round everyone is in for the long term. And at the same time, we were able to finally clean up the convertible debt that we had in the company, so we're now at 0.

So we had a changeover in the balance sheet of over GBP 14 million. We're in a very strong position. And we should be able to operate well through Quest implementation and into quarterly revenue growth over the next year plus. So very pleased with how this all came together. Not easy to close a major deal and a balance sheet build at the same time.

And then finally, there's more that we're focused on. I'd like to say we have where I did before, where we had three things we had to do, reimbursement, reimbursement, reimbursement. Today, we have a new three things to do, which is Quest Diagnostics, Quest Diagnostics and Quest Diagnostics. We have to support Quest. We have to make sure that we do it right.

But at the same time, there are ongoing discussions with multiple large diagnostic manufacturers to bring KidneyIntelX to laboratories around the world, kidney disease, chronic disease, cardiovascular and metabolic disease related is not a U.S. issue. It is a global issue. And we believe there are short-term opportunities to be able to get KidneyIntelX ex-U.S. into other markets that could add a significant amount of value to the table. And as part of that, we are moving towards our final stage with CE marking that we've been working on for quite a while. We can answer questions about that.

Also importantly, and I'm very proud of this, KidneyIntelX is now advancing in a large pharma clinical trial. This is a Phase II trial, and there are lots of other pharma activity as well. KidneyIntelX is now being looked at as a criterion for both patient inclusion, which makes a drug clinical trial much more efficient because you can get right to the intermediate and high-risk patients. That cuts the number of enrollees into your pharma trial significantly.

And KidneyIntelX, because it is an FDA-approved precision medicine biomarker-driven prognostic test, very accurate, is being used as an outcomes endpoint in the large pharma trial. We'll have more news for that coming up, hopefully, in the short term. But that, obviously, if this comes to fruition, we will have a material impact on our 2027 services revenue line.

And then finally, we are students of the capital markets in the U.S. and the U.K. There will be opportunities for us to bring on U.S. and U.K. analyst coverage in the short term. We are speaking to both sides of the Atlantic analysts that are very curious about the Quest Diagnostics arrangement. And the model that we're using now, which I believe is the future model for how you get an advanced diagnostic tool out to market. It's got to be through partnering.

And we're also going to be looking at enhancing trading liquidity in the U.S. and on the OTC markets. And of course, we're always eyeing at the appropriate time, a potential relist on the U.S. Nasdaq, which would help both with liquidity analyst coverage and capitalization. So I will end right there, and we can move into a Q&A session. Alex, I'll hand it over to you for a minute.

Great James, thank you very much indeed for your presentation. I will turn on your cameras now for the Q&A session. [Operator Instructions] I would like to remind you that recording of this presentation along with the copy of these slides is published and can be accessed via investment dashboard. Before if I may hand back to you to Chair the Q&A, and I'll pick up at the end. Thank you.

Thank you very much. And just a reminder to everyone that you have, obviously, James McCullough, who's just been speaking, but also with us today, Fergus Fleming, the Chief Technology Officer; Joel Jung, Interim Chief Financial Officer; and Julian Baines, Chairman.

There's a few questions that have come in, so I'll just fire away. I think probably the one that crops up straight away is could we call this collaboration agreement with Quest, the point of inflection for the company? Or are we not quite there yet?

No, I think we are there and I've been talking to Quest for many years and to pull off a collaboration like this is difficult. It takes a lot of time and intensity on both sides of the equation. I'm very fortunate that we have very strong...

Oh, I think we lost things back.

Yes. Just he is just coming through now, let me just reconnect to him. James, just press control of your microphone, it will be just perfect.

I'm back on.

That's correct. You're back on, yes.

Okay. I'm sorry about that. So I think that we have had a tremendous ability to move this agreement forward and I think that this agreement is very much at an inflection point and this one is ours to lose. It's clear the market is there, it's clear that the clinicians are there, it's clear that both parties recognize the market opportunity and have the resources to be able to apply and we're going to make sure we get this one right.

James, one of the questions, I think we've addressed it here, but a question that came in before you gave the presentation today was about putting the flesh and bones on the collaboration agreement with Quest. I think we've covered that in the presentation today.

The second question that we've had in advance was what is your view on the target for the next 12 months? I assume this is the 2027 target of 25,000 tests. What does it mean for Renalytix going forward?

Yes. And I'll have Joel step in and talk about this. We've set a target of 25,000 tests, which I think is realistic. Could it be more? Yes. Could it be less? Yes. But that's a very solid target given the market that we understand and the patients that are available to us. Joel, do you want to add to that?

Sure. So it is a target, it's a planning number. It's a number that we're using to size the lab. It's a number that we're using with Quest. It is a new test that we're rolling out through the Quest network, and we don't know exactly what the ramp will look like and so we set -- with Quest, we sat down and established a planning target. It's not a minimum, it's not a maximum. It's just that, a planning target. So we'll be providing additional information as we get closer to launch around how things are going and post launch, we'll be updating the market periodically with some of those ramp numbers.

I think back to the other question, it's a similar one from another shareholder in terms of, this is about delivery, I guess, executing this on a scale to win, thanks, James, how confident would you be as executives in terms of seeing this as a positive event for the future of the company and why?

So I think it's important to look at this in context, implementing at this scale is never easy and I think you have to approach it with a large degree of humility and you have to make sure that you have the resources at the table and a very strong iterative dialogue, not only internally with the management and the operators, but also with your partner that's at the table to make sure that you eliminate as many unknown and not unknowns as you can and we are approaching it very much in that way.

It's also important to understand that we have an enormous amount of know-how, which goes into this. So we have been out for a couple of years attempting to sell KidneyIntelX. It's not easy as a tiny company that often is struggling for capital with a limited sales force, but we have learned an enormous amount about how physicians look at risk in this space and not just physicians at the specialty level, but also physicians at a primary care level.

We've looked at how physicians order in many different scenarios. So in large hospital systems like Mount Sinai Health System and in smaller individual practices that may have high volumes of patients and physicians are doing uACR diagnostic testing and saying, what do I do next? So we've been able to look at this very complex mosaic of the clinical market space and understand how does our technology interface with that? How are the results used in practice? How are things ordered? How are blood samples transported?

What is the patient response to this whole thing? And so we've accumulated an enormous amount of knowledge about how to place early-stage risk assessment, early-stage prognosis at this critical juncture where physicians are making critical decisions. Should I put this patient on a drug? Should I refer this patient? What should I do with this patient? And remember, all of these patients, this is tens of millions of patients here. They all have existing disease. These are not screened patients. These are patients with kidney disease and diabetes. And so this is complex to understand this, it's complex to introduce a new paradigm, if you will.

And so we now have the knowledge base to do that. And our function right now is to translate this as cleanly, clearly and succinctly into this massive distribution system, this very sophisticated distribution system with the #1 brand name in the business, out to the national audience. So we understand what our mission is, we're not naive to that, we're not naive to the difficulties and I think early on, what's happening now is we're having a very robust dialogue with our counterparts at Quest at multiple levels. We've had tremendous support from them. I believe that we are becoming a trusted partner at the table, even though we are a small company, that's very important to me.

So the informal organization here, which is really going to make sure that the dialogue is smooth and comprehensive, and we can avoid some of the pitfalls, that is working beautifully. So we're off to a great start. We're already into the implementation. So again, I think this is running beautifully at the moment. There will be hurdles coming up, especially as we move into the late-stage implementation components, and we start to move into defining what the date is for the direct national launch. But we're going to be humble about this, and we're going to make sure that we address all of these problems as they come up.

We certainly have the capability internally. This is very important. Howard Doran, who is our President and Head of Commercial, has launched a very successful assay in cervical cancer testing, which grew to hundreds of millions of dollars in revenue with Quest Diagnostics. Fergus Fleming has integrated with some of the toughest of the tough. These are all the hard yards we've earned over the last couple of years. There's an embedded knowledge here that we're going to put to place, and we're going to get this one right.

Thanks, James. There's a question here regarding whether there are any initial works required to handle the anticipated increase in testing, including time scales and cost involved. I appreciate you probably went through this on Slide 13, but is there anything else that you need to cover in terms of configuring your lab for rapid upscale?

No. I just want to emphasize we're going to be very cash cost conscious and we're going to make sure that when we apply -- this is another thing we've learned, right, over the years. It's been hard yards here, especially in these markets for a small diagnostic company. So we have learned something. We're not going to add overhead unless it's absolutely necessary. We're not going to add overhead until we can specifically see the ROI on that overhead.

So at the moment, it is cost control. We are going to do specific things which are critical. For example, I mentioned adding that first level of automation, that's essential for maintaining quality as we scale up through tens of thousands of tests. We are going to take a look at personnel, but the beautiful thing is the company in its current configuration and current cost configuration is more than ample to get us into the Quest launch. There are a few things we need to add. But again, we're going to work as hard as we can to make increased spend associated with revenue ramp, right? That's one of the lessons we've learned over the last couple of years. Don't get ahead of your skis.

We are the dog that caught the bumper of the truck with this massive elegant system with Quest, the leading clinical lab, I believe, in the world for clinical testing, we're going to be cool here and we're going to make sure when we have to spend, we will. But we're going to make sure that we are cost conscious, and we're going to variably cost this against the revenue growth, we're going to do it right. That's how you -- that's how we're going to be successful in this deployment.

You've mentioned cost conscious. One question from an investor was, when do you think you'll be able to give guidance on the reduced ongoing cost base once distribution is up and running by Quest?

Relatively soon. We'll get visibility going into the second and the third quarters, and we will provide the market with appropriate updates. I think we put a target on the table. Again, it's a target, this is not a forecast, but that should give investors some significant confidence that we're not talking about an incremental improvement here. We're really talking about a major step change, as it should be with a player like Quest. But we'll inform the market at the appropriate time with forecast and again, I never want to get ahead of my skis on the forecast, the fundamentals are very much going to take care of themselves here. Joel, I don't know if you want to add to that.

We -- when we get closer to the launch and start to see how the volume comes in, then we'll be able to provide some updates to the market.

Might, if I just keep on the theme of costs and burn rate, the questions that have come through. One was, are you able to provide a monthly cash burn rate for investors?

I'll give that one to you, Joel.

Yes, our monthly cash burn has come down substantially from what it was over the course of the last year or 2. I think we're -- depends on what sort of activities are happening, I guess, but somewhere in the neighborhood of $600,000 to $700,000 a month is about the current burn.

I guess linked to this is a couple of questions we've had from investors regarding any needs to raise funds. Do you think there's a reason to raise funds again later in 2027 or '28? Are there any circumstances where you think you might need to raise funds? Another question from a shareholder.

So we'll remain opportunistic. At the moment, we don't need to raise funds. I want to focus on implementation, and we need to focus on implementation, if we get that right, the landscape changes dramatically in 2027. Raising funds, I don't mean to be evasive here, but it's a function of a number of variables, including market conditions.

And eventually, yes, we will raise some additional capital. How much, when and where? Let's get into Quest and let's roll. We're in a great position right now. We've got a good balance sheet, plenty of runway, costs are under control and we've got this massive wide open market with a leading player. And then we have additional catalysts between pharma, international distribution. We will look at all of the options as we get well underway into 2027. Right now, we have one job, head down implementation.

There's a theme of questions here on what margins might be available to Renalytix as part of the Quest deal. I'm fully aware that some of the numbers you just will not be in a position to talk about. But let me ask the question so that you know what investors are asking. Are you able to talk about -- there's a request for the estimated percentage margin from the deal with Quest per test and per unit. Other Quest investors have asked from the USD 950 reimbursement, how much is paid to Quest? What would the EBITDA margin be at 200,000? And what's the marginal contribution post breakeven? Quite a few questions there on those specifics. Is that confidential? Or are you able to give some guidance?

Yes and I apologize in advance. A lot of this is confidential. It will be revealed as we begin to roll out revenue. What I can tell you is the configuration of this deal, I think, is ideal for us and ideal for Quest Diagnostics. We remain an independent laboratory testing entity, we continue to bill for KidneyIntelX.

So for example, at Medicare, for every KidneyIntelX is run for the foreseeable future, Renalytix will continue to bill at the $950 rate. I believe we get paid on that from Medicare roughly within 21 days. It's fantastic and other insurance companies as we continue to build out that equation, we will continue to build.

So we recognize top line revenue. It will be much less expensive for us to generate sample acquisition now that we're relying on the expensive Quest infrastructure. It is chalk and cheese in terms of getting a patient blood sample into our laboratory versus what we do today and that's just a function of scale. There's no way to get around it. For example, we pay federal express charges, which I'm sure are vastly different than what Quest pays. We will not have to send out our own phlebotomists, it's all fixed infrastructure in place.

So the marginal contribution for running our existing business is going to improve materially. On the Quest side, having us operate as an independent laboratory provides a lot of flexibility. It also accelerates the ability for us together to come out and offer the test nationally, because we can use our existing laboratory in our existing system. So it's the best of both worlds for both.

I happen to think it represents a superb model for the future of how you launch innovative testing on a national scale. Certainly, the old days when you could go to the capital markets to finance, what we intended to do originally with KidneyIntelX 7 years ago don't exist anymore, those days are gone. So you're going to have to partner and we can do things that Quest can't. We can operate at a speed as a small company, that Quest can operate.

And Quest, obviously, we can never do what Quest Diagnostics does, and we don't have the brand name or the connectivity, et cetera. So this is very much an accretive collaboration and that's going to flow through to the entire Renalytix business model, better margins, higher capacities, access across physicians and patients.

And I apologize, I wish I could get into more details right now, but those will be forthcoming as we move into the national rollout in Q1. We'll be able to provide a lot more color on that, but I want to be respectful of -- very much respectful of the collaboration and what we can disclose.

Thinking about the national rollout, James, a question about would you look at other partners to collaborate to cover the other 50% of physicians and hospitals that Quest don't cover? How would you do that? How would you target those physicians that are outside of Quest?

I like Quest. I think Quest can handle just about anything that comes its way and as a developing trusted partner with Quest, I think that they can service a considerable amount of this market. We retain the ability to offer KidneyIntelX testing independently. That's a feature of the agreement. So anyone can come to us and order a KidneyIntelX test. There may be circumstances where that's appropriate, but again, everybody wants to get into the Quest menu to be able to do that is extraordinary, and I want to make sure that, that is our 100% focus, because that's where we're going to build the -- that's where we're really going to make the grade here over the next 3 years.

Just shifting over the horizon to beyond the U.S. Do you have any plans for other regions or countries, Europe, U.K., Canada, Australia? Another contributor asked, what's the strategy for international sales with or without helicopters?

With or without helicopters. No, very much kidney disease, cardiovascular disease, metabolic disease, this whole area is converging. It is a problem everywhere. Nobody escapes the 3 horsemen of the apocalypse here, cardio, kidney metabolic, and it's all related. If the filter, the kidney starts to break down, of course, you're going to have trouble with the plumbing and the pipes downstream.

So this is all coming together. It's being recognized by clinical societies across the world in different countries. The only way we get to it with efficiency, and we're now learning what we're very good at. What we're not good at? The only way we get to this is through partnerships. So I am speaking now to multiple large diagnostic manufacturing companies, who would like to look at taking KidneyIntelX and put it on their global platforms.

To me, that's a no-brainer play, because then we will be able to take the wet lab component, if you will. That's the blood tube component and any laboratory around the world can then process that one blood draw for the proteins, we're looking for. The rest will be accomplished electronically through the cloud, et cetera, and there are certain arrangements. But to me and especially now that Quest is rolling KidneyIntelX out nationally, suddenly, I'm looking a lot better, and there's a lot more validation from a commercial standpoint behind me.

This is an easy play for a large instrument manufacturer. Now getting an agreement with one of these huge organizations is obviously going to take time, but I've also developed a specialty at being able to work my way through these complex processes with these large organizations, and I'm doing that right now again. But I think national -- international distribution is certainly on the docket. I'd like to get that done sooner rather than later, because it's just a rising tide floats all boats and it concentrates everybody around KidneyIntelX. And then the subsequent products we're looking at. So we are going to add a cardiovascular component, risk assessment component to KidneyIntelX. So we're really cornerstoning in this kidney-cardiovascular-metabolic space, and that should be a global pursuit, not just a national pursuit.

So as well as adding those, is there anything that actually need to be upgraded to the test given that you maybe have been capitally constrained with capital in terms of investment in KidneyIntelX? Or is that's fit for purpose currently?

Again, I want to stay focus. Focus is the name of the mission, but I'll pass that to you, Fergus, if you just want to talk a little bit about some of the things that we're taking a look at.

Yes. James. Am I on mute?

No, we can hear you.

I think the key thing here is preparing some groundwork, like speaking to large-scale diagnostic manufacturers is a critical component to allowing this test to be ubiquitously available, but also introducing the concept of precision medicine in CKM and particularly in kidney disease into global markets is also something we have to seed to some extent and we're doing that with the Sinai Diabetes Center. We're doing it through doing the CE marking. The current configuration of the test is perfectly fine for a global market, in terms of what goes into the algorithm and what results we present to the provider and the patient, how you get to that result in an efficient manner without having to ship samples across the globe is really where the focus is.

So I don't think there's any significant investment in the actual core product. That's how it's delivered, and that will be done hopefully in large-scale partnership rather than us on our own. And then as I say, the work we're doing around CE marking, getting early use experience in Europe, for example, is going to be pivotal to engaging with those third-party collaborators to make even more attractive to them to bring it -- to bring others with them into the global markets.

Thank you. A question, James, for you to pick up and then Julian may want to come in here. Julian has been a big asset for the company. Could the company please provide a little bit of color on his departure and plans to replace him?

Yes. And I just want to say, Julian and I have been partnered since a long time, I may have had hair when we started to partner. So invaluable asset, Julian will continue to be a confident certainly for me, but he is, at the moment, Chairman of the company and will remain Chairman of the company and actively involved. But I just want to say that off of that, Julian, please.

Yes. I feel because the question is asking about the timing and everything else. My -- I think historically, 2 years ago, I came back in and stepped back in as Chairman. I think James will readily agree that the company wasn't in the strongest of places 2 years ago. So we stepped back -- I stepped back in and we worked closely together, firstly, to look at the cost base and then secondly, we both knew that the sales and marketing strategy wasn't working. You're not going to be able to sell the way we have been selling. The country is just simply way too big to try and access every corner of the U.S. as such a tiny company and James has already alluded to that in the presentation.

So we took a step back and said, what is the right thing for Renalytix and we definitely agreed that we needed a national distribution agreement with a major partner. And as questions have been asked, we started out with Tempus, that didn't work out, because it wasn't really the right partner for us, however, Quest was most definitely the right partner. And so with the combination of reducing costs and getting the Quest deal, I feel now is a good time to step back.

As James said, as I said in the announcement, I'm not leaving immediately, it will be at the end of this year. And we'll have a process where we both even spoke at 2 o'clock today, agree that we need an American big hitter now that really understands Quest, understands the type of testing that we do and can really support -- and also can support James in fundraising in the U.S., as somebody that can really make a difference because I think being a U.K.-based Chairman on AIM is perfect up to a point. And then that point has been hit now, and we've hit that inflection point hit that inflection point with me now and I feel strongly after conversations with James, that we need a different leader in terms of chairing this business who has much more U.S. capability in terms of driving the tactics.

To me, there is very little left to be done in terms of costs, in terms of delivering a deal with one of the major partners in the world. There's not a lot left to be done on that side. What really needs to be done implement, driving the growth of sales and support and supporting James in all those areas and that is much more a U.S.-based representative. So I thought the timing, I'm leaving on the back of a fantastic deal with Quest and a very successful fundraise and I think now is a good time to do that and open the door for a new chair.

Thanks, Julian. James, Julian mentioned Tempus there. We have had a question regarding what have you learned from that? And why is Quest going to be different?

Yes, Tempus. I think Tempus was on the road ultimately to Quest. It's chalk and cheese in terms of the types of deals that were presented. Tempus is a wonderful company, and they've done incredible things in oncology, especially with connectivity and this goes back to patient identification and patient access, blood logistics assets. And I felt like Tempus would be a great partner to do that.

Unfortunately, it hasn't worked out that way. There are a number of reasons why, which are exogen to Renalytix, market conditions, et cetera. But we were always going to be an add-on or an additional indication to a Tempus cancer-connected company. With Quest, I am now very well familiar and connected with the new head of the Cardio-Endocrine Metabolic Wellness Division, called CMEW internally and this is a strategic priority within Quest.

And if you read through Quest's annual reports and you see what they're doing to move into the -- to continue to build the franchise in chronic disease, again, it goes back to the chalk and cheese. This is very much a chronic disease, cardiorenal metabolic play with Quest, they have the connectivity and the capability and the distribution that's unmatched. So we're driving right down the fairway of Quest's strategic imperative and capabilities, particularly with this division and the close relationship we have. That's very different than what we were talking about originally with Tempus.

There was also a management changeover in Tempus and unfortunately, very shortly after we announced our agreement with Tempus, some of the key personnel rotated out. I ultimately thought that was something I could bridge, but I think it was a bit of a bridge too far. So great effort with Tempus, I still have an enormous amount of respect for what they're doing. They are helping to change oncology, but Quest Diagnostics is a completely different animal. And we are moving straight down the strategic fairway with Quest. And ironically, unfortunately, if Tempus had really taken off, I may not have gotten to Quest. So these are all the mistakes and the trials and the zig zags that go on to get to ultimately the place you need to be.

We are in the place, we need to be. I've got a handful of last questions that I just want to get through if we can, so that we've covered everything that investors ask. So these may be quick answers if you can do them, James. Who are the competitors of Quest? Do Quest have competitors in the U.S.?

There's really one main potential competitor here, which is Labcorp. Quest and Labcorp are the 2 largest clinical reference laboratories in the U.S. In terms of cardiorenal metabolic, in terms of this area, I think Quest stands on its own.

Okay. A question here, and I'm really not sure whether you can answer this, but do you have projected annual revenues for the U.S. for next year? I know you've talked about 25,000 tests in 2027, but I'm not sure there is any revenue guidance. Is that for annual revenues in the U.S.?

No, and it would be irresponsible to put guidance in the market today. I think we've defined a target at this particular valuation of the company, especially on a comparable basis. I think everybody can see if we execute where things are going to go, and we will put out forecast at the appropriate time. But we have not put a forecast into the market, especially in the context of Quest.

To that same question, we've had another investor ask, there's clearly a significant potential to access a large number of doctors and clinics. If you do have a surge in test volumes and strong revenue growth, how will this impact margin and profitability? I mean I don't think you can give too much away there either. Can you?

It's all good, right? I mean we're sitting here at a GBP 35 million market cap with the single largest distribution, that I could come up with globally. We passed through all the milestones FDA. We've got great reimbursement. We're in the clinical guidelines. We've just published substantial longitudinal multicenter data. I don't think we could be better positioned, and we're trading at a Series B venture valuation.

There is no risk associated with the product at this point. So you can count on the fact that things are going to improve. We have done internally low, medium and high cases. Just to be clear, I will operate from the low case and everything else is gravy. And in the low case scenario, which is the prudent thing to do, we're looking at our own internal revenue rollout with Quest. We're looking at our costs, the controls. We're looking at where we can go.

We will be ready if volume accelerates, that's a high-class problem, but we're going to run our business off a baseline now. And again, we've learned an awful lot over the last couple of years, which have been incredibly painful getting here. As many investors know, and we know internally, I am a shareholder, a significant shareholder of the company. This is the passion for me to make this thing work right now. So we will make sure we're cost controlled, and we will be ready in the eventuality that things accelerate beyond what we expect at that point, that's a good thing.

James, the 25,000 tests target for 2027, how does that compare to your previous run rate, annual run rates?

It's in a totally different universe. You can't -- it's uncomparable and the access we have now enabled, I mean we're going out to half of all U.S. physicians, not all of them are going to order KidneyIntelX, nor is it appropriate for them. But you cannot underestimate the access that we've just opened. And again, back to that patient identification, Quest runs millions of kidney disease diagnostics annually, many of those patients qualify for KidneyIntelX. So we know exactly where the patient is, who should benefit from KidneyIntelX. That's a paved road. We could never do that on our own.

The logistics component, just blood transport and access. There's a reason why large multibillion-dollar companies are now either doing what we're doing or have done what we've done. And there are great examples out there with Guardant Health, with GRAIL, and Siemens. So this is a known quantity, it's novel for chronic kidney disease. We're the only one in the space. We are the only tool that's gone through FDA and has Medicare reimbursement, there is no other. So I don't have any direct competition here, which is important. But there are examples in the cancer world and in the liver function space, for what this can become and how we can take advantage of this agreement.

So we have a lot of visibility here, which is great. That's going to lower the probability for mistakes, and it's going to accelerate our ability to get this out on a national scale.

Thanks, James. I've got 2 last questions. One is about the use of AI, as you ramp up? And then the second one is regarding what people should expect from Renalytix in the next 12 months. But the AI question, assuming Renalytix and Quest experience, the surge that you're expecting, is there a need to introduce AI technology to allow for efficiencies to cope with the growth?

So we already have data synthesis is very important. I think in clinical medicine, we need to separate the hype of AI, from what can actually be done and there's a lot of hype at the moment. And I need to make this point, we have a very sophisticated algorithm, it's advanced machine learning-enabled. We've had to go through rigorous review, millions of simulations, a lot of utility and outcomes data production, to get to a point where doctors are willing to use it.

It's one thing to read a pathology slide and give an opinion. It's a very different thing to take a biological sample and look into the crystal ball and predict with accuracy, power and simplicity the future. This is not easy to do. I don't care how big your compute center is and how much money you throw at it. There are certain things that you can't get around and I think this is critical in terms of competitive long-term sustainable competitive advantage, AI can't take your blood.

And it's going to be a long time before we see the large language models moving into the space to come anywhere near what we're doing today by taking a physical sample and understanding exactly what your biology does on a regulated validated basis. This is a very different game, that we're playing. So I like our position. I like what we've done. We have other things coming in the pipe. We've learned a lot to do this and now that we have a balance sheet and a major partner, we're going to be able to expend a little bit of energy now to expand that pipeline, but we're not going to get distracted on mission #1. Fergus, do you want to say something real quick here?

I think, James, you might have referred also to the operational use of AI in terms of optimizing our internal operational processes and that is something we are looking at and have adopted in very limited cases, in terms of using large language models for things like customer service, using AI for doing some low-level software development, but we're doing it very carefully. Because what we have found is as we go into discussions with large health systems via Quest and directly or with large pharma, there is a paranoia about the controls and infrastructure you build around your AI process, AI-enabled processes. So we are doing it in a very slowly, carefully curated manner, so that we don't get too far ahead and end up having to undo a lot of good work.

So yes, the answer is very -- in a very low level, targeted way we are looking at how AI can improve our internal processes so that they become more scalable, but we're doing that in a very careful way.

Thanks, Fergus. James, just before I come to the question about what can we expect from Renalytix in 12 months, an investor has snuck in a final question. So let me quickly ask it, how are you educating the medical profession about the product and its significance? And I guess the follow-on question for that, is that your job? Or is that Quest's job? How does that get done?

Very important question. It will be both of our jobs, a little bit differently and we're actually engaged in that discussion right now to understand allocation of resources and support. Obviously, we're still going to be there at conferences, we're going to be speaking to a number of different societies. We can do that because we have the deepest understanding of what KidneyIntelX is. But Quest will be also in the future, engaged in a lot of education. They have a reach that we could never hope to emulate. But that discussion is ongoing right now and I think we want to continue to do the right things, that support long-term clinical adoption, not just here, but externally. That includes continuing to publish. So we're going to have our 3-year outcomes data coming up. We're going to continue to examine our data and publish in high-quality, high-ranking peer-reviewed journals.

We're going to continue to present data at conferences. We will continue to evangelize where we can, but obviously, now we're moving into a completely different paradigm with a collaborator, like Quest and a lot of that is going to be worked out over the coming months. But very good question, because it is important to continue to educate.

And again, unlike when we started the company in 2018, today, we have a number of tailwinds. That Super Bowl ad to me was a starting gun, right? That's the masses now jumping on to, "hey, do I have kidney disease and what does it mean?" I just -- I've never seen anything like that in this space. It's fantastic. It's pushing preventative medicine, which we all need. We need to get in early to diagnose and then we need to understand what that diagnosis means. What is our risk and what can we do to treat. That's the power of diagnosis and prognosis, uACR and KidneyIntelX. So there's a lot of education that needs to be continued, but there are tailwinds.

And our involvement with large pharma, hopefully, which will result in KidneyIntelX being included in these large-scale trials will help a ton. And we'll be looking for opportunities, potentially cutting an agreement with a large global manufacturing diagnostic platform company will also evangelize this outside of the U.S. So there's a number of winds that are back now, which weren't available even 2 or 3 years ago.

Thank you, James. And the final question, what can we expect from Renalytix in the next 12 months?

Focus. Look, we're going to make sure we get this one right, because it is a rare opportunity to work with an organization like Quest. These opportunities don't come along every day. Obviously, investors should expect testing volume growth. We should expect additional, especially ex U.S. partnership agreements. We should expect additional news, as it happens with drug trials because drugs and diagnostics work directly together to blunt the progression of disease. And I think there will be some other discussion about the development of the pipeline. But we have to stay absolutely focused, this opportunity is too big and we have to do it once and we have to do it right.

Thank you. I would like to thank you, James, Fergus, Joel and Julian. You have covered all of the questions, that have been submitted. Thank you very much. Now let me just hand back to you, James, for some final closing remarks.

And I'll make these very brief, I want to thank all of our investors in the U.S. and the U.K. This is a privilege to be able to address this critical social need, that we have. I think we are now walking into the room of coordinated disease in chronic disease, specifically cardio-kidney-metabolic disease, this is all coming together. And at the basis is going to be our ability to understand risk in these diseases, because when you compile kidney-cardiovascular-metabolic disease, it affects 70% to 80% of all adults, none of us escapes and so the real question is, can we understand early what these developing diseases mean? For a lot of us, they don't mean anything. We will die with those diseases at 105, living high-quality lives.

But for a significant portion of the population, if you are at risk of progression in these disease categories, you have to get an early understanding of what your risk is, because there's so much that can be done. There are so many new therapies that are available, there are clinical strategies, but you have to understand your risk. This is the essence of prognosis and we think that KidneyIntelX represents this next generation of prognostic tools, that's going to bend the entire curve on chronic disease. And when we talk about social cost in the U.K., in the United States, if you don't get a handle on chronic disease early, if you don't stop or slow these processes, if you don't have appropriate moderated drug treatments early, you're never going to solve the cost continuum and it is unsustainable.

And unfortunately, even though we have miracle new drugs, like GLP-1s that are out in the field, unfortunately, these chronic diseases are getting larger in the population, they're not getting smaller. So we need advancements like KidneyIntelX, I think we're leading the way here and now with our collaborating partner, we actually have a real shot at making this a national and then eventually a global standard. So thank you all for coming along the ride with us, and we'll keep you up to date as events unfold.

Fantastic. Thank you all very much indeed for updating investors today. Could I please ask investors not to close the session, as you'll now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good afternoon to you all.