Exagen (XGN) TD Cowen 45th Annual Healthcare Conference summary

Operational progress and financial performance

• Achieved seven consecutive quarters of ASP growth, now at $404 per test, and reduced EBITDA loss by 70% to $4 million in Q3, with gross margins up 13 percentage points since 2022.

• Near-term goal is to achieve cash flow positivity by year-end, driven by new product launches in January.

• Ongoing focus on cost control and maintaining stable COGS despite inflation, with further margin gains expected from ASP improvements.

• All sales territories are now accretive, with plans to expand sales force by about 10% in 2025.

• Cash burn reduced to $14 million in 2023, with $22 million in cash at year-end and break-even targeted for Q4.

Market landscape and competitive positioning

• Autoimmune market is expanding, with ANA positivity rates doubling every decade and now at 41 million Americans.

• Biopharma business is growing, with larger and more structured contracts over the past 12–18 months.

• About one-third of U.S. rheumatologists use the core test, with growth expected from deeper penetration in the existing base.

• Enhanced value proposition with new markers for SLE and RA, aiming to increase adoption and improve patient outcomes.

• Market tailwinds include NIH funding changes and a shrinking rheumatology labor pool, increasing demand for efficient diagnostic tools.

Product innovation and commercial strategy

• Launched new markers for SLE and RA in January, increasing RA sensitivity from 70% to 85% and improving lupus sensitivity.

• Initial feedback from physicians and payers is positive, with reimbursement for new markers proceeding as planned.

• Product enhancements expected to drive higher ASP, with incremental impact to be disclosed after more data is collected.

• Example of clinical impact: revised panel enabled correct RA diagnosis for a patient previously misdiagnosed with fibromyalgia.

• Focused on responsible sales expansion and consultative selling to accelerate order growth and enhance value proposition.