Good afternoon and welcome to the Sera Prognostics Conference Call to review First Quarter Fiscal Year 2025 Results. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session toward the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Peter DeNardo of CapComm Partners for a few introductory comments.

Thank you, Andrew. Good afternoon, everyone. Welcome to Sera Prognostic's first quarter fiscal year 2025 earnings conference call. At the close of the market today, Sera Prognostics released its financial results for the quarter ended March 31, 2025. Presenting for the company today will be Zhenya Lindgardt, President and CEO, and Austin Aerts, our CFO. During the call, we will review the financial results we released today, after which we will host a question and answer session. If you've not had a chance to review our quarterly earnings release, it can be found on our website at sera.com. This call can be heard live via webcast at Sera.com, and a recording will be archived in the investors section of our website. Please note that some of the information presented today may contain projections or other forward-looking statements about events and circumstances that have not yet occurred, including plans and projections for our business, future financial results, and market trends and opportunities. These statements are based on management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's annual report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections and other forward-looking statements. As a reminder, a webcast replay of this call will be available on the investors section of our website. I will now turn the call over to Zhenya, Sera Prognostics President and CEO. Zhenya?

Thank you, Peter, and good afternoon, everyone. It's been just a few short weeks since we last held our quarterly earnings call near the end of March, during which we shared a lot of updates regarding prime and commercial priorities. So I'll aim to keep my comments brief today. We've continued to make progress in driving the transition from our clinical evidence development phase, with the full, pivotal prime study results being communicated in January, towards our next phase to pursue commercial growth opportunities. We are progressing nicely towards publication of the prime study results in a peer-reviewed journal. Today, I'll lay out our commercial roadmap over the next few quarters, which follows a geographically focused ecosystem playbook with three primary components, which we will look to perfect first in about half a dozen states and 10 states nationally primary. The first component is reimbursement, with a balanced approach towards commercial insurance, employers, and Medicaid, which is a key payer for most physicians, with about 43% of all births in the United States paid for by Medicaid programs. [indiscernible]. On reimbursement and Medicaid, in order to foster that reimbursement, we are simultaneously focused on the following. First, we're ramping up Medicaid plan pilots in the states most impacted by premature births. We believe that the work of intervention, anchored by the science and evident cost savings and responsiveness and awareness by physicians, gives us a solid shot on goal in states with higher premature births than the national average. For example, regarding cost savings and healthcare economics, the prime study results reported in January demonstrated that we can save one very expensive NICU day, on average about 4,000 per day nationwide, but depending on the level of the NICU, up to $20,000 per day, by screening on average just three…

Thanks, Zhenya. Good afternoon, everyone. Let me review our financial results for the first quarter. Net revenue for the first quarter of 2025 was $38,000 compared to nil for the first quarter of 2024. Total operating expenses for the first quarter of $9.3 million were up slightly from $9.1 million for the same period a year ago. Research and development expenses of $3.3 million were down approximately 9% relative to the prior year period, primarily due to lower clinical study costs as third-party expenses related to prime study analysis have continued to decrease. Selling general and administrative expenses for the first quarter of $5.9 million were up from $5.4 million for the first quarter of 2024 as we continue careful management of commercial activities focused on driving future growth, while adding some strategic headcount and investing in targeted awareness and other initiatives as we prepare for the publication of prime study data. Net loss for the quarter was $8.2 million, relatively flat, with $8.1 million for the same period a year ago. As of March 31, 2025, the company had cash, cash equivalents, and available for sale securities of approximately $114.2 million. As Zhenya noted, we are being selective where we deploy capital this year as we evaluate commercial opportunities to elevate test adoption and increase revenue. We will continue to be prudent in our approach to building awareness among patients and physicians region by region as part of our overall strategy. Operator, we can now please open the call for questions.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions]. Your first question is from Andrew Brackmann from William Blair. Please go ahead.

Hey, everyone. This is Maggie on for Andrew today. Thanks for taking our questions. Maybe first, if you could talk about the strategic headcount investments you started to make. Can you talk about what you expect the progression of that to look like throughout the year and how large of an investment you expect that to be for 2025?

Maggie, good to hear you. Thank you for the question. For now, we are planning to expand our commercial presence by 5 to 10 FCEs. And of course, we will monitor how quickly we make progress in our targeted states to first resource the states that I mentioned appropriately. Then, if it goes very well, potentially extend to the next wave of states. So, 5 to 10 for now, and we will report back probably in the next quarterly conference on how is it going and if we might want to increase that.

Okay, great. Thank you. Then, obviously, I know it's hard to predict the timing, but any updates you can give us just in terms of how the prime study publication is progressing?

Thank you. I wish I could tell you precisely when it's going to be published. I really want to. Unfortunately, I don't have the precise estimate. However, I do want to report that we passed the next milestone in engagement with the target journal. I'm looking forward to the next milestone and hopefully good news after that.

Great to hear. Thanks so much.

Wonderful.

Your next question is from Dan Brennan from TD Cowen. Please go ahead.

Great. Thanks for the questions. Maybe the first one you went over kind of quickly. Just what was the ACOG Bulletin update? Could you just elaborate a little bit on that and just speak to what the potential impact is about your progress and your outlook going forward for getting in the guidelines?

Great question. Thank you. ACOG Bulletin last month was a huge development in our space. The guidelines for prenatal care protocol were put in place something like about 100 years ago, first in 1930s, and the overall protocol has not been significantly changed since then. Last month's ACOG Bulletin specifically shifted away from one size fits all protocol to tailoring care based on risk stratification of expectant mothers in their pregnancy. It specifically talked about titrating interventions, including the frequency of visits, the particular medical interventions, not just based on medical conditions, but presence of risk in the pregnancy. So what got us very – and the community very excited about it is our PreTRM screen and treat strategy suggests that biology of pregnancy is different for every mom. And stratifying the risk based on biomarkers and clinical factors could direct interventions to much better clinical and health economic outcomes of the pregnancy. Specifically, in our case, we've seen across dozens of clinical trials that if we identify a higher risk pregnancy mom in weeks 18 through 20 with PreTRM tests and deploy our intervention bundle tested with multiple clinical trials that were published recently, namely AVERT in July of last year in Diagnostics Journal, and now PRIME Study, abstract of which was published in January 2025 in the Pregnancy Journal, shows that deploying that intervention to PreTRM test identified higher risk moms can have significant clinical outcomes improvement to those pregnancies. So in our product research, we've seen that tailoring care is enormously beneficial to the health of moms and babies. And seeing that in the guidelines from our top professional society, ACOG, has been wonderful to see. And in terms of the opportunity for PreTRM test, it's a first step of guideline setting bodies in looking at the research available to date to start helping physicians risk stratify pregnancies. And of course, we're excited at the right time whenever the guideline setting bodies prioritize reviewing care protocols for spontaneous PreTRM birth to take a look at the research that we are about to publish on and include their assessment and recommendation on how clinicians can use PreTRM tests in risk stratification for specifically the tailored care that they are recommending physicians to deploy.

Great, thank you for that. Maybe this is a follow up. How often does ACOG do these updates? And I'm just wondering, just remind us, I know we're super early post the data release earlier this year, but just kind of remind us now that you're a few more months into the process about contemplating all the things that need to get done. Like, A, how often do they update? And B, what's -- how do you think about kind of the predicate range of outcomes that could occur here if in fact you get into guidelines, what's the best case medium term and like worst case in terms of timing?

Yes, no, great question. It depends whether it's general update to guidelines or specific bulletin that governs our topic, which is Bulletin 234 from ACOG that governs treatment for spontaneous PreTRM birth. Each of these bulletins gets updated when a lot of new data becomes available, and on average, between 24 and 48 months in between the revisions. Our relevant Bulletin 234 was last updated in August 2021. So we're coming up on time where it would be natural for ACOG to refresh that. It also happens that 2025 is a very exciting year with a lot of new data coming out on spontaneous PreTRM birth. Of course, one of which is our very exciting data in PreTRM trial. As you are asking about how could the guideline recommendation journey evolve? We see three scenarios. Of course, the guideline revision timing is entirely up to ACOG and Society for Maternal Fetal Medicine, the two sister societies that collaborate closely on developing these guidelines. They prioritize about two, three topics per year for revision, then form at about a 20% committee that includes MSMs, OBGYNs, nurses, neonatologists, statisticians, health economists to review all of the latest literature that has been developed by the community in the last two, three, four years. And then upon the review and the insights, update the guidelines. So as we think about scenarios, given 2025 is likely to be a rich year where we won't publish not just prime main publication, but also possibly two to three additional publications with further insights and sub analyses on very, very rich 5,000 patient data and done by our illustrious 19% PI group. And not only by Sera, but other institutions are conducting a lot of research in PreTRM birth space. We're hoping that 2026 or 2027 could be…

Great. Yes, that was great. Maybe just last one, and then I'll kind of go kind of back on the queue. Just obviously Medicaid, you discussed it during the prepared remarks. You're pretty excited there. I mean, that's an interesting opportunity. Just what have you learned so far? I know it's early in terms of this opportunity, the states that you're identifying. And if we're sitting here 18 months from now, like what are the potential outcomes with progress or success in some of these states?

Yes, no, great question. We are undoubtedly excited because typically Medicaid trails commercial medical policy coverage by a couple of years. But for our test, it's been the opposite. We've seen a lot of engagement with state Medicaid plans, who all are governed. Of course, every state is different and sets their policy. According to their priorities, and some states are doing great on PreTRM birth, others are really not. So depending on how critical PreTRM birth priority is for that state, of course, we started focusing on the ones that need solutions for PreTRM birth the most. Second, we take a look at what quality metrics the state sets for the plans, and what outcomes do they measure state Medicaid plan performance on. And we target the plans where we believe we can make a major difference for plan performance that they're measured on, and the metrics where the state is looking to move the needle on. Sometimes it's NICU admissions, sometimes it's the rate of C-sections, sometimes its birth weight of the neonates. For us, we've analyzed and published through PRIME study abstract a lot of exciting outcomes we've already observed in the PRIME study, and are looking forward to giving Medicaid plans opportunity to see on what deployment of a PreTRM test and intervention bundle strategy can do for their members in terms of clinical outcomes to meet their quality metrics in their state, and of course, the cost of care outcomes. What makes us particularly excited about Medicaid is in the year when overall Medicaid program is looking to cut costs, PreTRM test and treat strategy can cut costs without cutting benefits. And that is a huge opportunity. Of course, that's where the policymakers should look first at solutions that can reduce costs without reducing benefits.

Great. Actually, let's take one more in. I know in the last call you discussed Medicaid pilot programs. You could have two to four programs over the next 12 months. Is that still your thinking?

Yes, that's exactly right.

Great. Okay, thanks.

[Operator Instructions]. We'll pause for further questions. There are no further questions at this time. I will turn it all over to Zhenya Lindgardt for closing remarks.

Thank you, operator. Before my closing remarks, I'll make one correction. I think I misspoke and stated that the number needed to screen of expectant mothers in order to save one NICU admission was 31. In fact, it is 40. As stated in our corporate deck on our website. With that, thank you, everyone, for attending our call today. We're pleased that we have now entered a new commercialization phase empowered by our PRIME study results, which have garnered interest and we expect to help open a lot of doors commercially. With those results in hand, we believe 2025 will be a build year for Sera and we look forward to sharing our progress with you. I'll now turn it back over to the operator to conclude the call. Operator?

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.