Aspira Women's Health Inc. (AWH) Q4 2021 Earnings Call Transcript

Aspira Women's Health Inc. (AWH -3.14%)
Q4 2021 Earnings Call
Mar 23, 2022, 8:30 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good morning, ladies and gentlemen and welcome to Aspira Women's Health Inc.'s full year 2021 and fourth quarter 2021 conference call. My name is Kyle and I will be your coordinator for the call today. [Operator instructions] As a reminder, this conference call is being recorded today. Leading the call today are Valerie Palmieri, executive chair of the board; Nicole Sandford, president and chief executive officer; and Bob Beechey, chief financial officer.

After the prepared remarks, we will open the call for Q&A. Before we begin, I would like to remind everyone that forward-looking statements defined under the Private Securities Litigation Reform Act of 1995, will be made during this call, including statements relating to Aspira's expected future performance, future business prospects, future events or plans. Although the company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, actual outcomes and results are subject to risks and uncertainties and could differ materially from those anticipated due to the impact of many factors beyond the control of Aspira. The company assumes no obligation to update or supplement any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Participants are directed to the cautionary note set forth in today's press release as well as the risk factors set forth in Aspira's most recent Form 10-K and our second quarter 2021 Form 10-Q filed with the SEC for a description of factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. At this time, I'd like to turn the call over to Valerie Palmieri, executive chair of the board. Valerie?

Valerie Palmieri -- Executive Chair of the Board

Thank you, operator. Good morning, everyone, and thank you for joining us today. As previously announced, I have been elevated to the role of executive chair of the board, I look forward to leading the company at a higher level and I'll be working side by side with our new president and chief executive officer, Nicole Sandford, who is joining me today to speak with each of you. As executive chair of the board, I intend to focus on specific strategic imperatives and enterprise value drivers, including the launch of critical new products, further development of Aspira's thought leadership, including key strategic commercial, scientific and advocacy partnerships as well as our clinical and scientific leadership via our KOL advisory boards.

As president and CEO, Nicole will lead the business, execute strategic and operational plans and scale and transform operational and functional areas to support our planned growth. We have forged a strong and positive relationship working with one another over the past year, and it has only gotten stronger since we took our new, on our new responsibilities. We look forward to partnering with one another to drive strategic milestones while delivering growth, revenue and profitability to all of you, our shareholders. In addition to the executive level changes, we have recently announced the appointment of Celeste Fralick.

Ph.D. to our board of directors. Dr. Fralick recently retired as chief data scientist at McAfee, where she was responsible for developing enterprise and consumer product analytics and data ecosystems for cardiomyopathy and neurostimulation.

Dr. Fralick is an accomplished executive who brings over four decades of data strategy experience to the board. She brings a broad background in technology and specifically healthcare in several markets with customer and industry-facing experience. She has been recognized globally for cross industry-leading analytics, ideation, strategic leadership and results-oriented competencies.

In addition, Dr. Fralick was named to Forbes inaugural 2018 list of America's top 50 women in technology. I would now like to update you on some recent strategic developments, which we are very pleased with, before I move on to the 2021 review. As discussed in our March 2021 call, we entered into a strategic research collaboration agreement for the development and commercialization of a microRNA high-risk ovarian cancer early detection test with Harvard Dana-Farber Cancer Institute, Brigham and Women's Hospital and the Medical University of Lodz.

They have published on a novel microRNA panel, which we intend to use in combination with current technology. After completion of multiple experiments interrogating diverse sample sets and data sets, we have consistently found the technology to be complementary improving the accuracy compared to the microRNA and protein biomarkers alone. Based on this outcome data, we have met the success criteria together. This month, Aspira has exercised the option for an exclusive worldwide license of its cutting-edge microRNA technology and will continue development of a novel combined assay utilizing a new platform as well.

We believe the high specificity demonstrated by this technology, coupled with our strong sensitivity of our technology has the potential to be the base technology for a diagnostic, which will function as a test for women with a high genetic risk of ovarian cancer, the end goal for truly developing a personalized risk solution for patients who are genetically predisposed to ovarian cancer. The brand name for this study is OVAInherit. There will be more to come as we move forward with publishing our early data. Nicole will also discuss additional new pipeline updates in her remarks.

I am now moving on to our recap. We believe Aspira Women's Health has effectively weathered the storm of the pandemic and is rapidly gaining momentum. We have delivered solid test volume recovery, improved price year-over-year considerably, added to our covered lives and lastly, made significant additions to our board and executive team. We continue to advance our product pipeline and strengthen our financial position in 2021.

We accomplished five major milestones. Number one, our OVA1 and platform adoption. In terms of full year 2021 metrics, volume grew 28% year over year. For Q4 2021, we performed 4,750 OVA1plus tests, which represented an increase of 23% compared to the same period in 2020 and an 11% increase sequentially compared to the third quarter of 2021.

Looking forward, we experienced headwinds in January due to the surge in the COVID-19 variant, which resulted in a slower-than-expected start to the first quarter of 2022. However, OVA1plus volumes recovered quickly and are trending higher in February and March. Our units per day increased from about 65 in the first few weeks of January to about 91 in the first week of March, which is a new average record per day. October was our prior record of 81 tests per day.

We believe this recent growth is a result of our ongoing commercial investments and increased patient visits as well as improved COVID access. In addition to unit adoption, we also successfully entered into four synergy contracts, of which two are with two of the largest independent women's healthcare groups in the U.S. with access to approximately 750 providers and 950,000 patients annually. The last contract we announced in January 2022 is a five-year contract with Axia Women's Health.

The goal of these relationships is to allow our clients to offer our best-in-class clinical diagnostic testing services directly to their patients via our universal platform. We believe this will provide a significant growth as we gain the ability to touch more providers through the larger provider bases that are associated with larger Aspira's synergy customers. Our platform strategy is key to mass adoption, coupled with our direct-to-provider strategy. The number of base ordering physicians increased to approximately 3,216 for the fourth quarter of 2021, representing a year-over-year increase of 23% and a sequential increase of 10% for the quarter.

The total number of new physicians in the fourth quarter of 2021 was 584, an increase of 25% over the same period in the prior year. And we noted significant new customer increase of 32% sequentially versus the third quarter of 2021. I am now moving on to our second major milestone, which is payer and price improvement. Full year for 2021 in comparison to full year 2020 grew by 45%, while total price per unit, including Medicaid, improved 13%, without Medicaid, the price improved to $414, which is a 15% improvement year over year.

We also reached 194 million covered lives, representing 59% of the lives in the U.S. We believe inclusion in the AIM and Evercore guidelines provides us with further validation and credibility in our discussions with all payers. We expect this momentum to continue as we prepare to submit the latest evidence on OVA1 clinical utility with 12 to 24-month outcomes. We plan to share more on this in 2022.

On the Medicaid front, we added a total of 6.9 million lives with the addition of New York State, New Hampshire and Washington, D.C. Having this coverage in place is critical to managing the underserved population as we believe OVA1 is the only technology available today that has adequate sensitivity for early stage ovarian cancer risk detection, specifically in Black women. With New York State, this brings our total credentialed Medicaid population to 61 million Medicaid lives, which is over 80% of the U.S. Medicaid population.

I'm now moving on to our third milestone, which is government support and momentum following our two congressional briefings in 2021. We actively engage with members of Congress and several noteworthy advocacy organizations, including Healthy Women, the National Ovarian Cancer Coalition, the Ovarian Cancer Research Alliance and the Black Women's Health Imperative in an effort to increase awareness about OVA1 and ovarian cancer. Our goal was to encourage legislation to provide financial support for additional clinical trials as we focus on diversity in trials. We also started the discussions on the trial requirements for adding the company's ovarian cancer technology into guidelines, such as the U.S.

Preventive Services Task Force, which will support the company's objective to launch a product that is broadly applicable for women with a high genetic risk for ovarian cancer. In addition we're laying the ground work for a bill for national coverage determination for Medicare for OVA1 as part of expanding access. Our work with these representatives, our congressional briefings and other advocacy work including with members of the Appropriations Committee has supported the NIH's recent funding increase of 25% for ovarian cancer research and the Department of Defense's congressionally directed medical research programs increase in funding for ovarian cancer of 29%. We are very pleased with these recent results and the speed with which the government took action.

Further, in response to president Biden's recent outreach to industry for suggestions on how we can better identify cancer early as part of the Cancer Moonshot 2.0 initiative, the companies had correspondence with the Biden administration to support the inclusion of early detection technologies for ovarian cancer among its key priorities. I am now moving on to the fourth milestone, which is our publication progress. We completed a paper, which has been published in the special edition of Diagnostics entitled Salvaging Detection of Early stage Ovarian Cancer Malignancies, when CA125 is not informative. In a retrospective study of 2,305 patients, OVA1 detected over 50% of the ovarian malignancies in premenopausal women that CA125 would have missed.

OVA1 also correctly identified 63% of the early stage cancers missed by CA125. This paper further validates and supports the superior early stage detection of ovarian cancer versus CA125, the most common test used today in a large population. In addition, we have several other key manuscripts in submission more to come on this front. Our last milestone is our strategic partnerships and study collaborations, which finished the year with three major ones in addition to the Harvard Dana-Farber Cancer Institute.

The first one centers around EndoCheck products. We executed an agreement with Opdivo assay whereby they provided us a sizable specimen and data bank from their therapeutic trials. We now have trial specimens from two of the three pharmaceutical companies, and these specimens will support our development of our EndoCheck product. Our second is our platform partnership with Genoox.

This partnership will enhance our data and biobank platform. Genoox and Aspira seek to tackle the most difficult diseases in women's health, and this platform should allow us to reduce the development time for potentially groundbreaking data solutions. And third is our key partnership with Northwell Health. This study will enroll over 600 prospective women with adnexal masses.

The study will also enroll 2,000 women at high-risk ovarian cancer, either due to personal or family risk of cancer or carriers of a germline variant associated with hereditary breast and ovarian cancer syndrome. Northwell is the largest healthcare provider in New York State and treats over 2 million patients annually and employs over 16,000 credential physicians. As you can see, our overall goal was to emerge from the three phases of pandemic operationally stronger, and we believe we did just that. We believe we are well positioned to grow, scale, drive adoption and most importantly, save lives.

I am now pleased to introduce our new president and CEO, Nicole Sandford. Nicole?

Nicole Sandford -- President and Chief Executive Officer

Thank you, Valerie. Before I start, I'd like to say that it has been an honor to assume the role of chief executive officer and to continue working closely with you to achieve our mission. As I've transitioned from board member to leader, my respect for the team of talented professionals that you have assembled has only grown. Your leadership has certainly set the stage for an outstanding future for the company.

I'm now going to spend a few minutes providing an update on our strategic priorities and the path forward for 2022. Our theme this year is focused execution. We've made a number of critical investments and now is the time to capitalize on those efforts. I intend to do that through focused execution in three areas: growth, innovation and operational excellence.

Starting with growth. You've already heard from Valerie about the increases in new physicians and volume from our existing physicians in 2021 despite several distinct COVID surges that challenged our field sales team throughout the year. We're learning to live with COVID and intend to improve our response and recovery to flatten the volume curve should additional variance cause disruption in 2022. I intend to work with the team to mine our learnings and ensure that we continue to see improvements in our sales related metrics regardless of COVID disruptions.

Staying with growth for a minute, you'll recall that we brought on Michael Newton as our head of, our new head of commercial. And I'm happy to report that he's already making a big impact. Drawing on his over 20 years of diagnostic healthcare sales experience, Mike will help to execute a commercial strategic refresh and reorganization in February of 2022 to enhance our national sales force and drive the accelerated adoption of OVA1plus as the standard of care for early risk detection of ovarian cancer in women who have been identified for surgery. This strategic refresh is aimed at positioning us to take full advantage of our commercial scale-up over the past 18 months focusing on the most promising territories and rationalizing sales reporting structures.

Early indications are that it was the right approach to achieve our growth plans for OVA1plus and has set us up for the successful launch of OvaWatch, which we expect to occur in the second half of the year 2022 and it is already working. Daily volumes in Q1 2022 have surpassed daily highs from 2021, as Valerie mentioned in her remarks. Let's shift gears to innovation. As you know, we've invested in building a pipeline of products that provides women's healthcare providers with a broad set of solutions for patients with a range of gynecological diseases.

As a reminder, many of the products in our pipeline are expected to be launched as LDTs or lab developed tests, and it may be helpful to provide some additional background context on LDTs before going into specific products. LDTs are a class of in vitro diagnostic device that is designed, manufactured and used within a single laboratory. Currently, the majority of novel technology and genetic tests are LDTs. Estimates for the number of LDTs in the U.S.

range from 60,000 to 100,000 plus with between 15,000 and 20,000 of those falling under moderate or high risk for FDA classification. In comparison, there are less than 500 FDA-cleared moderate to high risk test on the market. LDTs are often used to test for conditions or diseases that are either rapidly changing or that are the subject of quickly advancing scientific research. So the LDT approach might be the best approach in an evolving technology situation, and it allows for ongoing improvement in machine learning algorithms.

With that as background, I will provide an update on OvaWatch, our next-generation ovarian cancer test. An ovarian cancer risk assessment test for women who present with an adnexal mass, OvaWatch will be launched as an LDT in two stages. Phase I is a single-use point in time test and Phase II will allow for serial monitoring. We will focus on advancing to the commercial phase of the OvaWatch launch plan including driving provider adoption during the second half of 2022.

We believe the single-use product has the potential to triple the addressable market over OVA1plus our current ovarian cancer test. The launch of the serial monitoring test remains targeted for 2023 upon publication of data from the ongoing prospective serial monitoring clinical study. Now, let's move on to EndoCheck, our noninvasive aid in the detection of endometriosis. As we previously reported, we have received two pharmaceutical companies investment contributions, which we believe demonstrate the critical need for a diagnostic test.

The collaboration between each of Opdivo assay and AbbVie Inc. with Aspira represents a mutual dedication to create solutions to help the 6 million to 7 million women in the U.S. suffering from endometriosis by radically improving the time to diagnosis, as today, it may take 7 to 10 years for a diagnosis. We believe EndoCheck, our in-development diagnostic test for endometriosis will enable earlier detection, more effective treatment and perhaps avoid unnecessary surgery.

We previously announced the dual-track approach for the launch of EndoCheck as either an LDT or as an FDA-designated breakthrough device and we continue to pursue both paths at this time. Accelerating EndoCheck is a top priority for the company in 2022. In summary, our pipeline is advancing and is a priority for me and the entire company which will be aided significantly by the expansion of our relationship with the Harvard Dana-Farber Cancer Institute. With respect to operational excellence, the entire company is focused on building the infrastructure we need to sustain our growth through 2022 and into the future.

We are also very focused on the stewardship of our resources on behalf of our shareholders, including the appropriate allocation of cash to those activities that are most likely to drive our immediate and longer-term growth and, as importantly, shorten the distance to positive cash flow. We are a fast-growing company that is developing complex women's health products. And as you might expect, there are opportunities to enhance the efficiency of our operations. It is important to note, however, that we are facing the same tight labor conditions as the rest of the industry.

We are working hard to retain our top talent and avoid costly turnover but we expect that to be a challenge for most of the coming year. Before I hand off to Bob to provide a financial update, I want to take a moment to acknowledge Kaile Zagger, our Chief Operating Officer, who has decided to leave the company to pursue another opportunity. We are grateful to Kaile for her dedication to Aspira and wish her the best in her future endeavors. And now over to you, Bob.

Bob Beechey -- Chief Financial Officer

Thank you, Nicole. Fourth quarter 2021 OVA1plus revenue was $1.8 million, an increase of 29% over prior year and a 12% increase sequentially. This 29% OVA1 revenue increase is primarily due to an increase in the number of tests performed in 2021 as well as an increase in the OVA1 average revenue per test in the fourth quarter of 2021 compared to the prior year. Prior to COVID, in 2019, the third quarter versus fourth quarter growth was 7% quarter over quarter.

Despite COVID headwinds, we grew 12% sequentially and achieved a quarterly record number of tests performed in the fourth quarter of 2021. On a full year basis, 2021 OVA1 revenue was $6.6 million, an increase of 45% over prior year. This 45% increase is driven by both the lower number of tests performed in 2020 due to the COVID-19 and an increase in the OVA1 average revenue per test. The revenue per OVA1plus test performed was $382 for the fourth quarter of 2021 compared to $377 during the third quarter of 2021.

This year-on-year price increase was 5% compared to the prior-year fourth quarter of $364. Our full year revenue per OVA1 test perform was $378, a 13% increase compared to the full year 2020 price of $334. Our full year revenue per OVA1 test in U.S. Medicaid perform was $414, a 15% increase compared to the full year 2020 price, excluding Medicaid.

Gross profit margin on OVA1plus was 56% in the fourth quarter of 2021 compared to 50% in the prior year and 57% in the third quarter of 2021. The year-on-year price increase was driven by volume improvements, while the third quarter gross profit included slightly less kits and postage rate. Research and development expenses for the three months ended December 31, 2021, were $1.5 million, a decrease of $100,000 or 4% compared to the third quarter of 2021. Our R&D investment increased $700,000 or 98% year over year.

This spending was primarily focused on product development costs related to OvaWatch, investments in Aspire Synergy and consulting expenses associated with EndoCheck regulatory clearance. Sales and marketing expenses were $4.9 million for the three months ended December 31, 2021, and a decrease of $200,000 or 4% compared to the third quarter. This decrease was primarily due to less recruiting and promotional support costs as we execute upon our commercial strategy. The prior-year sales and marketing expense of $2.8 million was depressed as it did not reflect the current investments we are making in market awareness and the sales team additions.

General and administrative expenses were $3.6 million for the three months ended December 31, 2021, a decrease of $200,000 or 5% compared to the third quarter of 2021. We incurred $2.7 million in general and administrative expenses in the prior-year quarter. The year-over-year variance is attributable to headcount and personnel expenses. We ended the fourth quarter of 2021 with approximately $37.4 million in cash, cash equivalents and restricted cash.

Cash used in operations in the fourth quarter of 2021 was $7.6 million, which was a decrease from the third quarter, which was $7.9 million. This decrease sequentially was primarily due to reduced consulting costs as well as recruiting costs from our sales team investments. Our short-term focus is to continue execution on a key catalysts. Key catalysts include acceleration of OVA1 adoption and price, accelerated adoption of our Aspire Synergy platform and successful launch of new products.

The organizational changes Nicole referred to will result in onetime severance separation and settlement payments as well as legal costs of approximately $1.3 million in the first quarter of 2022. I would now like to hand the call back to Valerie to wrap up.

Valerie Palmieri -- Executive Chair of the Board

Thank you, Bob. Before we open up the call for Q&A, let me restate our optimism for building the company for sustainable growth for the near term and long term. 2022 will mark the first year with our second-generation technology being offered in a full access environment. It will be the first year with our first Aspira Synergy customer ramping up adoption as well.

Ovarian cancer accounts for more deaths than any other cancer of the female reproductive system and is the only gender-specific cancer with greater than a 50% mortality rate. Our work in products are at the forefront of changing the standards of care and the detection of ovarian malignancies. We believe we are helping close the gap in detection and, most importantly, survival for women. In the near term, we believe OVA1plus, with our diversity differentiation will become the standard of care and personalized pelvic mass risk assessment for ovarian cancer.

Our long-term goal is to become the personalized liquid biopsy standard, inclusive of all ages, stages and race and ethnicities. We are now happy to open up the call for Q&A and answer any of your questions. Operator?

Questions & Answers:

Operator

[Operator instructions] Our first question is from Brian Weinstein with William Blair. Please proceed with your question.

Unknown speaker

Hi. Good morning. Thank you. This is Dustin on for Brian.

Bob, maybe this one is for you. I know you called out the severance cost for the personnel rationalization. We're just trying to get a better detail on some more specifics around the sales force rationalization. What are the expected cost savings from this? And maybe more importantly, what are your expected benefits from this and how is that factored into your outlook for 2022?

Bob Beechey -- Chief Financial Officer

I think it was largely realignment and reinvestment. So while there will be some savings, it was largely a change relative to skill sets and coverage. There were also some management changes associated with that. So I think the other factor relative to looking at spend in 2022 is that we are anticipating launch costs associated with OvaWatch this year.

So in terms of absolute numbers, we're not seeing -- we're not planning a significant decline relative to overall sales and marketing expenses during the year. So it's really about effectiveness and productivity. So I think it's consistent with our intentions to drive productivity up during the year. And then also the other factor in terms of spend is a significant expectation around the OvaWatch launch this year.

Unknown speaker

Got it. Great. Thank you. And I know as of last quarter, I think you ended with around 40 reps.

I just wanted to confirm that number is still right around there and maybe what your intentions are for that number for the rest of 2022?

Valerie Palmieri -- Executive Chair of the Board

Hi, Dustin. This is Valerie. Last year, we ended about 26 reps and our goal is to be in that 30 to 35 zone.

Unknown speaker

Got it. Sorry about that. 

Valerie Palmieri -- Executive Chair of the Board

No problem.

Unknown speaker

Great. Thank you. And then regarding the licensing deal on the RNA technology, we just want to get a better understanding of how that option was exercised? Was it a cash payment? Was it stock? Does it entail future royalties? And then maybe some further detail on the time lines when you expect that tech to be developed for that new assay.

Nicole Sandford -- President and Chief Executive Officer

So in terms of the -- hi. It's Nicole. Thanks for the question. In terms of the cost, it was a relatively nominal cash payment, and we are actually still working on the terms of the agreement going forward.

Is that right, Bob?

Bob Beechey -- Chief Financial Officer

Yeah. No, we have a royalty arrangement with them that we previously disclosed that that's in the same zip code as our -- it's low single digits percentages. So I think that's consistent with our margin profile currently with the additional technology. What we will do, and it's largely reflected in our current run rate, but the exercise of the option basically commits us to support the codevelopment of what will be an LDT likely.

So I think it's really not a big onetime spend. It's really a confirmation that we're moving forward with the next phase of development. And we're very pleased with the economics of the royalty arrangement. 

Unknown speaker

Got it. Understood. Thank you. And then in terms of trends, I know you talked about the first quarter hitting some records.

That's great. It looks like the recovery is going well. But maybe just trying to get some of your assumptions for the rest of the year in terms of access and ASPs, if there's any outlook that you have maybe for next month and beyond then that would be appreciated?

Bob Beechey -- Chief Financial Officer

Well, we referenced the fact we're working clinical utility on OVA, and I think that the big factor we think that will ultimately -- so relative to price and ASP, think in terms of incremental growth in the short term, absent a significant publication. One of the factors that we anticipate helping to drive adoption in general is our Synergy platform expanded use case. So I think when you look at the outlook, while we haven't given guidance, we're all optimistic given the recent trends we're seeing in customer conversion as well as volume that access is opening up. So as Nicole mentioned, we're all over if we have a resurgence that we don't -- we want to minimize any impact to that.

But we're moving full steam ahead. Valerie mentioned we're at 30. We anticipate leading up to the launch, which we anticipate being this year of the OvaWatch that will build on synergy and incrementally increase the sales force from 30 to -- in the mid-30s, 35 is really the number we've said publicly. So I think the optimism -- we're back in our office now and our sales force is jazzed up with the momentum that Michael is bringing to the table as well.

So we're very bullish that our strategy of building out availability with synergy with the two super groups and then launching the OvaWatch is going to provide us very strong momentum going into the second half of the year.

Unknown speaker

Got it. Thank you. And then a last one on cash burn. It's been focused for a lot of investors.

I think this earnings season in regards to other companies in the diagnostic space. Bob, incorporating your comments about operating expenses with the restructuring and all the moving pieces there. How should we think about what that means for cash burn this year?

Bob Beechey -- Chief Financial Officer

Well, I think I signaled that Q1 has the one-off cost. So that's really onetime. And then I think we're thinking about a marginal reduction and then compression of cash burn as we launch and further grow adoption as the Synergy platform starts to kick in with volume as our sales force productivity. Recall, we've said in the past, while we did make some changes relative to the sales force, we've got a lot of salespeople that are getting better tenured.

So I think we're going to start to get to a full access, fully trained, fully up to speed stride. So I think -- and then our big optimism is related to dropping in OvaWatch during the year, which was a much wider indication that we think is going to fuel adoption because the toolkit relative to OvaWatch becomes a lot more clinically useful. The OVA1plus is much more acute in terms of life or death and the implication for patient care, but the ability to use OvaWatch to really determine if surgery is necessary is very -- our voice of customer on clinicians leads us to believe that there's just a gap in the toolkit that we think OvaWatch is going to significantly impact. So those are the factors that will provide the uplift for utilization on the revenue side and think in terms of cash burn being most influenced by that and less so by the restructuring.

So I think we're on the current trajectory. We built out and essentially think about the Q1 or it's more than a tweak, but it's really an optimization move as opposed to a cutback.

Unknown speaker

Got it. Great. Thanks for taking our questions.

Operator

Our next question is from Ross Osborn with Cantor Fitzgerald. Please proceed with your question.

Ross Osborn -- Cantor Fitzgerald -- Analyst

Hi. Good morning, everyone and congrats on the progress. So starting off, can you discuss OvaWatch? Would you be able to provide some more color around the commercialization plan for single-use? How should we think about the ramp exiting this year and early next?

Valerie Palmieri -- Executive Chair of the Board

Yeah. So as we mentioned, we submitted our paper last year and we actually have some really positive signals that we may be seeing publication of that soon, so stay tuned. And the ramp-up will be in the second half on that commercialization plan. We have a lot of work to do, but we have a really solid plan in place.

So we should be fully in the market in the second half of the year, and we expect to see -- I think in our remarks, we talked about there being a significant exponential driver to our volume as a result of OvaWatch. But of course, that's not all going to happen this year. It will really start ramping up in the second half, and we'll see broader adoption next year. And then as we bring on the serial monitoring, it will grow from there.

Ross Osborn -- Cantor Fitzgerald -- Analyst

OK, great. And then are you able to discuss pricing at this point or at least how it compares to the company's ASP?

Bob Beechey -- Chief Financial Officer

There's a couple of factors there. We are optimistic that there'll be the ability to cross walk the Medicare pricing from the OVA1, it's similar technology with a different algorithm. And I think that baseline Medicare reimbursement, while we don't have final approval, we're in discussion, and we're optimistic that we'll essentially equate to the Medicare pricing, then we have to go through the grind of working through -- working with all the individual insurers. So that won't happen overnight.

But we think that the technology is similar such that it's a broader indication. So we'll have a different PLA, CPT code for OvaWatch. But our intention is to migrate it to similar to OVA1 pricing but there will be a little bit of a lag.

Ross Osborn -- Cantor Fitzgerald -- Analyst

OK. Got it. Thank you for the color. And then on endo, I think I may have missed it, but is the company still targeting a launch in the first half of next year?

Bob Beechey -- Chief Financial Officer

We've said 2023 and we're not trying to be cute on the timing. But there's still some -- a lot of work to be done. So we've certainly committed to 2023, and we're not backing off of that.

Ross Osborn -- Cantor Fitzgerald -- Analyst

OK. Great. And then moving on to gross margin. Can you just provide a little bit more clarity on some of the headwinds and tailwinds seen during the fourth quarter? And how we should think about that for calendar '22 looks like GenetiX may have looked at margin during the quarter?

Bob Beechey -- Chief Financial Officer

No. GenetiX, I think it's really volume-driven primarily. We had some -- we're sorting out the scaling and we were doing a lot of resupply of kits, and that's what gave rise to Q3. That's the dynamic, there is kit build and resupply and the timing of that.

So I think -- when we scale over the year, we view margin to have upside largely based on volume ramp. We will have, as I mentioned earlier, more -- I think in terms of incremental price increase over the course of the year, which goes straight to margin and then the volume -- the scaling of the fixed costs relative to volume and we're not anticipating any one-offs, but the kit as we scale and build out kits and go to new customers, that's where it gets slightly lumpy. But as the numbers grow, I think the significance of that will smooth out.

Ross Osborn -- Cantor Fitzgerald -- Analyst

OK. Got it. And then lastly for me, I guess congrats on the higher selling price in the quarter. Have you seen the willingness for payers to meet the increase? Can you provide any color on the pipeline in terms of coverage?

Bob Beechey -- Chief Financial Officer

Well, we've gotten very positive indications, primarily with Medicare on payer coverage for OvaWatch. It's obviously premature relative to anything with EndoCheck to approach them. As I mentioned -- the step functionality that we're trying to drive, we previously discussed a clinical utility study, which has been somewhat hampered from a time line perspective relative to COVID. We try not to use that as an excuse, but that's why it's been somewhat delayed.

That's been the issue with some of the larger nationals. But the other factor in the strategy in particular, relative to the large super groups as we think that they're very helpful in influencing payers as their customer base gets adoption because I think the voice of those providers actually counts a lot more than we as a device manufacturer and vendor. So I think that's the other element is as we get adoption and, in particular, get some major provider partners, we think that's going to help with reimbursement. But the new news relative to our dialogue needs to be the clinical utility, which we expect to be able to publish something this year.

But then obviously, there's a lag relative to the cycle of the payers in terms of getting their agreement and when they implement. So we're not -- we don't have our plans anything other than the incremental -- hitting the singles, picking up payers over the course of the year, we've been doing that over time, but we don't operationally plan on a big step function.

Valerie Palmieri -- Executive Chair of the Board

Let me say something on that, too. This is Valerie. Also the other piece is just having full access. This is our first year with having full access on the Cigna in a sense of assuming Omicron variant is shutting things down.

But we got the Cigna contract, the Cigna pricing and a lot of the pricing we got during COVID. So the hope is that a new sales force, additional feet on the street, additional tenured feet on the street, we should be seeing more of those contract prices come through, as Bob said, but the clinical utility is the big step function.

Ross Osborn -- Cantor Fitzgerald -- Analyst

OK, great. Thanks for the additional color.

Operator

Our next question is from Kumar Raja with Brookline. Please proceed with your question.

Unknown speaker

France Hudendu for Kumar from Brookline. Appreciate the business update. Thank you. For the ongoing EndoCheck trial, could you please talk about the type of samples that are being shared by the two companies? And just to get an idea of how you are thinking about the test, confirmation of endometriosis, is it still require tissue biopsy and histology? Or do you expect that the other test may potentially replace it all together?

Valerie Palmieri -- Executive Chair of the Board

Good morning, Kumar. It's Valerie Palmieri. Thank you for the question. Let me answer in two parts.

So in terms of specimens, we have a specimen collaboration with AbbVie and a specimen collaboration with Opdivo, two of the three pharma companies. These specimens are retrospective specimens. And we also have our own retrospective specimens as well, as well as additional study specimens where we've been working with collaborators. So in aggregation, we have a large retrospective specimen bank, which is the heart of the validation of the EndoCheck product.

We also -- in parallel, we are running -- we are initiating a prospective trial as well. So we have retrospective specimens and we are initiating a prospective trial as well. And the end goal in terms of comparing it to laparoscopic biopsy. Laparoscopic biopsy is invasive.

This will be a noninvasive aid in detection and our goal is to have strong enough sensitivity and specificity, whereby a doctor and the patient would have indication of the endometriosis detection, and at that point, could initiate either medical management or could initiate surgery if that is specific treatment. So the goal is that this is for women, the initial product out of the gates will be women that are moderate to severe pain, and this will be a noninvasive endometriosis aid and detection product.

Unknown speaker

Got you. Thank you. And also with regards to the breakthrough designation decision for EndoCheck, I was just curious if you've seen any further guidance from the FDA? And is there any timelines that you could share with us? And also, could you talk a little bit about what kind of benefits this designation offer, especially in terms of regulatory issues or the commercial launch? Thank you.

Valerie Palmieri -- Executive Chair of the Board

OK. So in terms of that question, there's a couple of parts there. So the breakthrough designation is a brand new program. I'm not sure how familiar you are with it.

the benefits of it are that when you have a product that is truly breakthrough and you meet three criteria, which is number one, are you solving for a disease that's irreversibly debilitating; number two, is there a predicate device; and number three, is there an improved patient well-being. And we believe in our discussions with the FDA, we have supported those three, but we are still continuing discussions with them. In addition, we are running a parallel process via LDT. As Nicole alluded to in her section, the majority of novel diagnostics are LDTs.

And we are running a parallel process, and that is something that we have informed as well the FDA. Your last question in terms of uptake on the product and also the sensitivity and specificity, again, we're looking to be the noninvasive solution versus laparoscopic biopsy.

Unknown speaker

Sounds great. Thank you. Thank you for taking the questions.

Valerie Palmieri -- Executive Chair of the Board

You're welcome.

Operator

We have reached the end of the question-and-answer session. And I will now turn the call over to management for closing remarks.

Valerie Palmieri -- Executive Chair of the Board

In closing, we believe that our accomplishments during 2021 set us up for a strong 2022 and beyond. With myself leading the board and Nicole leading the growth and scaling of the business, we are focused on doing the right things to drive profitability and growth. Our end goal is to serve the women's health market with a platform coupled with proprietary science and data tools, which will drive better health and well-being to each and every patient we serve. Thank you for joining us today, and we appreciate your support and interest in Aspira Women's Health.

Operator

This concludes today's conference, and you may disconnect your lines at this time. Thank you for your participation.

Duration: 49 minutes

Call participants:

Valerie Palmieri -- Executive Chair of the Board

Nicole Sandford -- President and Chief Executive Officer

Bob Beechey -- Chief Financial Officer

Unknown speaker

Ross Osborn -- Cantor Fitzgerald -- Analyst

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