Sera Prognostics, Inc. (SERA) Q4 2021 Earnings Call Transcript

Sera Prognostics, Inc. (SERA 3.93%)
Q4 2021 Earnings Call
Mar 29, 2022, 5:00 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon and welcome to the Sera Prognostics' conference call to review fourth quarter and fiscal year of 2021 results. [Operator instructions] We will be facilitating a question-and-answer session toward the end of the -- 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 Mr.

Peter DeNardo of CapComm Partners for a few introductory comments. Please go ahead, sir.

Peter DeNardo -- Investor Relations

Thank you, Chuck. Good afternoon, everyone. Welcome to Sera Prognostics' fourth quarter and full year 2021 earnings conference call. At the close of the market today, Sera Prognostics released its financial results for the quarter ended December 31, 2021.

Presenting for the company today will be Greg Critchfield, chairman, president, and CEO; and Jay Moyes, 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 is found on our website at seraprognostics.com.

This call could be heard live via webcast at seraprognostics.com, and the 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 Greg, Sera Prognostics' chairman, president, and CEO. Greg.

Greg Critchfield -- Chairman and Chief Executive Officer

Thank you, Peter, and good afternoon, everyone. Today, I will provide an overview of key business highlights during the quarter and our expected developments over the near term. We are pleased that Sera completed 2021 with a number of significant accomplishments that we believe will help pave the way for substantial success in the future. These include continuing to build our commercial infrastructure, signing important third-party agreements -- payer agreements, and publishing key studies that strongly support Sera's test-and-treat PreTRM strategy.

We believe that all of these activities will help us to improve the health outcomes for moms and babies and thereby achieve significant healthcare cost savings for society. Commercially, at this point in time, we are in very early market development. As a market builder, we are doing something no one else has done before, bringing the first commercially available blood test to market to determine an expectant mother's individual risk of spontaneous preterm birth. Taking a broadly and rigorously validated test to market that has the potential to enhance the paradigm of pregnancy treatment is not a simple endeavor.

It involves creating awareness through education of doctors, patients, and payers of the significant health and cost-saving benefits of using our test. This process takes time and requires the careful coordination of each element of the strategy that must be put in place to effectively build the market. COVID-19 complicated this process during the first seven months of our launch, with unforeseen pandemic spike having a profound and continued negative impact on normal healthcare delivery, physician engagement, and enrollment in clinical studies. Thankfully, we appear now to be emerging from that situation.

Today, I'll focus my commentary by providing you insights -- with insights into major areas we are addressing in the execution of our plans: our strategy and execution with payers, including an update on Anthem; our continuing efforts to generate important health and economic data, including a timeline for enrollment of our PRIME study with Anthem and clinical and economic data readouts; our work to address healthcare disparities; the efficient use of capital resources to build infrastructure and capabilities; continuing the design of the sales operations, including key sales learnings that we are leveraging to empower our team for success as we call on physician practices; and a brief review of the progress on our product pipeline as we leverage our advanced proteomics and bioinformatics platform. First, a word on payer strategy. Payers required data in order to make informed decisions on coverage. As we have consistently articulated, our strategy is to publish peer-reviewed articles that demonstrate the clinical and economic benefits that occur as a result of applying PreTRM testing.

In November of 2020, we launched the PRIME study within the Anthem network to generate further data that should enable Anthem and others to optimize how PreTRM testing is rolled out in their networks. From July 2021 until the present, four clinical and health economic studies have been published in respected journals. One of these was the rigorous health economic analysis performed by HealthCore and Anthem of the PreTRM strategy, which was published in September of 2021, based on Anthem's own data. As a consequence of strong clinical and economic data, we successfully entered a multiyear, long-term commercialization agreement with Anthem in the first half of 2021.

The commercialization agreement enables Anthem to access Sera's testing services and for Sera to be paid for such testing. It also specifies that Anthem will pay annual minimums for testing during the term of the agreement. We received the first minimum payment this past January. We believe this payment is one of the many elements indicative of Anthem's continued support.

Payer revenues, including from Anthem and others, have been slow to develop due in part to COVID-19, as well as some payer personnel turnover. Further, while it takes time to materialize, we have seen some payers shift their strategic focus toward disadvantaged populations in a way we believe will broaden the business opportunity for our testing. We will address our view on short-term expectations later in the call. A key positive is that the Centers for Medicare & Medicaid Services, CMS, recently set a Medicare payment rate of $750 for Sera's unique CPT Proprietary Laboratory Analyses, PLA, code for the PreTRM test.

We see this assigned rate as a further validation of the commercial value of the PreTRM test, which puts us in an excellent position for reimbursement discussions and decisions with all payers, commercial, self-insured employers, integrated health networks, and governmental Medicaid and Medicare plans. While we continue to work closely with Anthem, we've also entered into contracts with a number of self-insured employers and have recently announced a contract with MultiPlan, a national large insurance network payment system with more than 700 healthcare payers and 1.2 million healthcare providers participating in its network. We see this and other executed contracts as a positive indicator for future reimbursement. We are in active discussions with a number of payers, and we will announce future key opportunities contributing to the revenue growth in the future.

We see that -- these kinds of payers as nearer-term revenue opportunities that will contribute to growth over the next few years, ahead of more widespread payer adoption. I'd like to give you a bit of the timetable on the clinical and economic outcomes. The PRIME study, a prospective randomized controlled trial launched within the Anthem network, is designed to provide a template for Anthem and others to optimize how to effectively roll out Sera's PreTRM test-and-treat strategy across their networks. I'm pleased to report that the PRIME study enrollment is accelerating as we emerge from the COVID-19 impacts we saw last year and early this year.

We have now enrolled nearly 1,000 pregnancies across 14 sites around the country. The co-primary endpoints are hospital length of stay reduction and improvement of neonatal health. We believe that the PRIME study is on track to have 2,800 interim enrolled pregnancies in the fall of this year and for the readout of the trial to take place during 2023. We believe that publication of positive PRIME study results will be an accelerant for growth in 2024.

In the meantime, we expect additional clinical and economic data to be made public during the first half of 2022 and continuing thereafter. We will announce the data from these efforts as soon as we are able to do so. We believe that positive results from these studies will continue to provide momentum for continued test order and revenue growth ahead of the PRIME study readout. Our work now on health disparities.

Sera is committed to addressing the significant disparities in maternal and newborn health that exist in underserved populations, particularly among Black women. This has become an important key focus for Sera with its contracted partners. You may recall, our recent appointment of Dr. Woodrow Myers as an advisor to Sera, focusing on public and political affairs.

We continue to work with him and other key individuals and organizations on a multidisciplinary strategy to address health equity and disparities. We believe the PreTRM test has great potential to make a meaningful contribution to more proactive management of the large numbers of higher-risk pregnancies that result in poor outcomes in these underserved populations. We're pleased to see an increasing number of third parties joining with Sera in focusing on these huge unmet medical and societal needs to work together toward greater health equity. Discussions are underway with state, national, and regional insurers to address these challenges.

We look forward to being able to announce specific initiatives, not only among currently contracted payer parties working with Sera to do so, but also how we involve additional payers in helping us to make a real difference. We believe that the adoption of Sera's cost-effective and cost-savings approach will generate significant societal benefits and will also be a source of future revenues. This points to a long-term, robust opportunity to help doctors and patients improve the outcomes of pregnancy while Sera grows over time. Over time, we view these initiatives that I just described as key elements in our deliberate, persistent, and multifaceted strategy to build the foundation for a much-accelerated uptake as payers and physicians more widely adopt Sera's technology and we capture a large percentage of the enormous PreTRM testing market.

Use of capital resources to build infrastructure and capabilities is important. Notably, there are 3 million -- approximately 3 million candidate pregnancies annually for the PreTRM test in the U.S. And we're building a solid platform that is designed to enable us to make a strong impact as more data become available, more widespread insurance coverage occurs, and physician acceptance accelerates at the provider and/or professional society levels. To effectively impact those millions of pregnancies, there are a number of operational imperatives that must occur.

To that end, we're utilizing our significant capital resources to accomplish the following activities: build out electronic ordering and infrastructure; negotiate new blood draw partnerships and/or developing new blood collection techniques; streamline the customer experience for patients, physician offices, as well as our billing processes; complete important clinical studies to reinforce and support strong sales messaging and advance PreTRM as a standard of care; establish contracts with strategic early adopter commercial payers, healthcare and physician networks, self-insured employers, and governmental third-party payers; and improve our lab processes that will increase efficiency and capacity while lowering costs. We've had a lot of learnings from deploying our sales reps. In 2021, we hired over two dozen sales territory managers. During 2022, we will continue to aggressively pursue early market development driven by these territory managers that we believe will produce steady near-term revenue growth as we refine our approaches and learn while we create a new paradigm for pregnancy management.

Again, we are marketing the only commercially available prognostic blood test to determine the risk of spontaneous preterm birth. As such, we embark on this important journey with key learnings from the sales force hired and deployed beginning in Q3 through Q4 of 2021. This has informed our approach and allowed us to optimize our go-to-market strategy for success. We've adjusted our sales messaging based on our experience while also improving the training, coaching, and performance measures of our existing sales team.

These changes have already led to gradually increasing month-over-month and quarter-over-quarter improvement in Q1 2022 physician visits, practices converted to ordering, order volumes, and test results delivered. And we are encouraged by what we are seeing. We're using tools to identify and target innovative and early adopter physician practices. We are expanding consumer engagement that we believe will drive interest at the patient level.

We plan to expand the sales force selectively in response to increased demand and payer coverage. A final word about product pipeline advancement. Beyond commercializing PreTRM, we're also pleased with our progress in advancing our product pipeline by leveraging our advanced bioinformatics and proteomics platform to create better predictive information for pregnant women. We recently presented our work on preeclampsia in a late-breaking poster session at an international scientific meeting.

We are planning on validating a preeclampsia predictor by the end of this year, with the completion of the development of the commercial predictor taking place during 2023, and launch thereafter. We continue to believe that Sera's vision to be the pregnancy company will be realized by developing valuable information for mothers, doctors, and payers across a number of important pregnancy conditions. As new products are launched, we believe that these efforts will create additional revenue streams for Sera. I'll now turn over the call to Jay for a review of our fourth quarter financial results and a view of our expectations through the end of this year.

Jay.

Jay Moyes -- Chief Financial Officer

Thanks, Greg, and good afternoon, everyone. Today, I'll briefly review our financial results for the fourth quarter and then provide commentary on our outlook for the near and mid term. For the fourth quarter of 2021, we reported revenue of $26,000, compared to $6,000 for the same period of 2020. Total operating expenses of $12.6 million were up significantly from $4.8 million for the fourth quarter of 2020.

The increase was primarily due to the scale-up of operations to market and commercialize our PreTRM test. Research and development expenses for the fourth quarter of 2021 were $3.1 million, compared to $2.1 million for the prior-year period, primarily due to increased laboratory operations and clinical study costs. Selling, general, and administrative expenses for the fourth quarter of 2021 were $9.5 million, up from $2.7 million, due primarily to increased headcount as the company has scaled commercial operations and general corporate infrastructure, as well as increased costs related to operating as a public company following our IPO in July 2021. Net loss for the fourth quarter of 2021 was $12.5 million, compared to $5.4 million for the same quarter a year ago.

As of December 31, 2021, the company had cash, cash equivalents, and available-for-sale securities of approximately $140 million. I would like to stress that in the current difficult environment for corporate financing, we are comfortable that we have sufficient capital resources to implement our strategy into 2025 without the need to raise additional capital. Turning now to our expectations. Although we have not previously given guidance and don't intend to do so for the time being given that we are in the early phases of commercialization, we do want to keep you informed as to the commercial ramp and the timing we see going forward.

The macro challenges we face, including wave after wave of pandemic, causing patients to defer doctor appointments, have impacted the revenue trajectory in the short term. Our belief is that revenues in 2022 will be less than $500,000. We do not plan on giving additional guidance beyond that for the foreseeable future. But as Greg mentioned, although revenue growth has been slow, progress on a number of key fronts has been strong, and we believe we have the capital resources to execute on our strategy.

I'll now turn the call back to Greg. Greg.

Greg Critchfield -- Chairman and Chief Executive Officer

Thanks, Jay. We'd like to thank everyone for attending our call today. We expressed on our last call that these are early days for Sera in commercializing the PreTRM test. Though early commercialization always presents challenges, we are pleased to see increased trends of adoption as we execute our strategy.

Our strengths lie in our first-mover advantage in a market with no significant discernible competition, ample cash on the balance sheet, a deep roster of experienced professionals, and a compelling health economics story underpinned by rigorous data. In a very difficult market landscape, we believe we are uniquely positioned to achieve our mission to better human life as the pregnancy company. And with that, we'll open the line for questions. I'll turn it back over to the operator.

Questions & Answers:

Operator

Thank you. We will now begin the question-and-answer session. [Operator instructions] And the first question will come from Patrick Donnelly with Citi. Please go ahead.

Patrick Donnelly -- Citi -- Analyst

Hey, guys. Thanks for taking the questions. Maybe one on PRIME. You know, just trying to figure out, just can you talk about how much you view this as a catalyst for payers coming on board.

You know, you actually are having ongoing conversations with payers today. What's the willingness to reimburse before seeing this data versus kind of waiting? Just wondering what those recent conversations suggest in terms of needing to see the economics to be available for PRIME before coming online versus the willingness to step in front of it and start paying for this.

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah. Thank you, Patrick. We view PRIME as being additive to the large body of evidence, health, economic, and political evidence that have already been reported out. Again, the purpose is to optimize -- give people the ways of optimizing the rollout of PreTRM testing.

There's no question, there are a number of payers that have already decided there is value. They've signed contracts with us, and we are in active discussions to do so with a large number of them. So, we see PRIME as being additive to that body of evidence.

Patrick Donnelly -- Citi -- Analyst

OK. That's helpful. And then maybe one just on the guide Jay gave there on the under 500 grand. I mean [Technical difficulty] Can you guys just give a little more color on, I guess, what you're seeing, what has changed since some of the conversations we had a couple of quarters ago in terms of the expectations for '22.

Is it, you know, COVID pressuring the volumes, reimbursement? Maybe just help us figure out what's kind of the delta in there.

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah. As I mentioned in my remarks, the -- there were two very serious waves of COVID that occurred that were entirely unanticipated in the early part of 2021. That was one factor that limited access to physician offices. It changed the way that obstetrics was practiced.

There were a lot of things that happened as a result of the pandemic. At the same time, the other thing that we've seen is now a keen focus on the part of payers to be in a position to address healthcare disparities. We saw some personal -- personnel changes that occurred among certain insurers. We saw people adapt their strategies to decide where the technologies would be best deployed.

And we're very excited about the opportunities that exist to actually better address the disparities that we see among underserved populations. So, those are some of the things that have happened. Additionally, I'll remind everyone that our sales team was largely -- our sales team was virtually entirely hired during the second half of 2021. Many of them were hired in the last quarter.

It does take time for sales reps to come up to speed and to become productive. And because of our monitoring of data, we're in a good position and are seeing the results and making adjustments as we more effectively address the market in a -- on a go-forward basis.

Patrick Donnelly -- Citi -- Analyst

OK. And then, Greg, picking up on your last point there, I mean, on the sales force, has the trajectory of the revenue shift changed your plan in terms of sales force hiring, how you're thinking about '22? In terms of hiring even in '23 given, again, the revenue being a bit lower, how are you thinking about kind of building out the sales force, the infrastructure there?

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah, the way we think about it is the -- at the end of '21, our sales headcount was approximately 30. What we're going to do as a company is monitor the adoption, monitor payment by insurance companies, and we will judiciously adjust our sales force depending on market conditions. That's what we plan on doing. By the way, this model works.

We did the same thing in the early days at Myriad. That's what led to the tremendous success that we had there. It is possible to roll out of sales force in a -- in an effective manner by paying attention and developing best practices and replicating them across the body of sales representatives. That's clearly the strategy as we move forward.

Patrick Donnelly -- Citi -- Analyst

Understood. Thanks. I'll leave it there. I appreciate it, guys.

Operator

The next question will come from Brian Weinstein with Blair. Please go ahead.

Dustin Scaringe -- William Blair -- Analyst

Hi, this is Dustin on for Brian. First question, I'm wondering about the contract minimums. I know you just mentioned that you got your first minimums recently, but we're wondering just how those should roll throughout '22 and maybe the scale of those, in addition to how they compare to your original expectations at the time of the IPO.

Greg Critchfield -- Chairman and Chief Executive Officer

Now, Jay, do you want to answer that one?

Jay Moyes -- Chief Financial Officer

Yeah, sure. We haven't really spoken in detail about the contract minimums, and we really don't intend to do so. But we have received the minimums that we are entitled to and expect to receive the minimums going forward. So, I think the -- you know, everything in accordance with the contracts are moving as expected.

Dustin Scaringe -- William Blair -- Analyst

Got it. And I know you gave some color on the recent trends you're seeing with the test, but we're wondering what you're hearing from your sales force. What are clinicians saying about the tests? Are they positive on it? And are there any reservations that they have that are maybe slowing down the pace of adoption right now?

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah, what the sales force is hearing from physicians includes the following. Certainly, doctors are confirming that there's an unmet need. They're reaffirming that there's a significant clinical gap in how to manage the challenge of preterm birth. They acknowledge that a solution like PreTRM is something that's really needed.

The questions that we get from them are what percentage of patients come back at increased risk? What do I do when a patient comes back with an elevated risk? What does the clinical protocol I'll use? What does the maternal-fetal medicine experts think about it, about the test? And are the professional societies aware of Sera's technology? There are excellent answers for all of those things. I could tick them all off. I won't do so now, but those are the kinds of things that we enter into discussions. Clearly, there's an interest among OB-GYNs.

We were able to just sit down and explain things to them. They're very interested. They want to know how would I actually use this in my practice? 

Jay Moyes -- Chief Financial Officer

Yeah. And, Greg, I might add that, you know, we do carefully monitor productivity, and we've put key initiatives in place to address what could potentially be roadblocks. We managed productivity through coaching, education, accountability, simplification of messaging, streamlining the time of contact with the patient near to the time the blood is drawn, and simplifying the process to bring practices on board. There are all improvements from which we're seeing higher productivity.

So, I just wanted to add that.

Dustin Scaringe -- William Blair -- Analyst

OK. Thank you. And then one more for us. You recently showed data on the first pipeline product for preeclampsia.

Just wondering how this data came in relative to your expectations. What this means for clinical adoption? And can you give us an update on the other pipeline products that are in development? Thank you.

Greg Critchfield -- Chairman and Chief Executive Officer

Sure. Yeah, we're very excited about the preeclampsia data that were presented at the Society for Reproductive Investigation. We are in the process of conducting a complete validation of the preeclampsia prediction. And with that, we see a complement to the kind of information we're adding.

It goes back to what our strategy is, develop clinically meaningful and economically impactful predictions that can make a difference -- positive difference in the lives of mothers and babies. Clearly, the -- our preeclampsia work is part of that. PreTRM is clearly that. There are additional products that will come later.

We're in various stages of development. But we -- we're very excited to validate the preeclampsia product and ultimately make it available to the market after it's validated. Sometime after 2023 is when we would expect to see something there.

Operator

The next question will come from Kevin DeGeeter with Oppenheimer. Please go ahead.

Kevin DeGeeter -- Oppenheimer and Company -- Analyst

Hey, thanks for taking our questions. Greg, you mentioned you've made some adjustments to sales messaging and also that, you know, one of your goals for early commercialization are kind of, you know, settling on, you know, best practices that then can be, you know, rolled out across the larger sales force. You know, what are some of those changes in messaging that you picked up and that you're looking to implement? And how should we think about, you know, some of the incremental learning and impact on best practices?

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah. What we've done is we -- as you look at the time period between when a patient first hears about the test and the time that the blood is drawn, we shortened that period. It makes it simpler for the patient to get in and see the doctor and actually have a top of mind when she visits the doctor. So, that's been one of the things that we've been doing.

We've worked on simplifying the message, who is this test for? It's very easy to explain to physicians why the -- what the test is used for, who the candidate patients are. And as it turns out, it's the great majority of singleton pregnancies that are, in fact, candidates for the test. We also -- when people ask the question, what do we do clinically with the patients? We -- the simple retort is, what are you doing currently when you have a patient who is, in fact, at high risk? There are known protocols that are practiced every day. We emphasized to the doctors that you can use protocols that you're familiar with and that those are ways of addressing the risk in your patients.

All of those simplifications in terms of materials, in terms of presentation, in terms of sales approach, decreasing the amount of time required to explain the message, all those things are elements of best practices, and we believe they are the reasons that we're seeing the increased uptake that we're witnessing as we've entered into 2022.

Kevin DeGeeter -- Oppenheimer and Company -- Analyst

Great. As a follow-up, I think you highlighted, you know, driving patient interest or patient awareness in PreTRM is kind of, you know, one component of the strategy. How should we think about, you know, relatively capital-efficient ways to just sort of, you know, generally, you know, motivate the pregnant mother who's coming in to, you know, engage the clinician in a potential conversation?

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah. There are a number of tools that can be used. We are ramping up our voice in social media networks, making this information available to more women. We have planned campaigns both on the physicians' side and the patients' side to go out and raise awareness.

There are ways to do that very effectively. The -- we'll have more to say as we enter into broader coverage. We also look geographically at where the physicians and patients are likely to be most receptive. We had a good deal of experience doing this in the Myriad days where we started out in selected geographies, made sure that it worked before we moved to others.

That's the kind of strategy that we use as we roll out our digital campaigns to raise awareness. Clearly, there are really three major customers that we have to hit. There's -- first of all, we have to make sure that the payers are aware and can pay for the testing. The physicians need to be made aware in order to order the test.

And the patients are the ones that are going to benefit the most. Having all three of them requires coordination, and our activities are coordinated to make sure that we can address all three of those key customers that are involved in our testing.

Kevin DeGeeter -- Oppenheimer and Company -- Analyst

Great. Thanks for taking our questions.

Operator

[Operator instructions] Our next question will come from Dan Brennan with Cowen and Company. Please go ahead.

Unknown speaker -- Cowen and Company -- Analyst

Hi, this is [Inaudible] on for Dan here. Here's a question on the kind of readouts for PRIME. So, I mean, do you have any kind of clear metrics in mind, you know, within your co-primary milestones and kind of what they look like?

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah, the PRIME study -- the primary outcomes of the PRIME study are a decrease in the length of stay in the hospital and improvement in neonatal health as measured by standard indices of how healthy the babies are when they're born. As was demonstrated in the Prevent PTB study, we showed more than a 70% reduction in preterm -- in the time that preterm babies spent in the NICU -- in the queue or the NICU or the hospital. So, hospital length of stay is a critical variable that we look at. For every day the baby is in the hospital, it's generating expense.

This is what costs the health system a lot of money. And the babies that are most poorly developed spend the longest time there. Measuring neonatal health directly tells us that if we're able to successfully decrease the time in the NICU in hospital, if the babies are discharged and are healthier, that is the kind of outcome that we seek to achieve, and we are measuring it directly. These are the outcomes that matter the most to payers.

And the PRIME study, we designed that study with payers in mind. We collaborated with our colleagues at Anthem as we built the metrics for that trial. We're very excited to continue to add to the data that exist that show identifying early, intervening early and proactively in pregnancy can, in fact, make a difference in health outcomes and in the economics.

Unknown speaker -- Cowen and Company -- Analyst

Correct. Great. And then just to kind of follow up on the strategy you may have with PreTRM, so you are -- you have mentioned a bit of a pivot toward looking at underserved populations. I'm was wondering if you could give some more color on what that looks like and how you're kind of divvying your sales force along those lines? Thanks. 

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah. It's a well-known fact that African American women have preterm birth rates that are anywhere from 50% to as much as almost double the preterm birth rates seen in non-African American populations. Clearly, there are areas in the U.S. where the underserved populations are burdened disproportionately by preterm delivery.

We -- what we've done as a company has actively gone after those areas. We have recruited -- we have trial sites that are recruiting for the PRIME study that covers some of the most highly affected geographies for prematurity in the U.S. We are in discussion with people at the federal level, state level, and with payers to put programs together where we can actually affect the benefit by giving the PreTRM test as part of a package to these patients. Those discussions are underway.

There is a lot of activity, a lot of interest. And clearly, politically, it -- there's a lot of attention to it. As I said before, from a healthcare perspective and disparities, we need to do a better job. And we are finding very receptive conversations that we believe are going to result ultimately in substantial collaboration that will actually generate revenue as we provide value from our PreTRM test to society.

Unknown speaker -- Cowen and Company -- Analyst

Thanks. And then just one quick follow-up, if I could. So, I think you previously mentioned there could potentially be interim PRIME data by Q4 this year. Is that still a potential possibility? And if not, kind of where about on '23 do you see it landing? Thanks.

Greg Critchfield -- Chairman and Chief Executive Officer

Yeah. Unfortunately, the COVID pandemic slowed down the development of getting the readout completed this year. We believe we will have the requisite number of enrolled patients in the PRIME study, 2,800, so that the readout can occur in 2023. And we're looking at having the readout of the PRIME study taking place in 2023.

Now, as I said before --

Unknown speaker -- Cowen and Company -- Analyst

Great, thanks.

Greg Critchfield -- Chairman and Chief Executive Officer

We're at nearly a thousand patients enrolled already, and we're on track to complete enrollment to get to the point where we can perform the interim look and ultimately the final look.

Unknown speaker -- Cowen and Company -- Analyst

Great. Thanks. I'll hop back in the queue.

Operator

[Operator instructions] This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Peter DeNardo for any closing remarks. Please go ahead, sir.

Peter DeNardo -- Investor Relations

Thank you, Chuck. This concludes the call. We look forward to providing an update on our business when we report first quarter 2022 financial results. Thank you and good afternoon, everyone.

Operator

[Operator signoff]

Duration: 41 minutes

Call participants:

Peter DeNardo -- Investor Relations

Greg Critchfield -- Chairman and Chief Executive Officer

Jay Moyes -- Chief Financial Officer

Patrick Donnelly -- Citi -- Analyst

Dustin Scaringe -- William Blair -- Analyst

Kevin DeGeeter -- Oppenheimer and Company -- Analyst

Unknown speaker -- Cowen and Company -- Analyst

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