StageZero Life Sciences Ltd

TSX:SZLS

Earnings Call Transcript

[Operator]

Good morning, ladies and gentlemen, and welcome to the StageZero Life Sciences Third Quarter Financial Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Rebecca Greco. Ma'am, the floor is yours.

[Rebecca Greco]

Thank you, Catherine. Good morning, everyone, and thank you for joining the StageZero Third Quarter 2021 Earnings Conference Call. Joining me today is StageZero Chairman and CEO, James Howard-Tripp; CFO and COO, Matthew Pietras; and Dr. Padman Vamadevan, StageZero's Clinical Director of Global Program Development. Please note that management's discussion today will contain forward-looking statements about anticipated results and future prospects. Forward-looking statements involve a number of risks and uncertainties, and StageZero's results may differ materially from those discussed today. Investors should consult the company's ongoing quarterly filings and annual reports for additional information on risks and uncertainties relating to these forward-looking statements. Investors are cautioned not to rely on these forward-looking statements. The company disclaims any obligation to update these forward-looking statements, except as required by law. On today's call, measurement will refer to non-GAAP adjusted EBITDA. The metric includes certain items discussed in our press release under the heading discussion of non-GAAP financial measures and any other items that management believes should be excluded when reviewing continuing operations. The reconciliations of StageZero's non-GAAP measures to the comparable GAAP measures are available on the financial tables of the Q3 2021 financial results press release on StageZero's website. With that, I would like to turn the call over to James Howard-Tripp, StageZero's Chief Executive Officer and Chairman. James?

[James R. Howard-Tripp]

Thank you, Rebecca, and hello, everyone. Thank you for joining us today. Q3 and what has been a tumultuous 18 months have certainly been one of our busiest. This quarter, we very significantly advanced StageZero's mission of developing one of the foremost cancer detection, diagnostic and treatment programs in the world. Our proprietary technology, the deep expertise of our clinicians and our experienced leadership team has StageZero positioned to capitalize change in health care, of this we're certain. On September 2, we closed the acquisition of Care Oncology, creating a vertically integrated health care company. Since then, we have launched the AVRT program; positioned Aristotle [ with unit ]; established an on-site clinic in Richmond for Aristotle specimen collection as we test and build out a physical hub-and-spoke model; significantly expanded our management team, both in the U.S. and the U.K.; onboarded the new CFO and COO. We also listed on the OTCQB exchange in September. This past week, we announced an alliance with Teen Cancer America, which gives us both a national platform to highlight the need for early diagnosis of cancer in all age groups and the fact that there are strategies by which to do this. Please turn to Slide 4. As a company, we are devoted to meaningfully improving cancer patient outcomes through early detection and intervention. The COVID-19 pandemic has exacerbated the challenges the medical field faces in detecting and treating cancer. During the height of the pandemic, physicians' offices were often closed, routine check-up schedules were disrupted, biopsies and screening appointments were postponed. [ The specification ] of critical medical services has caused more cancer diagnoses to be made at later and later stages, leading to tragic and irreversible patient outcomes. In fact, it is now spoken of as a tsunami of late-stage cancer diagnoses. We have to get back to finding cancer early. Next slide, please. In StageZero, we're promoting a health care system that minimizes illness by proactively identifying high-risk individuals at the earliest detectable stages of disease. To this end, after more than a decade of research, we have developed Aristotle, a first of its kind, multi-cancer testing panel simultaneously screening for multiple cancers from a single sample of blood using mRNA gene expression profiling. What makes Aristotle different from other multi-cancer liquid biopsy screening tests is the high sensitivity and specificity that we offer. With Aristotle, a positive test does not just tell the patient that they have some form of cancer. It tells the patient with greater than 90% accuracy, the type of cancer they most likely have. The sensitivity and specificity continues through to detecting cancer at all stages. For example, in colorectal cancer, finding Stage 1 and 2 cancer equally, as well as Stage 3 and 4. This is a major differentiator from other cancer tests and a significant competitive advantage for StageZero. Next slide. The early diagnostics market is large and growing quickly, but this is only part of our story. Combined with our liquid biopsy and telehealth capabilities, we're positioned at the nexus of 3 of the most exciting areas in health care today. We could be in any one of these segments, but we are instead in all 3. I will say that again, we could be in any one of these segments, but we are instead in all 3. The opportunities ahead of us are substantial and the scope of how we can improve patient outcomes for potentially millions of people is a driving force of why we're doing what we do day-to-day at StageZero. Next slide, please.We believe that vertical integration is an essential part of success in today's post-COVID marketplace and recent examples of successful companies supports that. Therefore, the acquisition of Care Oncology was an important step in realizing our growth strategy. So what have we done? You know the pandemic has fundamentally changed the way health care services are provided, most noticeably with an enormous shift to telehealth services. StageZero and Care Oncology have well-developed telehealth capabilities that allow us to read patients mostly everywhere, the U.S., the U.K. and European Union, Canada, New Zealand, Australia, India, for example, in a way and at the times requested by patients. We can consult with them, arrange for them to have diagnostic tests. Send a phlebotomist to their home or arrange for them to visit one of our laboratory partners and provide them with treatment plans. We had to, however, bolt our 2 systems together. In the same way, we have had to merge the IT systems, websites to where we would direct patients [ to initiate ] programs had to be built and aligned, payment options [ allowed ], case managers, nurses and physicians briefed or trained in the new tests and programs, external lab partners brought on board and the myriad of other tasks that go with large sophisticated program introductions.Health Clinics, the parent company to Care Oncology were very accommodating before the closing and worked with us to test and fine-tune various marketing messages that has allowed us to get out of the gate. For example, with the small change in marketing in the U.S. to the TREAT program, we've seen an immediate 15%, 20% increase in consultations as we're able to reach more people. Various components of our comprehensive cancer care has been available for a while. They have, however, only just come together in the comprehensive way we intended. Diagnostics plus treatment with the attendant revenue streams from each. Remember, patients stay with us for months and years. We're now processing the significant number of patients in the queue for the tests and programs. As a reminder, AVRT is the program that helps patients to reduce their risk of developing metabolic pathway diseases such as cancer by way of early detection and interventions. Aristotle and the single cancer test are integral to this. Treat, built on the Care Oncology protocol, is our adjunctive treatment program to standard of care for patients with cancer. Our innovative solutions and market approach, combined with our dedicated team of experts, sets us apart in the health care industry. In summary, we're taking a systematic approach centered on creating patient convenience and value. We run our tests in our own advanced laboratories, employ our own physicians, nurses and phlebotomists and have our own proven patient care protocols to take back control from disease and empower patients to live longer while improving their quality of life. I'll now turn the call over to Dr. Padman Vamadevan, our Clinical Director of Global Program Development, and Pad will share a clinical perspective. Pad, please go ahead.

[Padman Vamadevan]

Thank you, James, and good morning to everyone. It's a pleasure to be here with you today. Firstly, I'd like to address the concept of what it means to be healthy in today's society. Traditionally, this has been simply defined as the absence of disease, and this would imply that the transition from the state of health to one of disease is a purely binary construct. In reality, modern medicine has demonstrated that the spectrum of health in humans is far more nuanced than this. For example, most patients eventually diagnosed with cancer may exhibit underlying physiological or serological alteration that our biomarkers of high risk or pre-cancerous states up to 5 to 10 years prior to their eventual diagnosis. And this phenomenon is true of almost all chronic diseases. Unfortunately, in those patients without any overt symptoms or signs, there is no currently established clinical pathway to proactively screen for and elucidate these vital hidden signals and to then subsequently reduced risk and improve patient outcomes from much earlier intervention. The deployment of Aristotle as a part of the wider AVRT offering provides StageZero with a unique platform on which to maximize these public health gains. Not only are we operating at the intersection of 3 global health megatrends, as James mentioned earlier, but we can also draw on the highly specialist clinical expertise in immunometabolic oncology that is now available to us following the acquisition of Care Oncology, enabling early intervention in addition to early detection. Our medical team has unparalleled knowledge in targeting the underlying chronic inflammatory and metabolic pathways that underpin the development of cancer as well as other chronic diseases from our research and clinical work with Care Oncology, and drawing on this experience ensures that each consumer receives the very best clinical advice for their individual circumstance. StageZero has a clear commitment towards capitalizing a transformational paradigm shift in health care from the current [ sick ] care model to one of proactive risk reduction, early detection and intelligent intervention. This depends on the enablement of consumers to make positive health choices for themselves, underpinned by a fundamental change in mindset in how we define health, illness and treatment and the empowerment of consumers with the provision of high-quality education and expert clinical oversight from physicians with a proven track record in this field. Our inherent advantage is that we've taken a bifurcated outcome of health or illness. But instead, by capturing the entire depth and breadth of an individual's serological, physiological and sociodemographic profiles longitudinally over many years. We are able to establish a continuum of millions of relevant data points that enable us to robustly interpret the consumers' current and future health status. When interrogated comprehensively by our clinicians and used to tailor a course of interventions, we hope to dramatically enhance health outcomes by identifying early-stage disease and even reducing the possibility of disease at current in those deemed to be high risk. What we're doing at StageZero is of paramount importance for several reasons. COVID-19 has shown the public that the traditional external indices of health aren't always representative of one's true risk of becoming seriously unwell. As a result, people have never felt more aware of their own mortality nor more minded to proactively take responsibility for their own health, empowering them to do so under the supervision of expert clinicians is vital to ensure that [ scattergun ] testing does not simply raise more questions than answers. Furthermore, the process of screening and diagnosis can typically represent an arduous and particularly stressful journey for cancer patients, and there is frequently an absence of specialist support or advice throughout. StageZero's wraparound clinical platform streamlines this continuum of care for all patients. And given the established telehealth integration of our service, we have an unsurpassed reach to join the dots for users in every corner of the world. As a doctor, it's truly exciting to work on developing a groundbreaking program that I'm certain will lead to the transformational public health benefits to consumers and patients at every stage of health and illness. Thank you all for your time. I'll hand it back to you now, James.

[James R. Howard-Tripp]

Thanks very much, Padman. We cannot overestimate the importance of the physician in the process Padman's just described. The physician truly has the ability to guide and help the patients on their journey and Care Oncology with us provides the clinical interventions needed to help patients stay well. I can't reinforce this enough. It is really critical. I'll now turn the call over to Matt who will discuss our financials, along with our operational highlights from the quarter. Matt?

[Matthew J. Pietras, CFO & COO]

Thank you, James, and hello, everyone. I'll begin by walking you through our financials for the quarter. Remember, all figures are in U.S. dollars. In the third quarter, we generated $684,000 in revenue. That's compared to $1.46 million in the year-ago quarter. We reported a total comprehensive loss for the third quarter of $2.2 million or $0.02 per diluted share as compared to a total comprehensive loss of $2.3 million or $0.05 per diluted share in the third quarter 2020. These results were largely driven by several factors, including a comparative decrease in revenue of $700,000, and that was primarily attributed to a reduction in COVID testing. There was a reduction in the cost of goods sold and corresponding laboratory costs of $200,000, a gain of $2.4 million from the revaluation of convertible debentures and warrants that was offset by an increase in finance-related costs of $900,000, an increase in R&D and sales and marketing of $500,000 and lastly, an increase of $500,000 in general and administrative expenses. The comparative increases associated with G&A, R&D, sales and marketing and even financing are largely attributed to the acquisition of Care Oncology and the corresponding integration of operations, including the compensation and onetime consulting support associated with that acquisition. As a reminder, we do present adjusted EBITDA as a metric to compare our results on an operating basis. In Q3 2021, our adjusted EBITDA was $2.1 million loss as compared to a loss of $100,000 in the third quarter 2020. Please see our full reconciliation of GAAP and non-GAAP financial results in our third quarter 2021 MD&A. Turning our attention to the balance sheet for just a moment. We closed the third quarter with $1.6 million in cash as compared to $4.2 million at the end of the second quarter. During the quarter, we used $2.5 million cash in the operations and $100,000 in financing activities. There were no warrants exercised in Q3. Supporting our results in the quarter, our laboratory generated just over $400,000 in revenues, predominantly associated with COVID-19 testing in the third quarter and $3.3 million for 2021 so far this year. While we've seen a recent reduction in COVID testing since the first quarter, we did experience a slight increase in COVID testing in the third quarter. As we're all aware, COVID continues to produce unprecedented hurdles as society drives toward resuming a more normal balance with the introduction of vaccines. However, the need for testing continues as borders open, personal and professional travel resumes and large employers return to offices. While the trajectory and severity of COVID infection remains unpredictable, we expect testing to increase throughout the next several months and into early 2022. Can you please turn to Slide 10? We're pleased with the results we've seen from our COVID-19 testing program and our dedicated response to this pandemic is something that our entire company can be proud of. We've completed many thousands of tests so far this year and have helped to facilitate critical cross-border travel and return to work efforts. Moreover, the operational advancements StageZero made through the development and rollout of our testing program has made a lasting impact on our company. We've gained competency in the large-scale coordination of mobile phlebotomists. We've deepened our laboratory expertise and we've built important relationships with everyone in our testing program, from physicians and nurses to customers and patients. Please turn to Slide 11. Turning to our core business operations. As James mentioned, our acquisition of Care Oncology was a watershed moment in the company's history. We now are truly a vertically integrated health care services company and offer a complete telehealth solution for patients. We're able to comprehensively address patients across the spectrum of health and illness, with everything from early diagnostics to sophisticated and proprietary cancer treatment protocols regardless of stage. Furthermore, we've opened the doors of our Richmond, Virginia laboratory so that we can provide patients an opportunity to not only access COVID-19 testing services, but also our groundbreaking Aristotle product. This lab is one of the most technically capable labs in the entire world, having a CAP accreditation and a CLIA certification. Only 1% of laboratories in the United States meet these rigorous criteria. Our flagship Richmond laboratory will serve as a model for our future growth. Please turn to Slide 12. Such growth includes the continued development and build-out of our leadership team and skilled staff. Our long-term strategy is to deepen, broaden and expand our capabilities every day. Specifically, we're talking about deepening our cancer detection capabilities in order to detect even more tumor types in the earliest of stages. We're doing this through an investment in our R&D capabilities and the integration of next-generation sequencing. When we talk about broadening what we do, we're referring to the targeting of gene signatures for other chronic illnesses to evaluate an individual's risk of cardiometabolic, autoimmune and even neurological diseases in the future. Today, we're focused on cancer and many of the different forms and stages of it. But the framework we've built is repeatable for a vast array of other chronic illnesses as well. We're working to expand our reach in 3 key ways. First, we will further integrate technology into our treatment protocol and platform. The evolution of how we treat patients will increasingly include machine learning and artificial intelligence, allowing us to further individualize our patient treatment in revolutionary ways. Second, over the next several months, we expect to perfect the operations of our hub-and-spoke model by leveraging strategically located regional partner labs so that over the next several years, we can deploy our model globally. The hub-and-spoke strategy that we have developed will prove to be a critical aspect of deploying Aristotle and our other liquid biopsy technologies in the future. And third, we're working through the legal and regulatory process to facilitate the global launch of our telehealth platform. Please turn to Slide 13. As James mentioned, our strategy has positioned StageZero at the nexus of 3 of the fastest-growing trends in health care, liquid biopsies, telehealth and early diagnostics. And we're excited to be able to drive a paradigm shift in health care and fulfill our mission of helping more patients live longer and healthier lives. With that, we can open the call to questions. Rebecca, please go ahead.

[Rebecca Greco]

Catherine, would you please give the audience instruction on how to put forward their questions, and then I will go to the Q&A on our webcast.

[Operator]

Certainly. [Operator Instructions]

[James R. Howard-Tripp]

Rebecca, would you like to start with the e-mailed questions?

[Rebecca Greco]

Yes, I'll start with those. Our first question is, is Care Oncology providing revenue in this quarter? Matt?

[Matthew J. Pietras, CFO & COO]

Yes. I could take that one. Thank you, Rebecca. It's a good question. So we need to remember that Care Oncology was acquired in early September, right? So it was part of our operations and our results for just 1 month of the quarter. However, it was immediately accretive. And so it did provide some revenue, but the impact of it is marginal. I think we should all expect to have a much more significant impact in the fourth quarter.

[Rebecca Greco]

We also have a question for Padman. [ Giving ] some clarity on our patient journey for both TREAT and Aristotle. Can you speak to that?

[Padman Vamadevan]

Yes, of course. Thanks for the question. Really important question, actually. I think it's probably important to give you a little bit of background about Care Oncology. So the Care Oncology clinic was first launched back in 2013, and what we do is to treat cancer patients with a patented protocol of safe, [ repurposed ] medicines, very much as an adjunct to their standard cancer treatment they received from their oncologists. The drugs that we use are known to have beneficial anticancer effects by their roles in mitigating chronic inflammation and metabolic dysfunction, which we know are true -- 2 of the biggest drivers of cancer and other chronic diseases. And that the modifications afforded by our protocol essentially optimize the patient's internal environment and make it as hostile as possible to optimize the standard of care treatments that oncologists are giving. We actually published a paper in 2019, which attest to this. It demonstrated an almost doubling of survival in patients with the highest grade of brain cancer, something called glioblastoma multiforme, which is traditionally very, very difficult to treat. And so what we did with Care Oncology was take that deep knowledge that we gained and understood that the same chronic inflammatory and deranged metabolic pathways that drive worse cancer outcomes in our TREAT patients, they're also responsible for the development of new disease, whether that's cancer or cardiovascular disease, autoimmune disease in the first place. And received lots of families of patients who were asking, what about me? How are you going to stop me from getting cancer? And so we designed AVRT, which is designed to target consumers one step earlier. So rather than treating them when they do have established disease, AVRT seeks to delineate those consumers who are at high-risk of developing disease or already have very early-stage disease. And Aristotle clearly helps with that. We do this through our extensive patient questionnaires, highly specialized blood tests, thorough physiological testing and Aristotle test where appropriate, and that enables us to create a bespoke risk profile for each user and then intervene early if required at a time that we can provide those benefits. And I think it's really important to note here that the cancer and chronic disease patient journey is very, very different to a one-off diagnostic test patient journey. Our experience with Care Oncology and now, AVRT, helps us to realize the inherent value that cancer patients place on direct clinician oversight and education. And that's where our offering is so different. Our team is designed to be a point of contact to patients at all points of their care journey, whether it be completely well consumers engaging with us within AVRT due to worries about their underlying health status. Those with symptoms or positive Aristotle tests who are undergoing screening or diagnostic testing or patients with established diagnoses who enroll in the TREAT program, and we have the expertise to support, advice and intervene at every step of this journey. I hope that answers it.

[James R. Howard-Tripp]

Pad, that's good. I'll add a tiny piece on that. I think just a clarification for investors, too. If we look at the entry points for this, the entry points for TREAT are patients that are critically ill with cancer. So they're already under standard of care and so they come to us for the adjunctive treatment. Patients in -- through AVRT, initially are coming to us essentially through Aristotle. They are coming to us through a series of the other cancer tests as well. Sometimes, they want the single test. But essentially, the entry point is through Aristotle. As it broadens out, we will be doing the sort of broader metabolic approach as it drives to, but that's the beginning point for all [ in this ]. I think one of the questions that people have is, obviously, the ramp-up in terms of where we expect to go in revenue. It's a continuum. The first thing we had to do, as we talked about, is bolt these 2 pieces together. You got to get your systems working, then you drive it through. And the reason for doing this is that these are cancer tests. These are not COVID tests. So with all of the things we've talked about, and you have to have this continuum of treatment. So with everything now in place, we're actually moving down the path rather aggressively, and we'll continue to report on that, obviously, as we move out across the next while. Rebecca, back to you.

[Rebecca Greco]

Yes. We have [ Patrick Maguary ] on the line. Catherine, can you let his question come through?

[Operator]

Patrick's line is live.

[Unknown Analyst]

I hope you're all well. Jim, you just recently touched on the revenue side of things, which was the primary basis of the question. I think a clear pathway to what revenue looks like in subsequent quarters, specifically the near term, is obviously something that is of high interest. I think there's a drastic disparity between the expectations and what truly is reality from a scale perspective. We're obviously just amalgamating the 2 companies. We're not going to go from 0 to 1,000, but could you provide any kind of expectation or reasonable tangible material revenue projection? Or anything kind of in the next kind of Q4, Q1 and forward on?

[James R. Howard-Tripp]

Yes, Patrick, good question. I can't give projections. Wouldn't be the right thing to do, but let's make sure that we can address it in as good a fashion as possible. I think the first thing that we've learned with COVID is everything takes 3x longer than you would expect it to take. So just the practicality of it. So if you look at the fact that we bolted the 2 organizations together only at the beginning of September, if anyone has been involved in an acquisition and knows the complexity of putting these together, we have come together remarkably quickly. So the good thing about this is it's come together very quickly. The bad thing about it, yes, it always takes a little longer than you need. But you have to have the process in place before you -- you've got to have the [ funnel ] property there before you can begin to fill it. The good thing now, the funnel is essentially fully in place, those pieces [ that ] we can fall into place as we go along. We have started to fill the funnel. We have significant demand sitting out there. We've been queuing people, we've been backing them up until all of this could run. We've actually opened the tabs on that, and we're bringing those people in right now. So although there was marginal effect from the Care Oncology acquisition in Q3, Q4, we will have full effect and not just full effect, but we'll have the build-out across that. We're actually growing the business that has come to us out of Care Oncology, both in the U.S. and the U.K. We're continuing to fine-tune that. So in other words, just the existing business, we are growing. In addition to that, we're obviously now able to sort of fully turn on Aristotle. We're also able to fully turn on AVRT. And so all of those will build out. But I'm also going to caution people here. I know we work to quarters, but quarters are an artificial construct when you're working with a company. The thing with a company is you have to build it. By and large, the business cycle will run from about September until sort of the beginning of the next [ summer ]. As it drives through, you've got a little bit of a hiccup across the sort of December -- Christmas-New Year period as it slows down. But other than that, that's the cycle. And you drive through and then, of course, it slows down a little over the summer months. So for us, we're focused on making it extremely successful, driving the revenue as hard as we can. We're very confident we can do that. We're operating at this point, pretty much holding our heads level. So that part is there, and so you build it out. And so that's where we go. And we will have to report as we go ahead. But the full effect of the acquisition is only just beginning, and I think that's the key part to your question. Makes sense?

[Unknown Analyst]

Yes. Certainly, Jim. I appreciate that. And operationally, the business has obviously never been in a better place. And I'm sure the financial performance will reflect that moving forward. Just quickly, one last question to segue off of the revenue. Obviously, with the current cash on hand relative to the monthly cash burn, we're in a situation where the next quarter, if we continue to be on the same cash burn rate, there's obviously going to be a deficit there. Is there any capital-intensive raises that are looking to come down the pipe?

[James R. Howard-Tripp]

We don't know. We haven't made any decisions with respect to this. I think it's always a balance as you go on out. Obviously, you're building it -- so let me -- sorry, let me step back and answer that a little differently. We've just listed on OTCQB. We need to begin to build out very aggressively into the U.S. We've been doing a series of [ non-deal ] road shows with some of the banks into the U.S., so that we're very U.S.-focused. And we know that there is very significant demand or very significant appetite for where we are. In actual fact, the usual question is, "Wow, how do we get in?" So very, very strong focus. Part of what you invariably have to do as you go down this path is that you've got to allow opportunities for the institutional investors to get in. That means you have to have a capital strategy. All of this building forward to us listing on NASDAQ. And so yes, I think there should be full expectation that as we move out across the next 12 months, yes, we're going to be raising capital, whether we need it immediately or not, because it's the right thing to do. However, what we do when, we haven't decided yet, we'll have to sort that out as we go along. And the other thing, too. Right now, we think we've got the beginnings of a bonfire as it's beginning to really burn quite brightly. One of the things to do if you have more money, too, is that you can actually throw gasoline on the bonfire. We'll have to decide whether that's an appropriate strategy. And so we would go there. Good?

[Unknown Analyst]

Yes, I appreciate that. Have a great day, guys.

[James R. Howard-Tripp]

Rebecca, shall I maybe address the shareholder meeting? I think we've had some...

[Rebecca Greco]

Yes, I was just going to say we have a question as well on the shareholder meeting. And just speaking to whether the milestones have been achieved or when we expect that to happen?

[James R. Howard-Tripp]

Yes, yes. So I think a fair degree of confusion regarding the shareholder meeting and apologies if we were not clear enough in the beginning. The deal that was done was for 15 million shares for the acquisition of Care Oncology. There's an additional 8 million shares that goes to Health Clinics upon the achievement of certain milestones. Those milestones are performance-related and that is achieving $4 million on one of the programs. It's really good growth in terms of where it goes. And so that is where it is. So the -- what we're asking investors for is not whether to approve the 8 million shares. We're asking, we need to pay it either in shares or we need to pay it in cash should they achieve the performance milestone. So therefore, we're asking whether there is a preference in paying it in shares or paying it as the royalty. And if anyone doesn't have full details on that, you can come to us for it or you can look it up on the FAQs. So it is that. The performance milestone, when it is met, we will announce. Which means it has not yet been met. Bear in mind, that we only put this together on September 2. So it would be amazing if it was met in 1 month, it would also mean that we had set the bar incredibly low. We haven't. We needed a way to ensure that we would see significant growth out of this program, that everyone would keep their focus on it. And so that's what we've done. If we get -- if they meet the performance milestone, and at this point, it looks as if they definitely will. And I say "they" because it's actually us at this point, but it means that we're getting the growth out of the program that we anticipated, then it is good for all of us. So that is that. Rebecca, answered clearly enough?

[Rebecca Greco]

Yes, I think so. We have one last question. Someone is asking whether we still have our relationship with Mercer?

[James R. Howard-Tripp]

Yes. The answer to that is yes. We retain our employer. In fact, let me address that a little more broadly. We not only retain our employer relationships, we're actually adding to them. And I know that there is huge focus on us moving into the employer field. We will, at the most appropriate point. And so let me step back a little bit on just the entire process behind Aristotle, behind AVRT. TREAT run separately, TREAT is for critically ill patients, people come through on that. The rest that is focused into the early diagnosis, early treatment aspect is different. And so right now, AVRT, Aristotle; Aristotle, AVRT, depending upon which way you want to position it is available to all patients. And we're actually getting very good interest and very good uptake. So we drive down that. As you move from that, you go right, where do you take it next? And so we are in discussion with significant groups of physicians as they look to expand it. The obvious answer -- the obvious question is would we make it available to physicians outside of our own clinics network that's already set up? And the answer to that is yes. And we're in discussion with groups on that, but we're not going off to the single individual physician. It doesn't make sense to us. We need people that we can work with on a repeat basis that essentially become part and parcel of what we do because that's what benefits everyone. So can you expect that as we move out in the future? Yes, you can. What about health care groups, in terms of taking it into hospitals, into clinics, the likes? Yes, you can expect that as well. Then you move to the employers. And as we've spoken with a significant number of employers, the answer is yes, we want to do this. But right now, we're still figuring out how to mostly stay alive, to sort out who we screen, who we don't screen who's vaccinated, who's not vaccinated. And the moment we start to get through all of this, we will begin to ramp up in terms of doing these programs. We're very active in this area as we talk to people, and that, too, will play out in due course. And I think you will see over the next little while as we put announcements into the marketplace, you will see a variety of interesting new groups that we're working with. I hope that answers it well.

[Rebecca Greco]

Thanks, James. Those are our questions.

[James R. Howard-Tripp]

Okay. That's marvelous. So in conclusion, I'd like to summarize the key points of the call again. Q3 has been an exceptionally busy quarter. Taking the quarter up until now, we've closed the acquisition of Care Oncology, we've pretty much mostly integrated operations. We have Aristotle as the centerpiece to the AVRT offering. We're also continuing our single cancer diagnostics, BreastSentry, ColonSentry and Prostate Health Index. We have a partnership with Quest Diagnostics that has allowed us to offer expanded inflammatory pathway testing to aid in the diagnosis of early disease, especially cancer. We've launched AVRT in the U.S. and are showing excellent initial uptake. We will launch AVRT in the U.K. and Europe in the early part of next year. We have increased our oncologist support in both the U.S. and U.K., Europe. We boosted the advertising budget and we've seen an immediate increase in consultations. We intend to significantly expand on this. COVID testing remains steady, and we have several new partnerships starting that are expected to increase demand. And with that, we'll thank you for joining us today. Rebecca?

[Rebecca Greco]

Thank you for joining us today. This concludes our conference call. You may now disconnect. Operator?

[Operator]

Thank you. Ladies and gentlemen, this concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.