Exagen Inc. Common Stock Canaccord Genuity's 46th Annual Growth Conference
Review the key takeaways and the transcript of this earnings call.
- Exagen is a specialty diagnostic lab focused on autoimmune disease testing, particularly in rheumatology, serving about 2,800 physicians annually and holding an estimated 3 to 4% share of the $2.2 billion autoimmune testing market.
- The company’s flagship tests utilize cell bound complement activation products (CB-CAPs) technology, providing a disease-specific assessment rather than a snapshot in time, which improves diagnostic precision for lupus and rheumatoid arthritis.
- Exagen published a systematic review in June covering 14 studies over nearly 12 years supporting the clinical utility of CB-CAPs.
- The company has demonstrated the ability to diagnose lupus approximately 18 months earlier than conventional testing and improve rheumatoid arthritis diagnosis by identifying half of the negative patients missed by conventional tests.
- Since CEO John Aballi joined in fall 2020, Exagen has increased its average selling price (ASP) per test from roughly $280-$300 to a trailing 12-month ASP of $446 as of Q2 2026.
- Top-line revenue was declining prior to 2021, with cash burn around $40 million in 2022, but has improved dramatically with the new reimbursement and billing strategies.
- In Q2 2026, Exagen achieved near EBITDA breakeven with an adjusted EBITDA loss of approximately $100,000, reflecting improved margins and cash burn reduction.
- The company changed billing practices in summer 2023, requiring medical records and clinician signatures, which initially caused a 20% volume decline but has since led to volume growth, including an 11% year-over-year increase in Q2 2026.
- Exagen’s sales force has grown to 45 territories with revenue per territory increasing to about $1.5 million.
- R&D spending is about 10% of revenues, approximately $6 million annually, focused on low-risk, high-need projects with the next product launch expected in early 2027 for myositis testing.
- The myositis test will launch with established CPT codes and reimbursement, with plans to pursue enhanced reimbursement as clinical utility improves.
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Transcript
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Hi, welcome to the Canaccord Genuity Growth Conference. I'm Kyle Mikson. I cover life science tools and diagnostics for Canaccord. I'm pleased to welcome you to a fireside chat with Exagen here with us today. Exagen is a pure-play leading provider of autoimmune disease testing products, and we'll learn more about that today, with a current focus in lupus expanding. With the company, we have the CEO, John Aballi, and CFO, Jeff Black. Thanks, guys, for joining us today.
Good morning. Good morning. To start, maybe provide a brief overview of Exagen and the market and industry that you fit into in rheumatology.
Great. Well, good morning, everyone. Exagen is a specialty diagnostic lab based in San Diego, California. We focus in the autoimmune, specifically the rheumatology space. We offer proprietary, unique, and comprehensive testing for patients with lupus, rheumatoid arthritis, scleroderma, other types of connective tissue disorders. For us, we are heavily focused on the rheumatology call point, and we serve annually about 2,800 physicians right now, dispersed throughout many different subspecialties, but again, rooted more commonly in the rheumatology space. Overall, we believe we have about 3%-4% of the autoimmune testing market. That is estimated on our end, about $2.2 billion annually. We are trying to bring a level of clarity and precision that you commonly see in the oncology space into autoimmunity.
Okay, your tests are based on, at least historically, the CB-CAPs technology, Cell-Bound Complement Activation Products. Why is that differentiated? How does that improve performance? Any kind of data or publications that you point to in terms of what clinicians- Yeah, perfect timing, actually.
We published a systematic review which pulled together the results of 14 different studies across about a decade, or almost 12 years' worth of research. That was just published in June. In these disorders, you have the innate immune system really ramped up and attacking the individual's body. What is occurring in, call it conventional autoantibody testing, is you are getting a snapshot point in time, what is the immune system doing right then. CB-CAPs, as you referenced, is an acronym for Cell-Bound Complement Activation Products, and this leaves a covalently bound scar on the surface of various cell types, which is highly specific and pathologic for certain diseases, lupus being one that we focus on more heavily. What you get with our testing is a true sense of has a pathological episode occurred?
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