Insight Molecular Diagnostics' Q3 2025: Contradictions Emerge on FDA Timelines, Government Shutdown Impact, and Revenue Outlook

Guidance:

• Cash on hand $20M and no debt.
• Q3 cash burn below $6M/quarter target; expect ~ $6M/quarter and a modest uptick in Q4 due to FDA/clinical expenses.
• Lab services revenue expected sequentially flat in Q4.
• Preparing FDA submission in December; targeting mid-2026 regulatory approval/commercial launch (contingent on FDA/government timing).
• Plans to validate heart assay in 2026 and lung assay in 2027 and pursue reimbursement submissions (heart 2026, lung 2027).

Business Commentary:

* FDA Submission and Market Anticipation: - Insight Molecular Diagnostics is anticipating an FDA submission for GraftAssureDx in December 2025, after which the FDA review process begins, lasting up to 150 days. - The company is hopeful for a positive regulatory outcome, anticipating increased demand from transplant centers to bring testing in-house, which could drive broad adoption.

• Clinical Trial Progress and Market Validation:

• The company's clinical trial for GraftAssureDx is advancing, with leading transplant centers actively enrolling patients across multiple sites.

• This trial is expected to generate data supporting the assay's performance and reliability, crucial for market acceptance and adoption.

• Financial Performance and Cash Runway:

• Insight Molecular Diagnostics finished the quarter with $20 million in cash and no debt, maintaining a cash burn of $6 million per quarter.

• The company has been able to sustain this cash burn while investing in research and development, and additional activities like extra lab services work are expected to extend the cash runway.

• Strategic Registry and Novel Score Integration:

• The company launched a registry program to familiarize clinicians with alternative measurements of dd-cfDNA and capture real-world data on their utilization.

• Early interest in the new CM score algorithm has been positive, with plans to incorporate it into production, potentially improving biopsy yield through enhanced predictive value.
  

  Sentiment Analysis:

  Overall Tone: Positive

  • Management repeatedly described “momentum is building,” said they are “very close” to planned FDA submission, highlighted Q3 cash burn was below the $6M/quarter target, emphasized positive external data and clinician enthusiasm, and repeatedly framed registry and CM score progress as drivers of adoption and commercial upside.

Q&A:

• Question from Mark Massaro (BTIG, LLC, Research Division): On the Palmetto MolDX LCD (422 kidney protocol), even if the interval is finalized as is, do you still see the $1B opportunity and is there upside or potential removal of limits?
  Response: Company believes the >$1B TAM framework remains valid, will advocate for expanded MolDX coverage, but outcome of the final LCD is uncertain and outside their control.

• Question from Mark Massaro (BTIG, LLC, Research Division): To what extent could increased organ transplant access (e.g., at‑risk organs) drive utilization of transplant testing?
  Response: Management is optimistic: more at‑risk organs should increase monitoring needs and thereby demand for testing.

• Question from Mark Massaro (BTIG, LLC, Research Division): How are you thinking about GraftAssureCore LDT at the Nashville CLIA lab as potential upside and cash preservation?
  Response: LDT/registry strategy is tightly linked; clinical evaluation and registry billing of relative dd‑cfDNA should generate incremental revenue starting as sites onboard (expected contributions beginning in Q1–Q2 next year).

• Question from Harrison Parsons (Stephens Inc., Research Division): What conversion curve do you expect 12–18 months post‑clearance and what are the gating factors from early adopters to center‑wide adoption?
  Response: Adoption pace depends on head‑to‑head and real‑world data; company is actively driving data generation, engagement and registry activities to steepen the curve.

• Question from Harrison Parsons (Stephens Inc., Research Division): What broader clinician feedback have you received about the favorable PPV and its role as a differentiator?
  Response: Clinicians have responded very positively—CM score provides rule‑in capability with materially higher PPV, seen as a potential paradigm shift for biopsy decision making.

• Question from Harrison Parsons (Stephens Inc., Research Division): After the government shutdown, is mid‑2026 still the right timeline for potential regulatory approval and commercial launch?
  Response: Management is still targeting mid‑2026 but acknowledges timing is contingent on FDA/government status; they remain preparing as planned.

• Question from Michael Matson (Needham & Company, LLC, Research Division): Can you give metrics around trial enrollment or samples collected to date?
  Response: Enrollment is slower than ideal but five sites are actively enrolling and management has medium‑to‑high confidence they will have needed samples for year‑end submission.

• Question from Michael Matson (Needham & Company, LLC, Research Division): How does the registry help clinicians compare GraftAssureDx to current assays versus head‑to‑head testing?
  Response: Registry familiarizes clinicians with company reports and alternative metrics in real‑world use to build comfort and engagement—it's complementary to, not a substitute for, controlled head‑to‑head studies.

• Question from Michael Matson (Needham & Company, LLC, Research Division): If centers run head‑to‑head testing, how will reimbursement/billing be handled—will you assist with costs?
  Response: Company runs clinical evaluation programs: they cover testing costs for matched sample comparisons (companies don't bill both tests), enabling head‑to‑head data generation.

• Question from Michael Matson (Needham & Company, LLC, Research Division): What are the biggest risks to the mid‑2026 launch timeline?
  Response: Primary risk is FDA timing/government shutdown; internal production and submission readiness are on track.

• Question from Thomas Flaten (Lake Street Capital Markets, LLC, Research Division): With ~51 days left in year and 5 of 10 sites recruiting, will other sites meaningfully contribute and how long to analyze and assemble submission for FDA?
  Response: Company is executing a two‑wave approach: initial submission targets the primary performance endpoint (85% NPV) with current sites; submission dossier is being prepped now and clinical data are the final inputs to be plugged in at the end.

• Question from Thomas Flaten (Lake Street Capital Markets, LLC, Research Division): How should we think about cash burn in H1 next year—will it moderate or increase as you prepare for launch?
  Response: Plan is to keep cash burn roughly flat (with possible slight increase); any acceleration or higher spend would be communicated ahead of time.

Contradiction Point 1

FDA Submission Timeline and Impact of Government Shutdown

It involves differing perspectives on the impact of the government shutdown on the FDA submission timeline, which is critical for regulatory approval and commercial launch.

Did the government shutdown delay your regulatory approval and commercial launch timelines? - Mark Massaro (BTIG, LLC, Research Division)

2025Q3: We're hopeful that the government gets funded and stays funded. We assume we're still on pace, but we can't control everything. The FDA isn't taking questions from companies like ours, and we're staying focused on completing our trial. - Joshua Riggs(CEO)

Has the government shutdown affected your mid-2026 schedule for regulatory approval and commercial launch? - Michael Matson (Needham & Company, LLC, Research Division)

2025Q1: We're still preparing for a mid-26 launch. We are not changing anything. We're focused on engagement and utilization of our assay, and we don't need the government to be open to do those things. - Joshua Riggs(CEO)

Contradiction Point 2

FDA Review Timeline and Submission Strategy

It involves differing expectations on the timeline and strategy for FDA review, which is crucial for regulatory approval and market entry.

Can you provide any metrics regarding enrollment or samples for the trial? - Michael Matson (Needham & Company, LLC, Research Division)

2025Q3: We're confident that we'll have all the samples needed to complete submission by year-end. - Joshua Riggs(CEO)

What are the next milestones for DetermaIO? - Mark Massaro (BTIG)

2025Q1: The key is to collect and accrue clinical samples for the trial. - Josh Riggs(President & CEO)

Contradiction Point 3

Government Shutdown Impact on Timeline and FDA Approval

It highlights differing perspectives on how a government shutdown could affect the company's timeline for regulatory approval and commercial launch.

Has the government shutdown affected your mid-2026 regulatory approval and commercial launch schedule? - Harrison Parsons (Stephens Inc.)

2025Q3: We're still preparing for a mid-26 launch. We are not changing anything. We're focused on engagement and utilization of our assay, and we don't need the government to be open to do those things. - Joshua Riggs(CEO)

Has the government shutdown delayed your regulatory approval and commercial launch timeline? - Joseph Conway (Needham)

2024Q3: We're hopeful that the government gets funded and stays funded. We assume we're still on pace, but we can't control everything. The FDA isn't taking questions from companies like ours, and we're staying focused on completing our trial. - Joshua Riggs(CEO)

Contradiction Point 4

Revenue Expectations from GraftAssure Kits

It involves expectations regarding revenue generation from GraftAssure kits prior to FDA clearance.

Can you provide any enrollment or sample metrics for the trial? - Michael Matson (Needham & Company, LLC, Research Division)

2025Q3: We haven't seen any purchases of kits yet because it's a research-use-only test. We expect purchases to start as we move further along in the FDA process. Depending on the number of centers we sign, we could see some revenue later in the year, but it won't be significant. - Joshua Riggs(CEO)

Have centers started using GraftAssure kits? Have they begun purchasing kits, and is there potential for material revenue before FDA clearance? - Michael Matson (Needham)

2024Q4: We haven't seen any purchases of kits yet because it's a research-use-only test. We expect purchases to start as we move further along in the FDA process. Depending on the number of centers we sign, we could see some revenue later in the year, but it won't be significant. - Joshua Riggs(CEO)

Contradiction Point 5

FDA Review and Submission Expectations

It involves changes in expectations regarding the FDA review process and submission, which is critical for the company's regulatory approval and commercialization strategy.

What are the biggest risks to your mid-'26 launch timeline? - Michael Matson (Needham & Company)

2025Q3: The biggest risk is the FDA. We feel confident internally, but the FDA could drag out the process. We can't predict what the government shutdown might mean for our reviewers. - Joshua Riggs(CEO)

How long to convert the U.S. sales funnel to revenue post-FDA approval, and what preparations have been made? - Vidyun Bais (BTIG)

2024Q3: We expect a 6 to 9-month lead-in period after FDA approval for centers to switch to in-house testing. Preparedness includes pilot projects and building relationships with key transplant centers. - Joshua Riggs(CEO)