Sera Prognostics Q3 2025 Earnings Call - Advancing Medicaid Pilots and Imminent PRIME Study Publication Propel Transition to Commercialization

Operator: Afternoon, and welcome to the Sera Prognostics conference call to review third-quarter fiscal year 2025 results. At this time, all participants are in listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s call. As a reminder, this call is being recorded for replay purposes. I would like to turn the call over to Jennifer Zebuda, Sera’s Head of Investor Relations, for a few introductory comments. Sera, please go ahead.

Jennifer Zebuda, Head of Investor Relations, Sera Prognostics: Thank you, Operator. Good afternoon, everyone. Welcome to Sera Prognostics’ third-quarter fiscal year 2025 earnings conference call. At the close of market today, Sera Prognostics released its financial results for the quarter ended September 30, 2025. Presenting for the company today will be Zhenya Lindgard, President and CEO, and Austin Aerts, 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 can be found on our website at sera.com. This call can be heard live via webcast at sera.com, and a recording will be archived in the investors’ section of our website.

Please note 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. I will now turn the call over to Zhenya.

Zhenya Lindgard, President and CEO, Sera Prognostics: Thank you, Jennifer, and good afternoon, everyone. Building on the momentum from our PRIME study and ongoing commercialization efforts in the third quarter of 2025 marked continued progress in our transition toward PreTRM test adoption. We advanced our geographically focused strategy. In these regions, we are executing an integrated approach to achieving fair coverage, physician education, and patient awareness. We’ve continued to build visibility through key industry events and data presentations. Earlier this week, we presented health economics data at the International Society for Pharmacoeconomics and Outcomes Research, or ISPOR, Europe Conference. In October, Dr. Brian Erie delivered a compelling presentation of PRIME study outcomes at the inaugural Renaissance Conference, The Three Ages of the Woman, titled Dismantling the Preterm Barrier: Biomarker-Guided Bundle Care to Improve Neonatal Outcomes. Links to both the poster and the presentation are now available in our press release issued today.

We remain on track to publish the full results of our PRIME study in a peer-reviewed journal by the end of the year. We’re very far along through the process of preparing a publication, and we look forward to sharing it with all stakeholders. What you can expect from us is a press release upon acceptance for publication, followed by an investor and analyst event with our principal investigators to discuss the strong primary outcomes we shared earlier this year, as well as some new and compelling data points from the study demonstrating the efficacy of the PreTRM test. Following PRIME, we plan to maintain a steady cadence of data publications and presentations focused on key topics, including health economic benefits, subpopulation analysis, for example, first-time moms versus other moms, and Medicaid expected cost savings associated with Sera Prognostics PreTRM test.

These data subsets will build on the robust evidence base already established by our PRIME and AVERT clinical studies. Together, they will not only reinforce the clinical and economic value of PreTRM, but also help support its adoption into standard prenatal care. Let’s now shift to our commercial strategy and progress. For those newer to our story, I’ll start with a quick overview. Our sales and marketing efforts are concentrated in select regions where we see strong alignment across several factors: headway with payer and Medicaid program discussions, support from influential local opinion leaders, engagement from early adopter institutions, and presence of PRIME study sites. By focusing on areas where these elements converge, we’re creating conditions for meaningful clinical uptake of the PreTRM test. We’ve made real strides with Medicaid planned pilot programs, and our inaugural pilot in Nevada is actively enrolling patients.

We’re engaging payers in our first wave of six target states, collectively representing a strong commercial opportunity covering approximately 33% of U.S. births and 35% of Medicaid births annually. Beyond this first wave, we’ve initiated outreach to the next tier of target states, expanding our footprint of states in discussion to 13 in total. We’re also in discussions with organizations with regional and national reach across multiple lines of business. These early signals of market engagement give us confidence that we are well-positioned to drive meaningful coverage and adoption in our target states and beyond. Our commercialization strategy is anchored in getting coverage first. It is built on a two-prong approach: first, targeting state engagement across first and second wave states, for example, Nevada, Texas, and Massachusetts, that have shown interest, face high preterm birth rates, and have leveraged tools to adopt innovative programs in prenatal care.

Second, payer-driven adoption through pilots and alignment to value-based care programs. By engaging state and payer leadership and connecting to the efforts of local institutions driving improvement in prenatal and maternal care quality outcomes, we’re building a local flywheel of adoption that aims to accelerate provider buy-in and lay the groundwork for broader coverage. With Medicaid financing over 40% of 3.6 million U.S. births annually, the opportunity to drive meaningful cost savings and improve outcomes is substantial. We believe the PreTRM test offers a differentiated, data-driven solution for states seeking to reduce neonatal complications and manage Medicaid expenditures more efficiently. Our health economics data shows potential in-year savings from PreTRM test screening of low-risk pregnancies. The path from initial state Medicaid director engagement to a state coverage decision takes time.

Initially, we anticipate a cycle of about 24 months or more driven by the nature of prenatal testing and claims data availability. For example, the blood draw occurs between weeks 18 and 20 of pregnancy and is followed by four to five months until delivery of babies and another three months or so for claims data to become available for analysis. Once the data is reviewed, we present the pilot results to the Medicaid plan and other state stakeholders to inform coverage decisions. As additional pilots launch, we will use the resulting data to demonstrate feasibility and build a strong business case for statewide coverage. Our commercialization strategy in the immediate term will focus on this target geography adoption wave by wave until guideline inclusion. Success of these efforts depends on achieving coverage in Medicaid and commercial plans, value-based care arrangements, and activating physician adoption and advocacy.

Engagement with clinical leaders and alignment on target populations will be critical to securing guideline inclusion and accelerating adoption. Post-guidelines will scale nationally with a field sales force aiming for broader payer coverage and expand national awareness building through traditional marketing channels. Although guideline inclusion is a longer-term milestone, our focused efforts both in evidence generation, KOL engagement, targeted state coverage, and physician adoption are all needed to support it. Ultimately, the strategy positions us to drive meaningful revenue growth while improving outcomes for mothers and babies nationwide in helping address healthcare utilization trends, including rising costs associated with rising NICU admission rates and longer hospital stays surrounding maternal and neonatal care.

To provide clear visibility into our accelerating commercial execution, even at this early stage, we will begin sharing some key traction indicators, such as Medicaid pilot momentum, including number of live pilots, enrollment completion milestones, and expanding pipeline of states in discussions that will serve as tangible markers of progress as we build towards sustainable revenue growth. We’re gaining meaningful traction across the payer landscape. We’re actively engaging with 10 payers across 13 states, a diverse mix, both national and regional, Medicaid and commercial, who are focused on offering competitive healthcare benefits while managing rising costs. Our strategy targets forward-thinking organizations with strong member bases in key states where our sales reps are positioned well to maximize pull-through. We’re also prioritizing institutions with value-based payment models, aligning incentives for providers and payers in preventing preterm birth complications.

PRIME and AVERT data strongly support a value-based approach and can accelerate PreTRM uptake where positive outcomes translate into payer, provider, and patient success. To recap our commercial progress, momentum is building. Our first Medicaid pilot is now live. We’re in active dialogue with all six of our initial target states, and we’ve already begun engagement with the next wave of states, setting the stage for broader adoption and impact. To support our fundamental clinical and commercial efforts, we’ve made high-impact leadership appointments to the Sera team. As announced in October, Dr. Tiffany Inglis was appointed Chief Medical Officer. An accomplished OB-GYN with over 20 years of experience, including a decade in clinical practice and recent leadership at Elevance Health and Carillon Health, Dr. Inglis excels at driving women’s health initiatives, payer coverage, and cost-effective outcomes.

She will spearhead our medical affairs and strategy to accelerate PreTRM test adoption and establish it as a standard of care for preterm birth risk. In preparation for broader adoption of the PreTRM test in our target states and beyond, we appointed Marisol Urbano as the Head of Commercial Operations. With 20 years of healthcare experience and a proven track record in diagnostics, her leadership will be instrumental in accelerating customer onboarding and supporting clinical integration, key enablers of commercial traction during this foundational growth period. Complementing this leadership, we have successfully completed the hiring of sales representatives across all six of our target states and are well-positioned to expand market access and PreTRM utilization. Lastly, beyond our progress in the United States, we continue to explore Europe, a region that fully appreciates the pressing gap in preterm birth risk screening.

We remain engaged in productive discussions with European regulatory bodies and are on track to submit our dossiers in early 2026. In closing, we’ve made significant strides in laying a strong foundation for adoption and reimbursement, setting the stage for future growth. Looking ahead, we’re optimistic about the flywheel effect and these initiatives, which we believe will drive meaningful adoption and contribute to better maternal and neonatal outcomes. With that, I’ll turn it over to Austin, our CFO, for a review of our financial results. Austin.

Austin Aerts, CFO, Sera Prognostics: Thanks, Zhenya, and good afternoon, everyone. I’ll provide an overview of our financial performance for the third quarter of 2025 and our balance sheet position. Net revenue for the third quarter was $16,000 compared to $29,000 in the same period last year. During the quarter, we received a $100,000 prepayment from the first Medicaid pilot in Nevada, which increased our deferred revenue balance as of September 30, 2025. Total operating expenses for the quarter were $9.0 million compared to $8.9 million in the third quarter of 2024. Research and development expenses were $3.3 million, down from $3.5 million for the third quarter of 2024, primarily due to lower clinical study costs following the completion of the pivotal PRIME study and as the company shifts towards commercialization.

Selling general and administrative expenses were $5.7 million, up from $5.4 million for the prior year period, a modest increase as we carefully invest in targeted commercial activities and strategic headcount additions while building market awareness and preparation for the publication of PRIME study data. Our net loss for the quarter was $7.8 million, down from $7.9 million in the third quarter of 2024 as we continued our focus on managing our capital resources ahead of revenue expansion in the future. As of September 30, 2025, we had cash, cash equivalents, and available for sale securities of approximately $102.4 million. We are encouraged by the commercial momentum that Zhenya Lindgardt discussed, including our first Medicaid pilot program in Nevada. We are diligently working to translate our foundational progress into tangible outcomes and significant growth opportunities.

In the meantime, we continue to manage our capital prudently, prioritizing high ROI opportunities to support commercialization while maintaining a strong balance sheet to fuel our growth strategy. Operator, we can now open the line for questions.

Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the one on your telephone keypad. You will hear a prompt that your hand has been raised. Should you wish to cancel your request, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Thank you. Your first question comes from the line of Dan Brennan from TD Cowen. Please go ahead.

Dan Brennan, Analyst, TD Cowen: Great. Thank you. Thanks for the update. Maybe just on the Medicaid pilots, Nevada, you’ve got six other states behind it or five other states behind it. I know at the Q2 call, you discussed two to four pilots signed up. I don’t know what the timeframe was, but it was kind of in the near term. Do you feel like your progress is going on track? Do you feel ahead of plan, behind plan in terms of getting Nevada signed up? When do you think you’d get the four or get to the six pilots signed up?

Zhenya Lindgard, President and CEO, Sera Prognostics: Dan, thank you so much for the question. We’re very much on track. One is launched in recruiting. Another one is in contracting. That gets us to two. We believe a couple more shortly in active discussions with the payers in other states. With that, the fact that we’ve expanded to the next wave of states tells you that we’re very much on track on getting a foot in the door in each of the states and going beyond because we feel we have good traction even in the first wave of the states. We’ll definitely continue communicating progress once the pilots are up and running. Obviously, while we’re in contracting, we’re going to probably not communicate what the states and the payers are. Once we’re underway, with their permission, we’ll share it with all of you.

Dan Brennan, Analyst, TD Cowen: How big are the pilots? Nevada, you said $100,000 prepayment. Just how do we think about, I know the criticality is to get it established so you can eventually get state Medicaid coverage. Just speak to during the pilot phase, what’s the economics? What are you getting paid to run these tests? How big is the Nevada program? Just any color around that?

Zhenya Lindgard, President and CEO, Sera Prognostics: Sure. The trade-offs here, Dan, are how fast we want results. The fewer patients in the pilot, the faster the decision on coverage, which, of course, would be best to driving outcomes for moms and babies sooner. The drive to have a bigger pilot, of course, is powering the pilot to show great results because, again, we are looking at reasonably rare events of significant preterm birth that we want to ameliorate. From that perspective, the typical size of a pilot would probably be a few hundred patients.

However, I will tell you, as we’re engaging with plans and state Medicaid directors, we’re not only suggesting that we pilot, but we are in active discussions for some value-based healthcare arrangements and contracts where we can show what the test can do when screening the moms in the state with achieving quality metrics and putting some dollars at risk as opposed to setting up a similar conversation in context of a pilot. It is hard to tell you specifically because each state has a slightly or each payer has a slightly different arrangement and size and scale of the program. Some payers and states are looking for a statewide contract that is value-based. Obviously, that would be many thousands of patients as opposed to a few hundred. Does that help?

Dan Brennan, Analyst, TD Cowen: Got it. Okay. And are you collecting full price when you, even though it’s small, like hundreds of thousands, are you collecting the full PreTRM test price or is it discounted or just how does that work?

Zhenya Lindgard, President and CEO, Sera Prognostics: Again, the specifics I won’t get into. But we are very happy with the price realization in these early engagements with payers and state Medicaids. We don’t know how that will evolve when we get to full-scale coverage for the state, but we’re optimistic about what we’ve seen to date.

Dan Brennan, Analyst, TD Cowen: Got it. And then just in terms of PRIME, so timing-wise, you guys still feel confident it’ll come before year-end? So we’ve got whatever, eight weeks, excuse me, like six weeks left. You think it’ll come before then? Maybe just any more color in the confidence there. If it slips a little bit, I guess no big deal. Then B, just remind us of the additional data we’re going to get and what’s going to be impactful that’ll come out in the publication that we didn’t see so far?

Zhenya Lindgard, President and CEO, Sera Prognostics: Yeah. No, Dan, we are. I know we’ve been talking about any day now for the last few quarters, but it truly is super close now. We are confident it is coming in the coming weeks, ideally before the end of the year. In terms of specific data, of course, it would be impossible to highlight the data before the publication itself. What I can promise is as soon as the publication is out, we’ll have an in-depth event to go over all of the new insights. I will highlight that the insights are coming from engagement with the reviewers. As you know, we’ve talked about a series of publications coming out of mining an incredibly rich data set that comes out from PRIME.

We pulled forward some of the insights that were coming in future publications because of the requests of the reviewers to add that to the publication. Look forward to sharing that, but unfortunately, I can’t highlight those until publication date.

Dan Brennan, Analyst, TD Cowen: Got it. And then maybe one more, just in terms of the path forward, $100 million in cash. You have these pilot studies in the background and then the PRIME study and then obviously guidelines. But as we think about the next one, two, three years, getting PRIME out, getting the pathway to guideline inclusion, whatever you need to do there, and then simultaneously, like you said, with these pilot studies. But on the guideline, you said in the past, I think typical cadence is what, 24-48 months post-publication. Is that still your best guess right now such that if the publication, let’s say, comes out in the next month, the end of 2025, are we thinking more like end of 2027, end of 2029 is when guidelines could occur? And then I guess the focus between then and now would just be these pilot studies?

Zhenya Lindgard, President and CEO, Sera Prognostics: Okay. So a couple of questions on that one. Yes, we are, that is still 24-36 months, is still a pretty good guesstimate, I would say. We have developed an engine to mine the data and add real-world evidence to our portfolio that certainly is going to be the best thing we can do to influence and create literature for review for the guidelines to be updated with the new tools that are available to clinicians. That is a critical workstream for us. We’re hoping that will be truly a steady stream of data. In addition to mining PRIME data, of course, we talked about real-world evidence, which should see its first publication next year, as well as the data that’s coming out of engagement with the plans and the states.

Until the guidelines, I do think the key focus is this geographic focus in driving density of adoption in specific states. Given our first target states represents over a third of births in the United States, that’s not small volume at all. That is plenty of work to get done and volume to drive. I don’t want to just zero in and call it pilot engagement. Not at all. It’s going to be much broader than that, including positive policy coverage achievement across plans and value-based care contract arrangements and just driving physician adoption institution by institution in some of the multi-hospital systems and women’s health clinics. A lot more to come on that. Please don’t just focus on the pilots. Pilots is one tool in our toolkit. Indeed, it’s going to be a geography-focused effort and post-guidelines. We’re going to move to a nationwide commercialization.

Dan Brennan, Analyst, TD Cowen: Got it. Okay. Great. I’ve taken up like four questions. I guess I’ll stop there. Thank you.

Zhenya Lindgard, President and CEO, Sera Prognostics: No, no problem at all. Thank you for the great questions.

Operator: Thank you once again. Should you have a question, please press star followed by the one on your telephone keypad. Your next question comes from the line of Andrew Brackman from William Blair. Please go ahead.

Maggie Bowie, Analyst, William Blair: Hi everyone. This is Maggie Bowie on for Andrew today. Thanks for taking our questions. Maybe first, just to start, can you walk through just once you have the PRIME publication in your hands, what your plans are there and how you think about organizational readiness at this point once the PRIME publication comes, hopefully before year-end?

Zhenya Lindgard, President and CEO, Sera Prognostics: Thank you so much, Maggie. Organizational readiness, we’ve been preparing for quite a few quarters for PRIME to come out. So what we’ve done is prepared the dialogue that can commence once the data is out, specifically policy review by payers. As you can imagine, without a peer-reviewed publication, engagement is on the pilot basis and early engagement. However, once we have the publication, the formal processes of review can commence within the payer institutions. Number one priority, as we mentioned, is getting coverage and reimbursement. That’s the first thing that organization will drive upon publication. Second, of course, is dissemination of information with clinicians, education, awareness building. What you can anticipate is presence at conferences, ACOG district conferences, seminars, CME events. We really want to get the data out to as many physicians and opinion leaders as possible.

In parallel, of course, we are engaging with opinion leaders on the new data that is coming out of the PRIME that will shape new publications coming out of the data. Our field force is going to use as a third key thrust the PRIME publication to make sure that in all of our target states, we are driving physician adoption with the major institutions and hospitals who have been engaging with us under CDA around the data to go ahead and drive education with all of their clinicians with the publication in hand. We feel the organization is very much ready with all of the appointments we have made this year with our Chief Commercial Officer, Lee Anderson, with our Chief Medical Officer, Dr. Tiffany Inglis, a lot of roles within the commercial organization, and hiring our salesforce. We are in great shape to press go on our plan post-publication.

Maggie Bowie, Analyst, William Blair: Great. Thank you for that. Maybe just one, just on the commercial team, how should we be thinking about that build-out as we get into 2026 once the PRIME publication is out there? Just with that, how should we think about your SG&A expense in 2026? Thank you.

Zhenya Lindgard, President and CEO, Sera Prognostics: Great question. I’ll start with the commercial team size. Then, Austin, if you want to talk through the SG&A question, that would be great. Maggie, what we’re aiming to do as we expand the engagement with states and the payers and have the initial coverage established, we plan to expand the salesforce to drive the pull-through in those geographies. Each of the waves is about four to six states. We’ve staffed the first wave of six states. You can anticipate that we will bring new sales reps and medical science liaisons to the next wave of states as traction in those geographies is achieved. We’ll continue following our philosophy of investing behind the wins to put field personnel in place to drive engagement on the ground with physicians, with practices, with office managers, and opinion leaders.

Austin, do you want to talk through on the parameters of our SG&A change anticipated in 2026?

Jennifer Zebuda, Head of Investor Relations, Sera Prognostics: Sure. Hi, Maggie. Thanks for the question. We’re aiming next year to keep expenses relatively similar to the way they are this year while also shifting a lot of our capital allocation certainly towards sales and marketing activities. We do expect to see a relatively significant increase on the sales and marketing line while overall expenses stay relatively flat.

Maggie Bowie, Analyst, William Blair: Great. Thank you both.

Zhenya Lindgard, President and CEO, Sera Prognostics: Thank you so much, Maggie. We’re excited to reallocate capital to commercialization from our main evidence-generating activities over the last couple of years.

Operator: Thank you. There are no further questions at this time. Ms. Lindgardt, please proceed with closing remarks.

Zhenya Lindgard, President and CEO, Sera Prognostics: Thank you so much. Before we close the call, I just want to emphasize the strong foundation we’ve built this quarter with advancing the evidence generation, accelerating commercial execution, and strengthening our leadership team. With the first Medicaid pilot live and active engagement across 13 states and key hires in place, we’re really well positioned to drive adoption of the test and delivering meaningful impact in maternal and neonatal outcomes. Looking ahead, we remain focused on disseminating PRIME results, expanding payer coverage, and working towards guideline inclusion. Thank you all so much for the continued support as we work towards transforming prenatal care and creating long-term value for patients, providers, and shareholders. Over to you, operator, to close the call.

Operator: Thank you. This concludes today’s call. Thank you for participating. You may all disconnect.