Spectral AI, Inc. Q4 FY2024 earnings call

• Burn validation study: Positive top line results announced, with DeepView system outperforming burn physicians in sensitivity (86.6% vs 40.8%), Dice Score (68.5% vs 39.2%), and specificity (61.2% vs expected 36%). Plans to submit results to FDA by end of Q2 2025 for De Novo classification in 2026.
• Deployments: Successfully deployed three DeepView systems in Australia at leading hospitals, and gathering real-world data in UK and Australia.
• SnapShot M: Handheld, portable diagnostic tool with over $7 million in government funding, expected for military deployment in 2027 with potential beyond combat medicine.
• Spectral IP: Formed in March 2024, secured $1 million investment, and plan to spin off into independent publicly traded company.
• Financial highlights: Reduced monthly operating losses from $4.6 million in first half of 2024 to ~$2 million in second half, satisfied $10.1 million short-term debt in February 2025.

In the fourth quarter of 2024, research and development revenue was $7.6 million, compared to $5.3 million in the prior year period. For the full year 2024, research and development revenue was $29.6 million, a 63.5% increase from $18.1 million in 2023, representing the highest revenue in the company's history. Gross margin in Q4 2024 was 44% compared to 46.1% in the prior year period, and full year 2024 gross margin rose to 44.9% from 43.6% in 2023. As of December 31, 2024, cash and cash equivalents totaled $5.2 million, but after the long-term debt financing, the cash position exceeds $14 million. The company forecasts revenue of approximately $21.5 million for fiscal year 2025, with no commercial contributions from UK/Australia DeepView system sales included in this guidance.

• The company is forecasting revenue of approximately $21.5 million for fiscal year 2025.
• The financial guidance for fiscal year 2025 does not reflect any contributions from the sale of DeepView system for burn in the U.K or in Australia or any additional material financial contributions from DeepView system commercialization.

• Forward-looking statements involve known and unknown risks, uncertainties, assumptions, etc., that could cause actual results to differ.
• Regulatory risks in obtaining FDA clearance and commercialization.
• Risks related to unknown factors affecting commercialization in UK, Australia, and other regions.

Q: What are plans for commercial readiness and launch, including staffing and regions?

A: Anticipate FDA clearance with De Novo submission, precondition market with studies, papers, and mobilizing sales force. Currently discussing co-products but no material disclosures yet.

Q: On $21 million in BARDA R&D revenue for 2025, bridge from 2024?

A: 2025 is a step back in revenue as positioning for FDA submission, with ramp up expected in 2026. Commercial revenue from UK/Australia not dispositive for overall revenue.

Q: What's left to submit to FDA after good burn study results?

A: All required sections of the FDA application, including SAP, statistical plan, hardware/software requirements, validation, and review by BARDA first.

Q: Pediatric study timeline and data use?

A: Enrolled 164 patients (115 adults, 49 pediatric), data processed, analyses ongoing but not required for FDA submission.

Q: Milestones for SnapShot M in 2025?

A: Incorporating preliminary feedback from military, submitting plans, focusing on ruggedness and testing for austere settings.

Q: Learnings from UK deployment and protocol changes?

A: Users giving helpful input, comparing to previous technologies, data to be shared at scientific meetings, need to establish coding and change care paradigms.