{ "docId": "019dd923-622c-750b-8b9a-ad0811d3e80d", "docSlug": "dfcef8f28a20", "documentTitle": "Accelerate Diagnostics (AXDX)", "authorId": "61_White_Diamond_Research", "authorName": "White Diamond Research", "documentKindSlug": "research-note", "documentKindLabel": "Research note", "sourceTypeSlug": "short_seller", "sourceTypeLabel": "Short seller", "presentationDate": "2019-09-16 00:00:00", "orientation": "portrait", "aspectRatio": 0.77272725, "pageNumber": 34, "pageCount": 41, "prevPage": 33, "nextPage": 35, "slideType": "executive_summary", "function": "diagnose_problem", "density": "dense", "nDataPoints": 8, "notes": "The slide presents a bearish thesis on AXDX based on primary research (lab surveys) and reimbursement analysis.", "elementsJson": [ "paragraph" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9a-ad0811d3e80d/34", "deckHref": "/decks/019dd923-622c-750b-8b9a-ad0811d3e80d", "deckJsonHref": "/decks/019dd923-622c-750b-8b9a-ad0811d3e80d.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9a-ad0811d3e80d#slide-34", "components": [ { "bbox": null, "kind": "callout", "text": "Our concern is: if those who know Pheno the best (those who used the system previously) are not buying Pheno, then who is?", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-78b4-70ad-b3a1-ef55f859d51a", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.08, "w": 0.78, "x": 0.11, "y": 0.42 }, "kind": "paragraph", "text": "Craig Hallum, as well as other sell-side analysts, who were initially bulls have since walked away. The only sell-side analyst bull right now is Piper Jaffray, and even they only have a $19 PT on AXDX after the Q219 results. See the above survey outcome quote here on page 32, as well as the other sell-side reports.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "1a61a033-86b4-43aa-9ee5-b3d02de3d784", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.32, "w": 0.78, "x": 0.11, "y": 0.09 }, "kind": "paragraph", "text": "channel check: reach out to the labs who know Pheno the best and see if they adopted Pheno following the launch of the reagent rental model. This includes labs who participated in AXDX' clinical studies. Our results were surprising...out of 15 centers with experience using Pheno, only 5 have plans to implement the system: 2 actively use it today, 2 are implementing 1H19 and 1 will “probably adopt.” Among the labs not implementing Pheno (10 labs), 7 cited test cost. Other responses included lack of evidence to justify adoption, physical size of the cartridge creating capacity/logistics issues, software glitches and one lab referenced false positives and negatives as well as inconsistency with streptococcus testing.... Our concern is: if those who know Pheno the best (those who used the system previously) are not buying Pheno, then who is?", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "af146f99-4a6f-4e76-b840-eb8988e54f01", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.25, "w": 0.78, "x": 0.11, "y": 0.6 }, "kind": "paragraph", "text": "AXDX charges $ 50,000 for its Pheno system and about $200 per PhenoTest panels (list price is $250). Currently, there is no additional reimbursement for PhenoTests and the hospital pays from the total DRG sum, meaning that an extra payment to AXDX come out of the hospital’s pocket. Other rapid diagnostic companies, such as TTOO, received special add-on NTAP reimbursement, which covered 65% of the diagnostic kit cost. Given lackluster AXDX revenues, anyone would assume that NTAP reimbursement would provide a nice tailwind. Yet, it appears that AXDX management procrastinated on the NTAP application. As evident from the excerpt below, no NTAP reimbursement will be available for AXDX until at least Q4 2020, because it takes 2 extra months from approval to Medicare coverage.", "attrs": null, "subkind": "paragraph", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "c295a135-4adb-4b0a-a071-382ba4443065", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.06, "w": 0.78, "x": 0.11, "y": 0.52 }, "kind": "title", "text": "No meaningful reimbursement is on the horizon for expensive PhenoTests", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "03af209c-63f8-4ee4-9d04-476e0a9d0092", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "diagnostic-test", "slug": null, "matchId": "5bbfc868-8656-465f-8a8f-001f8c2067cf", "evidence": "The slide uses primary research (channel check) to diagnose the root cause of poor company performance.", "confidence": 0.8 } ], "arcBeats": [ { "to": 41, "from": 30, "beatId": "ca57db9c-677e-4ef8-919c-92b1690ee48e", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Solution (Provide relief)", "beatSlug": "problem-agitate-solution-solution-provide-relief", "evidence": "The document implies that the solution is to be cautious of the system's limitations and avoid investment in AXDX, citing a potential decline in AXDX shares.", "position": 2, "confidence": 0.8, "parentBeatName": "Resolution", "parentBeatSlug": "resolution" } ], "loops": [ { "to": 35, "from": 31, "name": "Cost Of Inaction", "slug": "27-cost-of-inaction", "bestFor": "Urgent budget requests, compliance, risk mitigation", "matchId": "c590c16d-0680-4cc5-a734-8a884e9eff8b", "evidence": "The document implies that the cost of inaction is the potential decline in AXDX shares and the unjustifiable premium vs its close comparator, T2 Biosystems.", "position": 1, "objective": "What is the cost of inaction regarding AXDX's Pheno system?", "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point", "confidence": 0.7, "description": "Quantify what happens if the audience does nothing" } ], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }