Interleukin Genetics, Inc. (ILIU) Q4 2014 Earnings Conference Call March 20, 2015 8:30 AM ET
Executives
Steve Dipalma - Interim CFO
Kenneth Kornman - CEO, President and Chief Scientific Officer
Analysts
Brian Marckz - Zacks Investment
Ed Nitry - Everest Capital
Operator
Good morning ladies and gentlemen and welcome to the Interleukin Genetics Fourth Quarter and Full Year 2014 Earnings call. At this time all participants are in a listen-only mode. With us today from Interleukin Genetics are Ken Kornman, Chief Executive Officer, President and Chief Scientific Officer, and Steve Dipalma, Interim Chief Financial Officer. Please be advised this call is being recorded at the company's request and will be archived on the Company's website at www.ilgenetics.com. We will be facilitating a question and answer session at the end of the management's formal remarks.
At this time, I would like to turn the call over to Dipalma. Please go ahead, sir.
Steve Dipalma
Good morning everyone and thank you for joining us to discuss Interleukin's financial results and the highlights for the year ending December 31, 2014. On today's call Dr. Kornman will first provide an overview of recent company highlights then we'll review the financial results for the fourth quarter and full year 2014. Dr. Kornman will offer some closing remarks and then we'll open the call up for your questions.
I hope you had the opportunity to review the fourth quarter and year-end financial results press release we issued earlier this morning. Before moving into the discussion of the year end results, please note that today's remarks will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in Interleukin's filings with the Securities and Exchange Commission including its annual report on Form 10-K filed yesterday. As such, actual results may differ materially from what is discussed on today's call.
Please note our earnings release and 10-K filing will be available on the Investor Relations page of our website, www.ilgenetics.com later today. With that I'll turn the call over to Dr. Kornman. Ken?
Kenneth Kornman
Thank you, Steve and good morning everyone and thank you for joining today' call. As many of you are aware Interleukin Genetics is a personalized health company that develops unique and proprietary genetic tests that enable better prevention and treatment of specific chronic inflammatory metabolic diseases. We believe that our proprietary tests developed and rigorously validated in partnership with leading academic institutions can be used to better guide disease prevention and treatment. This is accomplished through healthcare practitioners to provide improved care for their patients and through our commercial distribution partners to provide improved services to their customers. Information from our test therefore can assist physicians and dentists in providing better care and the entire working individuals to improve their health through personalize prevention. Our test can also be useful in assisting pharmaceutical companies to improve drug development in use by identifying sub populations that maybe more responsive therapy.
Our currently marketed products include PerioPredict, our lead genetic test that analyzes genetic variations associated with periodontal disease. The test is done at the dentals office and is performed using the simple, quick and painless cheek swab. PerioPredict identifies individuals who had increase risk or moderate to severe periodontitis and disease progression and who therefore may benefit for more preventive oral care mainly additional cleanings every year in order to prevent the disease.
The test results in combination with smoking and diabetes is key contributing risk factors provide important information for dentist in assessing prevention in treatment options for their patients. PerioPredict specimens are analyzed exclusively in our CLIA-certified laboratory in Waltham, Massachusetts and the results are provided to the dentist to assist in personalizing preventive care in their practice.
We expect PerioPredict test to be reimbursed as part of dental insurance policies to provide value in terms of improved dental preventative care that depending on policy design they deliver a lower cost of care and potentially a lower cost of managing certain chronic diseases as a direct result of reducing severe periodontitis.
In 2013, a clinical study from University of Michigan title patient stratification for preventive dental care is published in the Journal of Dental Research. This landmark study involved more than 80,000 patient years of data and 5,117 patients monitored for 16 consecutive years and explore the influence of three key risk factors for periodontal disease, smoking, diabetes and genetics on tooth loss given varied frequencies of preventive dental [indiscernible] that included cleanings.
The results of this study indicate in low risk patients those with none of the three risk factors non-smokers, not diabetes and negative for PerioPredict, there was no significant difference between two dental preventive visits per year and per preventive visit per year in the percentage patients who had tooth extractions over the 16 year monitoring period.
In addition, these results indicate that in high risk patients those with any one of the three risk factors with a PerioPredict positive result being the most common of the three. In that situation two preventive visits per year significantly reduced the percentage of patients who had extractions over 16 year monitoring period, compared to those who had one preventive visit per year.
For patients with two or three risk factors with smoking, plus PerioPredict positive representing approximately 67% of those patients, two cleanings annually did not appear to be sufficient to control risk for tooth loss. During 2014, we build upon this important body of scientific research with new data demonstrating PerioPredict's utility in identifying specific gene variance in multiple ethnic groups. In April 2014, we published the study filed association of Interleukin one gene variations with moderate to severe chronic periodontitis in multiple ethnicity in the Journal of Periodontal Research.
These data further validate the association between periodontitis and the Interleukin one genotype pattern a specific genetic profile that can be elucidated by Interleukin's PerioPredict genetic risk test.
In addition, this large study results demonstrated that detection of the Interleukin 1b variations provided added value in the prediction of moderate to severe periodontitis, above and beyond the risk attributable through smoking and diabetes alone. So again this study expands upon our evidence for the value of PerioPredict in multiple ethnic populations and demonstrates that our test can be utilized accurately in dental offices regardless of ethnicity.
This month we presented new PerioPredict clinical data at the 2015 International Association for Dental Research Annual Meeting. This study report titled IL1 Genotype and Obesity Characteristics Interact to Influence periodontists progression, discuss new clinical results that demonstrated how Interleukin one gene variance amplified the previously reported association between obesity and periodontal disease progression. IO one gene variance had been previously shown to amplify detrimental effects of other risk factors besides obesity including smoking and diabetes in terms of periodontitis severity and progression. The new study provided additional evidence to guide clinical use of IO one gene variance together with other risk factors to assist dentists in identifying high risk patients who could potentially benefit from more frequent dental cleanings and monitoring to better maintain oral health.
In addition an independent group from the University of Pittsburg reported in the February 2015 issue of the Journal of Personalized Medicine that among 881 patients individuals who were smokers, had hypertension, diabetes or IO one genotype had a higher frequency of tooth loss and the loss was even greater in patients with more than one of these risk factors combined.
We're excited and encouraged by the additional supportive data that have been generated and we look forward to continuing this important line of research. In addition to generating and reporting new data we continue with our activities aimed at increasing awareness and adoption of [PerioPredict] clinical practice. During the fourth quarter of 2014 the American Dental Association annual meeting we were honored to receive the 2014 Dr. Bicuspid Dental Excellence Award for PerioPredict which was recognized as the best new hygienist product of the year. Dr. Bicuspid is the most widely read daily blog in the dental industry.
In January we announced that an article titled Dentistry Gets Personalized is published online in the Genome Magazine, the article which also appeared in the Fall 2014 print issue of Genome Magazine included an overview of PerioPredict and its utility in identifying a patient's risk for severe periodontal disease based on the individual's genetic profile as well as its role advancing personalized medicine in dentistry.
In summary we believe PerioPredict is an essential tool for prevention of periodontitis and we're focused on expanding the adoption by insurance plans, employer groups and dentists over the coming years. We're convinced that even a small share of the available market would represent a significant opportunity in terms of revenue and earnings for Interleukin and so we remain very enthusiastic about the PerioPredict opportunity.
Our enthusiasm is based in part on the knowledge that almost 175 million people in the US are covered by dental insurance through private employer group contracts highly concentrated with six large payers the largest of which is Delta Dental across the US. To date what we have found in our discussions with insurance players and employers and through medical education with dentists is that there is growing recognition of the medical and financial consequences of periodontitis and other conditions associated with IO one mediated inflammation and therefore greater interest in risk based protective programs and policies that encourage more patient responsibility for preventive health. Based on what we've learned over the past year we're focused on encouraging the adoption of risk based preventive programs and policies that include PerioPredict.
Most dental insurance plans now reimburse for two cleanings per year, essentially a one size fits all model that assumes two cleanings per year is optimal for everyone irrespective of the individual patient's risk for periodontitis, in cases where the PerioPredict test is positive reimburse for three or more cleanings per year may be warranted to prevent the progression of periodontitis, a much more costly condition.
Looking forward our focus during 2015 will be to continue ongoing discussions with additional large dental payers that have expressed interest in using PerioPredict test in some way in their policies. And with large employers with the goal of signing new payer partnerships this year which we believe could result in significant PerioPredict revenues in 2016 and beyond. Beyond PerioPredict we continue to develop leading edge genetic tests intended to help pharmaceutical companies improve their drug development and assist positions in guiding better therapy decisions for patients with certain chronic diseases by identifying some populations that maybe more responsive to therapy.
Of note these are cardiovascular disease test which will use IO1 pro-inflammatory genetic variations to guide drug development and use to prevent secondary cardiovascular events. A good example of this is our strategic collaboration with Isis Pharmaceuticals. During the first quarter of 2015 Interleukin and Isis entered into a collaboration under which Interleukin will provide genetic testing services and kits to support two Isis clinical study. The first is a Phase II study evaluating ISIS-APO(a)Rx in patients with high lipoprotein(a), subjects with Lp(a) levels are at a high risk experiencing life threatening cardiovascular event.
In addition ISIS-APO(a)Rx is any sense drug candidate that shows the ability to reduced Lp(a) level in their Phase I clinical program. The other study is a Phase I study evaluating a separate novel therapeutic candidate ISIS-APO(a)-LRx again in healthy volunteers with high Lp(a). The Isis collaboration is a great example of how we can work with pharmaceutical companies to employ complimentary genetic tests designed to improve clinical outcomes. Overtime we may identify other pharmaceutical companies that maybe similarly interested in using our tests and services in conjunction with their drug development programs.
And finally on the financial front, in December we strengthened our cash position with $10 million financing that will enable us to advance PerioPredict as well as our other genetic tests.
With that I'd like to turn the call over to Steve Dipalma, for review of our fourth quarter and full year 2014 results and financial highlights. Steve?
Steve Dipalma
Thank you Ken. First I'll provide an overview with the financial results for the fourth quarter ended December 31, 2014. For the fourth quarter 2014 revenues were $322,000 compared to $671,000 for the same period in 2013. This decrease is primarily attributable to breakage revenue, which is deferred revenue recognized when after the passage of time test redemption is considered unlikely, and reduced license fee income recognized in 2014 compared to the same period for 2013. These decreases are largely due to the recognition in the fourth quarter of 2013 of breakage revenue from test kit sales made during all of 2009 to 2010, and a license fee income for the second, third, and fourth quarters of 2013, whereas breakage revenue and license fee income recognized in the fourth quarter of 2014 was related to that quarter only.
Cost of revenue for the fourth quarter of 2014 was $320,000 or 99% of revenue compared to $390,000 or 58% of revenue for the same period in 2013. The decrease in cost of revenue is primarily due to reduced less by cost and a lower number of test process partially offset by increased compensation expense. Research and development expenses for the fourth quarter of 2014 were $176,000 compared to $212,000 for the fourth quarter 2013. The decrease is primarily attributable to the decreased compensation related to departing staff. Selling, general and administrative expenses for the fourth quarter of 2014, were $1.4 million, compared to $2 million for the same period in 2013. This 25% decrease is primarily attributable to decreased expenses related to the initial marketing activities for PerioPredict that occurred in 2013, it's not reoccurred in 2014, decreased consulting and professional expenses, decreased employee compensation, and lower sales commissions paid pursuant to the merchant network and channel partner agreement with Amway Global.
Net loss for the fourth quarter of 2014, was $1.6 million, or a loss of $0.01 per basic and diluted common share, compared to a loss of $1.9 million or $0.02 per basic and diluted common share for the same period in 2013.
Turning to the full year 2014 financial results. Total revenues for the full year were $1.8 million, compared to $2.4 million for the full year 2013. The change in total revenue is attributable to higher revenues in 2013 due to a promotion by Interleukin's partner, Amway, resulting in a large volume of pre-paid test kits returned for processing, partially offset by $309,000 of breakage revenue recognized in 2014, compared to 2013 dollars of breakage revenue recognized during 2013. In addition Interleukin earned $151,000 of royalties for the full year 2014 from its license agreement with AVGI compared to $199,000 of royalties earned in the full year 2013.
Deferred revenue at December 31, 2014 was $3.1 million compared to $3.8 million in the prior year representing genetic test sold and not yet processed. The decrease in deferred revenue is due to a higher volume of test payment received for processing during 2014. And were paid [indiscernible] advance during year 2014. As a reminder our revenue is recognized when a test is processed in our laboratory and a result is issued to the customer. Customers have historically paid in advance for these processing services when a kit is purchased. This prepayment has resided on our balance sheet as deferred revenue until the processing occurs, at which point it is recognized as revenue.
Accounting rules have been developed that allow the recognition of this deferred revenue if there is only a remote chance that the test will be returned. Based on our analysis, we determined the majority of the tests we sell come back for processing within the first two years after sale, and at the chance of the test being returned for processing is remote after three years.
Included in genetic revenue for 2014 is $309,000 of breakage revenue related to unredeemed genetic test kits for 2011, compared to $213,000 of breakage revenue recognized for 2013 related to unredeemed genetic test kits from 2009 and 2010. We expect to continue to recognize breakage revenue going forward on a quarterly basis. We will also analyze redemption patterns to make sure our assumptions continue to hold true in the future.
Cost of revenue for the full year 2014 was $1.4 million or 79.3% of revenue compared to $1.6 million or 67.2% of revenue for the full year 2013. The increase in the cost of revenue as a percentage of revenue in 2014 compared to 2013 is primarily attributable to a fixed laboratory cost being applied to a lower volume of genetic test processed during the period. Deferred cost of revenue related to breakage revenue was $13,200 for the full year 2014 compared to $8,400 for the full year 2013.
Research and development expenses were $843,000 for the full year 2014 compared to $722,000 for the full year 2013. The increase $121,000 or 16.8% is primarily attributable to increased compensation related to employee annual salary performance increases as well as separation payments for departing staff.
Selling, general and administrative expenses were $5.8 million for the full year 2014, compared to $6.6 million for the full year 2013. 12% decrease is primarily attributable to decreased expenses related to initial marketing activities for PerioPredict test that occurred in 2013 in preparation for the 2014 market introduction which expenses did not recur in 2014, as well as decreased consulting and professional expenses, and lower sales commissions paid to Amway Global as part of our merchant network and channel partner agreement.
Interest expense was $6,300 for the full year 2014 compared to $472,000 for the full year 2013. At December 31, 2014, $11,250 of interest expense due to venture loan and security agreement interlinked on December 23, 2014 was offset by $4,900 in interest income. There was no interest expense due excess for the full year 2014 as all our standing convertible debt was converted to common stock on May 17, 2013 as part of the May 2013 private placement.
Net loss for the full year 2014 was $6.3 million or $0.05 per basic and diluted common share compared to $7.1 million or $0.08 per basic and diluted common share for the same period 2013. In December we successfully closed $10 million financing. Half of this total or approximately 5 million was raised from equity private placement with new and existing investors, including leading life science investment firms, New Enterprise Associated or NEA and Bay City Capital. The remaining $5 million was raised through a venture loan and security agreement with Horizon Technology Finance Corporation and proceeds from these transactions will be used primarily to accelerate commercialization of our proprietary genetic test, including PerioPredict and for general corporate and working capital purposes. Cash-and-cash equivalents were $11.5 million on December 31, 2014 which we believe is sufficient to fund the company's operations for at least the next 12 months.
Now I'd like to turn the call back over to Ken for some closing remarks.
Kenneth Kornman
Thank you, Steve. At Interleukin we remain convinced that the future of healthcare is about the promise of personalized medicine and its potential to increasingly shift care from treatment to prevention especially with common chronic diseases of aging. These sentiments enjoyed significant tailwinds in January 2015 when President Obama announced the launch of the Precision Medicine Initiative, $250 million program aimed at helping doctors develop personalize medical treatments for their patients. This program is an important milestone that builds on the momentum that has been growing since the decoding of the human genome. It recognizes that by enabling doctors to identify high risk patients, strategies to prevent or manage their disease more effectively can be implemented thereby improving outcomes, all while potentially reducing healthcare cost. At Interleukin Genetics, we've been a leader in personalize medicine for a number of years through our focus on developing genetic spaced risk assessment. We're gratified that President Obama has recognized the enormous potential of personalized medicine and proud of the role we are playing to help change the current healthcare paradigm, a one that is largely defined by broad treatment to one that focuses on customized prevention in individualized care.
In 2015, we will remain focused on expanding the market opportunity for PerioPredict through direct discussions payers and employer groups and through medical education with dentist. We believe PerioPredict offers compelling value within policy design that include risk base preventive dental care. Our expectation is that additional dental plans, other insurance payers and employer groups will begin to introduce various policy designs to meet a broad range of needs over the next few years. We will also work to find opportunities for our other genetic tests including working with pharmaceutical companies in the development of novel new treatments for information related disorders such as cardiovascular disease and osteoarthritis.
Thank everyone for joining us on today's call and we'll now open the call to your question.
Question-and-Answer Session
Operator
[Operator Instructions]. Our first question comes from Brian Marckz with Zacks Investment.
Brian Marckz
Good morning Ken and Steve and congratulations on the progress and on the recent financing. Do you see continued progress with the rollout of PerioPredict in terms of increasing volume of testing shift or the number of patients covered in the plans of the test? And can you talk about how the rollout has progressed so far relative to your initial expectations?
Kenneth Kornman
So, we've really learned a lot during this past year 2014 and we are actively moving forward in terms of those learnings and in terms of the opportunities. There are three parts to this market ecosystem relative to reimbursement of PerioPredict, they are the insurers, the employer groups and brokers and benefits consultants who advice employers on policy designs and policy [indiscernible].
All of these interface to have a policy in place covering PerioPredict and risk based dental preventive care. We are making good progress we believe in finding this pipeline that leads to revenue and we certainly will keep people informed as we're able to make information available and make it clear in terms of what's going on, as we're able to do so.
We might add to this that a part of this whole process is involved in communication with employers and we spent a much of 2014 in a very good discussions with insurance groups insurers. Late in 2014, we broadened our discussions to encompass both large and mid-size employer groups and a brokers and benefits consultant. And all of this is moving along quite nicely.
Brian Marckz
So, you've been very active you and your staff in attending and presenting it some of the major industry events, can you talk about the reception that you've had from dentists and other professionals in the industry regarding, what they think about PerioPredict as a tool for preventive care and any feedback that they've provided to you?
Kenneth Kornman
Yes, I can only judge that primarily from both questions that are asked during these presentations, as well as individual discussions on the side. We've had a broad range of presentations to everything from insurance groups, government groups, professional dental groups, that's ongoing and it has continued up through the end of last week.
We've spread these discussions pretty broadly based upon where we see interest emerging making sure that we are communicating clearly within the, in the market place in terms of the strength of the evidence and the opportunity to improve dental care.
So far I would say that all of the feedback we've received directly from these presentations has been very positive. We get excellent questions and perhaps most importantly we get invited to do follow up presentations. I'll give you an example, last summer I gave a presentation to a group called the American Association of Dental Consultants, which are the dental, which are the dental directors and consultants for essentially all of the insurance groups in the US. And gave a presentation there in response to that presentation I was invited to give a presentation which we announced that was given just about a week ago, maybe a little more than that down in DC to an entity called America's Health Insurance Plans, and this is a massive group of medical and dental insurers really the senior executives of these plans who are looking at where's the future of health care going and so again I presented our story to all of the dental directors who participate in this AF organization which is pretty extensive. Our feedback so far has been quite promising.
Brian Marckz
In terms of the Isis agreement that you recently signed that relates to your cardio vascular disease test can you frame for us how significant an opportunity that presents today and then kind of down the road, assuming eventual regulatory approval for their drug candidates is that something that you see as potentially companion diagnostic if and when the drug is commercialized?
Kenneth Kornman
So, as some of you are probably aware the process in terms of companion diagnostics is a challenging process innately of course you have two different products moving through a regulatory and testing process, many times they're out of sync. If you start down that very defined path, so the more typical strategy today is basically what we're seeing with Isis and that is they have a drug development path that is very focused moving forward and we've been invited to participate in that to see if we can add value in terms of the strength of their drug response to certain populations. If that's successful then we would expect that our test may become available as a means of guiding use of that drug or using potentially other drugs.
We're excited about the cardio vascular data that we reported recently for those of you who are not aware of the most recent publication probably five months ago the end of 2014, this is study right at the Mayo Clinic it's a four year prospective study in terms of identifying people who had second cardiovascular events so all these people have a diagnosis of a heart disease, they were followed for four years after that diagnosis to see who died of cardiovascular disease who had a second event, who needed bypass or stents put in.
And what the data showed is that the combination of our test, being positive for our test and having an elevated level of this chemical we mentioned LP(a), those two together were significant and strong predictors of the future in terms of who had a second heart attack. And most importantly at the two year time horizon that specific combination predicted 60% of the second events. We think this is important information and we believe our tests can add value in multiple drug development programs related to cardiovascular secondary events, as well as potentially primary events. So as some of you know we have strong patent coverage, we have strong evidence on multiple tests, cardiovascular disease, osteoarthritis, a few others and we certainly are being opportunistic in terms of how might move those forward when there is in fact an opportunity on the drug side.
Brian Marckz
Great, and just a last one and it is on the OA test. Can you talk about if there is anything new development in terms of discussions with potential partners or dentists?
Kenneth Kornman
That's in our opinion really great test. And it identifies patients who already have osteoarthritis but it segregates into a group that is much more likely to show disease progression to severe complications. And a second group which may have some early pain, clear diagnosis but could walk along with just taking [indiscernible] for pain control for 20 years and be just fine. And so the beauty of that test is it really should facilitate drug development and as some of you know the OA market is absolutely tremendous and currently there are no drugs approved for modifying progression with osteoarthritis.
So it's a great opportunity and we certainly feel strongly that our test has the potential to add value. At the moment we as I think opportunistic is probably the best way to describe it where we see opportunities we take advantage of them relative to these tests, we'll continue to do that. We do not have a business development staff out specifically targeting drug companies at the moment relative to OA. We're receiving information on a regular basis and looking for the opportunities and then we pursue on next phases.
Operator
[Operator Instructions]. We do have another question from Ed Nitry with Everest Capital.
Ed Nitry
When I first started investing in ILI the focus was on heart, then it changed into the weight program which morphed into the PerioPredict now we're heaving of Isis contracts. Could you give us a guestimate or a percentage of where the revenue stream will come from in two or three years?
Kenneth Kornman
It's an excellent question Ed, and I appreciate your historical perspective on this. And it does in fact speak to my earlier comment in terms of opportunity. So [or better] in terms of protection as many of you know we were early player in this personalized medicines space, and we captured some very broad patents. We laded to especially chronic inflammatory diseases and genetic aspects of that. And then secondarily some of the weight management work. So your question is really at the heart of how we see it from a strategic standpoint. At the moment we see fantastic opportunity as we discussed extensively in the last year in terms of PerioPredict. We see that the cost of the value from the test and most importantly the value it brings to the marketplace. The employers and insurers and the patients and quite frankly the dentists in terms of increasing focus on patients who really would benefit from care and need the care.
So in the two to three year time horizon we've great expectations in terms of the PerioPredict opportunity. At the same time we certainly are moving forward with cardiovascular disease, including new evidence that was presented just at the end of 2014. We think it's likely there will be additional studies done on the cardio vascular test. There are some fascinating drugs being developed that actually fit very, very closely with our cardiovascular test, Isis is one example, there are other large pharmas that add drugs for secondary cardiovascular events that might also interface nicely with our cardiovascular test and so we're optimistic that we may find a good partner for that test, pharmaceutical industry.
It may will be based upon the evidence that came out at the end of 2014 that there are a near term opportunities for the cardiovascular test, more directly in the medical marketplace that care for patients by their physicians and cardiologist and we certainly will look at those opportunities. You think Osteoarthritis is a little behind cardiovascular disease in terms of just the nature of the drug development process out there. We think weight management continues to have very exciting possibilities and require some more development on our part in order to engage both pharmaceutical companies and broader types of commercialization organizations who will depend on just more evidence supporting that particular test. So that's really, what we see is the near term and then broadening into more of a five year horizon, it's an excellent question.
Ed Nitry
And finally Ken, with the latest fundraising how much of the stocks and warrants are restricted? And could you also comment on the article that appeared in JADA recently on why there was no response by the company or outrage at the misleading and if not false comments made in the article and will JADA give us equal time? Thank you, Ken.
Steve Dipalma
This is Steve Dipalma. I will jump in on the first question. None of the shares are warrants or restricted per se. None are registered for a resell yet, that's in process but there is no real restrictions on any of those securities. They were part of the last financing in December.
Kenneth Kornman
Thanks for the question in terms of the article in Journal of the American Dental Association. So, we were given an opportunity to respond, we do have a response in that particular journal. It's a more of a professional scientific response across, it's led by the University of Michigan authors who really control that particular manuscript that we published. And so they really controlled the response to the article that appeared in the Journal of the American Dental Association.
There is no question that we're surprised that such an article would be published because it's misleading at best, it's we think intentionally misleading and certainly anyone that looks carefully at the data that they present will see that besides their taking a shot at our genetic test, their actual analysis shows that widely accepted risk factors? Smoking and diabetes in their analysis showed no effect at all which is further indication that their analysis was just from the beginning. So, we'll continue to tell the story of how much evidence is out there, it's substantial. The Michigan study was one of the largest ever in dentistry as I mentioned a few minutes ago, it involved more than 80,000 patient years of data, over 5,000 patients followed for 16 years in the offices of their own dentists, that's really a remarkable study. And I'm talking about it constantly, other evidence coming out about it will continue to have very strong opportunities to communicate the evidence behind PerioPredict test. It goes back many years and it's substantial. So, we're pretty comfortable, we've not been impressed that there has been any response to the negative article, but this is the perspective of academics, I say that [having being one] myself at one time that like to take pot shots occasionally.
Operator
Ladies and gentlemen, this concludes our question and answer portion of the call. I'd like to turn the call back over to management now for additional closing remarks.
Kenneth Kornman
Yes, thank you very much. We appreciate everybody's dialing in, we very much appreciate the thoughtful questions. We are excited about how things are moving forward and we look forward to speaking with you again in the near future. Thank you all.
Operator
Ladies and gentlemen, that conclude today's presentation. You may now disconnect and have a wonderful day.
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