On this page of StockholderLetter.com we present the latest annual shareholder letter from EXAGEN INC. — ticker symbol XGN. Reading current and past XGN letters to shareholders can bring important insights into the investment thesis.

 •  4/30/2025 Letter Continued (Full PDF)
 •  4/28/2023 XGN Stockholder Letter
 •  4/26/2024 XGN Stockholder Letter
 •  More "Diagnostics" Category Stockholder Letters
 •  XGN Benford's Law Stock Score = 87

XGN Shareholder/Stockholder Letter Transcript:

2024
ANNUAL REPORT


Dear Shareholders,
2024 was a transformative year for Exagen. Over the course of 2024, we intensi  ed our
focus on delivering the best testing for patients and clinicians     both in accuracy and
service     and the results are energizing. We set ambitious goals to improve every aspect
of our   agship AVISE   CTD diagnostic platform, from reimbursement rates to
operational e  iciency, all with an eye toward pro  table growth. I   m pleased to report
that we not only achieved those goals, but in many cases exceeded them, positioning
your company for an exciting future.
Raising the Bar: ASP Hits a New Milestone
One of our proudest achievements in 2024 was dramatically improving our average
selling price (ASP) for AVISE CTD. When I joined Exagen in mid-2022, our trailing 12month ASP was about $285 per test and facing downward pressure from a Medicare
repricing in early 2023. Fast forward to today: our ASP has surpassed the $400 mark for
the   rst time. In fact, by the end of 2024 our trailing 12-month ASP reached roughly
$411 per test, up $75 from the year prior. This is an exciting milestone that brings us
close to our near-term goal of attaining 50% of the full Medicare (CMS) price for our ASP.
Such a gain     over 40% increase in two years     is extremely rare in our industry, and it
re  ects extensive work to demonstrate the value of our tests to insurers.
How did we achieve this pricing power? Throughout 2023 and 2024, we overhauled our
revenue cycle operations and appeals process. We invested in better personnel,
systems, and documentation to ensure insurers recognize the clinical importance of
AVISE CTD. We even made the tough decision to ask physicians to include detailed
clinical notes with test orders (a burden on busy clinics) to strengthen our
reimbursement claims. This change caused a temporary slowdown in test volume
growth     a one-time reset as we expected     but it was a strategic trade-o   we were
willing to make. The payo   has been clear - payors are increasingly acknowledging
AVISE CTD   s value, and our payments per test have risen dramatically. We believe this
foundation of higher ASP not only boosts current revenues but also validates the realworld impact of our diagnostics. As we move forward, expanding test volume on top of a
higher ASP will drive much more pro  table growth than volume alone ever could.
Financial Strength: Growth with Improved E  iciency
Our   nancial results in 2024 underscore the strength of our revised strategy. We
delivered record revenue for the year     approximately $55.6 million, the highest in
Exagen   s history. This represents healthy growth over 2023, fueled largely by the

reimbursement improvements mentioned previously and our team   s focus on highvalue testing. It   s gratifying to see top-line growth even as we prioritized pro  tability.
Gross margins expanded to nearly 60%, up from 56% in 2023, thanks to pursuit of more
pro  table business and prudent management of business operations.
More importantly, we achieved this growth while signi  cantly cutting our losses. Our
adjusted EBITDA improved by about 40% year-over-year, with a loss of roughly $10
million in 2024 compared to a ~$17 million loss in 2023. In other words, we cut our
EBITDA de  cit nearly in half. We also substantially narrowed our net loss, re  ecting
disciplined cost management and smarter spending. This is a remarkable turnaround
from prior years and indicates that the business can sustain itself as we continue to
grow. In fact, with our cash on hand of about $22 million at the end of 2024), our runway
now extends to pro  tability, giving us ample breathing room to execute our plans. Few
companies in this space and at our scale manage to reduce expenses and losses by
over 70% while still growing revenue, but Exagen   s 2024 performance shows it   s
possible with a great product, focus and determination. We enter 2025 on a far stronger
  nancial footing     nearly break-even in cash   ow     and with line of sight to achieving
pro  tability in the near future.
One Million Patients and Counting
Amid these   nancial gains, we never lost sight of our core mission - helping patients
su  ering from autoimmune diseases get the answers they desperately need. In 2024,
we reached a humbling and historic milestone     Exagen tested its one millionth patient
with AVISE CTD. Think about that for a moment, one million patient lives touched by our
  agship test. Many of these individuals had spent years searching for a correct
diagnosis. Patients with complex connective tissue diseases endure an average of 6 or
more years of doctor visits before getting a de  nitive diagnosis. AVISE CTD is helping to
cut that agonizing journey shorter by providing clarity sooner. Every test represents a
person     someone   s mother, brother, or friend     who might   nally put a name to their
illness and get on the path to proper treatment. Reaching one million patients is a
testament to the trust that rheumatologists have in our tests and the tangible impact
we   re making to clinical practice. We celebrated this milestone, but more than anything
it reinvigorated our team   s passion for expanding our reach. There are millions more
patients out there with undiagnosed autoimmune conditions, and we are determined to
help them   nd answers faster.

Innovation in Action: New Lupus and RA Biomarkers
Perhaps our most exciting strategic accomplishment this year was innovation within
our core product. For the   rst time since AVISE CTD   s inception, we meaningfully
enhanced our   agship test pro  le with new biomarkers. These additions     the result of
intensive R&D throughout the year     represent a leap forward in diagnostic power for
two of the most prevalent autoimmune diseases we target, lupus and rheumatoid
arthritis.
x 
T-Cell Lupus Pro  le: We introduced a set of three novel T-cell biomarkers
(called TC4d, TIgG, and TIgM) that signi  cantly improve sensitivity for systemic
lupus erythematosus (SLE). In plain language, these tests can detect lupus
cases that traditional antibody tests might miss, especially in patients whose
symptoms are ambiguous. By augmenting our existing AVISE CTD pro  le with
these T-cell markers, we give physicians a more comprehensive tool for
diagnosing lupus con  dently, even in complicated cases. Early feedback from
the   eld has been very positive     our new T-cell markers are being well received
by rheumatologists, and a recent peer-reviewed study in Frontiers in
Immunology validated their superior performance over conventional biomarkers.
x 
RA (Anti-RA33) Pro  le: We also added three anti-RA33 antibody tests (IgA, IgG,
and IgM) to enhance rheumatoid arthritis diagnosis. These markers provide
clinicians with crucial data to identify RA in patients who would otherwise be
considered    seronegative    (i.e. lacking the usual RA antibodies). In e  ect, our
updated o  ering can now catch rheumatoid arthritis cases that previously
slipped through the cracks of standard testing. This is opening up a new
population of patients and rheumatology practices for Exagen     one that could
be much larger than, our lupus market. The launch of the RA33 pro  le has gone
smoothly, and physicians are starting to use it to con  rm di  icult RA diagnoses
with greater con  dence.
These new lupus and RA biomarkers were commercially launched in January 2025 after
securing regulatory approvals, including conditional approval from New York State in
late 2024. We owe a big thanks to our R&D and clinical lab teams for executing an ontime development, validation and launch     a feat that validates our ability to focus,
prioritize, and deliver high-impact innovations quickly. Importantly, these proprietary
enhancements give Exagen an even greater competitive edge. We expect them to be
catalysts for growth on multiple fronts: driving greater test utilization, further improving



 4/30/2025 Letter Continued (Full PDF)