Exagen Inc. (XGN): Business Model Canvas [Dec-2025 Updated]

You're looking at a specialized diagnostics player in late 2025 trying to finally translate its proprietary technology into consistent profit, and the Business Model Canvas lays out this exact tension. Honestly, the Q3 numbers show the tightrope walk: they booked $17.2 million in revenue, but still logged a $7.1 million net loss, even with over $45 million in cash on hand. The whole structure is geared toward hitting that full-year guidance of $65 million to $70 million and achieving positive adjusted EBITDA by Q4, balancing the high cost of their 45-territory sales force against the value of their unique AVISE tests. Keep reading; this canvas shows exactly how they plan to manage the costs and partnerships to make that pivot happen.

Exagen Inc. (XGN) - Canvas Business Model: Key Partnerships

You're looking at the critical external relationships Exagen Inc. needs to keep humming to hit its targets. These aren't just names on a slide; they represent revenue streams, R&D pipelines, and operational security. Let's break down the numbers tied to these key alliances as of late 2025.

Biopharma and CROs for the growing Pharma Services business

The Pharma Services segment is showing real traction, which is key for diversifying revenue away from pure diagnostics. This partnership channel relies on the trust built through scientific collaboration and timely data delivery.

• Pharma and CRO business contributed nearly $800,000 in revenue for Q3 2025.
• Year-to-date Pharma Services revenue reached $1.2 million as of Q3 2025.
• The existing backlog for this segment stood at $3.5 million at the end of Q3 2025.

Johns Hopkins University for Lupus Nephritis biomarker development

The exclusive license agreement with Johns Hopkins University (JHU) is a major value driver, especially for the pipeline. This partnership focuses on developing non-invasive assays to guide treatment for Lupus Nephritis (LN).

The urinary biomarker panel developed in collaboration with JHU researchers has shown significant predictive power in validation studies, outperforming established markers:

Biomarker/Test	AUC for Predicting Active Proliferative LN (NIH Activity Index > 2)
JHU Urinary Biomarker Panel	90%
C3	73%
C4	67%
Anti-dsDNA	60%
UPCR (Urine Protein/Creatinine Ratio)	59%

This panel is designed to track changes in histological activity noninvasively, which is critical for preventing irreversible kidney damage.

Third-party commercial payors for reimbursement rate negotiation

Securing favorable payment terms from commercial payors is essential for realizing the Average Selling Price (ASP) for new tests. Exagen's commercial success hinges on these payors providing adequate coverage.

For the recently launched systemic lupus erythematosus (SLE) and rheumatoid arthritis (RA) biomarkers, the expected reimbursement was aligned with initial estimates of $90 per test as of Q1 2025.

The trailing twelve-month ASP for the flagship AVISE CTD test grew to $428 per test as of Q2 2025, up $27 per test over Q2 2024.

Government payors (e.g., Medicare) for coverage and payment

Government payors, including Medicare, represent a foundational reimbursement source. Exagen's laboratory is certified by the Centers for Medicare & Medicaid Services (CMS) under CLIA for high-complexity testing.

The company explicitly notes that delays in coverage and reimbursement decisions from Medicare remain a business risk factor.

Suppliers for specialized reagents and laboratory equipment

Operational continuity depends on securing key materials, often from a concentrated supplier base. Exagen has specific contractual commitments in place to mitigate supply chain disruption.

For the year ending December 31, 2025, the aggregate minimum annual purchase commitment related to an amended supply agreement for new consumable reagents is $10.4 million.

The company's reliance on a small number of vendors is significant; for the three months ended June 30, 2024, approximately 99% of diagnostic testing supplies were purchased from two suppliers.

Regarding capital equipment, a financing arrangement entered into in January 2025 resulted in a total liability balance of $1.7 million related to the financed laboratory equipment as of March 31, 2025.

Exagen Inc. (XGN) - Canvas Business Model: Key Activities

Exagen Inc. focuses its core operational activities on advancing proprietary diagnostic development, optimizing the revenue capture from those tests, and executing commercial outreach across its defined sales footprint.

Proprietary diagnostic test development and validation (R&D)

The company dedicates resources to expanding its testing portfolio, which includes ongoing research into lupus nephritis platforms. Operating expenses in the first quarter of 2025 reflected strategic investments in R&D, totaling $12.5 million.

• Operating expenses in Q1 2025 were $12.5 million.
• Pharma and CRO business revenue for Q3 2025 was $780,000.
• Pharma Services backlog at the end of Q3 2025 was $3.5 million.

Revenue cycle management to maximize Average Selling Price (ASP)

Maximizing the realized price per test is a critical activity, supported by internal processes and payer negotiations. The trailing twelve-month Average Selling Price (ASP) for the AVISE CTD test showed consistent growth through 2025.

Metric	Value (Q3 2025)	Value (Q1 2025 TTM)
AVISE CTD Trailing Twelve-Month ASP	$441 per test	$419 per test
Year-over-Year ASP Increase (Q3 2025)	$37 per test	$42 per test (vs Q1 2024)

The long-term goal for the Average Selling Price is around $500 per test.

Commercial sales execution across 45 territories

Exagen Inc. executes its commercial strategy through a field-based sales approach, continually evaluating and expanding its reach into key metropolitan areas. The sales force footprint was actively growing through 2025.

• Sales territories stood at 45 at the end of Q3 2025.
• This represented an increase from 42 territories at the end of Q3 2025.

This execution supported a record total revenue of $17.2 million in the third quarter of 2025, a 38% increase compared to the third quarter of 2024.

Operating the CLIA-certified, CAP-accredited laboratory

The company's operations center around its specialized laboratory, which processes the proprietary tests and delivers results. The gross margin reflects the efficiency of these laboratory operations, which was favorably impacted by ASP improvements.

• Gross Margin in Q3 2025 was just over 58%.
• Year-to-date gross margin through Q3 2025 was just over 59%.

The company ended Q3 2025 with $35.7 million in cash and cash equivalents.

Launching new biomarkers like anti-PAD4 for RA diagnostics

Innovation includes launching new panels to enhance diagnostic sensitivity, particularly for rheumatoid arthritis (RA). The successful commercial rollout of these new markers is a key activity supporting future volume and ASP growth.

• The company commercially launched seronegative RA markers for anti-PAD4 at the end of Q3 2025.
• This launch followed the earlier enhancement of the AVISE CTD offering with new systemic lupus erythematosus (SLE) and RA biomarkers.
• The expected reimbursement for the earlier set of new RA/SLE biomarkers was initially estimated at $90 per test.

Management expects full-year 2025 revenue to be between $65 million and $70 million.

Exagen Inc. (XGN) - Canvas Business Model: Key Resources

You're looking at the core assets Exagen Inc. (XGN) relies on to execute its strategy in the complex autoimmune diagnostics space. These aren't just line items; they are the proprietary engines and infrastructure that drive their value proposition.

Proprietary Cell-Bound Complement Activation (CB-CAPs) technology

The foundation of Exagen Inc.'s differentiation is its proprietary Cell-Bound Complement Activation (CB-CAPs) technology. This technology measures stable biomarkers of complement activation by quantifying C4d covalently bound to circulating cells, such as erythrocytes (EC4d) and B cells (BC4d). The stability comes from the markers binding to the cell surface for the life of the cell. This approach was pioneered by Drs. Manzi and Ahearn.

• CB-CAPs are the cornerstone of the AVISE CTD test.
• The technology uses flow cytometry for quantification.
• It offers a correlation between marker quantification and the degree of complement activation.

CLIA-certified, CAP-accredited specialized laboratory

Exagen Inc. operates a specialized laboratory that is both CLIA-certified and CAP-accredited, which is critical for delivering precise, timely results in rheumatic disease testing. This centralized facility allows for the performance of Multi-Analyte Assay with Algorithmic Analyses (MAAAs), yielding a single result from a single blood draw.

This laboratory infrastructure supports the entire suite of AVISE-branded tests. It's a necessary physical asset for handling the specialized flow cytometry and proprietary assays required by their technology.

Financial Strength as of Q3 2025

As of the end of the third quarter of 2025, Exagen Inc.'s liquid assets and receivables provided a solid base. The combined total of cash and accounts receivable was $46.792 million, exceeding the required threshold of $45 million.

Financial Metric (Q3 2025 End)	Amount (in millions USD)
Cash and Cash Equivalents	$35.7
Accounts Receivable, net	$11.092
Total Cash and Accounts Receivable	$46.792

The cash position represented an increase from $30.0 million at the end of the second quarter of 2025. The company reiterated its expectation for full-year 2025 revenue to be between $65 million and $70 million.

Portfolio of AVISE-branded diagnostic and prognostic tests

The AVISE-branded portfolio represents the commercial output of the Key Resource of technology and laboratory infrastructure. The flagship AVISE CTD test is designed to help distinguish patients with Connective Tissue Disease (CTD) or similar overlapping symptoms. The AVISE CTD offering incorporates over 30 biomarkers selected for clinical relevance.

The average selling price (ASP) for the AVISE CTD test expanded to $441 per test in Q3 2025, up $37 per test from Q3 2024. Test volume for AVISE CTD grew 16% compared to Q3 2024.

Here's a look at the key components of the testing portfolio:

AVISE Test Name	Primary Function/Key Feature
AVISE CTD	Comprehensive diagnostic tool powered by CB-CAPs technology.
AVISE Lupus Profile	Achieves 80% sensitivity and 86% specificity for SLE using 10 biomarkers and an algorithm.
AVISE SLE Monitor	Leverages EC4d to help assess patients with SLE disease activity.
AVISE SLE Prognostic	Assesses risk for organ involvement like Lupus Nephritis.
Enhanced Rheumatoid Arthritis Profile	Combines anti-RA33 and anti-PAD4 to substantiate seronegative RA diagnosis.

Experienced, specialized sales force focused on rheumatology

Exagen Inc. deploys an experienced, specialized sales force whose focus is exclusively on the rheumatology specialty. This focused commercial team is essential for driving adoption of complex diagnostic tools like AVISE CTD among rheumatologists, who are the primary prescribers for these autoimmune condition tests.

• Focus area: Autoimmune diagnostics for chronic and debilitating conditions.
• The sales effort supports the commercial launch of new markers, such as seronegative RA markers for anti-PAD4 in Q3 2025.

Finance: draft 13-week cash view by Friday.

Exagen Inc. (XGN) - Canvas Business Model: Value Propositions

You're looking at the core benefits Exagen Inc. delivers to its customers, which are primarily rheumatologists and biopharma partners, as of late 2025. These propositions are grounded in their specialized testing portfolio.

Definitive diagnosis of complex autoimmune diseases like lupus and RA

Exagen Inc. provides clarity in decision-making for conditions like lupus, rheumatoid arthritis (RA), and Sjögren's syndrome using its flagship AVISE® CTD test. This commitment to definitive diagnosis has seen significant adoption; by December 31, 2024, Exagen Inc. reached testing its 1,000,000th patient with AVISE CTD.

Earlier and more accurate diagnosis via AVISE CTD test

The value here is in providing clinicians with information that shortens the autoimmune diagnostic journey. The Average Selling Price (ASP) per test reflects this added value. The trailing twelve-month (TTM) ASP for AVISE CTD was $419 per test as of the first quarter of 2025, growing to $441 per test by the third quarter of 2025. The company has a long-term goal for the ASP to approach $500. New biomarkers incorporated into the offering in early 2025 carried an expected reimbursement of $90 per test.

The enhanced AVISE CTD includes new systemic lupus erythematosus (SLE) biomarkers, specifically the T-Cell Lupus profile with TC4d, TIgG, and TIgM markers, which are noted to provide superior sensitivity for SLE compared to conventional markers.

Prognostic and monitoring tools for disease management (e.g., SLE Monitor)

Exagen Inc.'s full suite of AVISE-branded tests is designed not just for diagnosis but also for prognosis and monitoring of rheumatic diseases. The company is actively developing tools for ongoing disease management, evidenced by presenting six abstracts at the American College of Rheumatology Conference, including a plenary presentation related to the continued development of a lupus nephritis platform.

Novel biomarkers, like anti-PAD4, for seronegative RA patients

You see this value proposition materialize with the commercial launch of novel seronegative RA markers, including anti-PAD4, in the third quarter of 2025. This was the second novel set of RA biomarkers launched in 2025. The RA profile also includes additional anti-RA33 biomarkers: IgA, IgG, and IgM. The total addressable market for RA diagnostics is estimated to be large, with the RA market specifically having a broader addressable market of 2.5 million annual tests.

Clinical trial support and testing services for biopharma partners

Exagen Inc. supports biopharma partners through its testing services. For the third quarter of 2025, the Pharma and CRO business segment generated $780,000 in revenue. Year-to-date through Q3 2025, this segment totaled $1.2 million in revenue, and the company reported a backlog of $3.5 million.

Here's a quick look at the financial metrics supporting the delivery of these value propositions as of late 2025:

Metric	Value (Late 2025)
Full-Year 2025 Revenue Guidance (Low End)	$65 million
Full-Year 2025 Revenue Guidance (High End)	$70 million
Trailing Twelve-Month Revenue (as of 9/30/2025)	$63.6 million
Q3 2025 Record Revenue	$17.2 million
Year-to-Date Revenue (Through Q3 2025)	Roughly $50 million
AVISE CTD TTM ASP (as of Q3 2025)	$441 per test
Q3 2025 Gross Margin	Just over 58%
Year-to-Date Gross Margin (Through Q3 2025)	Just over 59%

The company has 45 sales territories, up from 42 at the end of Q3 2024, supporting commercial execution.

Exagen Inc. (XGN) - Canvas Business Model: Customer Relationships

You're looking at how Exagen Inc. keeps its key customers-rheumatologists-engaged and how they manage the financial side of that relationship as of late 2025. It's a mix of direct sales force interaction, scientific validation, and heavy lifting on the billing side.

Dedicated sales and clinical support for rheumatologists

Exagen Inc. targets approximately 5,000 rheumatologists across the United States with its portfolio of testing products. Customer relationship management here means direct engagement to drive adoption of their AVISE testing solutions.

The company has been actively expanding its commercial footprint. Management planned to expand sales territories by adding several new territories in 2025 to increase penetration into the rheumatoid arthritis (RA) market. This direct sales focus is key to driving volume.

Here's a look at how the value per test, which directly relates to the perceived value delivered to the physician and patient, has been trending:

Metric	Q1 2025 (Trailing 12-Mo)	Q2 2025 (Trailing 12-Mo)	Q3 2025 (Trailing 12-Mo)
AVISE CTD Average Selling Price (ASP) per test	$419	$428	$441
AVISE CTD Test Volume Growth (Year-over-Year for Q3)	N/A (Q1 YoY Growth was 6% over Q4 2024)	14% (vs Q1 2025)	16% (vs Q3 2024)
ASP Increase over Prior Year (Q3)	N/A	N/A	+$37 per test over Q3 2024

The Chief Scientific Officer, Dr. Michael Mahler, is central to scientific engagement, which supports the sales effort by validating the tests.

High-touch revenue cycle management for patient and payor claims

Handling claims is a critical, high-touch component because reimbursement directly impacts physician willingness to order tests. Exagen Inc. employs strategies specifically designed to maximize collections, which requires close management of patient and payor accounts.

For instance, in the first quarter of 2025, the company ended the period with an accounts receivable balance of $14.7 million, driven by a strategy to hold claims to maximize reimbursement. Following the initial release of these held claims in April 2025, combined cash, cash equivalents, and accounts receivable were projected to be approximately $28 million as of April 30, 2025.

The focus on optimizing the financial relationship is clear:

• New systemic lupus erythematosus (SLE) and rheumatoid arthritis (RA) biomarkers launched in Q1 2025 had expected reimbursement in line with initial estimates of $90 per test.
• The company ended Q3 2025 with $35.7 million in cash and cash equivalents.
• Full-year 2025 revenue guidance was reiterated between $65 million and $70 million.

This financial management directly supports the ongoing service relationship by ensuring the process is as smooth as possible for the ordering physician.

Scientific engagement through conference presentations and research

Scientific validation is a core relationship-building tool, especially with specialists like rheumatologists. Exagen Inc. actively presents its research to establish credibility and educate the market on new diagnostic markers.

In the third quarter of 2025, Exagen Inc. announced the acceptance of six abstracts at the American College of Rheumatology (ACR) Convergence 2025 meeting. This included a featured plenary presentation in collaboration with Johns Hopkins University.

Key areas of scientific focus presented in late 2025 included:

• Highlighting a urinary biomarker panel for Lupus Nephritis management.
• Presenting preliminary data on a novel kidney damage biomarker panel.
• Showcasing research on anti-RA33, anti-PAD4, and traditional biomarkers for RA diagnostic accuracy.

Also, in Q1 2025, the company published a T-cell manuscript in the peer-reviewed journal Frontiers in Immunology, detailing the clinical benefit of new SLE biomarkers. The pharma services business also contributed $780,000 in revenue in Q3 2025, indicating external research partnerships.

Focus on patient-centered care and improved clinical outcomes

The ultimate goal of the customer relationship is enabling better patient care through timely diagnosis and monitoring. This is built into the product roadmap and commercial strategy.

The company's strategy includes leveraging its testing portfolio to market therapeutics, positioning the offering to provide targeted solutions that ultimately serve patients better. The commercial launch of seronegative RA markers for anti-PAD4 at the end of Q3 2025 is the latest enhancement to the AVISE CTD panel, aimed at improving diagnostic precision for RA patients.

The company's mission is clear: to offer solutions to address the medical needs of the community and aid patients and healthcare providers in the diagnosis, prognosis, and management of autoimmune conditions. The Q3 2025 total revenue reached $17.2 million, showing market acceptance of these patient-focused solutions.

Exagen Inc. (XGN) - Canvas Business Model: Channels

You're mapping out how Exagen Inc. gets its specialized autoimmune testing services to the rheumatologists who need them. The channel strategy is highly focused, relying on a mix of direct engagement, proprietary infrastructure, and public market visibility.

Direct sales force targeting community rheumatologists is a primary route to market. The strategy explicitly targets the approximately 5,000 rheumatologists across the United States. This direct engagement is crucial for driving adoption of complex tests like AVISE® CTD and newer assays, such as the recently commercially launched seronegative RA markers for anti-PAD4, which was noted in the Q3 2025 update. The company noted in its Q3 2025 commentary that expansion into new sales territories is beginning to show meaningful contributions.

The entire testing operation flows through a Centralized, proprietary laboratory for all testing services. This laboratory is both CLIA-certified and CAP-accredited, which is non-negotiable for high-quality diagnostic delivery. The performance of this centralized channel is reflected in the Q3 2025 financial results: AVISE CTD test volume grew 16% compared to the third quarter of 2024. Furthermore, the Trailing-twelve-month Average Selling Price (ASP) for AVISE CTD expanded to $441 per test as of September 30, 2025.

For Investor Relations and public market communications, the channel is the public market itself, trading on Nasdaq: XGN. This channel keeps capital markets informed. For instance, as of December 1, 2025, the stock closed at $7.50 per share, with 22.66M shares outstanding. The company provided a 2025 full-year revenue guidance range of between $65 million and $70 million, and ended Q3 2025 with $35.7 million in cash and cash equivalents. The Q3 2025 total revenue was reported at $17.244 million.

Clinical adoption is heavily driven by presence at key scientific gatherings. Regarding Medical conferences (e.g., ACR Convergence 2025), Exagen Inc. announced the acceptance of six abstracts at the 2025 American College of Rheumatology Convergence meeting, which took place October 24-29, 2025, in Chicago, Illinois. The company maintained a physical presence at booth #1228 and hosted an Innovation Theater on Monday, Oct 27, 2025, to present data on lupus nephritis and rheumatoid arthritis biomarkers.

Here's a quick look at the channel metrics we can quantify:

Channel Component	Metric/Value	Reporting Period/Date
Direct Sales Target	Approximately 5,000 rheumatologists	Late 2025 Strategy
Laboratory Accreditation	CLIA-certified and CAP-accredited	As of Late 2025
ACR Convergence Presence	Six accepted abstracts; Booth #1228	October 2025
Nasdaq Ticker	XGN	As of Late 2025

The engagement through these channels supports the core testing business, which is summarized by these operational statistics:

• Q3 2025 Total Revenue: $17.244 million.
• AVISE CTD Test Volume Growth: 16% year-over-year for Q3 2025.
• AVISE CTD Trailing-Twelve-Month ASP: $441 per test (Q3 2025).
• Shares Outstanding: 22.66M.
• Cash on Hand: $35.7 million (End of Q3 2025).

Investor communications use specific access points:

• Q3 2025 Earnings Call U.S. Dial-in: 201-389-0918.
• Webcast access via investors.exagen.com.
• Replay available until November 18, 2025.

Exagen Inc. (XGN) - Canvas Business Model: Customer Segments

You're looking at the core groups Exagen Inc. (XGN) serves as of late 2025, based on their latest reported performance through the third quarter. Honestly, their success hinges on getting their specialized diagnostic tests, like AVISE CTD, into the hands of the right clinicians and getting those tests paid for.

Rheumatologists and other specialists managing autoimmune diseases are definitely the primary end-users. Exagen Inc. has been actively expanding its reach to these doctors; they reported operating in 45 sales territories by the end of Q3 2025. This commercial push is translating into volume, with AVISE CTD test volume growing 15% compared to the third quarter of 2024. The company is also enhancing its offering for these specialists with new seronegative RA markers for anti-PAD4, which they commercially launched at the end of Q3 2025.

For third-party commercial health insurance payors, the focus is on demonstrating value to secure coverage and appropriate rates. The Average Selling Price (ASP) for the AVISE CTD test reflects the ongoing reimbursement negotiations and mix shift. The trailing twelve-month ASP expanded to $441 per test as of Q3 2025. Management noted a near-term headwind from losing a large high ASP direct bill account, which they are mitigating by converting that business into the standard commercial insurance payer mix. This ASP growth, alongside volume, drove year-to-date revenue up 19% through Q3 2025 compared to the prior year.

Regarding Government payors (e.g., Medicare, Medicaid), the search results don't give us a specific revenue percentage for these segments for 2025. However, the company's general strategy involves working diligently with large national payers to establish the value proposition, which would encompass both commercial and government entities. The success in driving up the overall ASP suggests progress in securing favorable reimbursement terms across their payer base.

The segment of Patients with complex, chronic autoimmune conditions, such as lupus, rheumatoid arthritis, and Sjögren's disease, is the ultimate beneficiary of Exagen Inc.'s work. The company's mission centers on providing clarity for decision-making for these patients. While we don't have the exact number of covered patients, the total revenue generated from testing reflects the scale of utilization by this patient population.

The Pharmaceutical and Contract Research Organizations (CROs) represent a distinct, growing revenue stream. This business segment generated revenue of $780,000 in the third quarter of 2025. Year-to-date through Q3 2025, this segment recognized $1.2 million in revenue, a significant jump from about $100,000 in the same period of 2024.

Here's a quick look at the financial performance reflecting the combined impact of these customer segments through the first nine months of 2025:

Metric	Value (Nine Months Ended Sept 30, 2025)
Total Revenue	$49,944 thousand
AVISE CTD Trailing 12-Month ASP	$441 per test
Gross Margin	59.3%
Pharma Services Revenue	$1.2 million
Cash and Cash Equivalents (End of Q3)	$35.7 million

The company reiterated its full-year 2025 revenue guidance to be between $65 million and $70 million.

Finance: draft Q4 2025 revenue projection based on Q3 run-rate by Friday.

Exagen Inc. (XGN) - Canvas Business Model: Cost Structure

You're looking at the cost side of Exagen Inc.'s business as of late 2025, which is heavily influenced by scaling laboratory operations and expanding commercial reach. Honestly, for a diagnostics company like Exagen Inc., the cost structure is where the path to profitability gets really clear, or sometimes, a bit murky.

The total operating expenses for the third quarter of 2025 were reported at $13.2 million, which is a step up from the $11.6 million seen in the third quarter of 2024. This increase is key to understanding where the cash is going right now. The bottom line for the quarter was a net loss of $7.1 million.

Here's a breakdown of the key cost components based on the Q3 2025 financial data, showing the scale of the investment in operations and growth:

Cost Component	Q3 2025 Amount (in thousands)	Notes
Revenue	$17,244	Record total revenue for the quarter.
Cost of Goods Sold (COGS)	$7,173 (Calculated)	Derived from Revenue and Gross Margin of 58.4%.
Gross Profit	$10,061	Revenue minus COGS.
Research and Development (R&D) Expenses	$1,730	Investment in pipeline and new biomarker validation.
Total Operating Expenses	$13,175	Includes SG&A, R&D, and other operating costs.
Net Loss	$7,087	GAAP net loss for the period.

The Cost of Goods Sold (COGS) for lab operations, materials, and labor is directly tied to the volume of tests processed. With a reported Gross Margin of 58.4% for Q3 2025, the implied COGS was approximately $7.173 million on revenues of $17.244 million. Management is focused on driving this margin higher, aiming for the mid-sixties over time, which means aggressively managing the costs associated with running the CLIA-certified, CAP-accredited laboratory.

When you look at the Selling, General, and Administrative (SG&A) expenses, they are a significant driver of the higher operating costs. The CFO noted that the increase in operating expenses was due in part to SG&A associated with the first sales territory expansion since the CEO took over, plus a key commercial leadership addition. This spend is directly supporting the commercial strategy to grow test volume, which increased 16% year-over-year for the flagship AVISE CTD test.

Research and Development (R&D) is a necessary cost for future value creation. For Q3 2025, R&D expenses totaled $1.730 million (or $1,730 thousand). This spending supports the pipeline, including the continued development of a lupus nephritis platform and the recent commercial launch of seronegative RA markers for anti-PAD4. This investment is essential for expanding the test portfolio beyond the core AVISE CTD offering.

The remaining operating costs, which include the bulk of SG&A, can be estimated by subtracting R&D from the total operating expenses. This residual amount, approximately $11.445 million ($13,175 thousand total operating expenses minus $1,730 thousand in R&D), covers the significant sales force costs and general overhead needed to support the growing commercial footprint.

• Cost of Goods Sold (COGS) is managed to achieve a gross margin of 58.4%.
• R&D spend was $1.730 million in Q3 2025.
• Operating expenses were $13.2 million in Q3 2025.
• The largest component of the operating expense increase was driven by SG&A related to sales expansion.
• The net loss for the quarter was $7.1 million.

Finance: draft 13-week cash view by Friday.

Exagen Inc. (XGN) - Canvas Business Model: Revenue Streams

You're looking at how Exagen Inc. actually brings in money, which is critical for valuing any diagnostics play. The core of their revenue generation is built around specialized laboratory testing services, primarily for autoimmune diseases. This isn't just one bucket, though; it's a flow dependent on volume, price, and who is paying the bill.

The primary stream is definitely the diagnostic testing revenue from the AVISE suite. This is where the flagship AVISE CTD test comes into play, which helps clinicians diagnose complex conditions like lupus and rheumatoid arthritis. You saw strong execution here in the third quarter of 2025, with the trailing twelve-month Average Selling Price (ASP) for the AVISE CTD test hitting $441 per test as of September 30, 2025. That's a nice jump of $37 per test compared to the same time last year. Test volume growth is also a key driver; the AVISE CTD test volume grew 16% year-over-year in Q3 2025. Honestly, volume growth coupled with ASP expansion is the formula for top-line success in this space.

The actual cash collection relies heavily on reimbursement payments from commercial and government payors. This is the step after the test is ordered and processed, where Exagen Inc. bills insurance companies and government programs. The success of the commercial team in securing favorable contracts and managing the claims process directly impacts the realized revenue from the testing volume.

A secondary, but growing, component is the Pharma Services revenue from biopharma/CRO partnerships. These are collaborations where Exagen Inc. provides its specialized testing capabilities to pharmaceutical companies or Contract Research Organizations (CROs) for clinical trials or research. For Q3 2025, this segment contributed nearly $800,000 in revenue. Year-to-date through Q3 2025, Pharma Services revenue reached $1.2 million, and they reported a backlog of $3.5 million, which suggests solid revenue visibility into the near future.

Here's a quick look at the top-line performance as of late 2025, which helps frame the full-year expectations. You can see how the year-to-date performance stacks up against the guidance:

Metric	Amount/Range
Q3 2025 Total Revenue	$17.244 million
Year-to-Date (9 Months) 2025 Revenue	$49.944 million
Full-Year 2025 Revenue Guidance	$65 million to $70 million
Q3 2025 Gross Margin	58.4%

The company reiterated its full-year outlook, which suggests they expect the fourth quarter to be strong to land within that range. The guidance for the full-year 2025 revenue is $65 million to $70 million. If they hit the high end of that range, management indicated they expect to achieve positive adjusted EBITDA in the fourth quarter of 2025. This financial target is what you should use for your valuation models right now, defintely.

To summarize the key revenue drivers for Exagen Inc. as of Q3 2025:

• Primary driver is the AVISE suite diagnostic testing revenue.
• AVISE CTD trailing-twelve-month ASP was $441.
• Q3 2025 test volume grew 16% year-over-year.
• Reimbursement from payors is the mechanism for collection.
• Pharma Services revenue contributed nearly $800,000 in Q3 2025.

Finance: draft 13-week cash view by Friday.