How Ventyx Rebuilt Clinical Accruals With Condor

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Patrick Vogt (Condor): Let's get things kicked off. Thank you, everybody, for joining today's webinar on streamlining clinical finance. My name is Patrick Vogt, Senior Manager of Clinical Finance here at Condor. I work with our customers to implement them in our software and get their trials up and running, so their teams can effectively manage their clinical trials from an accounting and financial front.

I'm joined today by Roy Gonzalez from Ventyx Biosciences. Roy has been a longtime client of Condor, and we're here to talk through what he's seen in the clinical finance landscape and his story of coming into a new company and revamping things to fix issues from the past. Roy, would you like to introduce yourself?

Roy Gonzalez (Ventyx Biosciences): Hey everybody, I'm Roy Gonzalez, Principal Financial Officer and Principal Accounting Officer for Ventyx, and Senior Vice President of Finance. I've been with Ventyx for coming up on three years. Before that I had about twenty years of experience across various industries - transportation, med device, and pharma.

A little background on Ventyx. The company was incorporated in 2018 in Delaware and went public in the fourth quarter of 2021. All of our assets are internally discovered. At that time the focus was autoimmune diseases - psoriasis, psoriatic arthritis, ulcerative colitis, Crohn's disease. We've since pivoted to central nervous system indications like Parkinson's, along with cardiovascular indications such as recurrent pericarditis and broader cardiometabolic disease.

When I joined, we had a slew of tox, stability, and preclinical work happening on top of four Phase 2 trials. There was a lot of volume for the company and a lot of data points, and it wasn't necessarily organized. Walking into Ventyx was probably not an uncommon situation: scientists form a company, and the finance and accounting shop is more of an afterthought. So you can imagine how messy it was.

Patrick Vogt: I've run into many current clients in similar situations, looking for solutions like Condor to help the team streamline and get more effective, using data sets that weren't being used before.

Today we're going to dive into four main topics: the reduction in manual errors and improved financial accuracy Roy has seen, increased efficiency across his team, improved vendor tracking from both a payment and a recognition perspective, and the financial insights gained from implementing these systems. Then we'll touch on the audit and compliance impact.

Roy, I know you set the stage a bit already.

Roy Gonzalez: I can give more background on what things looked like. As I mentioned, finance and accounting was an afterthought - the focus in preclinical and clinical companies is the science. So there was a lot to do on the accounting side.

We walked into an environment that was very reliant on spreadsheets, and with that kind of volume in spreadsheets there's always that pit in your stomach about spreadsheet quality.

Patrick Vogt: Is there a formula error somewhere? Are we missing a sum?

Roy Gonzalez: Exactly. And the models weren't really built out to estimate expenses, so there was a lot of reliance on CRO reporting where we could get it. That's another piece - your contracts won't always stipulate CRO reporting. Sometimes you have to pay for it, sometimes you don't.

As for the environment I walked into: I should start by saying that every year we've had an audit, it has ended in an unqualified opinion. But we've had bumps along the way and difficult audits - lots of questions from our auditors, lots of SAB 99 memos, and at that time it was auditor-found errors. That always makes things difficult when you talk about SOX and how issues were found and quantified.

There's also Ventyx's trajectory. We went from emerging growth company and smaller reporting company status to large accelerated filer, then back to smaller reporting company. So we went from SOX light to SOX heavy and back to SOX light. It's been a journey.

Patrick Vogt: It's been great to be by your side through that. Coming in, there were definitely things we worked on together to gain alignment and find a better path forward, and those are some of the things I want to expand on.

As you mentioned, it was mainly spreadsheet models, which is typically what we see in the industry, because a tool like Condor is relatively new. And we take a different approach than those spreadsheet models do.

Let me give the audience some detail on what Condor does. As a financial platform, we manage accruals and forecasting for clinical trials, and we approach it from a data-driven perspective. We set up all the contracts associated with each trial, we set up the protocol in our software, and then we feed in data from the actual trial, whether from the EDC system or the IRT system. Those are important data sets that denote the progress of a clinical trial, and from them we can form an independent expense estimate.

Roy, from your perspective, what has your experience been since we made that transition, and what benefits have you seen?

Roy Gonzalez: There are a lot of benefits. When you first start looking at clinical trials, the first question is about a budgeted line item: what does enrollment look like, what do site activations look like? You don't really think about the patient journey, or how your CRO or your trial is built out.

To your point about data-driven estimates, with EDC-level data you're getting visit-level and procedure-level information to build an estimate. In the past, we had these wonky spreadsheets that didn't link well, with formula errors. I think we've all been there. But more importantly, how does that translate into the accuracy of your number, and into how you communicate with your clinical operations team?

Our process was very iterative, very manual, and very reliant on CRO reporting, because our initial cut at expense generation didn't really reflect the patient journey. It was rudimentary. Some would say good enough.

Patrick Vogt: That's a subjective statement - especially among auditors.

Roy Gonzalez: That's right.

Patrick Vogt: We came in and implemented your portfolio at the time. Along with the data-driven estimate, did you see an efficiency gain for your team in closing the books?

Roy Gonzalez: Without a doubt. Expense calculation used to be a very iterative process. It was always, here's what we have, go back and speak to clinical operations, try to get the CRO on the horn. It was iterative to the point that those were the last entries booked. Now that we have EDC and IRT data, these are some of the first entries we book.

The benefit is that you have time to really digest that information and pressure test your number. The efficiency gain from booking those entries up front was tremendous for us.

Patrick Vogt: We'll get into how clin ops has become more of a trusted partner with that data-driven approach. But on the vendor reporting you were so heavily reliant on before - is that something you still use now that Condor is in the picture?

Roy Gonzalez: We're not as reliant on it. We're formulating what I'd call an independent expense estimate, and then using vendor-reported or CRO-reported data to reconcile against it. If we're off by a certain percentage or dollar amount on a budget line item, it becomes a discussion about why. We can opine on the assumptions, and it helps us level set on whether we believe our estimate or the CRO-reported number is correct. And to my earlier point, getting those entries in earlier gives us the time to have those discussions.

Patrick Vogt: Has that extra time enabled you and your team to work on strategic initiatives - to actually look forward? I'm in some of these conversations, so I'm a little biased, but there's always the component of continuing to get better and build efficiencies. Have you seen that impact on your team, where people can do the job in a more efficient way rather than struggling to just get it done by the deadline?

Roy Gonzalez: Most accounting shops, especially in our space, are always asked to do more with less. Early on, my focus was on how we get efficiencies, and that was mostly about prioritizing the IT stack.

Our R&D line is the largest line on our financials, so it made sense to start there. We had to rebuild NetSuite, and we rebuilt it in conjunction with the Condor build-out. We've also taken time to look at time and expense with Concur, segregation of duties with FastPath, NetSuite account reconciliations, and NetSuite OCR. In that same timeframe we transitioned from TriNet to Paylocity, and now we're with ADP. There's a tremendous amount of system work being done, and we wouldn't have been able to do any of it without time - which is what Condor gave us. It gave us the ability to de-risk a big part of our P&L so we could start focusing on other areas.

Patrick Vogt: And things like the integrations we're setting up add to those efficiencies - we can move data seamlessly in a trusted fashion, rather than adding another step for your team.

Roy Gonzalez: The NetSuite and Condor integration is going to be key for us, because then we can drive approval within Condor, test the entry as an IT application control once or twice a year, and let it run - approval in Condor, auto-posting in NetSuite.

Patrick Vogt: I've appreciated your forward thinking about prioritizing your tech stack and figuring out which pieces matter most.

The next section is the intelligent data component of the process you're using for clinical accounting and accruals. Our system was built to leverage data from clinical contracts and clinical databases to come up with an independent expense estimate you don't need to rely on your vendors for, which gives you the ability to book a preliminary journal entry before you receive any vendor reporting.

Roy Gonzalez: That's the other challenge - some of these CRO accrual reporting packages come very late. You should already be closed and thinking through your analytics and your fluxes. Having your own independent estimate, being able to pressure test it later, and potentially pushing through a topside entry if you don't agree with either the CRO or the Condor estimate - that all takes time you now have.

Patrick Vogt: Let's focus on the financial insights you've gained. How has data-driven decision-making transformed how your department works?

Roy Gonzalez: That's a big piece of it. With four Phase 2 trials and all the preclinical work happening, we had a lot of data. But what do you do with it? How do you organize it?

That's really what Condor has done for us. Yes, you have to work with biostats to build out how Condor syncs and maps to the EDC and IRT, but that's a one-time effort. It organizes the data for you, and when you have organized data down to the line level, that becomes impactful, because you have a full fact pattern for decision-making.

Case in point: we were winding down the psoriasis trial and were in the middle of negotiations around a final change order. What proved it out for me and brought it full circle was that what we had sitting in prepaid was very close to what we believed we should be refunded. So we knew it was working. I don't know how many companies you have that have seen the full life cycle - starting a trial, building it out in Condor, and winding it down - but we've seen that, and we know it's accurate.

Patrick Vogt: There have been a number now who have finished the full cycle. And I'm glad that instance happened with us, because it enabled the conversations for your team to go to clin ops and talk about the final value we were landing on for the change order, and then to go out to the CRO and negotiate a refund. I don't want to say they were going to do something shady, but it seemed like there were more funds they were planning to hold onto than the number we were talking about. Having all that data aggregated to show the line item levels that rolled up into the final values gave your team the insight to have those conversations.

Roy Gonzalez: Exactly. We knew where we could push in negotiations and where we should pare back. That was an important aspect of it, because we knew there were sensitive areas where we likely didn't deserve money back, and other areas where we strongly believed we should get funds back based on the work performed. It worked out really well.

Patrick Vogt: I remember those discussions about the discount being removed and things like that - we had many meetings on it.

The next thing I want to touch on: what steps did you take as a company to ensure data integrity and quality when dealing with this volume of data? Maybe compare what it was then to what it is now.

Roy Gonzalez: Most of us who come from an audit background understand the idea of IPE - information produced by the entity - and the custody of reports and how they feed into systems.

The way we operate now, we're working on the integration, and a lot of that will go away with an IT application control. But today we download reports and capture checksums and row counts. We upload the data, check those checksums and row counts, and make sure the completeness and accuracy of the information moving between systems holds. What guides that process is the Condor checklist, where we document the formal steps taken to vouch for completeness and accuracy of reports. It keeps us organized. From a SOX perspective, our auditors appreciate it, and that's where they'll look to test IPE. They want to make sure what we're downloading is in fact what we're uploading, and that our expense estimates are based on what was checked for completeness and accuracy.

In the past it was very loose. At that time we were under SOX light, so it was a little easier to navigate. As we moved to SOX heavy - I never get it right between 404A and 404B - it became very important to document the entire process. So that's where we were and where we are today.

Patrick Vogt: Now that you've centralized all of that data, the contracts, and even the decision-making in Condor and documented it in a single place, I feel it has fostered a culture where your department has more of a seat at the table for specific decisions - or for identifying something another department should look at, and maybe getting some money back. Can you speak to a scenario where you saw that benefit?

Roy Gonzalez: It comes down to value proposition. Generally, when you're an accountant just calculating numbers and booking them, you're more tactical. When you have data, you can start questioning things and making strategic decisions that guide clinical operations.

Keith, who recently joined our team, has been really instrumental in partnering with our clinical operations team. The role of the accountant becomes almost a blend of FP&A and accounting, because you have insight not only into actuals but into what's forward-looking.

A good example is out-of-scope services that aren't budgeted for. What mechanism do you have to understand what's happening out of scope? Your EDC data makes that pop, and you'll see a variance in the reconciliation between your estimate and what the vendor provided. That drives a conversation between accounting and clinical operations: do you realize this is the volume of out-of-scope activity happening? Do we want to get ahead of it? Do we want to proactively look at a change order? Where do we expect this to go? I think one of those was the MRIs.

Patrick Vogt: That's exactly what it was. We identified that the costing in the contract was lower than what had actually been agreed with the sites themselves.

One thing I want to speak to: as you said, accountants are more tactical about this. They see the numbers, they understand where they come from, and they know what to do with them to get the job done. But to me, numbers tell a story, and that's how I've always looked at accounting and at FP&A. Condor provides the framework to organize it, read it, and tell that story.

I've seen that firsthand with several of your team members, who have gotten more comfortable going to speak to counterparts in other departments, because they have something to show them in a language and framework that relates to the systems those teams work in and the nomenclature they use. Coming from the CRO world, I spoke that language all the time - I had to work with clinical team managers and project managers. One thing I enjoy now, implementing and helping clients, is showing the framework of data within Condor, and even better, teaching that language so they can go to their business partners and get what they need for a go or no-go decision.

Roy Gonzalez: That's important. When you're in a meeting, whether it's an audit committee meeting or an interdepartmental one, you can't just throw up some numbers and say, this is what it looks like. You get people's attention by telling a story around the numbers. I was always told: pictures, stories, numbers. That's how I was raised. Having bar charts and trends helps, because they're easily digestible - you can even screenshot them into a deck.

Patrick Vogt: On the flip side, have you seen other departments reaching out to you for information now, when it used to be the other way around?

Roy Gonzalez: Absolutely. The questions in the past were more about invoicing - how much did we spend on this PO? Now it's shifted, and I think we're seen more as a business partner. It's morphed into our department helping with contract negotiations, and that's outside of procurement. That's coming out of the accounting shop, because we have the data, we have the knowledge, and we understand where the trials are. We understand what happens if enrollment slows or site activation slows. So you absolutely become a business partner rather than just tactical execution.

Patrick Vogt: It's been great to see that shift. When we were implementing, we had to convince people to give us certain information. Now it's flipped, and those same individuals are asking us for information.

That leads into the next section: budget and vendor accountability. We've talked about how Condor organizes these contracts, but it can also ingest vendor reporting at a line item level to reconcile what Condor estimates from the data against what each vendor reports.

In general, this felt like an accounting-based reconciliation exercise when we first put it in the software. But it quickly presented itself as a benefit for managing your vendors and working through change orders - we have a change order in progress module that tells you the impact of an amendment. What challenges did you face before, on vendor management? Did you have the ability to go back and question what those vendors were telling you?

Roy Gonzalez: A lot of this comes back down to the organization of data. The way Condor is laid out, you look at the budget within the system and you see the unitized amounts. When a budget line item starts to go out of whack, that triggers a question. And when you get down the road of negotiations, you can clearly see any differences in unitized cost. You understand that very quickly, as opposed to the past, where you were digging through your old contract asking what the budget looked like, or looking at a spreadsheet with the budget laid out in it. Now it's easy to see discrepancies between the original budget and the change order.

One of the most important things is that it forces you to have the conversation. You're only going to get a yes or a no, but it's better to hear a no than not to ask the question or challenge what the CRO is providing.

The other piece is real-time data. Change order negotiations usually start with discussions and then there's a long runway before you finally agree. What you agreed to back then may be based on stale information. Now it's easy to say, let's figure out where we are now and what this looks like relative to the conversation we had a couple of weeks or months ago. You can stay real time on how a change order develops and is negotiated - and that's really because the IRT and EDC integration gives you the ability to negotiate on current rather than stale data.

Patrick Vogt: To bring that full circle: the estimate gets created in Condor using the data, and we line it up against the CRO reconciliation information to see what the CRO reported versus what Condor is estimating. The big variances pop out, and they may or may not be correct depending on the decisions made by the operations teams running the trial.

I've seen it firsthand with you, where we know a change order is coming because you can start to see it slip. We can account for those expenses in the meantime, and it allows a productive conversation with the business owner who's going to run that change order negotiation, so you become a strategic partner in it - first to make sure you're aligned, and second to make sure you aren't being taken advantage of. And just as important, you're forming that relationship with your clin ops department so that next time, you're looped into the process by them.

Roy Gonzalez: Most clinical operations folks aren't lucky enough to deal with just one study. So building that relationship and having their trust is really important, because it's an extension of what they're doing. At the end of the day, the ops people are the ones approving the invoices. Having a trusted business partner to go to and ask questions - one who's actually informed - is a game changer.

Patrick Vogt: And they know somebody else is looking at it now too, at that granular level. In some organizations those individuals are the ones with the authority to say yes or no. The system is also doing that check for you, so it's a sense check on what's been approved, and the analysis in the next period uncovers a lot.

Roy Gonzalez: I did want to mention one more thing on out-of-scope services and the actual versus CRO reconciliation. When the auditors look at that reconciliation, or want to understand your fluxes period over period, it becomes an easier analysis, because you understand exactly why there's a big change in expense. When it comes to putting fluxes together for the auditors, I find it very helpful that you can drill in, understand where your fluxes are, and know what's material and what you need to speak to. So it also helps with the audit process.

Patrick Vogt: On that note, in our platform we trend site activations, active and closed sites, and the same for patients enrolled. The curves for those line items align very closely to a lot of the expenses being reported.

That's something I find nice coming in to implement, because a lot of accountants in this space don't necessarily have the clinical knowledge to understand how these items move and what triggers them to be expensed or invoiced. Once you align it to a site activation or patient enrollment curve and start to see the expenses alongside it, it sinks in: these are the big drivers, this goes here, that goes there, and now I know why all of this is happening every month.

Roy Gonzalez: That's a great point, because the whole picture comes together - the assumptions clin ops signs off on and agrees to, compared to budget or the contract, compared to the expense trends, and then the actual journal entry. You see the whole picture, which we didn't have before, and you can understand where a trial is very easily. Before, you'd have to do a lot of hunting and pecking.

Patrick Vogt: It's like clearing the fog. Everything was there initially - the organization of it is what makes the information easy to take in at a glance.

Patrick Vogt: So far we've focused on the accounting and accrual side. I want to move into forecasting, which Condor also supports.

I want to go back to something you mentioned: that your accounting department has turned into a hybrid of accounting and FP&A. From our perspective, Condor is an accounting system built with an FP&A methodology - we have the triggers to extrapolate expense into the future. Do you think that framework has changed the way your department thinks?

Roy Gonzalez: I do. From an FP&A perspective, the way we used to look at trials, working off the contract budget, was to say X percent of the expense relates to startup over this period, X percent to conduct, and the next percent to closeout. It was a rough estimate, and there was a lot of reforecasting in a rudimentary system like that.

Now, having the ability to look at site activation rate and enrollment rate will really help us understand budget versus actuals. We'll be able to explain why we're out. And the beauty of it is that you can scenario plan based on different factors. It's a game changer for us.

Patrick Vogt: For further clarity, this goes back to speaking the same language as clin ops. Our forecasting module uses everything built in accruals and leverages that algorithm to project the trial's financials forward. But we need parameters to drive that forward-facing activity, and those inputs can come directly from your clinical operations team or from the vendor running the trial.

The way we look at it, those are defensible items. There's always an operational plan: how many sites are we activating next month, how many patients do we plan to screen or enroll? Those are the hard drivers your timeline gets sized around. Do you see having those inputs come from a clinical partner as a benefit for forecasting?

Roy Gonzalez: Without a doubt. And not to get too accountant-y on you, but it's like having an FP&A person who doesn't understand revenue recognition trying to forecast rev rec on a multiple element arrangement. They just don't get it. Having a forecast based on accrual methodology makes a lot of sense, and you'll have a lot more precision in your estimate.

Patrick Vogt: And even if you do miss, there's a rationale as to why, because of the specific parameters that were assumed.

Roy Gonzalez: In the ideal world, you're getting sign-off from your business partners on the assumptions that drive a forecast. These people are close to enrollment and site activation and any other factors, so having them opine on what you're using as your driver is very helpful - they're used to speaking in those terms.

Patrick Vogt: That's what we've seen work as well. Going back to how you used to forecast, taking the high-level buckets of startup, conduct, and closeout and assigning a percentage of the contract budget to each - I wouldn't say that's wrong, because there's rationale behind it, and those overarching phases exist and we know which contracts get associated with them.

But in Condor, now that forecasting is up and running, we're leveraging historic data from the accruals we've built from those clinical databases, plus all the assumptions and contracts we're tracking. In tandem with the parameters we just discussed - site activation, patient enrollment, changing your patient target mix or your site target mix - those are all options you can play with. It unifies the picture: here are my trended expenses, and here's my forward-looking forecast based on those assumptions.

Roy Gonzalez: It's nice to have, and I'm sure a lot of people have seen this: programs stall, trials stall. What's that going to cost? Having that answer handy is really important.

Patrick Vogt: What's your carrying cost, the monthly fees you still have to pay?

I want to speak to an example from your forecasting, the MRIs we mentioned earlier. This trial was implemented in Condor pretty early on. We're going through enrollment and starting to see the patient journeys form, but we also noticed we were a little too accelerated in how much we were expensing on investigator grants. That was uncovered in the forecasting module, and going back to the theme of this conversation, it sparked a question that led to an answer: we may be under-budgeted in a certain section.

Roy Gonzalez: It's a CRO trick - they'll low-ball you and then change order you.

Patrick Vogt: Coming from my history, that definitely could be the scenario. We all try to win business and assert good business, and CROs are needed in this industry.

But the point is this: before you had a framework like Condor to generate that estimate, how would you ever have seen something like the overage in contracted MRI costs versus what was budgeted? How would that have played out?

Roy Gonzalez: Realistically, we would have been reactive about it. At some point someone would have looked back at the invoices and the budget and said, we have a problem.

Patrick Vogt: And the money would be out the door by then.

Roy Gonzalez: Absolutely. We would have been entirely reactive in that scenario.

Patrick Vogt: There's an obvious benefit from where I sit, but in my eyes the system gave your team the ability to do something that wasn't really a process before. And as we look forward, we're in talks about that process working more broadly. We have new technology available - what are your thoughts on how we can leverage it to improve your team's process?

Roy Gonzalez: It goes hand in hand with how the relationship between clinical operations and accounting has grown. It further develops that relationship and gives us a seat at the table to help steer the trial. It's another reason we should be at the table helping with negotiations, and I think that value is seen at this point. We're able to articulate areas of risk. At the end of the day, cash out the door and liquidity are among the biggest issues for companies right now. To the extent that we can be proactive, help manage cash flow, and keep a trial on track, that's very important.

Patrick Vogt: You've made a portfolio shift over the past few months, and I'm excited to see how you use Condor to make those decisions as you build out each of those pieces.

You touched on cash, and cash is king. How do you think about cash when you're starting a trial, and throughout its life cycle?

Roy Gonzalez: We have our trials baked at this point. We understand base case and worst case, and if we get good data here, what we'd do next. But at the end of the day, we're not going to start a trial unless we have the ability to see it through. That's my viewpoint on cash: we're going to put it to work at its highest and best use and be great stewards of it. To the extent we can recoup cash, that's great.

People say accounting is always a cost center, but that's not always the case. We've been successful in pulling back pretty large sums of money since the start of the year, and a lot of that is because we understand what's happening in the trials, what the prepaids look like, and how much activity has occurred. Condor has helped us become better stewards of our cash, in that we actively chase instead of wait.

Patrick Vogt: I've seen that too, and I appreciate that response, because I don't think any of us like being reactive in our roles - especially on a tight quarter close timeline or when getting your final budget in for the year.

Roy Gonzalez: And trust me, the audit committee gets very excited when you say we're going to recoup X, Y, and Z, or that we have recouped it.

Patrick Vogt: I won't speak too much on the recoup process, since I was there for it, but your team has used the tool to see those things, ask the right questions, and get the processes rolling to get those upfronts back and, sometimes, final refunds.

Roy Gonzalez: Most of us have experienced a trial dragging on with the monthly management fees just rolling.

Patrick Vogt: Painful.

Roy Gonzalez: Exactly. Trying to get things wound down to the point where we don't have those monthly management fees and can really start closing out - time is money at the end of the day.

Patrick Vogt: And our forecasting module shows you that reprojected endpoint. In the spirit of how you've been turning your operations, you get to ask: when is the last site going to close? When do we start closing? That's an even better question, because you then have different things to look at as those invoices come in.

Roy Gonzalez: It helps forecast cash too. If you have a milestone contract, that's one thing, but it helps to understand what the timing of outflows looks like. In most cases, pharma companies have investments with a money manager in safe instruments with maturity dates based on expected cash flows. So layering on that spend - one of the biggest areas of spend - is pretty important.

Patrick Vogt: Thank you for that, and I look forward to continuing to work with your team on the forecasting improvements we're rolling out. To everyone watching: we're continually improving the tool, listening to our users and to the industry, and we're excited to move into a more expanded, feature-rich forecasting module.

We're coming up on time, so let's see if we have questions from the audience. Audrey, has anybody asked anything?

Audrey McNicholas (Condor): Hi everyone, I've been in the background making sure everything's running smoothly. Let me read out a few questions, and if anyone has additional ones, feel free to put them in the chat or send them to me directly as the host and I'll read them off for Pat and Roy. Starting simple, and this one is for Roy: what's the best benefit you've seen from Condor?

Patrick Vogt: Let me take one from the chat first. Naomi asks: does Condor's forecast use a straight line, after taking the accruals into account, for the remaining costs on the contract?

Good question, Naomi, and thanks for speaking up. That isn't quite the logic. Condor unifies your accruals and brings them into the forecasting module, but it isn't just a straight line of remaining cost. Condor uses the same recognition methodologies from accruals to extrapolate the forecast forward. We're looking at patients moving through the schedule of assessments and when they complete each of their cycles. We're looking at the patient curves that form from that to understand how to expense certain line items in the budget.

It all comes back to how the accrual framework is set up. Once we've tagged each line item in those contracts with an accrual methodology, forecasting takes it from there, using the parameters we discussed today to project what it looks like in the future under the set of assumptions you want to move forward with. Naomi, there's a lot of complexity in what I just described, so I'm happy to take this discussion further on a future call.

Roy Gonzalez: I think of it more in terms of a waterfall chart, where you have a patient running along the journey. Patients join at different times and that waterfall is still occurring, all the way to last patient, last visit, and then it goes out. If your last patient, last visit is slipping, the timeline gets pushed. So it's active.

Patrick Vogt: I like the waterfall framing, and I know people do use that in Excel for patients. To sum it up, Naomi: it's still using patients, sites, and time to create the forecast. It isn't a straight-lined average of the remaining expense.

Roy, it looks like we have one question for you: what's the best benefit you've seen from Condor so far? I know we've spoken to a lot of it, but if you can sum it up in one.

Roy Gonzalez: For me, and this is touchy-feely, it's a level of comfort that I didn't have before. I'm the one signing our financials, so I'm always worried about their quality. At the end of the day I know I have a data-driven estimate that's been reconciled to what the CRO is saying, and if there are material variances, I understand why. So it's peace of mind and comfort.

Patrick Vogt: Thanks for that. And from your perspective, the organization of it is probably the most important piece, because you need to get that information at a quick glance.

Another question from Naomi: who managed the change orders and clinical finance before Condor, and what pushed you to look for a system?

Roy Gonzalez: Clin ops managed all the change orders before. We didn't have much input at all. That has since shifted, and we're very heavily involved.

As for what made me want to make the switch: I've worked for everything from a Fortune 5 transportation company down to small private companies looking to go public, with a lot of focus on SOX compliance and heavy audit procedures. When I came into Ventyx, I surveyed the landscape and quickly realized this was a massive risk. Someone asked me earlier why Condor. R&D is a very large section, if not the most material area, of our P&L. To rely on Condor as much as I do, I had to have a strong level of trust. I've known Condor's CEO for a while, and then I met Patrick, Jeff, and Audrey and other members of the team, and that trust was built - I understood their methodology is sound. Between understanding that we had a massive risk on our P&L and being able to trust the people at Condor, that's what pushed me to make the decision. There have been a lot of benefits I didn't contemplate when the decision was made, but it's been a game changer for us.

Patrick Vogt: We didn't get to the last question, but since you opened with all the issues you saw at Ventyx, let's circle back to it. As of last year's audit, how did the audit turn out?

Roy Gonzalez: We've had very good audits lately. We've always ended the year with an unqualified opinion since I've been here. We have had significant deficiencies around our old process, which is not fun - writing a SAB 99 memo. I can't say I personally wrote it, but I completely understand the pain of it.

Overall, since we implemented Condor, across all the trials we have in Condor and the other clinical contracts tied to it, we have not had any control issues whatsoever. We did have to get EY up to speed on understanding how the system works, but the fact that there's a SOC 1 report really helped. Once they understood the methodology, we were off to the races. It's been a good experience. We still have a good number of studies in Excel spreadsheets, and those are generally where we have issues.

Patrick Vogt: I look forward to working on those with you as well. Roy, thanks for the time, and I really appreciate you coming on and talking about your experience.

And thank you to everybody here for joining and taking the time to listen to us have a chat. If you have any further questions, feel free to reach out or drop me a message on LinkedIn. Thanks for the time, everybody. Have a good day.

Roy Gonzalez: Thank you, guys.

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