Q1 2021 Veracyte Inc Earnings Call
Good afternoon, ladies and gentlemen, and welcome to the various sites first quadrant 2021 financial results conference call.
Today's conference, possibly moving toward it.
I'd now like to turn the conference over to Tracy Morris and I recite Vice President of corporate Communications and Investor Relations you may begin.
Thank you Neil good afternoon, everyone and thanks for joining us today for a discussion of our first quarter 2021 and financial results with me today are Bonnie Anderson, Chairman and Chief Executive Officer, and Jane Elliott, Our acting Chief Financial Officer. We're also fortunate to have our incoming chief Executive Officer, Marc Stapley on the call.
Before we begin I'd like to remind you that various statements that we may make during this call will include forward looking statements as defined under applicable securities laws forward. Looking statements include those regarding the transition of our Chief Executive officer role and our projections for full year, 2020, one financial performance as well as our future plans prospects and strategy.
Financial goals product attributes launch plans and pipeline drivers of growth expectations regarding reimbursement and other statements that are not historical fact, it also includes statements regarding the potential impacts to our business, resulting from the COVID-19 pandemic anticipated timing of the launches of new products availability of our tests internationally.
And our total addressable market management's assumptions expectations and opinions reflected and these forward looking statements are subject to risks and uncertainties that may cause actual results and our performance to differ materially from any future results performance or achievements discussed in or implied by such forward looking statements and the company can give no.
Sure and that they will prove to be correct and will not provide any further guidance or updates on our performance during the quarter unless we do so and a public forum.
And he's refer to the company's press releases dated May 10, and 2021 and the risk factors included and the company's filings with the Securities and Exchange Commission for discussion of important factors that may cause actual events or results to differ materially from those contained in our forward looking statements.
Prior to this call we published releases announcing our first quarter 2021 results and the execution of our C E O trends.
Succession plan through which Bonnie Anderson, and our current chairman and Chief Executive Officer will assume the role of executive Chairman Chairman and Marc Stapley will become CEO. Both of these announcements are available on our website at Verisign Dot Com under press releases and the Investor Relations section. We also published a business and financial presentation, which we.
We'll reference during our remarks. The presentation is also available on our website under events and presentations and the Investor Relations section I will now turn the call over to Bonnie Anderson parasites, Chairman and CEO.
Thanks, Tracey and thanks, everyone for joining us today before we get into the strong progress we made and the first quarter I will begin with the CEO succession plan that we announced a few minutes ago I'm delighted to introduce Marc Stapley and various sites, New Chief Executive Officer to succeed me.
Me effective June one at which point I will transition to the active role of executive Chairman of the board as a founding CEO, who hasn't and best and so much into various site I couldn't be happier with the timing and circumstances of this leadership succession.
First the board and I are extremely pleased that mark will be taking the reins as CEO a parasite. He is the right leader with the right experience to take over at this important stage and parasites growth.
Mark shares my vision for parasite and all is aligned with our mission of applying the power of genomic science and technology to best serve patients by asking the right questions and providing answers that give a clear path forward. He is a seasoned global executive with highly relevant.
And industry experience from his time and alumina and helix.
He brings an ideal mix of strategic operational and financial acumen and combined with a proven track record.
Over his career he has built and like and complex global operations, including both centralized labs as well as the instrument and reagent kit business, which aligns with very tight strategic growth plan.
He also has extensive experience integrating acquisitions.
Lastly, I believe mark will be and excellent cultural fit at parasite. He is a results oriented leader with the ability to lead and motivate teams around a culture of high performance and high integrity.
Second we believe that parasite is well positioned for success with a powerful strategic global vision and the table is set to execute on this vision and continue our growth in the $50 billion plus long term global market for genomic diagnostic tests the.
The company is operating from a position of strength with a strong track record of execution and significant growth opportunities and.
And third the succession and fits with my timeline for transitioning out of the CEO role, which is something that I have been discussing with the board for about a year.
I am excited and committed to continue serving the company and to be a trusted advisor to Mark and my new World as an active executive chair and this role I will be intimately involved and ongoing strategy and business development I will be mark strongest advocate and ally and I look forward.
And to partnering with him to guide various site to achieve its full potential.
On a personal note I'm grateful to the board, our executive leadership team and various sites employees for their commitment and dedication to our mission and the health care providers and patients. We serve it is gratifying that together, we have built a global enterprise with market leading tests that are.
Transforming patient care and a range of cancers and other diseases I am as optimistic as ever about fair a site, where we are going and what we can achieve and with that I'm thrilled to have mark with us on the call today to introduce himself to you directly Mark. Please go.
Head.
Thank you Bonnie and good.
Afternoon, everyone I appreciate the warm welcome and the sites that you and the board are placed and need to lead verified through this next phase of growth.
As Bonnie said I share a vision from both sides and I'm passionate about improving outcomes for patients all over the world at every step of the difficult journey.
I'm incredibly excited to join a company that has such an excellent reputation and track record for bringing highly differentiated and clinically impactful tests to market.
Importantly, the site's ability to bring these tests to patients through both the central lab and distribute a kit modal creates an exciting global opportunity and.
And the near term, we have multiple ways to expand and growth and over the long term deep clinical diagnostic expertise provides a strong foundation from which to expand to other opportunities.
Joining verified as a compelling continuation of my career and applying genomics to help patients and.
And alumina isolated by my belief and the power of broad accessibility to genomics and when.
<unk> incredible global scale, enabling the entire industry.
And helix, we have been focused on using genomics to identify people with previous positions to cancer and other diseases as well as providing clinical diagnostic results to millions of people during the pandemic.
And with the verified team and will now be driving utility of genomics, one step closer to patients by <unk>.
Bringing to market innovative clinical tests, the guy to diagnosis and treat them.
Being able to continue to partner with Bonnie and her new position as executive Chair was a key element I mean, one thing to take on this role.
And the deep industry expertise and strategic vision, our incredible assets to me and the company.
Bonnie has created a wonderful business over the last 14 years and I intend to take full advantage of this opportunity to execute and build upon her vision.
I'd like to thank you Bonnie for Entrusting me with parasite.
Over the coming months and plan to dedicate time with key stakeholders the board.
The executive leadership team.
<unk> talented employees and the company as analysts and investors.
And I look forward to meeting many of you and the near future and with that I will turn the call back over to Bonnie.
Thank you Mark I cannot be more excited to partner with you as you pick up the torch and continue taking various site to where we aspire to go and with the strong performance and progress and the first quarter of 2021, we are well on our way turning to our first quarter performance. We delivered solid result.
It's with especially what bus momentum in March as COVID-19 vaccination rates increased across the country and physician practices continued to open up our total revenue for the first quarter was $36 $7 million and 18% increase over the first quarter of 2020 and our genomic testing and proud.
Volume was 14437 and tests in the quarter and increase of 11% over prior year with these solid results. We are reiterating our 2021 full year total revenue guidance of $190 million to $200 million.
We are thrilled to complete our acquisition of decipher Biosciences on March 12th and welcome their top notch team to the Variscite family. The integration is going really well and our teams are already collaborating and learning from each other to decipher business expands our reach into seven of the two.
Top 10 cancers in the United States, and it's already contributing strong revenue with its prostate cancer test, which continues to gain commercial traction.
We also made great progress and advancing our pipeline and are on track to launch three new products and Pulmonology and the second half of the year. These include our novel Noninvasive Percept and nasal swab test, which we believe is going to be a game changer and early lung cancer detection potentially.
<unk>, enabling more lives to be saved.
We are excited to unveil pivotal clinical validation data from the test at the upcoming ESCO annual meeting prior to its planned launch and the second half of the year.
Now, let's review key highlights for the first quarter.
I'll start with commercial growth are first measure of success.
Genomic testing and product revenue was $36 $1 million and increase of 19% over the first quarter of 2020 the.
The primary driver of the growth was the addition of the decipher prostate volume.
Excluding decipher our revenue grew 6% to $32 $9 million, driven primarily by our Afirma franchise and fiber and cancer affair.
Afirma is leaning our pandemic recovery among our legacy tests with physician offices increasingly accessible to patients as well as our sales reps are.
Office based physicians represented about 50% of our Afirma volume and the vast majority of our Urologic cancer business.
In fact in March of 2021 we experienced all time monthly highs and the number of unique ordering physicians from both Afirma and decipher prostate testing with nearly 2400 and over a thousand physicians respectively.
Our afirma business continues to gain momentum as the newest standard of care and thyroid nodule evaluation with adoption for the franchise further fueled by physician interest and our expression Atlas to provide comprehensive genomic profiling information on cancerous thyroid nodules at the time.
Diagnosis.
We believe our decipher franchise continues to be well positioned for long term growth as we offer what we believe is the best product and most extensively validated genomic biomarker and the prostate cancer space.
We also are benefiting from new Medicare coverage decisions for expanded indications in late 2020, including for high and very high risk indications that allow our sales reps to target and no physician call point, the over 5000 radiation oncologist practice.
Thing and the United States.
On the Pulmonology side, our percept, it and and busy it business continues to rebound, although at a slower pace with a pandemic still limiting the number of bronchoscopy is being performed.
As evidence our claims analysis research shows that overall bronc bronchoscopy volume's are at 50% pre pandemic levels here too, though we saw significant test volume increases in March compared to January and February.
In addition to gaining increased physician access to our customers. We are continuing to grow our use of digital engagement tools, a highly effective marketing approach that we learned during the pandemic.
Our efforts here include a number of peer to peer webinar series, featuring leading kols discussing their use of our products and sponsor participation and active online physician communities as well as targeted online marketing that drove more than 200000 visits to our product websites in the.
First quarter and all time high.
We also made significant progress and pipeline advancement, which will expand the breadth and depth of our offering as well as our global reach we are especially excited to unveil pivotal clinical validation data for our percept and nasal swab test in lung cancer in conjunction with the upcoming <unk>.
<unk> annual meeting, which will be held virtually and June.
We believe our nasal swab test is going to bring much needed clarity too early cancer detection, where today physicians lack objective tools to determine which patients with potentially cancerous lung nodules found on C. T need further evaluation and which can safely be direct and.
To routine monitoring the.
And the need for a better tool is especially important in the wake of New U S. Preventative services task force recommendations that now expand the number of people eligible for annual lung cancer C. T screening to an estimated $15 million.
We are on track to launch our nasal swab test and the second half of 2021 at which point, we will make it available to a select number of sites throw and early access program as we have masked the clinical utility evidence needed to obtain Medicare coverage. Moreover, we plan to adopt the nasal swab test.
And counter analysis system in 'twenty, and 'twenty, two which we believe will enable us to begin accessing and approximately $8 billion global market for our lung cancer franchise.
We have also advanced our percept of genomic Atlas, which will provide physicians with comprehensive genomic profiling information for a patient's lung cancer tumor, enabling us to inform treatment decisions using the same tiny biopsy from a bronchoscopy or a transfer ethic NATO Aspen.
And that was used in diagnosis.
Currently this information is typically provided later and the workup process, which often leads to inappropriate or delayed treatment.
We will share new data on the perceptive genomic Atlas at the upcoming American thoracic society, or a T S and American society of clinical oncology or <unk> annual meetings and plan to commercially introduce the tests and the fourth quarter of 2020, one as part of our comprehensive lung cancer.
And our portfolio.
We also advanced the development of our envisaged classifier on the encounter analysis system.
And then launch later this year. This test will enable us to help inform our help improve the diagnosis and prognosis of interstitial lung diseases for patients and global markets. We plan to unveil performance data for the test on the and counter instrument at the Ats conference and look forward to submitting.
Tests for CE, Mark in Europe by the end of the year.
And we've initiated market shaping activities focused on identifying and and engaging with kols and target countries regarding clinical utility studies to support local market access decisions.
We've also made key hires and our market access and medical functions to support our efforts we are leveraging our current installed base and customers for the initial launch to help secure fast market access.
Additionally, and support of our global growth strategy, we initiated the development of our Variscite branded diagnostics, only and kind of a platform, which we had anticipated at the time of our transaction with me and our strength and which has become more timely with our planned menu expansion.
And on the system.
Our next focus on evidence development, where we also made significant progress.
During the quarter.
We are excited that six abstracts for genomic testing and lung prostate and fibrin cancers have been accepted for presentations at <unk>.
In addition to data for our lung cancer and portfolio products and these include a podium presentation for data from our participation in the van Damme study, which is a prospective validation of the decipher prostate test in African American men and shows the and adequacy of clinical.
Classification risk alone and the subsequent need for genomics.
Our continued partnership with many academic institutions and participation in key worldwide clinical trials, along with our publication track record will continue to deepen our leadership and prostate cancer over the long term. We also plan to share new data at Osco.
Trading our afirma expression atlas's ability to identify comprehensive genomic alterations in thyroid fine needle aspiration samples.
This information may form and treatment decisions at the time of diagnosis regarding new targeted cyber and cancer treatments that are available or in development.
We also have a significant presence at the a T. S Conference later this week, where in addition to the pipeline focused stayed out he mentioned earlier four abstracts will be presented showing robust performance data for our envisage a classifier.
We are pleased to see leading institutions such as U C. L. A begin to report data regarding their own experience with the test.
Finally at the European Society of medical oncology or ESMO breast cancer Conference. Also this month, we are excited about the presentation of initial findings and consensus from the first wave of procure.
And this European study utilize those Delphi methodology to generate consensus on the clinical utility of genomic tests, including Prosigna.
You will recall that this study is led by an independent scientific committee of breast cancer experts and includes input from over 140 breast cancer clinicians practicing throughout Europe.
Also related to Prosigna data from a prospective study evaluating the influence of the Pam 50 gene signature and therapeutic decision, making for patients with early stage breast cancer are being presented at the ESMO breast cancer meeting the Pam 50 signature and.
The foundation of our Prosigna assay.
With those insights I will now turn to a more detailed review of our first quarter 2021 and financials.
I will refer to our business and financial presentation, which Tracy mentioned earlier and which is available on our website.
And my prepared remarks until now addressed the first quarter 2021 key takeaways as well as the other content that is on slides three through eight.
I will begin the financial review with slide nine which reflects our topline full year total revenue expectations of approximately $190 million to $200 million representing growth of approximately 65% over 2020 at the midpoint of the range.
Turning to slide 10, and specifically the right hand column of the slide we generated $36 $7 million in first quarter 2021 total revenue and increase of 18% over the prior quarter prior year quarter.
We closed the decipher Biosciences acquisition on March 12, and consequently, our testing revenue of $33 $1 million includes $3.8 million and urology revenue for the period March 12 through March 31st of 2021.
We expect to file our form 10-Q today, which includes further detail on the acquisition.
Turning to slide 11, and our reported volume per quarter, we reported and 14437 tests across our portfolio in the first quarter of 2021 and increase of 11% over the prior year quarter.
This includes 1560 urology tests from decipher from March 12th 331.
Excluding the urology tests genomic testing volume for Afirma, envisage, yet and the percept and G. S. C was 10700, and and 43 and increase of two per cent compared to the first quarter of 2020.
Our first quarter product volume of Tucson, and some 130 for Prosigna testing represents a 12% sequential quarter increase, but a 14% decline over the first quarter of 'twenty, and 'twenty, which had been a record quarter for Prosigna testing volume.
Following our acquisition.
Slide 12 shows our performance against C. Six key performance indicators for the first quarter of 2021 compared to the prior year period.
We incurred $35 $1 million and decipher biosciences acquisition related costs, which we recorded in general and administrative expenses.
These expenses include $10 million and transaction expense, including banking and legal fees and $25 $1 million and nonrecurring post combination expense related to the acceleration and cash settlement of Unvested historical decipher stock Awards.
Slide 13 digs a level deeper into the total revenue breaking down and testing product and Biopharma and collaboration revenue.
Our results are shown against the prior year period, I would point out that for the first quarter of 2021 average testing and product revenue per reported test was approximately $2500, which marked a 7% increase from the first quarter of 2020.
Slides 14, and 15 provided revenue and volume trends and sequential and year over year.
Slide 16 shows our cost of revenue and absolute dollars as well as our gross margins with and without Biopharma and collaboration revenue gross margins remain in the men and six eight per cent range.
Slide 17 shows our operating expenses in absolute dollars and as a percent of revenue in the first quarter of 2021, our operating expenses included the $35.1 million into safer acquisition related expenses.
Excluding acquisition related expenses, our operating expenses were $34 $6 million for the quarter.
The sequential increase is principally from an increase in sales and marketing expenses.
And with the acquisition of decipher, we would expect our quarterly operating expenses to be and the following ranges for the remainder of this year.
R&D expense at $8 million to $10 million per quarter sales and marketing to ramp from 22 million in the second quarter to 24 to 25 million and by the fourth quarter.
G&A to range from 14 to 16 million per quarter, and excluding any nonrecurring or one time items.
And intangible asset amortization of three five to 4 million per quarter.
Slides 18 to 19 showed trends and our net loss and clash cash flow from operations as I mentioned earlier, we incurred and $35 $1 million and acquisition related expenses and the first quarter of 2021, which we recorded and general and administrative expenses.
We paid these expenses and the first quarter, reducing our cash flow from operations.
As shown on slide 20 on March 31, 2021, after paying for decipher and all associated acquisition costs. We ended the quarter with $324 million of cash on hand, and no material interest bearing debt outstanding.
In closing I would like to thank Keith Kennedy for his many contributions to various site. During his four year tenure with the company. He played an important role and our progress including building a strong financial infrastructure and team, which we believe will help ensure our.
And you'd success, we wish him the best and his next chapter.
Looking forward I believe our robust progress so far in 2020. One reflects a strong foundation that we have built to date. We are fortunate that mark will be joining as our new CEO to build upon the powerful strategic global vision that is the backbone of this success.
Improving outcomes for patients all over the world at every step of their journey in cancer and other diseases.
With the acquisition of the safer and the exclusive access to the and kind of analysis system for diagnostics that table and set for us to execute on our next phase of growth and we are well positioned to continue our penetration into the estimated 50 billion dollar plus long term.
Our kit for our tests and I'm excited for what is next for Vera site and fully committed to supporting Mark as he leads the company forward.
And with that I will now ask the operator to open the call for questions.
And as I remind you to ask a question you will need to press star one on your telephone.
Again star one on your telephone service.
Your question press the pound key.
And Lisa and that'll be compounded.
Yeah.
Okay.
Your first question comes from the line of money to do that from SBB Leerink. Your line is now.
Hi, Thanks.
Bonnie and Mark.
Great having you on board and.
Bonnie really working directly with you.
And it's been a great journey towards her side so far.
So thank you puneet.
Thanks, guys. So so force first of all Mark.
You know large population studies, you've been close to genomics, where a long time you know a lot of their site has done is build clinical evidence over the years to drive adoption of these tests and.
And in markets such as Afirma. So one question for you as you look at the various sites current position and the market given sort of your experience with the population studied the largest studies, where do you see opportunities and.
The portfolio and and maybe just you know bear sites, Hum and counter and upwards or to drive adoption of this test are broadly across the globe.
Obviously being somebody who is very close to sequencing. So tell us how do you view this.
And this opportunity and the use of and counter versus sequencing. Thank you.
Yeah.
I'm happy to answer that and anyone else can jump in as well, but it and from my standpoint, I mean, various cycles. When we've done an amazing job of addressing some really key markets and ecology and particular.
So obviously now with the recent acquisition of disciple and seven of the 10 top accounts was recovered so.
The way I look at it now.
And there's a lot of execution on that strategy, that's already been set and those markets that are very significant and as Bonnie just mentioned potentially $50 billion plus and the long term.
But I still think there's you know there's always a you know more breadth.
And expand indications, we can expand geographically, we can expand across different disease areas and.
So I you know I've always viewed the power of genomics and it was being incredibly broad and Boston.
Look forward to working with the team to achieve that and the company with respect to sequencing.
And the income from platform I think the platform itself is one of the key.
Buses from Neil parasite and the strategy that Bonnie and the team has executed on and I think that was an excellent moon and.
And it really does give the company tremendous opportunity to go broadly and geographically.
As far as different system sequencing I mean, as you mentioned you know a lot about the clinical evidence and the data and there are multiple ways to get after that and the approach to verify it has taken and with gathering huge amounts of data I think is incredibly and.
Differentiating and I'm very excited about it.
Yeah, and I'll just add to that I think just to remind everybody. That's listening we have a two pronged strategy for reaching US 50 billion dollar market and sequencing our whole RNA transcriptome sequencing is the backbone of what we do today.
A to discover to develop and to validate really high performing tests that patients and doctors can make clinical decisions on and and and bank on that performance. We also build incredible bio repositories out of all of the whole transcriptome and see what kept.
One thing work, we do and we believe continuing to serve the very large U S marketplace through our CLIA lab is absolutely. The right approach. We also believe a couple of years ago and continue to believe today that the right approach for the international markets is distributed.
Testing so when we took on this two business model approach, it's because we want the best solution for each market situation and that's what we'll be executing on and Mark has a terrific background with both sequencing and products to.
We're able to lead that.
That's great thanks, and thanks for that Bonnie.
If I could briefly touch on that.
I'm not sure if the site for a number for the quarter was.
Maybe you did and I didn't catch that and so if you could clarify it was really strong and the last two weeks and wanted to get that number and then also what percentage of reps are actually in person today. I think you gave a 50% number. So just wanted to make sure that that number was correct.
Our afirma and perceptive and thank you and I'll hop back into the queue.
Thank you, yes, we we recorded $3 8 million of revenue in the period from March 12, two and the end of the quarter and a 1500 and 60 tests you know March was a month of momentum across both our legacy business as well.
And to say per business.
So I went and take you know a few weeks of revenue in terms and number of weeks and the quarter by any stretch.
I in terms of number of reps, we now have together with just safer over 175 reps and the failed and we will continue to invest in sales expansion on the back of our block bladder cancer test, which we expect to get a final Medicare.
Coverage decision.
Later, this year and as we bring our nasal swab test and percept of Atlas to market and the U S. A and potentially a couple more positions as we launch and vizio and in country and international markets. So I'm not you know huge increases through the end of the year, but we'll continue to make those investments to keep up.
And with all the great product price pipeline advancements.
Next question.
Your next question comes from the line of Brian Weinstein from William Blair. Your line is now.
Yeah.
Hey, guys. Thanks for taking the questions congrats to Mark and.
Bonnie and Keith certainly Keith and the rumor and out I don't know them said and to US do you book moving on and that's really kind of the first question Ronny for you which is.
I mean, you've had.
And that's been together for a while we've now seen pretty meaningful turnover at the top between you Keith and John and I'll sort of now moving on all the time when the strategy.
Starting to come together and and now it's the point, where you start to realize the benefits of what that vision has been for many years. So can you help balance that positive outlook and the opportunities with the transition of many of the key leaders here and a couple of months of one another.
Well, Brian and I would say and we have been executing on a really big idea and a really bold vision and strategy over the last 18 months and we've always known that the company as it has over the 14 years I've been at the helm, we've gone through several iterations.
And so if evolution and that always happens, but the key is as as those changes are made that we use it as opportunity and elevate and attract and continue to evolve the structure.
For example, we are really pleased to have Tina Nova who's on the call with US today are joined US as part of our acquisition with her very talented team done and San Diego, who are also playing key roles across other aspects of the business Ciena is now the general manager of our decipher and our Afirma.
Our franchise, leading the business are the two top revenue generating products for the business and we're thrilled and excited to have Tina on board and doing that.
And also might recall, we havent another very senior executive to the staff beginning on January of this year Martin Frost joined US from here, a leadership position at agile and where he had built a significant growth across the globe and diagnostic and.
Pathology type businesses and are in fact, and his team was part of the success story with a C. D X with Keytruda. So he brings a remarkable and very relevant experience to the table Morton has added some people to his team and is leading the pulmonology franchise.
One requiring an incredible strategic leadership as well. So are we we have said goodbye to a few folks, but we have also strengthened our as well the top of the company were now aligned around our general manager structure with gives us top to bottom and clinical X.
For Ts in each of the clinical verticals that we're in we think that was another very important move and as we move forward with expanding menu and expanding toward the global potential of our and counter and product business.
It was important that we you know strength and the company with people that that bring that kind of expertise as well to the table.
So I'm thrilled I think the timing is right.
Because the table as well set and while there is many other things we can do strategically and smart gets his you know hands on the wheel just executing well as we go through these next few years is going to be very differentiating for parasite and I plan to be.
Mark side, and the executive chairman role, which will be an active role are helping to drive that success.
Thank you for that answer.
Moving just to kind of the more near term stuff here with the day to that's going to be published as part of abstracts coming out for <unk>, and then and ask them.
Typically on the nasal swab classifier, Brian and can you just level set us on what type of data do you think is necessary here for commercial viability utilization and reimbursement do you have any idea of kind of where the bar needs to be shocked when when we try and evaluate what the state is obviously, you're not going to tell us what it is but but but.
Where's the bar for kind of commercial success.
And that well Oh, we have a very clear idea and that we have spent a number of years honing in on what is needed to have success in that space and I think or clarity is we need to do two things we need to be able to develop and launch and test that's very high performing and rolling out cancer.
Or or classifying patients as low risk those patients we hope we'll be able to be classified and avoid any work up the economic benefit and value of that will be part of the clinical utility of our test on the other side are the patients with suspicious nodules that are.
Are likely have cancer for that part of the two class cut off we need very high performing tests. When it comes to specificity. So that we don't put a too many benign patients into that work up about bucket guidelines direct care today, it'll be important that our test line.
Up with those guidelines, which wouldn't require it to be a very high performing classifier and the value of getting patients diagnosed quicker and on treatment quicker will be part of the additional economic value that will be assessed two to prove the real clinical utility of <unk>.
Our nasal swab test and I can tell you we have got quite an exciting group of Kols Julia and her team have been preparing for the data unveiling and working with a lot of the thought leaders that have been very actively involved and the program and we're very excited about the name.
And swab test.
Great. Thank you very much.
Thank you.
Your next question comes from the line of Celgene them from BP Angie Your line is now open.
Hi, Thanks for taking the questions congratulations to Mark and welcome aboard and also congratulations Bonnie and job and beef to hear that you'll be in your current and your new role for a very long time [laughter]. So just starting with a clarification question.
And the precept and nasal swab test has the classifiers and locked in and it sounds like it has been so the data being presented is based on kind of the locked and classifier.
Yeah, why don't Giulia Kennedy is here and the room with us and why don't I, let her provide a little bit of a summary on what work has been going on since we had R&D day Julia sure. So since we had R&D day, we continued to do more development work on candidate class Vars and since then we have.
And locks them and put them through is a validation of pre specified validation plan and now have a a winner if you will and that data will be presented at ESCO. So, yes, it's locked and validated.
Fantastic and <unk>.
Also great to hear the physician practices reopening and recovery and it was kind of curious you know given we were hearing that there has been a lot of debate in terms of diagnosis of cancer screening and I've canceled last year and it may still be too early to tell or are you kind of seeing any kind of trends that are.
And you know different trends.
The.
Physician offices.
Our reopening and as you are getting more patient volume in terms of later stage diagnoses or you know or whatever else.
Yes, we do well and in fact, I'll I'll ask Tina to speak up here in a moment and give a little bit of a backdrop on what you're seeing and the and her businesses.
But but certainly the physician office accessibility is happening as I said in prepared remarks, the pulmonology space is still a little tighter mostly because we are still seeing the COVID-19 impact there of pulmonologists simply being the doctor still are working there with COVID-19 patients.
But also the procedures that they're performing have not yet completely rebounded because of the and hospital status, but teen and why don't you walk through of the two top revenue generating products and a bit and keeping close eye on our sales rep access why don't you give us a summary right sure.
Sure so on the prostate side and.
It was amazing that at the beginning of the year. The American cancer Society came out with a number that said they estimated that there would be 248500, new cases of prostate cancer diagnosed and the United States and in 2020, one and that represents a 29% increase over two.
2020, which is quite a substantial so they didn't specifically make a comment about COVID-19, but there's certainly been a lot of articles written that point to that knowing that a lot of people did not go to their primary care physicians, where a lot of these cancers are initially detected before they're sent a specialist in 2020.
Because of COVID-19 and also I have heard from physicians, well I'm out and the field that there's especially with older patients. There's still a lot of reluctance to leave home and to go to a hospital or go to a physician's office and even with conditions today.
The the decipher prostate market actually has recovered quite nicely in the last quarter as far as COVID-19 goes I would say about 80% of our offices are completely open and accessible for our sales reps different parts of the country are different.
And the Afirma for the thyroid is a little lower than that it ranges between about 60 and 70% of offices are accessible to sales reps, who just slightly lower.
And of course on the poem and Pulmonology side, which is not my.
And my expertise, but they see even lower because a lot of those positions as you would expect are treating COVID-19.
COVID-19 patients. So it's still not open a 100% we still see variability and we also see variability and geographic area.
Thanks, Tina and yeah, we're or encourage them, but certainly COVID-19 impact hasn't completely gone away yet.
Next question.
Right.
Your next question comes from the line of kind of just savant from Morgan Stanley. Your line is now open.
Hello, This is <unk>.
Thank you for taking my questions.
And I have validation data for <unk>.
Would you remind us what the enrollment criteria for that study and what are the potential differences between the population and studying this upcoming data presentation.
Compared to the population and included.
And like.
Yeah.
Sure I'll be happy to ask Julia to speak to that the work that we did earlier that was part of the unveiling of the R&D day, we've been able to expand that cohort, but Julio you want to talk for that yes, so and Tucson, and 19 and chest, we had a single cohort prospectively collect.
Good and that enabled us to provide a proof of principle classifier and you remember those results and then and and the R&D day back in December we have presented some data on a variety of Kennedy classifiers that used that cohort plus an additional.
Cohort that how different properties to it to enable us to create.
Create a spectrum of cases to train the classifiers. So the it could recognize a variety of cancers from different.
Populations from different sites different nodule sizes different subtypes, and whatnot to provide as much diversity as possible and the training set and at that time, we also locked away and independent testing with.
Similarly diverse characteristics and that is the stuff that we unlocked a well from in our validation and we'll be providing more color as to the data at the Astro meeting in June. Thanks, Julia we began getting access to these nasal cohorts that were collected are back with.
Our acquisition of Allegro, when we announced our collaboration with J&J and early 18, we announced that part of the big value of that collaboration with access to additional cohorts and although it will build for future. We've also invested in the noble study, which will be a cohort that we're in.
Pressing and for future development and lung cancer, hopefully, allowing us to even go further upstream and tap and eat even bigger market opportunity and lung cancer. So I'll end on lung cancer, we're excited about ESCO and look forward to bringing the nasal swab to market.
Great. Thank you so much for the color and then just.
And as a quick follow up.
The headline results.
Coming up next week.
Sure.
Yes, we'll be sharing a there will be a pre sharing of data because of the way <unk> has lined up the release of information and NASDAQ. So yes, you you will get a preview of that.
Thank you.
Uh-huh. Thank you for joining.
Your last question comes from the line of Mike Matson from Needham and co your.
Your line is now open.
Hi, Thanks for taking my questions I guess.
And I wanted to start with the guidance and kind of what the first quarter applause from the rest of the year or so.
If we take the midpoint of the revenue guidance would be about 195 million and I think from the fourth.
And fourth quarter call you said that there was about 48 million and there for cyber and I don't think that included this roughly 4 million that you've got and the first quarter. So that's about 52 million per newspaper, if I deduct that out that implies about 22% growth for the organic growth or.
Base business, excluding these hyper and <unk>.
It grew about 6% organically. So are you comfortable you can get to that growth.
And he sniper will do better than that 52 million range.
Yeah.
Thanks for the call, Mike and Yeah, we are reiterating and affirming our guidance of 190 million to 200 million and we're very confident that we'll get there and I think we'll have a various levels of performance across the whole portfolio, but are where we're very confident in that guidance.
Thank you.
Okay, Alright, and then just wondering if you could give us the book pulmonary Oh.
And biopharma sales for the quarter per quarter.
Yes, so we I don't think and believe we broke the pulmonary spell it out but the Biopharma revenue was two and hand, the biopharma and collaboration revenue for the first quarter is on page 13 of the slide deck breaks that out was.
566 million, that's a lump any revenue base a lot of that's coming from or a longer term collaborations and.
And that's where that was.
Okay Department, the pulmonary products lineup under our testing revenues and the only associated products within the product area that we pull out would be press cigna and associated instruments out there.
Okay Alright.
Alright, Thank you and yep.
Yep.
Ladies and gentlemen, this concludes our call today. Thank you for joining US you may now disconnect.
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