Q3 2023 Veracyte Inc Earnings Call

Speaker 1: Or.

Okay.

Speaker 2: Good day, and thank you for standing by. Welcome to the Vericide Third Quarter 2023 Financial Results webcast. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session.

Good day, and thank you for standing by welcome to the Vera site third quarter 2023 financial results webcast. At this time all participants are in a listen only mode. After the speaker's presentation there'll be a question and answer session.

Speaker 2: To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tristan Rebar. Please go ahead.

To ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising that your hand is raised to withdraw your question. Please press star one one again please.

Be advised that today's conference is being recorded I would now like to end the conference over to your first speaker today Tristan Rebar. Please go ahead.

Speaker 3: Good afternoon, everyone. Thanks for joining us for a discussion of our third quarter, 2023 financial results. With me today, Omar Ksatli, Professor Chief Executive Officer, and Rebecca Chambers, our Chief Financial Officer.

Good afternoon, everyone and thanks for joining us for a discussion of our third quarter 2023 financial results with me today are Marc Stapley.

Chief Executive Officer, Rebecca Chambers, our Chief Financial Officer.

Speaker 3: Vericide issued a press release earlier this afternoon detailing our third quarter 2023 financial results. This release along with the business and financial presentation is available in the investor relations section of our website at ferocyt.com.

<unk> issued a press release earlier this afternoon detailing our third quarter 2023 financial results.

The release, along with the business and financial presentation is available in the Investor Relations section of our website at <unk> Dot com.

Speaker 3: 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 are subject to risks and uncertainties. The company can give no assurance. They will prove to be correct.

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.

Looking statements are subject to risks and uncertainties. The company can give no assurance they will prove to be correct.

Speaker 3: Further, we are not under any obligation to provide further updates on our business trends or our performance during the quarter. To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that bear site files with the Securities and Exchange Commission, including bear sites most recent, for us in return.

Further we are not under any obligation to provide further updates on our business trends or our performance during the quarter to better understand the risks and uncertainties that could cause actual results to differ.

We refer you to the documents filed with the Securities and Exchange Commission, including Birthrates. Most recent forms 10-Q, okay.

Speaker 3: In addition, this call will include certain non-GAAP financial measures. Reconciliation of these measures, who in most directly comparable GAAP financial measures, are included in today's earnings release. Accessible from our IR section of BearSight's Web.

In addition, this call will include certain non-GAAP financial measures reconciliation of these measures to the most directly comparable GAAP financial measures are included in today's earnings release acceptable from our IR section of their sites websites.

Speaker 3: I will now turn the call over to Mark's family, bear say

I will now turn the call over to Marc Stapley verified.

Speaker 4: Thanks Tristan and thanks everyone for joining us today. I am pleased to share our third quarter results as well as an update on progress across our growth drive.

Thanks, Christine and thanks to everyone for joining us today I am pleased to share our third quarter results as well as an update on progress across our growth drivers.

Speaker 4: Our Q3 revenue was approximately $19 million, an increase of 19% compared to the prior year period.

Q3 revenue was approximately $19 million, an increase of 19% compared to the prior year period.

Speaker 4: Yet again, our call testing business drove this strong outcome with impressive revenue growth of 27% versus the prior year period.

Yet again, our core testing business drove this strong outcome with impressive revenue growth of 27%.

The prior year period.

Speaker 4: We also continue to further enhance our already different year financial profile generating $14 million of cash flow from operations and marking the fourth and the last five quarters with positive cash.

We also continued to further enhance our already differentiated financial profile generating $14 million of cash flow from operations.

In the fourth at the last five quarters with positive cash flow.

Speaker 4: Our proven framework of driving test adoption through robust clinical evidence, reimbursement and guideline inclusion has provided indisputable differentiation for our leading on market tests, enabling us to serve more patients and grow revenue at an accelerated rate.

A proven framework of driving test adoption through robust clinical evidence reimbursement guideline inclusion has provided indisputable differentiation for our leading our market test.

Enabling us to serve more patients and grow revenue at an accelerated rate.

Speaker 4: During the course that we were we were close to approximately 15,500 L Organization.

During the quarter, we reported approximately 15500 types of prostate cancer.

Speaker 4: up slightly sequentially as summer seasonality was more than offset by a reduction in

Up slightly sequentially.

Summer seasonality was more than offset by a reduction in weight.

Speaker 4: Given the site's growth, we have invested in our San Diego Lab operations over the course of this year, focusing on both lab capacity and the fish.

Given the size of this growth we have invested in a San Diego lab operations over the course of this year.

Focusing on both lab capacity and efficiency.

Speaker 4: I'm incredibly proud of our lab operations team that is executing on these improvements.

I'm incredibly proud of our lab operations team that has executed on these improvements.

Speaker 4: One of the impressive outcomes of their efforts is that the decisive turnaround time is now lowered and we've ever seen enabling us to get on to position for underpatient legal fast.

One of the impressive outcomes of their efforts.

The turnaround time is now lower than we've ever seen.

Enabling us to get access to physicians and patients even faster.

Speaker 4: Consequently, Decisal Whip was lower at the end of the quarter than we forecasted by more than 500 tests which resulted in recognising this record.

Consequently, the cycle work was lower at the end of the quarter than we forecasted by more than 500 tests.

Which was resulted and recognized as revenue.

Speaker 4: With the fastest hand around time as the new normal, our whip should remain approximately at this lower level going for.

With the fastest turnaround time is the new normal which should remain approximately at this lower level going forward.

Speaker 4: We again saw a record number of unique ordering positions for the Decipher prostate test in the quarter as our highly productive urology salesforce continue to broaden awareness of the test level one evidence status in NCCN guidelines.

We again saw a record number of unique ordering position solidifies the prostate test in the quarter.

As a highly productive urology sales force continued to broaden awareness of the test level, one evidence status in CCM guidelines.

Speaker 4: There are hundreds of publications and presentations contributing to evidence for the decipher platform. And we continue to engage with KOLs through our deciphered grid research.

There are hundreds of publications and presentations contributing to evidenced to the size of the platform and we continue to engage with kols throughout the site with great research I'll frame.

Speaker 4: During the quarter, the cyphergrid was ordered by physicians close to 50% of the time. As a reminder, the cyphergrid information is added to the patient report upon physician requests, provides further gene expression and signature data for research use only, which may also reduce the incidence of prostate cancer and molecular biologists.

During the quarter. Besides liquid was ordered by physicians close to 50% over time.

As a reminder.

Good information is added to the patient report upon the physician requests to provide further gene expression signature data research, you something which may offer additional insights into prostate cancer molecular biology.

Speaker 4: Further in clinical evidence for our products is a key tenet in our proven framework.

Further in clinical evidence for our products is a key tenant in a prudent framework.

Speaker 4: This portal was no exception as we presented six abstracts of the recent American Society, the Radiation Oncology, or Astronomical.

This quarter was no exception as we presented six abstracts at the recent American Society for radiation oncology or Astro conference.

Speaker 4: This included three oral presentations focused on a large randomized phase three trial, which showed the deciphered prostate genomic classifier's ability to predict risk of metastasis among patients with clinically high-risk disease.

This included three oral presentations focused on large randomized phase III trial.

Which showed that the size of the prostate genomic classifiers ability to predict the risk of metastasis among patients with clinically high risk disease.

Speaker 4: This is our 12th validation study of Decipher in a phase 3 randomized trial, demonstrating the test performance and clinical utility for enabling physicians to apply precision medicine for patients with prostate cancer.

This is our 12 validation study of the sites are in a phase III randomized trial, demonstrating the test performance and clinical utility for enabling physicians to apply precision medicine for patients with prostate cancer.

Speaker 4: As far as we know, no other molecular test for prostate cancer comes close to this level of clinical efficacy.

As far as we know no other molecular test for prostate cancer comes close to this level of clinical efforts.

Speaker 4: With high-risk prostate cancer becoming an increasingly worrying trend, we remain committed to providing access for patients across the care...

With high risk prostate cancer, becoming an increasingly worrying trend, we remain committed to providing access for patients across the care continuum.

Speaker 4: But part of this, we have developed and validated our decipher offering for those patients with advanced stage metastatic and castrate resistant prostate cancer.

As part of this we have developed and validated architecture offering for those patients with advanced stage metastatic castrate resistant prostate cancer.

Speaker 4: We are currently engaging with Medicare's Maldi X program on that draft coverage policy or LCD to enable decipher testing of this patient population.

We are currently engaging with medicare's multi X program on that draft coverage policy or LCD.

To enable decided to testing of this patient population.

Speaker 4: We expect the draft LCD to be finalized over the coming year.

We expect the draft LCD to be finalized over the coming year one.

Speaker 4: Once that is completed, we will submit for technical assessment a requirement to grant Medicare coverage and will in parallel engage commercial payers.

Once that is completed we will submit for technical assessment.

Climate to grow Medicare coverage.

In parallel engage commercial payors.

Speaker 4: We view these steps as critical to ensure our ability to more completely serve the close to 300,000 prostate cancer patients diagnosed each year in the United States.

We view these steps are critical to ensure our ability to more completely serve the close to 300000 prostate cancer patients diagnosed each year in the United States.

Speaker 4: Moving to a firmer, we delivered another record quarter with approximately 13,500 test reports.

Moving to our pharma, we delivered another record quarter with approximately 13500 tests reports.

Speaker 4: Our dedicated commercial team added more than 65 new accounts in the quarter, including some large health systems and competitive

Our dedicated commercial team added more than 65, new accounts in the quarter, including some large health systems and competitive wins.

Speaker 4: We believe this growth is being driven by increasing usage with existing customers as well as market share.

We believe this growth is being driven by increasing usage with existing customers as well as market share gains.

Speaker 4: Our current estimate is that more than 550,000 patients receive a thyroid bimedial asthma procedure in the United States annually to assess their thyroid nodule for cancer.

Our current estimate is up more than 550000 patients receive a thyroid by me the last feature in the United States annually to assess that thyroid nodule for cancer.

Speaker 4: Of those, approximately 119,000 are cytologically in the indeterminate or Bethesda 3 and 4 categories, which have historically accounted for the vast majority of a firm's patient population.

Of those approximately 119000 psychologically in the indeterminate.

But that's the three or four categories, which have historically accounted for the vast majority of the patient population.

Speaker 4: This year, the Bethesda System for Reporting Thyroid Type of Pathology broadened their recommendations for which patients may benefit from molecular testing to include those with a Bethesda-5 cytology diagnosis who likely have thyroid cancer.

This year at the <unk>.

Assistance reporting pyrite cytopathology broaden their recommendations.

Patients may benefit from molecular testing to include those with the Bethesda, five cytology diagnosis you'd likely have thyroid cancer.

Speaker 4: To this end, we are strong believers that a firm can provide critical information for the approximately 15,000 additional perps to five patients annually, who are now included in the recommendations from the elected.

To this end, we're strong believers that afirma can provide critical information to the approximately 15000 additional prepares to five patients annually, who are now included in the recommendation.

Yes.

Speaker 4: Given a firm a strong performance and positive outlook, we are once again updating our revenue growth expectations to be approximately 18% for fiscal year 2023.

Given our firm our strong performance and positive outlook. We are once again updating our revenue growth expectations to be approximately 18% for fiscal year 2023.

Speaker 4: A firm success is due in part to continued enhancements we've made to the test over the last 12 months.

Afirma success is due in part to continued enhancements we've made to the test over the last 12 months, including the addition of top.

Speaker 4: including the addition of curve promoter mutation testing and ongoing customer experience improvements such as our customer portal.

Promotional mutation testing and ongoing customer experience improvements such as our customer portal.

Speaker 4: We continue to work with leading KOLs to advance the science around thyroid nodules and cancer. And as a result, I'm excited to announce that we will be launching our RUO from the Bridge Report this quarter.

We continue to work with leading Kols to advance the science around fibroid nodules in cancer and as a result, we're excited to announce that we will be launching.

Our climate report this quarter.

Speaker 4: This research tool, similar in concept to the Cypher grid, leverages a firm with whole transcriptome-derived sequencing platform and database, and was developed through our novel discovery work and through published literature.

This research so similar in concept to decipher grid, leveraging the firm as a whole transcriptome derives sequencing platform and database.

It's developed through our novel Discovery work and published literature.

Speaker 4: It is designed to serve as a comprehensive resource for research into molecular characteristic that may ultimately help improve the understanding of how to manage patients with thyroid nodules and cancer.

It is designed to serve as a comprehensive resource for research into molecular characteristics. The may.

Ultimately helped improve the understanding of how to manage patients with thyroid nodules in cancer.

Speaker 4: Going forward, our focus is to utilize this new tool to continue to partner with academic researchers and KOLs to advance findings that may one day help to further personalize them to help, ourunning so thank you so much, we are getting friend, thank yousch.

Going forward our focus is to utilize this new tool to continue to partner with academic researchers and Kols to advanced filings that May one day help to further slides treatment to patients.

Speaker 4: For both prostate and thyroid cancer, there is still a lot to learn to better support patients in their diagnosis.

So both prostate and thyroid cancer, there is still a lot to learn to better support patients in the diagnosis and treatment.

Speaker 4: And we are proud to be able to facilitate new research with our grid off.

We are proud to be able to facilitate new research without radar screen.

Speaker 4: Our goal for both pests, which are still significantly under penetrated in the market, is that every patient that can benefit from our molecular diagnostic is able to access the cypher or pharma and we strongly believe that continued research will help to provide benefits to patients everywhere.

Our Gulf of both tests, which is still significantly underpenetrated in the market is that every patient that can benefit from a molecular diagnostics is able to access to <unk> and we strongly believe the continued research will help drive benefits for patients everywhere.

Speaker 4: Turning now to our long-term growth drivers, we continue to make significant progress on both deceptinators as well, and our global IBD strategy.

Turning now to our long term growth drivers, we continue to make significant progress on both the septal nasal swab and our global <unk> strategy.

Speaker 4: On I think I'll study for the test to nasal swab test is grown to approximately 19 sites.

I think our study for the process the nasal swab test will grow to approximately 90 sites.

Speaker 4: And we were in on track to finalize trial enrollment, known eight within the second quarter of 2024.

And we remain on track to finalize trial enrollment no later than the second quarter of 2024.

Speaker 4: We continue to view the perceptual assault test as serving a critical clinical on met need, as it improves the assessment of identified nodules for risk of malignancy, in current or former smokers who undergo recommended screening for lung cancer, as well as provides a risk classification.

We continue to view that protect our nasal swab test is something that critical clinical unmet need.

It improves the assessment of identified not just the risk of malignancy and current or former smokers, who undergo recommended screening lung cancer as.

As well as provide the risk classification.

Speaker 4: This patient population continues to grow as recently the American Cancer Society expanded the lung cancer screening guidelines for former smokers, already a population of 15 million in the United States.

This patient population continues to grow as recently the American cancer Society expanded the lung cancer screening guidelines.

Smokers already a population of $15 million in the United States.

Speaker 4: With this update, the population appropriate for screening has been expanded to ages 50 to 80 instead of 55 to 74. And now includes anyone with a significant smoking history, even if they stopped smoking more than 15 years ago.

With this update the population appropriate for screening has been expanded to ages 50 to 80 instead of $55 to 74.

And now includes anyone with a significant smoking history, even if they stop smoking more than 15 years ago.

Speaker 4: We meaningly advanced our ABD strategy this quarter as well. We have another solid quarter for our pro-signal breast cancer test as product revenue increased 21% versus the prior period, driven in part by demands from the Nordic.

We meaningfully advanced our IBD strategy this quarter as well.

We had another solid quarter for proper Cigna breast cancer test as product revenue increased 21% versus the prior year period, driven in part by demand from the Nordic region.

Speaker 4: As a reminder, earlier in the year, a signal was adopted as the definitive breast cancer test by the Government of Norway. Following a nationwide prospective study involving more than 2,000 patients.

As a reminder earlier in the year for signal was adopted as the definitive breast cancer tests by the government of Norway. Following a nationwide prospective study involving more than 2000 patients.

Speaker 4: Looking ahead, we're excited about report published this month by the Scottish Health Technologies Group. They've recommended a favorable position for prosignatory investment, which we believe will foster further demand for the test in the recent.

Looking ahead, we're excited about report published this month by the Scottish Health Technologies group, because they have recommended a favorable position for prosigna reimbursement.

We believe will foster further demand to the test in the region.

Speaker 4: Our move of the manufacturing of our pro-figment assay from Nanostring to our mass-safe France location is progress.

Our move into manufacturing of our Prosigna assay from nano stream to our Marseille, France location is progressing.

Speaker 4: This transition, while always an important part of our ABD strategy, has become increasingly critical over the last few months as we have faced a number of supply challenges.

This transition while always an important part of our IBD strategy has become increasingly critical over the last few months as we have faced a number of supply challenges.

Speaker 4: Consequently, we intend to stand up our own manufacturing line faster than we had originally planned. When we're doing everything we can, we ensure that all patients can continue to have access to the pre-figure test.

Consequently, we intend to stand up our own manufacturing line faster than we had originally planned on.

We're doing everything we can to ensure that all patients continue to have access to the Pacific northwest.

Speaker 4: The situation reinforces the need for us to control our supply chains, beyond simply improving our long-term economic around our IBD spread.

This situation reinforces the need for us to control our supply chain beyond simply improving our long term economics around our IBD strategy.

Speaker 4: Our global supply chain and manufacturing teams, working collaboratively with the commercial team, have done a fabulous job taking on this accelerated goal, and I'm proud of all they have accomplished today.

Our global supply chain and manufacturing teams working collaboratively collaboratively with the commercial team have done a fabulous job taking on this accelerated go and I'm proud of all they have accomplished to date.

Speaker 4: In spite of our mitigation efforts, we do expect this to be a headwind to volume and revenue in the fourth corner, the impact of which has been offset by strong testing outlook reflected in our updated revenue guidance.

In spite of our mitigation efforts, we do expect this to be a headwind to volume and revenue in the fourth quarter the impact of which has been offset by strong testing outlook reflected in our updated revenue guidance.

Speaker 4: Recall that product revenue represents less than 5% of our total.

The product revenue represents less than 5% of our total revenue.

Speaker 4: As a reminder, our decentralized IBD strategy is designed to make our clinically impactful tests available to patients all over the place.

As a reminder, our decentralized diabetes strategy is designed to make a clinically impactful tests available to patients all over the world.

Speaker 4: Fundamentally, we believe that the quality of our diagnostic and level of evidence supporting them is ultimately differentiators, as we can clearly see it happening in the US much.

Fundamentally we believe that the quality of our diagnostics and level of evidence supporting them.

Ultimately differentiates us as we can clearly see is happening in the U S market.

Speaker 4: Based on our own experience in the field, customer feedback, the growing installed base of NGS and QPCR platforms, and the cost structure of other platforms, we have decided to adopt a multi-platform strategy for our test.

Based on our own experience in the field customer feedback the growing installed base of Ngls and <unk> platforms and the cost structure about the platforms, we have decided to adopt to a multi platform strategy for our tests.

Speaker 4: We now believe this approach will help us reach more patients with our tests more quickly and hence accelerate long-term growth.

We now believe this approach will help us reach more patients with our tests more quickly and hence to accelerate long term growth.

Speaker 4: Leveraging the encounter development work already completed, our team has already begun bridging decipher prostate to qPCR and will surely be commencing a project to bridge our nasal swab to NGS.

Leveraging the encounter development work already completed.

Team has already begun bridging this types of prostate to Q PCR and will surely be commencing a project to bridge, our nasal swab to Ngls.

Speaker 4: To enable our launch of products on NGS, as announced earlier today, we have already signed an agreement with Illumina to develop and offer some of our tests on their next C550DX instrument.

To enable our launch products and Ngls as announced earlier today, we have already signed an agreement with Illumina to develop and offer some of our tests on their next week by 50 Dx instrument.

Speaker 4: We are on track to launch these new products consistent with prior expectations.

We are on track to launch these new products consistent with prior expectations. The timeline for which was previously predicated on submission to the next slide body in 2024 and 2025, respectively.

Speaker 4: The timeline for which was previously predicated on submission to the next site body in 2024 and 2025 respect.

Speaker 4: Given our updated plan, our recent interactions with the notified body, and the current evolving regulatory framework for IVDR, we expect the Decisal Prostate will commercially launch in mid to late 2025, and nasal swab in 2026.

Given our updated plan our recent interactions with the notified body and the current evolving regulatory framework for IBD all we.

We expect that this type of cross state, we will commercially launch in mid to late 2025, a nasal swab in 2026.

Speaker 4: At that point, we expect to be able to immediately leverage our existing commercial team who are selling for a signal. To drive towards reimbursement and adoption country by country for these new tests. With the benefit of a large existing installed base.

At that point, we expect to be able to immediately leverage our existing IBD commercial team with selling prices.

To drive towards reimbursement and adoption country by country, but these new tests with the benefit of a large existing installed base of instruments.

Speaker 4: I'm excited about this multi-platform approach to launching our test in the EOS market, underscoring our belief that exceptional cancer care begins with broad access to exceptional diagnosis.

Im excited about this multi platform approach to launching our test in the U S market underscoring our belief that exceptional cancer care begins with broad access to exceptional diagnosis.

Speaker 4: Now to further advance our global vision, we were pleased to announce the addition of two highly respected industry veterans to our senior leadership team during the quarter.

To help us further advance our global vision, we were pleased to announce the addition of two highly respected industry veteran swaps senior leadership team during the quarter.

Speaker 4: Dr. Phil Febbo has joined VeriCite as Chief Scientist Officer and Chief Medical Officer. And Dr. Marie-Claire Tain is now GM of our IVD business based in Marseilles, France.

Dr. <unk> has joined <unk> as Chief Scientific Officer, and Chief Medical Officer.

Dr. Larry <unk> now GMO for IBD business based in Marseille Chuck.

Speaker 4: Further, we recently launched a new corporate website which brings to life our vision and how we are differentiated from other companies in the

Further we recently launched a new corporate website, which brings to life our vision.

How we are differentiated from other companies in this space.

Speaker 4: In closing, Q3 was an exceptional quarter with strong execution in our core testing business and progress across our long-term growth drive.

In closing Q3 was an exceptional quarter with strong execution in our core testing business.

And progress across our long term growth drivers.

Speaker 4: We are now focused on executing our remaining goals for the year, while also setting the stage for global leadership in cancer diet.

We're now focused on executing our remaining goals for the year, while also setting the stage for global leadership in cancer diagnostics.

Speaker 4: With that, I will now turn to Rebecca to review our financial results for the quarter and our updated guidance for 2023.

That I will now turn to Rebecca to review, our financial results for the quarter and our updated guidance for 2023.

Speaker 5: Thanks, Mark. As Mark mentioned, we achieved excellent results in the third quarter with $90.1 million of revenue, an increase of 19% over the prior year period. We grew total volume to approximately 32,500 tests, a 23% increase over the same period of 2022.

Thanks, Mark as Mark mentioned, we achieved excellent results in the third quarter with $90 $1 million of revenue an increase of 19% over the prior year period. We grew total volume to approximately 32500 tests, a 23% increase over the same period of 2022.

Speaker 5: Quarterly testing revenue was $82 million, an increase of 27% year-over-year, driven by strong adoption of our Decipher Prostate Test post-Level 1 evidence designation by the NCCN, and continued penetration of the AFIRMA market, as well as strong prior-period cash collection.

Quarterly testing revenue was $82 million, an increase of 27% year over year, driven by strong adoption of our decipher prostate test post level, one evidence designation by the CCN and continued penetration of the afirma market as well as strong prior period cash collection.

Speaker 5: Total testing volume was approximately 29,500 tests, which includes the impact of our improved lab efficiency and whip reduction that Mark mentioned.

Total testing volume was approximately 29500 test, which includes the impact of our improved.

<unk> deficiency and whip reduction that Mark mentioned testing ASP was approximately $2750 per test benefiting from approximately $1 $5 million of out of period collections.

Speaker 5: Testing ASP was approximately $2,750 per test, benefiting from approximately $1.5 million of out-of-period collections. Adjusting for this impact, testing ASP would have been approximately $2,700.

Adjusting for this impact testing ASP would have been approximately $2700.

Speaker 5: Third quarter product volume was approximately 2,850 tests and product revenue was $4 million, up 21% year over year.

Third quarter product volume was approximately 2850 tests and product revenue was $4 million up 21% year over year.

Speaker 5: Biopharmaceutical and other revenue totaled $4.1 million, down 47% year over year. I've expected reductions in customer projects, extended sales cycles, and overall spending constraints across the industry led to the decline.

Pharmaceutical and other revenue totaled $4 $1 million down 47% year over year as expected reductions in customer projects extended sales cycles, and overall spending constraints across the industry led to the decline.

Speaker 5: Moving to gross margin and operating expenses, I will highlight non-GAAP results which exclude the amortization of acquired intangible assets, restructuring costs, and the impairment of long-lived assets, but does include routine stock-based compensation.

Moving to gross margin and operating expenses I will highlight non-GAAP results, which exclude the amortization of acquired intangible assets restructuring costs and the impairment of long lived assets, but does include routine stock based compensation.

Speaker 5: Non-GAP Gross Margin was 69%, up approximately 350 basis points compared to the prior year period. Testing Gross Margin was 73% of 400 basis points compared to the prior year period, benefiting from efficiency gains, fixed cost leverage, test mix, and higher ASP.

non-GAAP gross margin was 69% up approximately 350 basis points compared to the prior year period testing gross margin was 73% up 400 basis points compared to the prior year period benefiting from efficiency gains fixed cost leverage cosmetics and higher asps.

Speaker 5: Product gross margin was 39 percent, roughly flat versus the prior year period. Biopharmaceutical and other gross margin was 18 percent, down year-over-year given lower fixed cost absorption.

Product gross margin was 39% roughly flat versus the prior year period biopharmaceutical and other gross margin was 18% down year over year, given lower fixed cost absorption.

Speaker 5: Non-GAP operating expenses excluding cost of revenue were up 13% year-over-year at $58 million, driven by higher personnel costs and clinical trial expenses, as well as investments in facilities and infrastructure.

non-GAAP operating expenses, excluding cost of revenue were up 13% year over year at $58 million driven by higher personnel costs and clinical trial expenses as well as investments in facilities and infrastructure.

Speaker 5: Research and development expenses increased by $2.8 million to $13.3 million. Sales and marketing expenses decreased by half a million dollars to $23.8 million, and G&A expenses were up $4.3 million to $20.6 million.

Research and development expenses increased by $2 $8 million to $13 3 million sales and marketing expenses decreased by half a million dollars to $23 8 million and G&A expenses were up $4 3 million to $20 6 million.

We recorded a GAAP net loss of $29 6 million, which included $7 3 million of stock based compensation expense $7 3 million of depreciation and amortization and a $34 9 million impairment charge tied to our decision to adopt a multiplatform IBD strategy.

Speaker 5: We ended the quarter with $202 million dollars of cash and cash equivalents, well ahead of our expectations.

We ended the quarter with $202 million of cash and cash equivalents well ahead of our expectations.

Speaker 5: Turning now to our updated 2023 guidance.

Turning now to our updated 2023 guidance.

Speaker 5: We have raised our revenue projections yet again to $352 million to $354 million as compared to our prior guidance of $342 million to $350 million.

We have raised our revenue projections, yet again to $352 million to $354 million as compared to our prior guidance of $342 million to $350 million.

Speaker 5: This increase is based on our strong third quarter results and an improved outlook on testing revenue, which takes into account the Q3 whip impact and out of period collections, which we do not anticipate repeating. This guidance also contemplates Q4 product revenue of $2-3 million given the supplier challenges previously mentioned.

This increase is based on our strong third quarter results and an improved outlook on testing revenue, which takes into account the Q3 with impact in out of period collections, which we do not anticipate repeating.

This guidance also contemplates Q4 product revenue of $2 million to $3 million given the supplier challenges previously mentioned moves.

Speaker 5: Moving to cash, cash equivalents, and short-term investments. As always, our comments are barring potential M&A.

Moving to cash cash equivalents and short term investments as always our comments our borrowing potential M&A, we now forecast two and 2023 with more than $200 million of cash on hand, accounting for the impact of upcoming milestones and contingent consideration payments capital expenditures related to our lab expansion.

Speaker 5: We now forecast to end 2023 with more than $200 million of cash on hand, accounting for the impact of upcoming milestones and contingent consideration payments, capital expenditures related to our lab expansion, and other working capital trends.

And other working capital trends and importantly, this updated guidance represents an increase of approximately $30 million compared to our expectation at the beginning of this year driven by the strength of our testing portfolio as well as the fabulous execution of our managed care and billing team.

Speaker 5: Importantly, this updated guidance represents an increase of approximately $30 million compared to our expectations at the beginning of this year, driven by the strength of our testing portfolio, as well as the fabulous execution of our managed care and billing.

Speaker 5: To date, this year has been an incredible one for the VeriCite team, and I'm excited to continue to deliver on the financial goals we've set for 2023 and beyond. We'll now go to the Q&A portion of the call. Operator, please open the line.

To date this year has been an incredible one for the Verity team and I'm excited to continue to deliver on the financial goals. We set for 2023 and beyond we will now go to the Q&A portion of the call operator, Please open the lines.

Speaker 2: Thank you. At this time, we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced.

Thank you at this time, we will conduct a question and answer session. As a reminder to ask a question you will need to press star one one on your telephone and wait for your name to be announced.

Speaker 2: To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster.

To withdraw your question. Please press star one again please.

Please standby, while we compile the Q&A roster.

Speaker 6: Our first question is from Teha Savant with MS. Your line is now open. Hello, this is Yukon for Tejas. Thank you for

Our first question is from Jay Haas Savant with MFS. Your line is now open.

Hello. This is Hugo on for <unk>. Thank you for taking our questions.

Maybe starting with the Illumina club collaboration that you announced today.

How much does collaborations fit into more centralized testing model in the U S or is the focus here, mainly O U S adoption and if thats. The case has there been any changes in the strategy to build the tests on encounter.

Speaker 4: Yeah, great question. Thanks for that. So the collaboration with Illumina is very much focused on the OUS market and it's regarding our distributable IBDs as kits on the next CDX 550 platform.

Yes, great question. Thanks, Thanks for that.

The collaboration with Illumina is very much focused on the U S market.

And it's regarding distributable IBD.

Thats kits on the next seek Dx $5 50 platform now remember, we're very much from a clear standpoint, where.

Speaker 4: Now, remember, we're very much from a clear standpoint, we're a customer of Illumina today, and this doesn't change or impact that in any way, shape or form, other than we've expanded our relationship with Illumina to relate to outside customers.

Customer of Illumina is today.

This doesn't change or impact that in any way shape or form other than that we've expanded our relationship with illumina to.

To relate to outside the U S. As well so we're excited about that in relation to the and counter approach. The question you asked yes, the way that this much.

Speaker 4: So we're excited about that. In relation to the end counter approach, the question you asked there, yes, the way that this multi-platform strategy of ours will take place is we are going to leverage the best instrument or instruments for the test.

Multiplatform strategy evolves.

We'll take places we are going to leverage the best instrument or instruments for the test.

Speaker 4: So, you know, as we talked about in the prepared remarks, we will launch

So yes, we talked about in the prepared remarks, we will launch decipher prostate all in Q PCR, we will launch nasal swab on Ngls and for every other future tests, we'll consider the platform of platforms on which we'll launch those tests. The encounter we're still going to support very much for Prosigna test.

Speaker 4: Disciple prostate on QPCR we will launch nasal swab.

Speaker 4: on NGS and for every other future test we'll consider the platform or platform

Speaker 4: on which we'll launch those tests. The N-counter we're still going to support very much for our pro-signa test.

Speaker 7: and others that we have in place today, like lymph-micro-gampons, no changes there. Per thing there is actually one good example where we will also launch that product on NGS, which expands and provides more options for like a...

And others that we have in place today like <unk> for example, no changes there.

Prosigna is actually one. Good example, where we will also launch that product on NGF, which expands and provide more options for our customers.

Speaker 6: Hopefully that answers your question. Thank you. And then a separate follow-up question. You touched on this during the prep remarks, but could you, it sounds like some of the timelines have changed for submission of.

Hopefully that answers your question, yes, no that was great. Thank you.

And.

A separate follow up question you touched on this during the prepared remarks, but.

Could you it sounds like some of the timelines of change for our submission of prostate and nasal swab.

For the IV Dr process.

Was wondering if you could elaborate on some of the discussions that you had with the notified body.

And whether some of them some of them.

What from the discussions may have may have changed the timelines there.

Speaker 7: Yeah, so actually the timeline for when we now expect to launch these tests commercially has not changed. And when I say these tests, I'm talking about decipher prostate and nasal.

So actually the timelines for when we now expect to launch. These tests commercially has not changed and when I say these tests I'm talking about <unk>.

Decipher prostate and.

Speaker 7: But we've moved from providing a submission timeline, the steps after that, which would largely be outside of our control and unpredictable from a timeline standpoint, to now a commercialization timeline, which we think is better, more predictable, and clearer. And so now we're at a point where we're comfortable saying when we're able to commercialize these tests based on our roadmap and our project plan, whereas previously we weren't ready to put a commercialization timeout there.

Nasal swab.

But we've moved from providing a submission timeline the.

After that which would largely be outside of our control and unpredictable from a timeline standpoint to now a commercialization timeline, which we think is better more predictable on.

Clara and so now we're at a point, where we're comfortable saying when we're able to commercialize these tests based on our roadmap and our project plans, whereas previously we won ready to put our commercialization time out there. So how did you previously assumed something like at least a year for commercialization.

Speaker 7: So, you know, had you previously assumed something like at least a year for commercialization, you would have landed on decipher prostate in 25 and nasal swab in 26. We're now confirming we are ready, we will be ready to launch commercially decipher prostate in 25 and nasal swab in 26 consistent with that assumption.

Would have landed on decipher prostate in 'twenty, five and nasal swab and 26, where we are now confirming.

We are we will be ready to launch commercially to cycle prostate in 'twenty, five and nasal swab and 26 consistent with that assumption. Okay. So we've just taken I think less of the uncertainty out of it and made a little bit more committal on lot more committed in my in my opinion in terms of when we're ready to commercially launched now one thing I want to be very.

Speaker 7: Okay, so we've just taken, I think, less of the uncertainty out of it and made a little bit more committal, a lot more committal, in my opinion, in terms of when we're ready to commercially launch. Now, one thing I want to be very clear about, when we're ready to commercially launch from an IBDR perspective.

Clear about when we're ready to commercially launch from an IBD or perspective.

Speaker 7: doesn't automatically get us reimbursed and adopted in every country, remembering we've always said this, we still have to go country by country and drive reimbursement decisions and drive KOL support and adoption. So that doesn't change, which is why we continue to position this as a long-term growth driver.

Doesn't automatically get.

Reimbursed and adopted in every country remember, we've always said that we still have to go country by country and drive reimbursement decisions and drive Kols support and adoption. So that doesn't change which is why we continue to position. This as a long term growth driver and just one thing to add to that obviously.

Speaker 5: And just one thing to add to that, you go, obviously, this decision to broaden our strategy to include other platforms is really predicated upon the growing installed basis of those other platforms and as well, ensuring that we have conserved even more customers than what the installed base of the end counter allowed for. So we really...

Decision to broaden our to broadened our strategy to include other platforms is really predicated upon the growing installed bases of those other platforms and as well.

During that we have can serve even more customers than what the installed base of the encounter allowed for us. So we really very much view. This as something that is going to not only solidify the timelines that mark discussed, but also really allow us an opportunity to grow revenue even more quickly given the number of instruments already in the field.

Speaker 5: very much view this as something that is going to not only solidify the timelines that Mark, you know, discussed, but also really allow us an opportunity to grow revenue even more quickly given the number of instruments already in the field across QPCR and NextGPX. Great. Thank you very much.

Across <unk> and CTX.

Great. Thank you very much.

Great. Thank you one moment for our next question.

Speaker 2: Our next question comes from Matt Sykes with Goldman Sachs. Your line is now open.

Our next question comes from Matt <unk> with Goldman Sachs. Your line is now open.

Speaker 8: Hey guys, this is Prashant Khodon for Matt Sykes. Congrats on the quarter. Really great to hear the results.

Hey, guys. This is for Scott Carter on for Matt. Thanks, Congrats on the quarter.

Really great to hear the results.

Speaker 8: So how does an MSED test fit into the paradigm of screening for lung cancer with Percepta nasal swab and Lodos?

So how does an <unk> test into the paradigm of screening for lung cancer with perceptive nasal swab and low dose Cte.

Speaker 7: Yeah, that's a really great question. So we've talked about this a little bit before, and the way we think about multi-cancer early detection and healthy, basically healthy screening today is very different than the way we position and think about nasal swab. So nasal swab is focused very much on patients who have been identified with a lung nodule.

Yes, that's a really great question. So we've talked about this a little bit before and the way we think about about multi cancer early detection unhealthy basically healthy screening.

Today is very different than.

Kevin the way, we position to think about nasal swab. So nasal swab is focused very much on patients who have been identified with lung module and therefore, a high risk for lung cancer and helping to make an appropriate decision whether to accelerate treatment or avoid unnecessary procedures for those patients.

Speaker 7: and therefore a high risk for lung cancer, and helping to make an appropriate decision whether to accelerate treatment or avoid unnecessary procedures for those patients.

Speaker 7: uh... today very few people out of the fifteen million or or even more as we talked about in the prepared remarks who who could or should be getting screened today are actually getting screened so it's a small percentage of about a million and then there's actually more more long modules found incidentally actually than there are by screening

Today, very few people out of the $15 million or even more as we talked about in the prepared remarks, who could or should be getting screened today are actually getting screened so it's a small percentage, it's about $1 million and then thats actually more.

Lung nodules found incidentally etsy than there are by screening. So clearly there's a lot of people, including us who care a lot about getting more and more people screened now the way I think about multi cancer early detection is that could feed that funnel.

Speaker 7: So clearly, there's a lot of people, including us, who care a lot about getting more and more people screened. Now, the way I think about multi-cancer early detection is that could feed that funnel.

Speaker 7: So if a patient is identified through one of those tests in the future, assuming that they are adopted and reimbursed, as potentially having lung cancer.

If a patient is identified through one of those tests in the future assuming that they are adopted him reimbursed as potentially having.

Speaker 7: The next step would be a low-dose CT. And if a lung nodule is identified, then that puts that patient firmly into the workflow for nasal swab, for example. And so that's how we think about it fitting in. Of course, at that point, you have to believe that there'll be reimbursement for these tests, multi-cancer early detection tests, for healthy individuals.

Lung cancer. The next step would be a low dose <unk> of a lung nodule is identified then that puts that patient firmly into the workflow for for nasal swab for example, and so that's how we think about it fitting in of course at that point you have to believe that there'll be reimbursement for <unk>.

These tests multi cancer early detection tests for healthy individuals and you also have to believe that.

Speaker 7: And you also have to believe that there will also be reimbursement for load OCT and nasal.

There will also be reimbursement for low dose <unk> nasal swab.

Speaker 7: Having said that, I continue to believe that, at least in the nearer term, the incidental population will continue to be large in the screening population until that issue of underscreening is resolved. And that will be, I think in the first, as we launch the nasal swab test, will be one of the primary use cases and drive a significant volume.

Having said that I continue to believe that at least in the near term the incidental population.

We will continue to be larger in the screening population until that issue of under screen is resolved.

And that will be I think in the third.

As we launched our nasal swab test will be one of the primary use cases and <unk>.

Drive a significant volume.

Speaker 8: Thank you, that's helpful. And how are you planning on increasing market penetration with a firma? Is it more sales reps, additional coverage expansion, product updates, or...

Got it. Thank you that's helpful.

And how are you planning on increasing market penetration with our pharma is it more sales reps additional coverage expansion product updates or can you give us some more color there.

Speaker 7: More of what we've been doing, quite honestly. I mean, as you've seen this year, we far exceeded our original expectations with Affirma coming into the year, and we recently increased our guidance on that to 18% growth, and that's significantly higher than we anticipated. And it would appear that the multitude of things that we're doing are absolutely paying off in terms of penetrating the market and bringing on new accounts, which continues to be an encouraging sign. So what are we doing? We've enhanced the product.

More of what we've been doing quite honestly I mean as you've seen this year, we far exceeded our original expectations with afirma coming into the year and we recently increased our.

<unk> on that to 18% growth and that's significantly higher than we anticipated.

It would appear that the multitude of things that we're doing are absolutely paying off in terms of penetrating the market.

And bringing on new accounts, which continues to be an encouraging sign. So so what are we doing.

Speaker 7: We've added mutation testing to our product offering. We've launched a portal for customers to make it a lot easier for them to order the test and for the billing information to be correct.

Enhance the product.

We've added turf.

Mutation testing to our product offering.

We've launched a portal for customers to make it a lot easier for them to order the test for the billing information to be correct.

Speaker 7: uh... we just announced our grid offering for research use only for a firmer we also have an incredibly effective and dedicated sales team to to be honest i mean adding uh... large number of sales reps isn't what's been driving this at all in fact we've been doing this with pretty much a stable sales force and a very strong sales force

We just announced our grid offering for research use only for Afirma. We also have an incredibly effective and dedicated sales team.

To be honest I mean, adding a large number of sales reps is and what's been driving this at all in fact, we've been doing this with pretty much a stable sales force and a very strong sales force.

Speaker 7: So continuing into next year and beyond with these steps, we believe will help drive your further growth. The market's about 50% penetrated today for these kinds of tests.

So continuing.

Into next year and beyond with these steps, we believe will help drive and fuel further growth the market's about 50% penetrated today for these kinds of tests.

Speaker 7: And we've always said that we think that could get to 70% or beyond, and we can be the primary driver of that. So, yeah, a lot more of the same, quite frankly.

And we've always said that we think that could get to 70% or beyond and we can be the primary driver of that.

Yeah, a lot a lot more of the same quite frankly, the only thing I would add is there was also recently I don't know if you want to talk about the draft LCD is not necessarily.

Speaker 5: The other thing I would add is, is there was also recently, I don't know if you want to talk about the draft LCD, it's not necessarily.

Speaker 5: you know, for next year per se, because the timeline of that, you know, could be slightly longer. But as we look broadly across both Decipher and Affirma, we obviously are focused not only on penetrating the market as defined today, but also ensuring every appropriate patient can get the appropriate test, and to that end, broadening the market.

For next year per se, because the timeline of that could be a slightly longer but as we look broadly across both the cipher and afirma. We obviously are focused not only on penetrating the market as defined today, but also ensuring every appropriate patient can get the appropriate test and to that end broadening the market.

Speaker 5: And so, you know, I think longer term, as we think about penetrating both Affirma and Decipher, it's both about doing exactly the things that Mark mentioned, but also broadening the market indications over a multiyear period. And to that end, our managed care team is actively working to do so vis-a-vis, you know, working with Moldex and on the draft LCDs that have come out most recently.

So I think longer term as we think about penetrating both the firm and decipher it's both about doing the exactly the things that Mark mentioned, but also broadening the market indications.

For a multiyear period and to that end our managed care team is actively working to do so vis vis working with multi accident on the draft. LCD is that that have been that have come up. Most recently, yes. So that's a great point of if I can add that.

Speaker 7: Yeah, and that's a great point, Rebecca, and that could add reimbursement for patients in the Bethesda V category, where we do believe there's a significant clinical utility of our test. And so, you know, if that gets passed in a year or so, then, you know, we'll be very pleased about that for patients.

Good at.

Reimbursement for patients and the Bethesda five category, where we do believe there's a.

A significant clinical utility of our test and further.

If that gets passed in a year or so.

Then we'll be very pleased about that for patients.

Speaker 8: Got it, thanks, sounds like you're tackling it from all angles, congrats again. Thank you.

Got it thanks, it sounds like Youre tackling it from all angles Congrats again.

Thank you.

Thank you. Please standby for your next question.

Speaker 2: Our next question comes from Andrew Brackman with William Blair. Your line is now open.

Our next question comes from Andrew Brachman with William Blair. Your line is now open.

Hi, Andrew and then we're able to hear you.

Speaker 2: All right, we will move to our next question. Please stand by.

All right, we will move to our next question. Please standby.

Speaker 9: Our next question comes from Puneet Suda with Leverink. Your line is open. Hey guys, hopefully you can hear me.

Our next question comes from Puneet <unk> with Leerink. Your line is open.

Hey, guys hopefully you can hear me.

Hey, Anthony Yes, yes.

Speaker 7: So, I'm wondering if you can talk a little bit about the supply chain issues and what does that mean for the sort of the 4th quarter? And if you can quantify that.

So.

Wondering if you could talk a little bit about the supply chain issues and what does that mean for the fourth quarter and you can quantify that.

Speaker 4: Um, and then maybe also, you know, it's good to see that you're addressing this with multiple platforms, but can you maybe talk about the economic agreement there with Illumina assuming that, uh, you know, that being a multiplex platform, uh, that you would, you know, see more growth there versus.

And then maybe also it's good to see that you are addressing that with multiple platforms, but can you maybe talk about the economic agreement there with illumina assuming that.

That being a multiplex platform that you would see.

<unk> seen more growth there versus.

Speaker 4: you know, sort of the QPCR then counter approach.

Sort of the <unk> then counter approach.

Speaker 7: Let me come back to that one in a moment, but on your first question regarding supply chain, so as you know, I mean, this isn't the first time that we have dealt with supply chain challenges. We talked, you know, a little while ago, a couple years ago, less than that, about, you know, what we're dealing with with a firmer, and this isn't really that different in regard to every now and then. You end up with a lack of supply of key components or parts or kits.

Let me come back to that one in a moment, but on your first question regarding supply chain. So as you know this isn't the first time that we have dealt with supply chain challenges.

We talked a little while ago couple of years ago less than that about what we're dealing with afirma and this isn't really that different in regards to every now and then.

You end up with a lack of supply of key components for powerful kits.

Speaker 7: uh... and you have to mitigate that and so the good news is uh... we were doing uh... our own we were standing up our own manufacturing for these particular kit for prosigna in marseille as part of all uh... i'd be the strategy anyway if you know we had planned to get that done around the end of this year

And you have to mitigate that and so the good news is we were doing our own we were standing up our own manufacturing for these particular kits for prosigna in Marseille as part of our.

IBD strategy anyway, as you know we had planned to get that done around the end of this year.

Speaker 7: Once we saw this supply chain challenge is happening, we were able to accelerate that and are able to accelerate that and making great progress on.

Once we sold the supply chain challenges happening, we were able to accelerate that and are able to accelerate that and are making great progress on being able to launch our own kits to mitigate that supply challenge, which means that our kit supplement the other kits that we have.

Speaker 7: being able to launch our own kits to mitigate that supply challenge, which means that our kits supplement the other kits that we have.

Speaker 7: Increasing our available inventory and so, you know, the next thing you do then is you go through a very robust customer allocation process. You don't want to build inventory at customer sites when that inventory is extremely in short supply and you want to make sure it's available for all patients.

Increasing our available inventory and so the next thing you do then as you go through a very robust customer allocation process, you don't want to build inventory at customer sites. When that inventory is extremely ensure supply and you want to make sure. It's available for all patients and so there's a lot of activity involving our commercial teams to balance that.

Speaker 7: And so there's a lot of activity involving our commercial teams to balance that effect.

Speaker 7: So I'd say we're getting through it. We have assessed the potential impact. You saw in our prepared remarks from Rebecca, Q4 product revenue of two to three million, which is lower than we've been seeing in previous quarters and even lower than we anticipated because we did anticipate a little bit of an uptick in the fourth quarter. So hopefully we won't see that much, but that's what we're projecting right now.

Secondly, so I'd say, we're getting through it we have.

First the potential impact you saw in <unk>.

Our.

Prepared remarks from Rebecca Q4 product revenue of $2 million to $3 million, which is lower than we've been seeing in previous quarters, and even lower than we anticipated because we did anticipate a little bit of an uptick in the fourth quarter.

So hopefully we wont see that much but thats what were projecting right now.

Speaker 5: And then, Puneet, could you repeat your question on economics for the Illumina Group? It wasn't abundantly clear. Yeah, thank you.

And then Tony could you repeat your question on economics for yes.

Fundamentally clear, yes. Thank you, yes, little aluminum I mean, just wanted to understand is it an IBD kit that youll be manufacturing and it'll be a simply run on $5 50, Dx or is there some.

Speaker 4: Yeah, but a little, but a little, but I mean, just want to understand, is it an IVD kit that you'll be manufacturing, and it'll be simply run on 550 DX or is there it, you know, some sort of revenue sharing or proper sharing with the little structure?

Sort of a revenue sharing or profit sharing with illumina structure. Thank you.

Speaker 7: Thank you. I mean, the way to think about that is, alumina has this standard open offer clinical agreement. But there's not a lot of room for maneuvering that. And so we've been able to adopt that agreement, or at least our version of that. And that's how the economics is going to work. So there's technical access. There's milestone payments as you launch a new IVD. And then there's a royalty-based structure. And if you look online, you'll be able to see how that typically works.

The way to think about that is Illumina has the standard open offer clinical agreement.

Theres not a lot of.

Room for maneuver in that and so we've been able to adopt that agreement or at least our version of that and.

And that's how that's how the economics going to work so the technology access.

Milestone payments as you launch a new IBD and then there is a royalty based structure and if you look online youll be able to see.

How that typically works and just one point as our updated cash guidance contemplate the.

Speaker 5: And just one point is our updated cash guide does contemplate the technology access fee which is contemplated in the open offer and we've absorbed that in our cash guide.

The app.

Technology access fee, which is contemplated in the open offer and we've absorbed that in our cost guidance.

Got it.

Speaker 4: Um, Rebecca, I'm just wondering as we think about, you know, the, the biopharma impact obviously is happening with some of the biotech and budget funding and being under pressure.

Paul.

Rebecca.

Wondering as we think about.

The Biopharma impact obviously, it's happening.

Some of the biotechs and budget.

Under pressure.

Seems like decipher is doing well.

Sure.

Continues to gain traction of these penetration levels. So maybe just wondering what.

What can you provide us in terms of sort of 2024 as also the right jumping off point and overall just given a number of these moving parts and now supply chain as well as sort of mixed into it and as you as you bring on these other platforms. Maybe just anything you can provide there that would be.

Speaker 5: in terms of sort of 2024 as, or sort of the right jumping off point and overall just given a number of these moving parts and now supply chain as well sort of mixed into it. And as you bring on these other platforms, maybe just if anything you can provide there, that'd be helpful. Yeah, of course. So the other platforms, maybe just to hit those first, Puneet, those are tied to longer dated catalysts, right? With regard to the decipher.

Be helpful. Yes of course.

Speaker 5: Yeah, of course. So the other platforms, maybe just to hit those first, Puneet, those are tied to longer dated catalysts, right, with regard to the Decipher being launched in the back half of 25 and NasalSwab in 26. So that won't impact 2024 per se. On the product supplier issues that Mark was just highlighting,

So so the other platforms.

Maybe just to hit those first <unk> those are tied to longer dated.

Longer dated catalysts right with regard to the decipher being launched in the back half of 'twenty, five and nasal swab and 'twenty six so that won't impact 2024 per se.

On the product supplier issues that Mark was just highlighting.

Speaker 5: Given we are standing up our own manufacturing, we're very hopeful that this will not have an impact in 2024 and that it is short term in duration, especially since we are pulling forward those activities from our previous timelines of, you know, roughly around the end of the year. So, so that it will not necessarily impact 2024 at this point in time, albeit still, you know, still work a lot of work for the team to do there.

We are standing up our own manufacturing, we're very hopeful that this will not have an impact on 2024 and that it is short term in duration, especially since we are pulling forward those activities from our previous timelines of roughly around the end of the year. So so that it will not necessarily impact 2024 at this point in time, albeit still still work.

Speaker 5: On biopharma, we aren't ready to call 2024 at this point. The good news is, as we said on our last earnings call, we expected $18 to $19 million for 2023. How that looks in 2024, there's still very wide error bars, too, so I wouldn't necessarily want to go into that at this point in time or draw a line in the sand, given we're obviously working very hard with the teams to really kind of...

A lot of work for the team to do there on Biopharma, we arent ready to call 2024 at this point we the good news is as we said on our last earnings call, we expected, 18% to $19 million for 2023, how that looks in 2024. They are still very wide error bars, Sue so I wouldn't necessarily want to go into that at this point in time or draw a line in the sand given.

We're obviously working very hard with the teams to.

To really kind of.

Speaker 5: put a stake in the ground with regard to where we think 24 will be. A firm and a decipherer continue to be

Put a stake in the ground with regard to where we think 24 will be affirmative decipher continue to be good news stories across the entirety of their portfolio 2024, We hope we'll continue to see more of the same not that's not a quantitative statement. That's a qualitative statement in terms of we are not fully penetrated in these markets. We are broadening the indication we are.

Speaker 7: That's not a quantitative statement, that's a qualitative statement in terms of, you know, we are not fully penetrated in these markets. We are broadening the indication. We are making it easier for physicians to order our tests, and our sales team continues to crank. So, you know, I think 2024 will continue to be headlined by Affirmative and Decipher, and the rest of it, hopefully, you know, will be more around the edges as we progress forward with our strategy. Yeah, and maybe to add a little bit to that, I agree 100% with everything Rebecca said, the Decipher and Affirmative...

Making it easier for for physicians to order our tests and in our sales team continues to crank. So I think 2024 will be continue to be headline biopharma and decipher in the rest of it hopefully will be more around the edges.

As we progress forward with our strategy.

Speaker 7: Yeah, and maybe to add a little bit to that, I agree with Hunter, some of the more Rebecca said, the decipher and a firmer test, you think about all of the things that we're doing and I ran through in response to an earlier question, what we're doing in firmer and you can clearly see what we've been doing in decipher too. None of that's gonna stop. We're gonna continue to generate the evidence. We're gonna continue to pursue guidelines. We're gonna continue to pursue coverage.

Yes, and maybe to add a little bit to that I agree with 100% with evercore versus Abbvie decide for Afirma test you have to think about all of the things that we're doing and I ran through in response to an earlier question. What we're doing in farmer and you can clearly see what we've been doing and decipher to.

None of that's going to stop we're going to continue to generate the evidence we're going to continue to.

<unk> guidelines were going to continue to pursue coverage.

Speaker 7: and all of these things that have been so successful for us in the past. So the only real headwind I see for those businesses is the fact that as they grow, the comp is a higher number. So mathematically, there's a headwind, but relative to how these tests continue to grow each quarter, we're not going to change the working formula that's served us really well over the last decade.

On all of these things that have been so successful for us in the past so the only real headwind I see for those businesses is the fact that as they grow the.

The comp is a higher number some.

So mathematically there is a headwind but relative to how these tests continue to grow each quarter, we're not going to change the working formula.

This served us really well over the last few years.

Speaker 4: Got it. And if I can squeeze one more in, good to see Phil's addition to the team. I don't know if he's there, but just wondering, obviously, prostate and thyroid, you know, continue to be major areas and nasal swab, you were developing, but are there other areas or indication types where you can, you know, potentially take the technology now with, you know, now that you're going to have access to multiple platforms?

Got it.

If I can squeeze one more in.

Good to see fills addition to the team I don't know if he's there, but just wondering.

Obviously prostate entirely continue to be major areas of nasal swab viewer doping, but.

Are there other areas or indication types, where you can potentially take the technology now with.

Now that youre going to have access to multiple platforms.

Speaker 7: Yeah, so thanks for that. Yeah, it certainly is great to have Phil on board with his expertise and experience in not just those but other areas as well. And as we think about expanding

Yes. So thanks for that yes, certainly it's great to have Phil on board with his expertise and experience in not just those but other areas as well and as we think about expanding.

Speaker 7: within indications and across indications, let me start with the current indications and our specialty model that is working so well and is highly leverageable. Of course, we're gonna continue to drive into urology applications and more focus on bladder and so on. We're gonna continue to drive our pulmonology franchise with nasal swab as the really important anchor for that and we're extremely dedicated to that.

Indications on a cross indications, let me start with the current indications and our specialty model that is working so well in this highly leverages will of course, we're going to continue to drive into urology applications.

More focus on bladder and so on we're going to continue to drive our Pulmonology franchise.

With nasal swab is the really important anchor for that and we are extremely dedicated to that.

Speaker 7: Um, and then outside in other indications, of course, as part of our strategic planning process, we always look at those other indications and think about where we can organically or otherwise, you know, expand.

And then outside in other indications of course was part of our strategic planning process, we always look.

Those other indications and think about where we can organically or otherwise.

Speaker 7: Nothing specific on that at this point. We're very satisfied with the indications that we're in and how they're fueling our business.

Expand.

Nothing specific on that at this point, we were very satisfied with the indications that we're in and how they are fueling our business.

Speaker 10: But, you know, we're excited to continue to apply the model that we've built in other ways in the future. And that's why we brought on people like Phil and others to help, you know, with that strategy. So I'm excited to continue those conversations. Okay. Helpful. Thanks, guys. Thanks.

We're excited to continue to apply the model that we've built.

In other ways in the future and that's why we brought on people like Phil and others to help.

That strategy, so I am excited to continue those conversations.

Okay helpful. Thanks, guys. Thanks.

Thanks.

Thank you one moment for our next question.

Speaker 2: Our next question comes from Thung G. Nam with Scotiabank. Your line is now open.

Our next question comes from sung genome with Scotiabank. Your line is now open.

Speaker 5: Hi, thanks for taking the questions and congrats on the quarter, maybe starting out with the strategy. It's just kind of curious if you might be able to comment on why you're putting the decipher. Prostate on a 2 versus next and sequencing versus the next week. Just given that, you know, I can decipher if I'm remembering correctly, it's a whole transcript analysis.

Hi, Thanks for taking the questions and congrats on the quarter maybe.

Maybe starting out with the IBD strategy.

Kind of curious.

You might be able to comment on why you're putting the decipher prostate on <unk> next gen sequencing versus the next peak.

Just given that I can decipher if I'm.

Remembering correctly at the whole transcriptome analysis.

Speaker 5: And then also if there's a specific QPCR platform you have in mind or could just be utilized across multiple QPCR systems.

And then also if there's a specific PCR platform you have in mind or could this be utilized across multiple <unk>.

PCR systems.

Speaker 7: Yeah, great question and thanks for that. So decipher is a whole transcriptome test. That is a firmer in the US in our CLAB environment. And that's what enables us to launch something like grid. But just a reminder, as we plan to launch IVDs, including any platform, whether it be Encounter, PCR or NGF, we're launching a more of a targeted

Great question and thanks for that so so decipher as a whole transcriptome test as is.

In the U S in our CLIA lab environment.

And that's what enables us to launch something like grid, but.

Just a reminder, as we plan to launch IBD is including any platform whether it be encounter.

PCL or NGF.

We're launching the more of a targeted test so deciphered 22 genes fits beautifully on Q PCR there is a significant installed base for PCR and as we look at the installed base. The economics, we listened to customers and so on.

Speaker 7: so decide for a twenty two gene uh... fits beautifully on q p c r there is a significant installed based for pcr and as we look at the installed based the economics we listen to customers and so on uh... we were you know we've landed on q p c r the appropriate platform for that by the way it was it was also going to be a twenty two gene test on the encounter so

Where we've landed on Q PCR is the appropriate platform. So that by the way. It was it was also going to be at 22 gene test on the encounter. So so that doesn't change at all that doesn't mean in the future as the economics.

Speaker 7: So that doesn't change at all. That doesn't mean in the future, as the economics permit, that we wouldn't launch.

The permit that we Wouldnt launch it also on and yes, we could and that is an option for us.

Speaker 7: It also on NGS, we could and that is an option.

Speaker 7: Other tests, for example, nasal swab, which you look at a lot more targets, make a lot more sense on next-gen sequencing, same with Prasigna, which, as you know, is essentially pound 50. So, that is the, again, that is the approach. It enables us to look at the right platform, the best platform to optimize for the test, and it could, of course, be multiple platforms.

Other tests for example, nasal swab, which look a lot more targets make a lot more sand from next gen sequencing.

Same with Prosigna, which as you know.

Is essentially power <unk>. So yes that is the again that is the approach enables us to look at the right platform. The best platform to optimize for the test and it could of course be multiple platforms.

Speaker 7: So hopefully that answers that question. On your second part, with respect to a PCR provider, there's multiple options, and of course you can imagine we're looking at them all, and we could support multiple options with the test with very little incremental effort in terms of R&D work. So that may ultimately be where we go. It's more of an open platform, so it's not following the same formula as the supply agreement does with a little bit of R&D.

So hopefully that answers that question on the second Paul with respect to our PCR provider Theres multiple options and of course imagine we're looking at the moment, we could support multiple options with the test with very little incremental.

Effort in terms of R&D work, so that may ultimately be where we go.

It's more of an open platform. So it's not it's not following the same formula is the supply agreement with Illumina.

Speaker 5: Gotcha. That's super helpful. And then just on Affirma, great to hear that you're taking market share there still. Just kind of curious, are you referring, so are you actually taking share away from other, you know, your competitors? And kind of, could you maybe talk about the key drivers of that, why they might be switching to Affirma? And also kind of what your, what, what do your estimate in, what's your estimate in terms of

Got you that's Super helpful. And then just on the firm are great to hear that you were taking market share. There still just kind of curious are you referring to are you actually taking share away from other competitors and kind of could you maybe talk about the key drivers of that why they might be switching to a farmer.

And also kind of what your what are your estimate.

Our estimate in terms of.

Speaker 7: Your current market share is. Thank you yeah, it's a great question. It's difficult to pass these things that you can imagine, but I think actually- and this is the case for I believe, Decipher as well as a firmer, if you look at the overall market share. P, market penetration.

Your current market share it thank you.

Yes, it's a great question, it's difficult to parse these things as you can imagine.

Thanks actually and this is the case for I believe the <unk> as well as Afirma.

If you look at the overall market share penetrate market penetration.

Speaker 7: that we're clearly driving more market penetration. In other words, patients getting tests that wouldn't otherwise have got a test, physicians using the products that otherwise would not have used ours or anyone else's product.

We're clearly driving more market penetration in other words patients getting test that wouldn't otherwise have got a test physicians using the products that otherwise would not have used ours or anyone else's product.

Speaker 7: So that's the first. Within our existing customers, we also see that the utilization is increasing.

So thats the first within our existing customers.

We also see that the utilization is increasing so that's the second and then the third area of taking share from other tests, that's more anecdotal than anything else, but as we look at the respective growth rates I think it's clear to you can clearly get to that as a conclusion in some respects in that we hear from our sales team.

Speaker 7: So that's the second. And then the third era of taking share from other tests, it's more anecdotal than anything else. But as we look at the respective growth rates, I think that it's clear to, you can clearly get to that as a conclusion in some respects. And as we hear from our sales team, some of things physicians like in a firmest case, for example, we've got the new ordering portal.

Things physicians like an affirmative case for example, we've got the new ordering portal as we've just launched grid, we've got and then of course as evidenced.

Speaker 7: you know as we've just launched Gred we've got and then of course there's evidence you know one of the most important differentiators for all of our tasks is the level of evidence

One of the most important differentiators.

All of our test is the level of evidence in the case of decipher you've got end CCN level, one case of Afirma, you've got a tremendous.

Speaker 7: In the case of decisa, you've got NCCN level one case of a firmer. You've got a tremendous array of evidence supporting the use of our test, including comparing it to other tests. So I think that, and then you couple that with a very effective self-force in both cases who are very good at making sure that existing and new customers are aware of the level of evidence behind us. And then you start to see the kind of share gains we've talked about. Great. Thank you so much.

Array of evidence supporting the use of our test, including comparing it to other tests. So so I think.

And then you couple that with a very effective sales force in both cases, who are very good at.

Making sure that.

Existing and new customers are aware of the level of evidence behind US and then you start to see that kind of share gains we've talked about.

Great. Thank you so much.

Okay Youre welcome.

Thank you. Please standby for your next question.

Speaker 2: Our next question comes from Mason, Kierko with Stephen's Inc. Your line is now open.

Our next question comes from Nathan <unk> with Stephens, Inc. Your line is now open.

Speaker 11: Hey guys, thanks for the questions. Congrats on another strong quarter. Maybe a higher level one here on the 4th, 10 million in cash from operations. That's great to see an obviously pretty unique in space. As we look into 2024, how are you thinking about the focus going forward, balancing investments in driving top line growth versus focusing on operating leverage and starting a drive free cash flow?

Hey, guys. Thanks for the questions. Congrats on another strong quarter, maybe a higher level one here on.

The $14 million in cash from operations, that's great seen obviously pretty unique in the space.

As we look into 2024.

Are you thinking about the focus going forward balancing investments in driving topline growth versus focusing on operating leverage and starting to drive free cash flow.

Speaker 7: I'll maybe start in Rebecca please weigh in as well but the nothing's changed in our philosophy in that regard We've always been very focused on you know doing everything that we can to drive top line growth appropriately And we're not you know, we're not getting ahead of our skis in that regard I think we've found that extremely well. We have been Optimizing throughout our T&L For the last couple years if not before that

I'll, maybe start and Rebecca please weigh in as well but.

Nothing's changed in our philosophy in that regard we've always been very focused on doing everything we can to drive topline growth appropriately and we're not.

We're not getting ahead of our skis in that regard.

We filed on slide extremely well, we have been optimizing throughout our P&L.

For the last couple of years, if not before that.

Speaker 7: So there's a lot of things that we're doing that drive operational performance. In fact, you saw some of that as I talked about what the accomplishments in our decipher clear lab in San Diego and the turnaround time and efficiency there. That's one example. Another example would be the ITN system.

So theres a lot of things that we're doing to drive operational performance. In fact, you saw some of that as I talked about.

The accomplishments and our decipher clear lab in San Diego, and the turnaround time and efficiency there.

One example, another example would be <unk> systems.

Speaker 7: For example, so we're continuing to invest in terms of you know helping a scale our business

For example, so we are continuing to invest.

In terms of.

Speaker 7: but also keeping a very close eye on the net profitability and cash flow.

Helping us scale our business.

But also keeping a very close eye on the net profitability and cash flow and we're not in a position.

Speaker 5: We're not in a position, fortunately, where we need to raise cash and we don't anticipate we will be. Anything to add? No, just I think what you've seen out of us in 2023, our goal would be to continue that into the future. And obviously now we've had four of the last five quarters where we've generated cash flow from ops.

Really where we need to raise cash and we don't anticipate we will be I don't think.

No just I think what you've seen out of us in 2023, our goal would be to continue that into the future and and obviously now we've had four of the last five quarters, where we've generated cash flow from ops and that is a good news story.

Speaker 5: a good new story and one that you know we hope obviously we're not guiding to 2024 at this point in time but one we have from a philosophical perspective every intention of moving forward with and we don't believe that is coming at the expense of revenue growth and we would you know not want to do that at the expense of revenue growth so you know I think Mason thanks for asking the question but I think when it comes down to it we believe this is a differentiated portion of the the very slight investment thesis and one we feel strongly we should continue

One that we hope obviously, we're not guiding to 2024 at this point in time, but one we have from a philosophical perspective every intention of moving forward with <unk>. We don't believe that is coming at the expense of revenue growth.

And we would not want to do that at the expense of revenue growth. So I think Nathan thanks for asking the question.

I think when it comes down to it. We believe this is a differentiated portion of the various <unk> investment thesis and one we feel strongly we should continue.

Speaker 11: That's helpful, thank you. And in moving to the deciphered metastatic draft LCD, could you talk about kind of your interpretation of the LCD thoughts around the language and criteria that needs to change or could change in order to potentially open it up to multiple tests per patient?

That's helpful. Thank you and and moving to decipher metastatic draft LCD could you talk about kind of your interpretation of the LCD thoughts around the language and criteria.

That needs to change or could change in order to potentially open it up to multiple tests for patients.

Speaker 11: for patients and then maybe if that were to occur, I'd assume that testing affront when patients have localized disease would potentially decrease the percentage of patients who ultimately progress.

Patient and then maybe if that were to occur.

I would assume that testing upfront when patients have localized disease would potentially decrease the percentage of patients who ultimately progress. So could you kind of frame up how we should be thinking about if that were to occur the incremental testing opportunity.

Speaker 11: So could you kind of frame up how we should be thinking about, you know, if that were to occur the incremental testing opportunity?

Speaker 7: I think to your first part of your question, I'll come back to the second one, but to the first part of the question, you've hit really the nail on the head in terms of the key element of the draft LCD that we're focused on. Let me take a step back. The draft LCD in and of itself is extremely favorable as it should be for patients.

I think to your first part of your question I'll come back to the second one but to the first part of the question you've hit really the nail on the head in terms of the key element of the draft LCD.

We're focused on let me take a step back the draft LCD in and of itself is extremely favorable as it should be for patients. We believe in testing for this cohort of patients.

Speaker 7: We believe in testing for this cohort of patients. We believe, we've got evidence to suggest that Decipher supports it, and so we're very happy to see the LCD. The one area that we believe needs to be addressed is what you called out, which is the multiple tests per patient.

Believe we got evidence to suggest that decipher supports it and so we're very happy to see the LCD. The one area that we.

Believe needs to be addressed is what you called out which is the multiple tests per patient there are many many examples where legitimately.

Speaker 7: There are many, many examples where, legitimately, the same patient might need multiple rounds of molecular diagnostic testing, and as currently written, it would preclude that. So of course, as you can imagine, we've shared our feedback.

Same patient might need multiple rounds of molecular diagnostic testing and that is currently written that would preclude that sort of course as you can imagine we've shed off feedback.

Speaker 7: very openly with Moniax and prepared, you know, share our comments. And...

Openly.

With multi X and prepared shed all comments on.

Speaker 7: And so, where, somewhat hopeful that that gets addressed, it's important for, it's not a large number of patients, but it's enough and these patients do need to be taken care of appropriately. So, we're hopeful that that gets dealt with. Now, in terms of the second part of your question, I want to make sure I understand, but you saying that,

And so we're somewhat hopeful that that gets addressed it's important for it's not a large number of patients, but it's enough in these patients do need to be taken care of appropriately. So we're hopeful that dealt with now in terms of your the second part of your question I want to make sure I understand but you are saying.

Speaker 7: You know, by identifying patients earlier, you increase the – maybe you can just repeat the question and we can make sure we're addressing it.

Bye bye identifying patients early on you increase but maybe you can just repeat the question and we can make sure we're addressing.

Speaker 11: Yeah, and maybe my interpretation here is flawed, but I guess the way I think about it is a certain number of localized patients ultimately progress. There's numbers out there. I think that the way I kind of think about it is if you're tested upfront with the cipher treatment management is better maybe...

Yes, and maybe my interpretation here is flawed, but I guess the way I think about it as a certain number of localized patients ultimately progress there is numbers out there I think that.

The way I kind of think about it is if youre, if youre tested upfront with decipher.

Treatment management is better maybe.

Speaker 11: The progression rate goes down. Maybe that's not the case. I was kind of just asking about how you think about the incremental testing opportunity if you were able to test. Be.

The progression rate goes down maybe thats not the case I was just asking about how you think about the incremental testing opportunity. If you were able to test.

Each patient twice.

Speaker 7: Oh, what about... I don't think, yeah, so I don't think you should think of it as a multiple episodes of testing for every patient type of approach. More so than there are some patients for whom multiple tests would be required.

Oh Wow.

I don't think yes. So I don't think you should think of it as a multiple episodes of testing for every patient type of approach more so than there are some patients for whom multiple tests would be required.

Speaker 7: And an example might be that might be, and it's a little bit related to the case you described where a patient is on active surveillance and then develops another lesion and the other lesion needs to be tested and it's a more aggressive cancer. And so that will be driven by clinical factors and where we agree that there should be a concern from the physician who's treating them to desire a second test.

And an example of that might be a little bit related to the case, you described where a patient is on active surveillance and then develops and other lesion and the other lesion needs to be tested and it's a more aggressive.

Cancer, and so yes that will be.

Given by clinical factors.

Where we agree that there should be.

A concern from the physician who is treating them too to desire a second test in that case, but I don't I don't think you should think of it as every patient gets tested multiple times over their lifetime.

Speaker 7: But, you know, I don't think you should think of it as every patient gets tested multiple times over their life.

Speaker 11: and that right right and now that that's pretty clear but thank you guys i appreciate it

Right now that's that's pretty clear, but thank you guys I appreciate it.

Yes.

Speaker 2: Thank you. As a reminder to ask a question, you will need to press star 11 for your name to be announced. To withdraw your question, please press star 11 again. Please stand by for.

Thank you Adam.

A reminder to ask a question you will need to press star one one for your name to be announced to withdraw your question. Please press star one one again please.

Please standby for our next question.

Speaker 2: Our next question comes from Mike Mattson with Needham and Company. Your line is now open.

Our next question comes from Mike Mattson with Needham <unk> Company. Your line is now open.

Speaker 12: Hi, everyone, this is Joseph on from Mike, maybe just looking at.

Hi, everyone. This is Joseph on for Mike.

Maybe just looking at.

Speaker 13: Cypher and AffirmaGrid, I guess, you know, it's the research use only for Affirma. Maybe just wanted to get your comment again, I guess, on the biopharma business. I guess, is there any expectation that, you know, more tools or more services will be, you know, coming out of this side of the business? Some of you guys have talked about it being kind of on the back burner, you know, lower priority.

Decipher and affirm our grid I guess, you cannot see research use only for pharma.

Maybe just wanted to get your comment again, I guess on the Biopharma business.

I guess is there any expectation that more more tools or more services.

Coming out of this side of the business I know you guys have talked about it being kind of on the back burner low lower priority.

Speaker 12: but maybe just wanted to get a refresh on how you think about the business. And I guess maybe...

But maybe just wanted to get a refresh on how you think about the business and I guess maybe.

Speaker 12: Is there a plan for, I guess, a firma grid to be shifted to the clinical setting in the edge?

Is there is there a plan for I guess affirm our grid to be shifted to the clinical setting.

Sure.

And then just one more follow up after that.

Speaker 7: Yeah, so just to clarify, both Firmagrid and Deciphergrid are intended for research use only to provide additional information. And that's helpful in the context of the patient that the physician is treating and their overall practice and the research that they're doing as well.

Yes, so just to clarify both firmer grip on decipher greater intended for research use only.

To provide additional information and that's helpful in the context of.

The patient that the physician is trading in their overall practice and the research that they're doing as well, but in terms of biopharma.

Speaker 7: But in terms of biopharma, this isn't really enabled by grid. Grid is a byproduct of this. But the fact that we do whole transcriptome analysis on all of our tests gives us this incredible rich data set for all of these patients. And that has value for biopharma customers.

This isn't really enabled by great grid as a byproduct of this but the fact that we do whole transcriptome analysis on all of our test gives us this incredible rich dataset for all of these patients and that has value for biopharma customers.

Speaker 7: And so that side of our business of driving utilization of that data with biopharma continues, it isn't enabled by grid, it's enabled by a whole transcriptome approach, and we'll continue to engage with biopharma in, you know, utilizing that data for their studies. So yeah, that's absolutely a part of what we're focused on.

So that side of our business.

Driving utilization of that data.

With Biopharma continues.

It is enabled by grid is enabled by our whole transcriptome approach.

And we will continue to engage with Biopharma.

In.

Utilizing that data for that study so yes, that's absolutely a part of what we're focused on.

Speaker 12: Okay, yeah, sure. That makes perfect sense. Thanks for the clarification there. And then, I guess I'll maybe ask just because, you know, I think, Mark, you mentioned in the prepared remarks, but I guess, Link, Mark, you know, just haven't heard that said from you guys in a while. So, just wondering if there's like an update of anything there, any milestones in the future? Yeah, just an update on the product in general would be great.

Okay, Yes that makes perfect sense, thanks for the Clair.

Clarification there.

And then I guess I'll, maybe ask just just because I think Mark you mentioned in the prepared remarks, but.

I guess linked to Mark.

Just haven't heard that.

From you guys in a while so I'm just wondering if there's like an updated anything there any milestones in the future.

Just an update on the product in general would be great.

Speaker 7: Nothing specific at this point we're continuing to work with our partner on that and throughout this IBD strategy approach we would no change the air continue to support that.

No nothing specific at this point, we're continuing to work with our partner on that and.

Throughout this IBD strategy approach, who don't change that continue to support that.

Speaker 7: our man counter and as we work towards commercial launch, think about the right approach there with our partner. So no new update.

On encountering as we work towards commercial launch think about the right approach there with a partner so no new updates and certainly at this point, it's not something that you should factor in terms of the numbers.

Speaker 7: And certainly, at this point, it's not something that you should factor in terms of the numbers until we get to a point where the studies are completed and it's clear where the commercialization happens and how that happens.

Until we get we get to a point, where the studies are completed in.

It's clear whether we're the commercialization happens and how that happens.

Speaker 7: what that would look like, in which case we would give more color at that time.

What that would look like it looks like in which case, we would give more.

More color at that time.

Okay, great. Thank you very much.

Thank you.

At this time I'm showing no further questions I would now like to turn it back to Marc Stapley for closing remarks.

Speaker 7: Thanks, I appreciate it. I'm extremely pleased with the performance of our core testing business and I'm encouraged by the unpenetrated opportunity to help more patients in both the prostate and thyroid cancer market.

Thanks.

Get it.

I am extremely pleased with the performance of our core testing business and I'm encouraged by the UN penetrated opportunity to help more patients in both the prostate and Fireeye cancer markets. We're clearly growing in both indications at a rate that is exceeding the market and with our extensive product enhancements evidence development and opportunities to broaden reimbursement.

Speaker 7: We're clearly growing in both indications that a rate that is exceeding the market. And with our extensive product enhancements, evidence development and opportunities to broaden reimbursement, I see that continuing for many years.

See that continuing for many years.

Speaker 7: In addition, I'm excited to see our global expansion come to fruition with our augmented IBD strategy, and I applaud our team for their diligence and commitment to continuously evaluate our opportunity and approach. I'm proud of our VeriCite employees who have demonstrated their ability to execute quarter after quarter, driven by their passion to transform cancer care for patients all over the world.

In addition, I'm excited to see our global expansion come to fruition with our augmented IBD strategy and I applaud our team for their diligence and commitment to continuously evaluate our opportunity and approach I am proud of our verify employees, who have demonstrated their ability to execute quarter after quarter driven by their passion to transform cancer care for patients all over the world.

Thank you.

Speaker 2: Thank you for your purchase participation in today's conference. This does conclude the program. You may now disconnect.

Thank you for your participation participation in today's conference. This does conclude the program you may now disconnect.

Okay.

[music].

Okay.