Andrew Brackmann

Andrew Brackmann from William Blair asked about the considerations Veracyte uses when selecting which indications to expand TRUEMRD into annually, especially given varying market crowdedness and existing channel strengths. He also inquired about the company's appetite for M&A to expand its portfolio, given the strong cash generation.

Answer

CEO Marc Stapley explained that TRUEMRD, as a pan-cancer platform, will target markets where Veracyte has an inherent advantage, such as existing channels, to build out the entire care continuum. He noted that decisions would also be influenced by cohort availability and existing published data, and while they won't shy away from competitive markets, they will be thoughtful about timing. Regarding M&A, Marc Stapley reiterated that internal investments (clinical trials, product development, infrastructure) are the priority, and while M&A is considered, the funnel isn't huge, and the company remains diligent and disciplined, with no immediate plans for other capital allocation opportunities.

Andrew Brackmann inquired about Veracyte's organizational readiness for upcoming product launches and the associated investment levels. He also sought details on the 20% growth in Decipher's ordering physician base.

Answer

CEO Marc Stapley and CCO John Leite detailed a phased approach, leveraging their new v2 transcriptome platform and existing channel synergies to support launches without over-investing ahead of growth. CFO Rebecca Chambers confirmed lab capacity is being expanded to meet future demand. Regarding Decipher, Leite explained the 20% physician growth was a mix of new-to-test adopters, reactivated users, and competitive wins.

Maggie Boeye, on behalf of Andrew Brackmann at William Blair, asked about the potential upside levers for the Decipher test in 2025 and whether the company's view on the market opportunity for the NIGHTINGALE nasal swab test has changed.

Answer

CEO Marc Stapley identified Decipher's upside levers as penetrating the significant market white space, expanding in existing accounts, and launching the new metastatic indication. CFO Rebecca Chambers added that prior period collections could also provide upside. Regarding NIGHTINGALE, Stapley confirmed the view of the large market opportunity is unchanged, but its success hinges on demonstrating clinical utility and securing reimbursement.

Andrew Brackmann of William Blair asked about the outlook for 2025 testing volume growth, including key drivers and headwinds, and questioned the potential for further operating leverage and the company's capital deployment plans.

Answer

CEO Marc Stapley and CFO Rebecca Chambers highlighted continued market penetration and the new metastatic indication as drivers for Decipher, alongside high single-digit growth for Afirma. They noted a $6 million headwind from the Envisia portfolio decision and muted product revenue. They affirmed the model is leverageable and reiterated a sustainable 25% adjusted EBITDA margin target, emphasizing that capital deployment will remain disciplined and focused on internal execution over M&A.

Andrew Brackmann asked about the specific customer segments and product offerings driving NeoGenomics' significant NGS market share gains, and the anticipated benefits and practical impacts of the LIMS rollout and EPIC Aura solution on the business in 2026 and beyond.

Answer

COO Warren Stone highlighted NGS wins primarily from community oncology practices, driven by the PanTracer family and sustained growth in the heme NGS portfolio, along with successful "acquire" strategies. CEO Tony Zook emphasized NGS's strategic importance. Tony Zook explained LIMS consolidation aims for organizational simplification, cost benefits from retiring 8 systems, and efficiencies starting in late 2026, becoming more evident in 2027-2028. Warren Stone added that the EPIC Aura solution, going live in late 2025, will accelerate customer onboarding in 2026, and the AI-integrated LIMS will provide insights to streamline workflows and improve productivity.

Andrew Brackmann asked about the drivers of NeoGenomics' NGS growth, specifically where the company is seeing the most customer wins, the types of accounts, and which products are leading the share capture. He also inquired about the anticipated benefits of the LIMS rollout and EPIC integration into 2026, and their practical impact on the business.

Answer

COO Warren Stone stated that NGS wins primarily came from community oncology practices, with the PanTracer family (liquid, tissue, tissue plus HRD) and heme NGS portfolio being key products. CEO Tony Zook emphasized NGS as a strategic focus, with top five products contributing nearly a quarter of clinical revenue. Tony Zook and Warren Stone explained that the LIMS rollout would simplify the organization, retire multiple systems, and provide efficiencies across departments, with benefits expected in late 2026 and more significantly in 2027-2028. They also highlighted the EPIC Aura solution's role in accelerating customer onboarding and enhancing stickiness.

Andrew Brackmann of William Blair & Company, L.L.C. asked about the company's philosophy for setting guidance following several recent updates and what steps are being taken to rebuild investor credibility. He also requested a bridge from the prior 2025 guidance to the current, revised forecast.

Answer

CEO Tony Zook acknowledged the need for a more realistic and transparent approach to guidance, based on his deeper operational insights and direct investor feedback. He explained the guidance reduction was primarily driven by macro headwinds impacting the pharma services business and a strategic delay in the PANTRACER liquid biopsy launch to improve its product profile. Zook stressed that the company must now focus on execution and consistently delivering on its quarterly goals to rebuild credibility.

Andrew Brackmann from William Blair & Company, L.L.C. questioned CEO Tony Zook's philosophy on setting guidance after recent revisions and asked for a breakdown of the factors leading to the updated 2025 forecast.

Answer

CEO Tony Zook explained his new, more transparent approach to guidance, emphasizing the need to deliver consistently. He attributed the revised 2025 guidance primarily to unforeseen headwinds in the pharma services business and a strategic three-month delay in the PANTRACER liquid biopsy launch to improve its product profile.

Andrew Brackmann of William Blair & Company asked CEO Tony Zook about his initial 30 days at the helm, sources of optimism, and areas requiring more attention. He also inquired about the drivers behind the 22% of clinical revenue from five new NGS products and the expected growth trajectory for the upcoming PanTracer liquid biopsy test.

Answer

CEO Anthony Zook stated his initial observations confirmed his positive outlook, highlighting the talented management team and strong Q1 performance, while acknowledging headwinds in the pharma business. President & COO Warren Stone explained that while a couple of the five new NGS products have a larger contribution, all are meaningful. He noted the success is due to a combination of relevant products and strategic sales force expansion, which aligns with the upcoming PanTracer launch, fueling optimism for continued penetration in community oncology.

Andrew Brackmann asked about the potential upside levers and downside risks for NeoGenomics' full-year 2025 guidance, and how the recent Adaptive partnership might alter the company's criteria for future in-licensing deals.

Answer

CEO Christopher Smith identified NGS momentum, the second-half launch of liquid biopsy, and the Adaptive partnership as key upside levers. He noted the Pharma business remains a risk due to limitations on selling new RaDaR contracts. Head of Strategy Kareem Saad added that the criteria for future partnerships—strategic fit, commercial channel leverage, and financial accretion—remain unchanged, though inbound interest has increased.

Andrew Brackmann asked about NeoGenomics' profitability evolution, questioning how the company balances investments in growth opportunities with margin expansion, and noted an implied margin decline in the Q4 guidance.

Answer

CEO Christopher Smith stated that significant opportunities remain to expand gross margins via automation and new systems like LIMS, while strategically investing in growth areas. CFO Jeffrey Sherman clarified that Q4 margins would be impacted by planned investments in sales force expansion and liquid biopsy development, but affirmed the company expects continued favorable conversion of revenue to adjusted EBITDA.

Andrew Brackmann of William Blair & Company, L.L.C. asked about Tempus's appetite for continued acquisitions or partnerships in the near to intermediate term, given the recent activity in the space.

Answer

CEO Eric Lefkofsky responded that Tempus has historically been 'opportunistic, but not overly acquisitive' and intends to maintain that discipline. He emphasized that the company is not interested in deals that would derail its organic momentum or its path to profitability. While they continue to evaluate companies with interesting assets, any potential transaction would need to be synergistic and not a 'crazy left turn' from their current strategy.

Andrew Brackmann asked if a recent reimbursement win for an AI-based diagnostic changes the company's broader view on payer willingness to cover such tests. He also inquired about any planned changes to the commercial sales force deployment or incentives following the close of the Ambry acquisition.

Answer

CFO Jim Rogers responded that while the reimbursement win is an exciting milestone demonstrating payer willingness, it is still a long road to secure broad coverage for their portfolio of algorithmic diagnostics. He also stated there will be no significant changes to the sales force, as the Tempus and Ambry teams call on different specialists (oncologists vs. genetic counselors) with minimal overlap.

Andrew Brackmann asked how the Ambry acquisition could accelerate partnerships with health systems and solidify Tempus's position as a go-to provider. He also questioned how the company will balance future investments with its path to profitability now that the acquisition accelerates achieving positive EBITDA.

Answer

CFO Jim Rogers explained that Ambry deepens relationships by adding a strong presence with genetic counselors, complementing Tempus's oncologist focus. CEO Eric Lefkofsky added that large cancer centers want comprehensive vendors, and the acquisition strengthens this integrated platform. On profitability, Lefkofsky stated that while the acquisition helps them cross the EBITDA-positive hurdle, the focus will be on sustaining growth rather than maximizing short-term EBITDA.

Andrew Brackmann of William Blair & Company, L.L.C. inquired about the primary care sales strategy, seeking details on the company's increased confidence since the pilot phase and any new trends. He also asked about the impact of electronic ordering on utilization and customer acquisition.

Answer

Scott Hutton, President, CEO & Director, explained that confidence in the primary care strategy is growing due to consistent, reaffirming results that align with pilot findings, noting that nearly 50% of patients are managed in primary care. Regarding electronic ordering, Hutton stated that digital platforms improve test compliance by 30% and customer retention by 40% by streamlining the process and reducing errors compared to fax-based ordering.

Andrew Brackmann asked for more detail on the day-to-day changes for the reconfigured sales force, whether Integrated Delivery Networks (IDNs) were a focus in the primary care pilot, and what the long-term target for the total number of sales reps is beyond 2025.

Answer

CEO Scott Hutton clarified that the day-to-day for pulmonology reps remains focused on pulmonologists, but they are now supported by associate and primary care reps within a territory 'pod'. He noted the pilot focused on diverse practice settings rather than specifically IDNs, but confirmed primary care practices are well-equipped for blood-based testing. He projected ending 2025 with 95 reps and growing to approximately 120 by the end of 2026.

Andrew Brackmann of Stifel inquired about the 2025 revenue guidance, seeking a breakdown between the testing and biopharma businesses and the underlying assumptions for volume versus ASP. He also asked for the key drivers to bridge the gap to adjusted EBITDA profitability in the second half of the year. In a follow-up, he requested more specific details on the learnings from the 2024 sales force pilot program that is driving the expansion strategy.

Answer

CFO Robin Cowie explained that Biopharma Services would constitute 8-9% of 2025 revenue, with the majority of growth driven by volume, not significant ASP changes. She stated that reaching adjusted EBITDA breakeven relies on revenue growth combined with tight control over non-sales-related expenses. CEO Scott Hutton elaborated on the sales pilot, noting it successfully validated access to primary care physicians who manage a large portion of lung nodule patients. He highlighted that these physicians often have on-site phlebotomy, increasing efficiency and patient compliance, and they valued the test for guiding referrals to the appropriate pulmonologists.

Andrew Brackmann from William Blair & Company inquired about the business momentum following the CHESS conference, the evolution of interest in the Nodify franchise, and the key components of the company's strategy to achieve positive adjusted EBITDA in the second half of 2025.

Answer

Scott Hutton, an executive, described a significant shift at the CHESS conference from a 'push' to a 'pull' dynamic, with physicians now actively seeking out Biodesix, indicating strong market adoption. He explained that the path to adjusted EBITDA profitability relies on leveraging their high gross margins (in the high 70s), maintaining disciplined spending, and driving top-line revenue growth through continued sales force expansion.

Andrew Brackmann from William Blair & Company, L.L.C. asked about the key drivers for community channel expansion beyond Flatiron, such as the NeoGenomics partnership, and inquired about the strategic criteria for potential menu expansion beyond clonoSEQ.

Answer

CEO Chad Robins and CCO Susan Bobulsky highlighted the NeoGenomics collaboration as a key opportunity to enter new accounts. They also cited focusing on large oncology practice networks and leveraging academic thought leaders for community education as other core strategies. Regarding menu expansion, Chad Robins stated the focus would be on leveraging Adaptive's strong MRD brand and its established channel in hematologic oncology, as well as its broader diagnostic infrastructure.

Andrew Brackmann asked about the key assumptions supporting the fiscal 2025 MRD business guidance, specifically the drivers for the targeted $1,300 average selling price (ASP) and the expected pacing of margin progression toward profitability, including the impact of the NovaSeq X transition.

Answer

CFO Kyle Piskel outlined four main ASP drivers: the full-year impact of the new Medicare gap-fill rate, re-contracting with commercial payers, improved revenue cycle management, and increased Medicaid reimbursement. He projected first-half sequencing margins to be similar to Q4's 59%, with the NovaSeq X transition providing a lift in the second half. CEO Chad Robins affirmed confidence in achieving adjusted EBITDA positivity in the second half of 2025.

Speaking for Andrew Brackmann, Maggie Boeye asked about the key learnings from recent EMR integrations and the expected impact on 2025 volume, as well as an update on the NovaSeq rollout and its anticipated COGS reduction.

Answer

Executive Susan Bobulsky noted that integrated accounts are growing faster than the rest of the business, with a target for 50% of order volume to be on an integrated platform by year-end 2025. CEO Chad Robins confirmed the NovaSeq launch is on track for Q3 2025, expecting a 5-8% margin improvement in the first year, supporting a long-term 70% gross margin goal.

Andrew Brackmann of William Blair & Company, L.L.C. inquired about the successful home care pilot for congestive heart failure (CHF), asking for details on the potential timing, size, and structure of a commercial agreement. He also asked about the potential for the Butterfly Garden platform to create a 'flywheel effect' for the business.

Answer

President, CEO & Chairman Joseph Devivo explained the home care commercial model would likely involve a program fee based on enrolled patients plus a per-scan revenue component, with the first state expected to be signed before year-end. He framed home care as an accelerator for adoption. Regarding Butterfly Garden, Devivo confirmed it creates a 'flywheel' by adding new revenue streams from app sales, enhancing home care service capabilities with partner AI, and accelerating mainstream adoption by overcoming educational barriers for new users.

Andrew Brackmann asked about the process and key learnings from securing the second major hospital enterprise contract and inquired about the sales funnel for one-to-one student probe programs at medical schools.

Answer

CEO Joseph DeVivo explained that the hospital contract was secured due to a 'groundswell' of individual physician adoption, creating a need for the institution to standardize on Butterfly's platform. Regarding medical schools, he stated that adoption is now a question of 'when, not if,' with conversations focused on budgeting for campus store programs or including the device in tuition, creating a recurring annual revenue stream.

Andrew Brackmann asked about the role of international markets and pricing strategy in achieving the company's long-term mid-single-digit growth target.

Answer

CEO Stephen MacMillan stated that international markets are expected to be accretive to the company's long-term growth rate, despite some near-term headwinds. He clarified that future pricing power would likely come more from favorable product mix and innovation rather than direct year-over-year price increases.

On behalf of Andrew Brackmann, an analyst asked about the future growth contribution from the Biotheranostics business and the current state of its market penetration.

Answer

Chief Financial Officer Karleen Oberton stated that it is still early innings for the Biotheranostics opportunity, with market penetration remaining low. Chairman, President and CEO Stephen MacMillan added that he expects the business to be accretive to company growth for many years to come, consistent with other recent acquisitions.

Andrew Brackmann of William Blair & Company, L.L.C. asked for a breakdown of the key drivers behind the organic pricing increase in the quarter and how this trend is expected to evolve with the mix shift towards specialty tests.

Answer

President, CEO, and Chairman Adam Schechter attributed the positive price/mix to a continued increase in tests per accession, driven by an aging population and greater disease severity. He also cited the ongoing mix shift towards higher-value specialty testing. EVP & CFO Julia Wang complemented this by stating that unit price remains relatively flat, so the uplift is primarily from these mix and volume-per-accession factors.

Andrew Brackmann of William Blair & Company asked for a breakdown of the drivers behind the organic pricing increase in the quarter and how that trend might evolve with the ongoing shift toward specialty tests.

Answer

President, CEO, and Chairman Adam Schechter attributed the positive price/mix to a continued increase in tests per accession, driven by an aging population and higher disease severity, as well as the mix shift toward higher-value specialty testing. EVP & CFO Julia Wang complemented this by stating that unit price from payers remains relatively flat, confirming the growth is from increased test volume per patient and lab management agreements.

Andrew Brackmann of William Blair questioned the macroeconomic assumptions in Labcorp's 2025 outlook, specifically asking about the expected rate of inflation for key costs like labor and the potential impact of tariffs on the company's supply chain.

Answer

CEO Adam Schechter stated that the company has assumed 3% to 3.5% inflation for labor costs, noting that the labor environment and turnover rates improved in 2024. He also commented that any potential impact from tariffs would be 'very manageable.' CFO Julia Wang added that the LaunchPad savings initiative, which generates $100-$125 million annually, helps to offset rising labor costs.

Andrew Brackmann asked about the performance trends for advanced cancer tests within Labcorp's expanded oncology portfolio during the quarter and the outlook for future growth in this area.

Answer

CEO Adam Schechter explained that he views the oncology franchise holistically, including both esoteric and routine tests. He confirmed that the overall oncology business is growing faster than the underlying routine testing business. He emphasized Labcorp's competitive advantage is its comprehensive portfolio, which allows physicians to use a single ordering system for all necessary tests, and he expects oncology to remain a key growth driver.

Andrew Brackmann from William Blair & Company, L.L.C. asked for more detail on the functional medicine business, requesting to size the opportunity and understand what further investments are being made in the area.

Answer

CEO James Davis described functional medicine as a 'sizable chunk' of business that is growing at a double-digit rate, nearly as fast as Quest's own consumer-initiated testing channel. He explained that it's a high-growth area driven by consumer interest in prevention, wellness, and longevity, and that Quest serves as a key lab engine for these largely patient-paid services. He expects the strong growth to continue.

Andrew Brackmann asked how Quest Diagnostics is positioned to withstand a potential recession and how its business resilience might differ today compared to the 2008-2009 financial crisis.

Answer

James Davis, Chairman, CEO and President, emphasized that lab testing is an essential service in any economic environment. He noted that during the 2009-2010 recession, the impact on volumes was modest, around a 1% reduction. Sam Samad, CFO, added that more safety nets exist today, like the Affordable Care Act, and that patient collection rates held fairly steady during the last major recession.

Andrew Brackmann of William Blair asked about the Haystack MRD test, seeking details on 2025 volume and reimbursement expectations and the potential for a 'halo effect' or pull-through on the broader oncology business.

Answer

CEO Jim Davis explained that after a successful early experience program, Quest is now transitioning customers to commercial arrangements and expects to generate modest revenue in 2025 by billing Medicare and fighting initial denials. He highlighted that Quest's existing $1 billion oncology business provides a strong customer base for pull-through of the MRD test.

Andrew Brackmann asked how Quest's M&A integration tactics have evolved, seeking assurance on the company's ability to manage an accelerated pace of deal-making.

Answer

CEO Jim Davis detailed a dual approach to integration. For a standalone entity like LifeLabs, the focus is on procurement synergies and operational benchmarking. For hospital outreach deals, the integration involves moving a book of business into Quest's existing infrastructure, led by dedicated, experienced teams focused on IT, logistics, and operations, which provides confidence in their execution capabilities.

Andrew Brackmann asked about the increasing resonance of MDxHealth's tissue-based tests with pathologists and the primary drivers behind market share gains for the GPS test.

Answer

CEO Michael McGarrity explained that the company successfully dismissed the false premise that pathologists were reluctant to adopt the Confirm test. He clarified that pathologists now understand the test addresses the limitations of initial biopsies, not missed reads. McGarrity also noted that the GPS test's lower tissue requirement is compelling for pathologists. Regarding market share, he credited the success to a high-quality, consultative sales force, a superior product portfolio with unique value propositions for both Confirm and GPS, and the strategic advantage of being a single laboratory partner for urologists.

Andrew Brackmann from William Blair asked about the operating expense outlook, whether achieving adjusted EBITDA positivity would alter investment strategies, and the business impact of the recent NCCN guideline updates for the GPS test.

Answer

CEO Michael McGarrity explained that the company is confident in its path to positive adjusted EBITDA and this milestone will not change its rigorous, non-transformative M&A growth strategy. Regarding the NCCN guidelines, he noted they created more confusion than clear direction, and that MDxHealth's tissue-based test growth actually accelerated, demonstrating the strength of its clinical data and customer relationships.

Andrew Brackmann inquired about the specific drivers of strong volume growth at the account level, particularly regarding customer compliance with the full testing menu, and asked about the potential for further increases in average selling price (ASP).

Answer

Executive Michael McGarrity attributed the growth to deeper engagement with pathology groups, which provides leverage across multiple urology practices. He noted that pathologists increasingly value the Confirm test's utility and the GPS test's low tissue requirement. Regarding pricing, McGarrity confirmed there is significant room to grow ASP through both expanded commercial payer coverage and improved revenue cycle management, explaining that securing a test's inclusion in a payer's medical policy can further improve reimbursement rates.

Andrew Brackmann asked for the basis of management's confidence in its mid- to high-single-digit growth forecast for China and requested clarification on why only a small portion of products shipped to China are currently subject to tariffs.

Answer

CFO Joe Busky attributed the confidence in China's growth to strong visibility in the Labs and Immunohematology businesses, which have long-term contracts and are less affected by Volume-Based Procurement (VBP). CEO Brian Blaser explained that based on actual shipments in recent weeks, as a matter of practice, only a small number of products have been subjected to tariffs upon entering the country.

Andrew Brackmann of William Blair & Company asked for a big-picture perspective from the CEO after eight months in the role, specifically regarding his view on the company's collection of assets and potential portfolio changes.

Answer

Chief Executive Officer Brian Blaser stated that his primary focus is on improving the operational performance of the existing businesses. He expressed that he likes the current portfolio of assets and how they fit together across the patient care continuum. He indicated that the short-term focus is on execution to make each business more profitable and achieve higher growth, with no new comments on business development.

Andrew Brackmann inquired about the key components of the 2025 adjusted EBITDA margin expansion target and the visibility into underlying demand for the Labs business consumables.

Answer

CFO Joe Busky detailed the margin drivers, including approximately $20 million in remaining cost savings from the initial $100 million plan, new initiatives like organizational flattening, offset by merit increases and inflation. He also confirmed that visibility into the Labs business is strong due to long-term contracts and predictable ordering patterns.

Andrew Brackmann asked about the key learnings from securing a positive medical policy with TRICARE and how they can be applied to other payers. He also inquired about the internal steps remaining before the launch of the next set of RA markers.

Answer

President and CEO John Aballi explained that the TRICARE win validates the strength of their clinical evidence package, which can be leveraged in discussions with other large national plans. He detailed the remaining steps for the next RA marker launch, which include completing analytical validation, scaling up operations and training, and coordinating with suppliers for reagents, all of which are on a controllable timeline for a late 2025 or early 2026 launch.

Andrew Brackmann asked about the adoption curve for physicians using the new test, strategies to accelerate it, and key pipeline catalysts to watch for in 2025.

Answer

John Aballi explained it's too early to quantify the 'aha moment' but that the company is creating case studies to accelerate adoption. Key catalysts for 2025 include the impact of the recent launch, sales force expansion, pharma business growth, and a second wave of RA markers expected by year-end.

Inquired about a product referred to as 'Cologuard 2.5' in the proxy, asking for details on the product and its development.

Answer

'Cologuard 2.5' is the internal name for a version of Cologuard Plus that uses a smaller collection kit. This is being developed to meet the needs of certain patient populations, for use in programs like Care Gap, and for international markets. The company is currently in discussions with the FDA regarding this program.

Andrew Brackmann of William Blair inquired about the progress with commercial payers on reimbursement for the higher-priced Cologuard Plus and whether the pending Braidwood Supreme Court case has affected payer discussions.

Answer

CEO Kevin Conroy reported positive progress, noting the $592 Medicare price should serve as a floor for commercial negotiations. He mentioned that a handful of payers, including one national payer and a large state Blue's plan, have already contracted at that price. He expects to work through contracts with their approximately 800 payers over the next 18-24 months.

Andrew Brackmann asked about the progress on securing reimbursement for Cologuard Plus with commercial payers and whether their tone has changed in light of the Braidwood v. Becerra case.

Answer

CEO Kevin Conroy reported positive progress, stating the Medicare price of $592 serves as a floor. He noted that a handful of payers, including one major national payer and a large state Blue's plan, have already covered or contracted at that price. He expects to work through the company's approximately 800 payer relationships over the next 18 to 24 months to update contracts.

Andrew Brackmann from William Blair asked about the company's ability to forecast the business, what intra-quarter signs pointed to the miss, and how the variables in their forecasting model are changing.

Answer

CFO Aaron Bloomer explained that the primary intra-quarter signal was order growth from August through October not meeting the historically reliable, steep curve. He also cited the two large, back-to-back hurricanes as a significant, observable event that impacted forecasts for Q4. CEO Kevin Conroy added that the company has its arms around the execution issues and is taking action to address them for 2025.

Asked about the company's ability to forecast its business, what intra-quarter signs pointed to the miss, and how the variables in their forecasting model are changing.

Answer

Management pointed to two key intra-quarter developments: first, order growth from August through October was positive but not at the historically strong levels expected for that period. Second, the two major back-to-back hurricanes were monitored closely and allowed them to predict the negative impact on orders and results heading into the fourth quarter.

Andrew Brackmann from William Blair asked for commentary on the company's ability to forecast its business, what intra-quarter signs pointed to the shortfall, and how the variables impacting the business have evolved.

Answer

CFO Aaron Bloomer explained that the most significant intra-quarter sign was that order growth from August through October, historically a reliable growth period, was positive but did not accelerate at expected levels. He also noted the back-to-back hurricanes were a clear, observable event that impacted orders and results. CEO Kevin Conroy added that these issues come down to commercial execution, which the company is taking action to address for 2025.

Andrew Brackmann focused on the Cologuard rescreen opportunity, noting the high compliance rates once a test is ordered. He asked about the primary initiatives to increase the number of repeat tests being ordered by physicians and whether any incremental investments are planned for the second half of the year to support this.

Answer

CFO Aaron Bloomer confirmed that rescreens are a key growth driver, with the eligible patient population growing and compliance rates improving to 80% for second-time users and over 90% for third-time users. He highlighted that the company is using digital tools like MyChart and its advanced ordering portal within the Exact Nexus platform to engage patients and drive these repeat orders.

Andrew Brackmann asked about the company's exposure to potential U.S. tariffs following the election and any broader impacts on business strategy from potential policy changes.

Answer

CEO Thierry Bernard noted that it is too early for specifics but highlighted QIAGEN's balanced global footprint as a strength and reaffirmed commitment to its U.S. presence. CFO Roland Sackers added that while there is a U.S. corporate tax liability, global tax frameworks like Pillar 2 could also change, and any tariffs would likely have reciprocal effects, impacting companies globally.

Asked for details on the planned clinical utility study for Overwatch, an update on the company's ability to secure non-dilutive financing, and whether the current quarterly cash burn is sustainable.

Answer

The design of the clinical utility study will be finalized after gathering direct input from payers. The company has advanced its non-dilutive financing efforts by preparing its biobank for monetization and is actively applying for grants. Management has a track record of reducing cash burn and intends to continue this trend, despite a slight increase in Q2 for strategic investments.