Colleen Babington

Colleen Babington asked about Ambry's growth drivers (share gains vs. organic expansion), how its growth compares to the broader hereditary cancer market, and the mix of panels (e.g., Cancer Next vs. targeted) and its impact on ASPs.

Answer

Jim Rogers (CFO, Tempus AI) stated Ambry's Q3 gain was about 50% from share gains, expecting moderation in Q4 to low-to-mid 20s growth. Eric Lefkofsky (CEO, Tempus AI) noted the hereditary space is stronger than expected (low double-digit industry growth), with Ambry aiming for low-to-mid 20s growth due to its 'gold standard assays.' Jim Rogers added that ASPs have been consistent, with potential upside from the scaling rare disease business.

Colleen Babington of Wolfe Research asked about GRAIL's international expansion strategy, specifically how the NHS Galleri data will be used to engage with single-payer systems, and whether international growth would require new lab facilities.

Answer

CEO Bob Ragusa highlighted significant inbound global interest and described the upcoming NHS Galleri study results as a 'great calling card' for discussions with other countries. President of International Business Harpal Kumar added that the study's rigor and the NHS's reputation are expected to help convert global interest into meaningful growth opportunities.

Colleen Babington of Wolfe Research asked about the future trajectory of operating expenses, specifically whether R&D spend would stabilize, and queried the balance between sales and marketing investment versus R&D.

Answer

SVP & CFO Luke Power confirmed that R&D spend is expected to remain relatively flat, as the primary investment in the universal assay platform is complete. An executive (likely EVP & Vice Chairman Brian Brille) highlighted significant operating leverage, noting that case volumes have doubled in recent years while the sales team size has been stable, indicating no immediate need to shift spending from R&D to sales.

Colleen Babington, on for Doug Schenkel, asked about operating expenses, specifically if R&D spend would stabilize due to a focus on computational work and whether the company might reallocate spending from R&D to sales and marketing to build brand recognition.

Answer

Luke Power, SVP, CFO & Chief Accounting Officer, confirmed that R&D spend is expected to remain flat as the major investments in the universal assay are complete. Dr. David Spetzler, President, added that while large studies are ongoing, the bulk of the investment has been made. An executive highlighted the significant operating leverage in the sales force, noting that volumes have doubled in recent years with a flat sales team headcount, negating the need to shift spending.

Colleen Babington of Wolfe Research, LLC, on behalf of Doug Schenkel, asked about the focus of R&D spending, potential costs from large clinical studies, and the company's ability to leverage its sales and marketing infrastructure.

Answer

SVP & CFO Luke Power stated that R&D spending is expected to remain flat, as the primary investment in the universal Caris Assure assay platform is complete. President David Spetzler added that major investments for upcoming studies have already been made. EVP & Vice Chairman Brian Brille highlighted significant operating leverage, noting that case volumes have doubled in recent years while the sales force size has remained stable.

Colleen Babington, on for Doug Schenkel, asked for a breakdown of the strong prenatal volume growth, an update on ACOG guidelines for microdeletions, and inquired about Signatera's indication mix and the impact of biomarker laws on commercial reimbursement.

Answer

CEO Steve Chapman explained that prenatal growth was proportional across the portfolio, led by NIPT and carrier screening. He noted that while ACOG guideline timing is unknown, they represent significant future upside, especially for the ~1 million annual 22q tests that are currently unreimbursed. An executive added that breast cancer is a major growth driver for Signatera and that the primary commercial reimbursement challenge remains broad payer coverage, which biomarker laws are beginning to positively influence.

Colleen Babington, on for Doug Schenkel, asked about the Decipher ASP and volume outlook following the metastatic launch. She also questioned how the MRD test is differentiated, how its higher COGS will be managed, and if reimbursement will be ready at launch.

Answer

CFO Rebecca Chambers projected a stable Decipher ASP, as a higher Medicare mix in metastatic is offset by initial lack of commercial coverage. On MRD, CEO Marc Stapley highlighted the key differentiator is its 93-day lead time in detecting recurrence over imaging. Chambers added that while COGS are higher, a strong Medicare ASP and a multiyear cost-down plan will ensure the platform is accretive to adjusted EBITDA over time. She confirmed the plan is to launch with reimbursement in place.