Daniel Brennan

Daniel Brennan inquired about the drivers behind the strong sequential volume growth for Signatera and its sustainability, and also asked which upcoming clinical studies at ESMO and ASCO are most anticipated to drive future volumes.

Answer

CEO Steve Chapman attributed the record Signatera growth to strong clinical data, a large commercial presence, and a superior user experience. While pleased with the outperformance, he reiterated the prior sequential growth guidance of 10,000-12,000 units. For upcoming data, Chapman highlighted the DARE and I-SPY 2 studies in breast cancer. President of Clinical Diagnostics, Solomon Moshkevich, pointed to the INVIGR-011 trial in bladder cancer as a potential needle-mover. General Manager of Oncology, Alexey Aleshin, emphasized the cumulative growth opportunity from data in smaller histologies like sarcoma.

Daniel Brennan of TD Cowen asked for specifics on the pricing assumptions for Signatera and Women's Health in the 2025 guidance and inquired about the incremental market opportunity from the new lung cancer surveillance coverage.

Answer

Executive Mike Brophy reiterated that the guidance assumes stable Women's Health ASPs and continued steady improvement in Signatera ASPs, driven by better reimbursement from Medicare Advantage plans. President of Clinical Diagnostics, Solomon Moshkevich, clarified that the new Medicare coverage for lung cancer is for the surveillance setting, a significant expansion beyond the previously covered immunotherapy monitoring use case for patients with no evidence of disease after therapy.

Daniel Brennan of TD Cowen questioned the drivers behind Signatera's future price improvements, particularly the potential impact from state biomarker laws, and sought clarity on the significant gross margin expansion and its trajectory into 2025.

Answer

Executive Mike Brophy explained that while the pace of Signatera's ASP increases will moderate, there is still upside from state biomarker laws, though it may take a year for the full effect to materialize. Brophy attributed the 400 bps gross margin expansion (ex-true-ups) primarily to the product mix shifting towards the higher-margin Signatera, which is now Natera's largest revenue product, rather than a significant change in the adjuvant vs. surveillance mix.

Daniel Brennan asked for further details on Tempus AI's recent disclosure of $150 million in new data licensing bookings, including the rationale for this specific disclosure, an update on the total contract value backlog, and the expected trajectory of this business segment.

Answer

CEO Eric Lefkofsky clarified that Tempus AI selectively highlights significant data deals, like the $150 million in bookings, when they are collectively noteworthy, rather than providing quarterly booking figures to avoid creating noise about immediate revenue translation. He emphasized that these are typically multi-year deals and confirmed the total contract value is 'well north' of $350 million, growing 'up and to the right,' with annual disclosure planned for year-end. He attributed strong success to Tempus AI's differentiated data asset, proprietary software, and tools, which resonate with licensees and drive further separation from competitors.

Daniel Brennan asked for more details on the new $150 million data licensing contracts, the reasons for disclosing them, an update on the backlog, and the trajectory of this business segment.

Answer

Eric Lefkofsky (CEO, Tempus AI) explained that significant deals are disclosed when they reach a level worth highlighting, not on a regular cadence to avoid market noise. He confirmed the total contract value is strong and will be disclosed annually, noting over $350 million in bookings from two data points. He attributed success to Tempus AI's unique, differentiated data asset and proprietary software.

Daniel Brennan of TD Cowen asked for elaboration on the strong core genomic volumes, the performance and outlook for the Ambri hereditary testing business, and details on the Insights data business, including the contribution from the Pathos platform and any color on bookings.

Answer

CEO Eric Lefkofsky attributed the strong, widespread oncology volume growth to enhanced sales force efficiencies and technology stack improvements. He noted that Ambri's hereditary testing volumes were significantly stronger than expected, driven by capturing market share and overall market tailwinds, with promising growth in rare pediatrics. For the data business, Lefkofsky highlighted growth above their 30% target, a major new deal to build a foundation model, and strong visibility for the rest of the year.

Daniel Brennan asked about the drivers of performance, questioning if the 20% genomics volume growth was impacted by weather and how volumes might trend for the year. He also requested more color on the demand trends and funnel for the Insights business, beyond the AstraZeneca deal.

Answer

CEO Eric Lefkofsky characterized the 20% volume growth on their large scale as 'extraordinary' and stated the company is focused on long-term sustained growth over short-term fluctuations. CFO Jim Rogers noted the Insights business had a strong start, growing 58% YoY, and that the total remaining contract value now exceeds $1 billion, providing strong forward-looking visibility for the Data business for the next several years.

Daniel Brennan sought to clarify the growth components within the 30% core Tempus guide, asking for the approximate growth rates for the genomics and data businesses. He also asked for a breakdown of the adjusted EBITDA guidance between core Tempus and Ambry, and what synergy assumptions were included.

Answer

CFO Jim Rogers confirmed that a model with data growing in the mid-30s and organic genomics in the mid-20s was 'largely aligned' with their expectations. CEO Eric Lefkofsky stated the company is focused on achieving profitability, not maximizing it, and would reinvest outperformance into growth. Rogers added that no significant synergies from Ambry are included in the 2025 guide, as it will be run as a standalone business for the year.

Daniel Brennan inquired about the Ambry acquisition process, asking if it was competitive, what top-line growth is expected for the asset, and what synergies are anticipated. He also asked for clarity on the Q4 outlook by segment, particularly the growth rate for the Data business implied by the overall guidance.

Answer

CEO Eric Lefkofsky confirmed Ambry ran a competitive process and that Tempus's familiarity as a partner provided an advantage. He projected the combined company would grow 23-25% in 2025 and be adjusted EBITDA positive. CFO Jim Rogers outlined synergies, noting Tempus can leverage its data business and Ambry's payer relationships over time. Regarding Q4, they confirmed the 25-30% Genomics growth expectation but cautioned against extrapolating the high 87% growth from the Data business.

Daniel Brennan asked about the price, volume, and mix dynamics in the lab business for Q3 and Q4, and the strategic outlook for the lab market, including estimated share loss over the past 2-3 years. He also questioned Avantor's bioprocess portfolio and its potential for market growth in the next 12-24 months.

Answer

EVP and CFO Brent Jones noted down volume with modest price gains in Q3, expecting similar dynamics in Q4 for the lab segment. President and CEO Emmanuel Ligner acknowledged past large account losses impacting current performance but emphasized commercial effectiveness for future gains. He expressed excitement about the bioprocessing chemicals portfolio, citing high single-digit order intake year-to-date and the need to improve customer service.

Daniel Brennan inquired about the price, volume, and mix dynamics in the lab business for Q3 and Q4, and the outlook for pricing in 2026. He also asked for a strategic assessment of the lab market, including estimated share loss for VWR over the past 2-3 years and the opportunity for regaining it. Additionally, he sought a characterization of Avantor's bioprocessing portfolio, its position for market recovery, and key growth variables over the next 12-24 months.

Answer

R. Brent Jones, EVP and CFO, noted modest price realization against inflation, with similar dynamics expected in Q4, and overall stability. Emmanuelle Ligner, President and CEO, explained that past large account losses continue to impact market share over time, but expressed excitement about the bioprocessing chemicals portfolio, highlighting strong high single-digit order intake and the need to improve customer service and on-time delivery.

Daniel Brennan asked about the competitive pricing environment, seeking to understand its severity, the volume vs. price dynamics in the lab business, and whether the aggressive stance is a new strategic directive. He also requested color on end-market performance in academia, government, and pharma versus expectations.

Answer

President & CEO Michael Stubblefield acknowledged increased competitive intensity, particularly from large biopharma accounts, and framed the company's actions as a strategy to protect and grow share, citing over $100 million in recent contract wins. He noted end markets are stable, with a standout performance in academia and government. EVP & CFO R. Brent Jones clarified that the primary headwind has been on price rather than volume.

Daniel Brennan sought confirmation that the potential impact from China tariffs is not included in guidance and asked about sourcing exposure outside of China. He also requested more detail on the Lab segment's performance, including the magnitude of the higher-ed decline, the size of the bench-stage biotech business, and the nature of competitive pressures.

Answer

CFO R. Jones and CEO Michael Stubblefield confirmed that potential tariff impacts are not assumed in the guidance due to the dynamic situation. Stubblefield contextualized the China exposure as less than $100M of COGS and outlined mitigation levers. On the Lab segment, he specified the U.S. higher-ed business was down 'well into the double digits' and that bench-stage biotech represents about 10% of the Lab segment's exposure. He acknowledged a fragmented, competitive market where they experienced some account shifts but also secured wins.

Daniel Brennan asked for more color on the lab business's underperformance in Q4 relative to guidance and sought to understand the key puts and takes for the low single-digit growth forecast for 2025.

Answer

CEO Michael Stubblefield attributed the Q4 lab performance to a more muted seasonal ramp, holiday timing, and a lack of year-end budget flushes. He stated the quarter still highlighted the business model's resiliency with margin expansion and strong cash flow. The 2025 forecast assumes stable end-market conditions.

Daniel Brennan inquired about the wide implied Q4 guidance range for the company and its segments, particularly Bioscience Production. He also asked for an early perspective on 2025 growth expectations, referencing a street consensus of 4.5%.

Answer

EVP and CFO Brent Jones clarified that the Q4 segment outlook includes a return to growth in Laboratory Solutions and mid-to-high single-digit growth in bioprocessing, with the overall guidance range reflecting the recent divestiture. President and CEO Michael Stubblefield stated it was too early to comment on 2025, indicating they would follow their standard guidance cadence on the next call.

Daniel Gregory Brennan asked for elaboration on the impact of onshoring announcements, specifically how to think about incremental demand for CapEx, capacity, and drug volumes in the U.S., and the potential for equipment uptake from brownfield expansions in 2026. He also inquired about the EPS impact from tariffs, the Q3 favorability, the effect of European tariffs, and the outlook for Q4.

Answer

Chairman, President, and CEO Marc Casper described onshoring as incremental one-time demand for new equipment, initial stocking, and labs, generating demand over the next few years, though overall industry volume isn't changing. He highlighted Thermo Fisher Scientific's stronger presence in new facilities (bioproduction, Solventum filtration, Dynaspin bioreactor) compared to the existing install base, noting the bioproduction business is performing exceptionally well with bookings outpacing revenue. Senior Vice President and CFO Stephen Williamson clarified a $0.11 favorable impact from tariffs and related FX in Q3 compared to prior guidance. For Q4, he stated initial assumptions for tariffs hold, with no significant pickup expected due to increased U.S.-Europe tariff rates.

Daniel Brennan asked for the key factors underpinning the 4% market growth assumption within the 7%+ long-term outlook, particularly concerning pharma R&D. He also requested clarification on how much of the initial $400 million China tariff headwind was reversed in Q2 and what remains in the guidance.

Answer

CEO Marc Casper explained that their strong growth from pharma is driven by a holistic partnership across the entire drug development and manufacturing value chain, not just a single metric like R&D spend. CFO Stephen Williamson clarified that about half of the assumed Q2 tariff impact did not occur, accounting for the ~$75 million revenue beat. He noted the second-half guidance remains conservative and has not been updated for this improvement, creating a potential cushion.

Daniel Brennan questioned why positive pharma R&D spending trends aren't translating into stronger growth for the tools industry. He also asked if Thermo Fisher is seeing a pause in instrument spending in China ahead of stimulus programs and what the expected impact of that stimulus will be.

Answer

CEO Marc Casper clarified that overall growth is muted by headwinds in production-related areas like bioproduction, not just R&D, but he remains confident in long-term prospects. Regarding China, he noted that customers are actively applying for stimulus funds and expects the impact to materialize primarily in 2025. He reiterated that Thermo Fisher is incredibly well-positioned in the country for when the economy improves.

Daniel Brennan from TD Cowen inquired about the specific factors behind the third-quarter margin shortfall and the outlook for the strong-performing Pharma segment, particularly the NASD business.

Answer

CEO Padraig McDonnell and Interim CFO Rodney Gonsalves explained the margin pressure was from three equal factors: higher tariff costs due to increased volume, incremental commercial investments to capture demand, and higher variable pay. For Pharma, McDonnell noted 9% growth led by a double-digit increase in small molecule, while Simon May, President of the Life Sciences & Diagnostics Markets Group, highlighted that the NASD business grew in the high 20s and expressed confidence in a double-digit full-year outlook.

Daniel Brennan from TD Cowen inquired about the specific factors impacting Q3 margins, such as tariffs and investments, and sought details on the outlook for the Pharma segment, particularly the growth drivers for the NASD business.

Answer

President and CEO Padraig McDonnell explained the margin pressure was equally from higher tariffs, incremental commercial investment, and higher variable pay, noting the commercial spend is to capture rising demand. He also detailed the 9% pharma growth, driven by small molecule QAQC and the Infinity Tree platform. Simon May, President of the Life Sciences and Diagnostics Markets Group, added that NASD saw robust growth in the high 20s and expressed confidence in a double-digit full-year outlook. Interim CFO Rodney Gonsalves provided further color on the year-over-year margin decline, attributing it to tariffs, logistics, currency, and the BioVectra shutdown.

Daniel Brennan asked for an explanation of the relative weakness in the pharma market in the Americas and inquired about the assumptions behind the 'below-trend' market growth forecast for fiscal 2025.

Answer

CEO Padraig McDonnell advised not to 'read too much' into the Americas pharma numbers, attributing the performance to the timing of customer CapEx decisions and reiterating the expectation for growth in line with guidance for FY25. CFO Robert McMahon explained that while their long-term market growth forecast is 4-6%, they do not expect that for the full year. The 'below-trend' outlook is broad-based, with the key variables being the pace of recovery in pharma and other applied markets.

Daniel Brennan of TD Cowen asked for specifics on what drove the better-than-expected performance in China and whether the full-year guidance for the region had changed. He also requested more clarity on the NASD business, including its Q3 year-over-year growth, Q4 outlook, and the clinical versus commercial mix.

Answer

CFO Bob McMahon confirmed the full-year China guidance remains a low double-digit decline. He attributed the Q3 outperformance to the pharma sector, which improved significantly from a nearly 30% decline in Q2, driven by better services and consumables activity. For NASD, McMahon reiterated that it performed slightly better than the expected Q3 step-down and that the full-year outlook of roughly $300 million in revenue remains intact, supported by positive booking trends.

Dan Brennan asked for specifics on what drove the improvement in China during Q3 and whether the full-year guidance for the region had changed. He also requested the year-over-year growth figure for the NASD business in the quarter and more color on its outlook.

Answer

CFO Bob McMahon responded to both questions. He stated that the full-year guidance for China remains unchanged at a low-double-digit decline, with the Q3 improvement driven by better sequential performance in the pharma market's services and consumables. For NASD, he did not provide a specific quarterly growth number but confirmed it performed slightly better than the expected sequential step-down and that the full-year outlook of roughly $300 million remains on track.

Daniel Brennan of TD Cowen asked for more detail on how China's stimulus program is delaying demand this year and the visibility into a 2025 impact. He also questioned if the pharma slowdown could be due to customers absorbing the large volume of instruments purchased post-COVID.

Answer

CEO Padraig McDonnell explained that customers are pausing to understand the new multi-year stimulus, causing H2 delays but boosting confidence for a 2025 benefit. CFO Bob McMahon added that they have conservatively assumed no stimulus revenue in FY24. On the pharma instrument cycle, McDonnell stated that high lab activity suggests the slowdown is macro-related, not an instrument overhang. McMahon supported this by citing strong growth in consumables and contracted services.

Daniel Brennan asked for the specific growth figure for the instrument business in the quarter and its expected pacing for Q2 and the second half. He also requested more color on China's performance by end market and the outlook for the full year.

Answer

CFO Robert McMahon noted that while the overall LSAG segment was down 11%, consumables grew 6%. He guided for LSAG to be down low-teens in Q2, partly due to a timing shift, with more favorable comps in H2. For China, McMahon detailed that pharma was down ~20%, while markets like academia and chem/advanced materials grew. Management remains cautiously optimistic about China, expecting easier comps in the back half of the year.

Daniel Brennan from Cowen and Company requested more detail on the monthly pacing and exit rates in China, along with end-market trends there. He also asked for color on the divergent performance within the Chemical & Advanced Materials segment, specifically between core chemicals and advanced materials.

Answer

CEO Michael McMullen stated that China's order book was slightly above revenue with normal pacing, and the slowdown remains broad-based. CFO Robert McMahon added that the year-over-year performance in October showed marked improvement from the beginning of the quarter. Regarding C&A, McMullen confirmed continued slowness in the core chemical and energy business due to cautious customer spending, which contrasts with strength in Advanced Materials. LSAG President Phil Binns highlighted strong activity in the batteries market as a key driver.

Daniel Brennan of TD Cowen asked for details on the drivers behind the accelerated tissue volume growth in H1 2025 and its sustainability, as well as the nature of recent commercial payer conversations.

Answer

SVP & CFO Luke Power and an executive (likely EVP & Vice Chairman Brian Brille) pointed to the FDA approval of MI CancerSEQ, renewed sales focus, and a favorable macro environment with low (~30%) CGP penetration. Power added that commercial payer discussions have been positive, with payers recognizing the value of Caris's comprehensive approach and proprietary tools like GPS AI, which helps ensure patients receive the correct treatment.

Daniel Brennan inquired about the specific drivers behind the acceleration in tissue volume growth to 19% in H1 2025 from 14% in 2024 and its sustainability. He also asked for color on commercial payer conversations, including any pushback and confidence in future progress.

Answer

Luke Power, SVP, CFO & Chief Accounting Officer, attributed the volume acceleration to the FDA approval of MI CancerSEQ and a renewed sales team focus. An executive added that the market's TAM is large and growing with a low penetration rate of about 30%. Regarding payers, Power stated that conversations have been positive with no significant headwinds, as payers recognize the value of Caris's comprehensive approach and proprietary AI tools like GPS AI.

Daniel Brennan of TD Cowen inquired about the specific factors driving the notable acceleration in tissue volume growth and sought more detail on the progress of discussions with large national commercial payers.

Answer

SVP & CFO Luke Power cited the recent FDA approval of MI CancerSEQ and renewed sales team focus as key drivers for volume acceleration. EVP & Vice Chairman Brian Brille added that the market's low penetration rate (~30%) and Caris's differentiated platform offer a long runway for growth. Regarding payers, Power noted that value-added offerings like the GPSai tool, which can correct diagnoses and guide treatment, have been received positively.

Daniel Brennan pressed for details on the Q4 guide, questioning if it implied flat core growth, and asked for a breakdown of which of the five growth pillars had the most conservative outlook.

Answer

CEO Thierry Bernard refuted the characterization of flat Q4 core growth, reiterating that the focus should be on the core metric due to discontinuation effects. CFO Roland Sackers indicated that QIAstat and QuantiFERON are likely to perform better than predicted, while QIAcuity instrument sales face a challenging environment, but the overall aggregate target for the five pillars remains on track to be met or exceeded.

Daniel Brennan requested quantification of the gross impact from tariffs, sought confirmation on the timing of potential M&A news, and asked for the outlook for QIAstat for the rest of the year.

Answer

CFO Roland Sackers estimated the tariff impact at 'a few cents EPS' for the period, which he said the company has been able to offset through mitigation efforts. CEO Thierry Bernard confirmed that M&A is a top priority and that the company 'should be in a position to communicate' on deals in the 'coming weeks.' For QIAstat, he reaffirmed the full-year guidance and expects continued double-digit growth, driven by its expanded menu beyond respiratory testing.

Daniel Brennan asked for details on the drivers for the expected growth in the PCR segment, given weak instrument trends, and inquired about the company's exposure to potential U.S. import tariffs from a new administration.

Answer

CEO Thierry Bernard attributed PCR growth primarily to remarkable double-digit growth in consumables, fueled by new assays, biopharma applications, and the new 12-plex capability. CFO Roland Sackers addressed the tariff question by highlighting that a potential corporate tax rate reduction in the U.S. could be beneficial, while the impact of tariffs is unclear and depends on their specific structure.

Daniel Brennan of TD Cowen inquired about the rationale for lowering the top end of the clinical revenue guidance, the early clinical use cases for the NeXT Personal test, and the company's cash runway and future capital needs.

Answer

CFO & COO Aaron Tachibana explained the clinical guidance range was narrowed to $3-6 million from $3-10 million to reflect being further into the year, with an updated assumption of two Medicare reimbursements occurring in Q4. CEO Christopher Hall added that the company remains confident in its reimbursement timeline, citing positive engagement with Palmetto and a strong evidence base. Hall also detailed that the test is gaining traction in breast cancer, lung cancer, and IO monitoring, with high physician retention driven by its ultra-sensitivity. Tachibana confirmed the company's $173 million cash position is sufficient to reach cash flow breakeven without needing to raise additional capital.

Daniel Brennan inquired about the status of the MolDX reimbursement filing, the commercialization plan post-approval, how physicians are using the test compared to competitors, and any data expected at the upcoming ASCO conference.

Answer

Executive Christopher Hall reiterated confidence in achieving reimbursement for two indications in 2025, stating they are ahead of internal schedules. Post-approval, the company will accelerate commercial efforts and bill for previously submitted tests. He noted that physicians typically use NeXT Personal in place of other tests to establish a patient baseline. Hall also pointed to forthcoming neoadjuvant breast cancer data to be presented at ASCO, underscoring the assay's consistent performance across multiple studies.

Daniel Brennan of TD Cowen inquired about the drivers of strong clonoSEQ volume, particularly the early impact of the Flatiron EMR integration, the momentum in pricing, and the outlook for MRD segment EBITDA profitability following its first positive quarter.

Answer

Chief Commercial Officer Susan Bobulsky noted the Flatiron integration is in very early days but shows positive initial results, which is factored into guidance with potential upside. CFO Kyle Piskel attributed pricing strength to prior contracting efforts and new Medicaid wins, with more national contracts activating in H2. Both Kyle Piskel and CEO Chad Robins confirmed the MRD business is set up for sustained adjusted EBITDA profitability, while still allowing for continued growth investments.

Daniel Brennan of TD Cowen requested details on the 2025 ASP bridge, the impact of Epic EMR integration on volumes and payments, and the rationale for maintaining the current sales force size despite low market penetration.

Answer

CFO Kyle Piskel clarified that the new Medicare rate serves as a reference point for negotiating with Medicaid. Executive Susan Bobulsky noted that Epic-integrated accounts show faster order growth and new provider adoption, with a goal of having over 50% of volume EMR-integrated by year-end. She also stated the company is confident in its current sales force size, leveraging the NeoGenomics partnership for expanded reach.

Daniel Brennan inquired about the assumptions behind the new $1,300 average selling price (ASP) target for clonoSEQ in 2025 following the Medicare gapfill price increase, and also asked about the outlook for the MRD pharma business, including any milestones factored into the 2024 guidance.

Answer

CEO Chad Robins explained that the ASP increase to $1,300 is driven by both existing operational initiatives (~$200/test) and the new Medicare rate (~$50+/test), with potential for further upside. CFO Kyle Piskel added that the Q4 guidance includes a risk-adjusted assumption for pharma milestones and that the ~$200 million backlog supports a decent growth rate into 2025.

Daniel Brennan of TD Cowen questioned why the company would not disclose the aggregate size of the material AstraZeneca deal. He also asked about the future impact of rising Average Selling Prices (ASPs) and Average Contract Values (ACVs) on top-line growth and requested color on the company's backlog or book-to-bill ratio.

Answer

President Ross Muken cited the company's conservative nature for not sizing the deal but reiterated its material impact. EVP & CFO George Cardoza added that revenue from the deal would be under $1 million in Q4 2025 but provide a significant lift in 2026. Muken clarified that the doubling of ACVs is independent of the AZ deal, driven by larger enterprise accounts, and has resulted in a 'significant double-digit million backlog' that will convert to revenue over the next 6-12 months.

On behalf of Daniel Brennan of TD Cowen, a representative questioned if strong Q1 implementations would alter the back-half weighted guidance for 2025 and requested a geographic breakdown of new customer signings and quantification of the increase in average contract value.

Answer

CFO George Cardoza stated that despite the strong start, the company is maintaining its guidance and still expects a back-half weighted year as new contracts transition to routine use. President Ross Muken added that while new customer success is global, there is notable strength in North America, which is expected to contribute a disproportionate amount of growth. He noted that the average contract value (ACV) for new business doubled year-over-year, driven by these larger U.S. deals, but did not provide a specific dollar figure.

Daniel Brennan of TD Cowen asked for a strategic overview of the MSK-ACCESS and MSK-IMPACT partnerships, their potential financial impact in 2025, and the key drivers for the expected revenue acceleration next year.

Answer

Co-Founder and CEO Dr. Jurgi Camblong explained that SOPHiA is decentralizing MSK's premier liquid biopsy and solid tumor tests, with 18 customers already signed globally. President Ross Muken added that these higher-ASP applications will be a meaningful growth catalyst. Regarding 2025, management expressed confidence in a growth reacceleration driven by strong clinical volume momentum and new business, but stated it was too early for specific quantitative guidance.

Daniel Brennan challenged the pessimistic outlook for 2026 US academic funding, citing more optimistic signs from the Senate, and asked if customers would spend quickly if budgets are better than expected. He also requested details on the revenue mix from backlog versus new orders and its implication for 2026 visibility.

Answer

Chairman, CEO & President Frank Laukien stated he is preparing for a potential 20% NIH budget reduction for FY26 but would be delighted if it's better, asserting that customers would 'order in a heartbeat' if they receive grants. He explained that the backlog has decreased slightly to 6.5 months but remains a cushion, and that a significant portion of revenue, including aftermarket and smaller instruments, turns more quickly.

Daniel Brennan asked for details on the China stimulus program, including its potential size and impact for Bruker, and requested color on the biopharma business's performance and what indicators to watch for a recovery.

Answer

CEO Frank Laukien explained the stimulus is a previously announced program now flowing to provinces, with orders expected through 2025. He estimated its impact would be at least 100 basis points of growth for Bruker, primarily benefiting big-ticket items. For biopharma, he noted the business is down year-to-date, with CROs hit hardest and big pharma cutting costs. He stated Bruker's exposure to biopharma is strategically growing from ~15% toward 20% of revenue.

Daniel Brennan from TD Cowen revisited the topic of LCMS growth, asking for more color on the back-half assumptions and funnel strength, given the sequential growth deceleration from Q1. He also sought further clarification on the strong China results, asking if any components were temporary and requesting more details on the stimulus impact.

Answer

President and CEO Dr. Udit Batra reiterated that funnels are "exceptional" across large pharma and CDMOs, and the TQ Absolute XR is driving new penetration in DMPK labs. Regarding China, he detailed sustainable trends in CDMO activity and battery testing, while noting the stimulus impact was modest. SVP & CFO Amol Chaubal confirmed the guide conservatively assumes 5% instrument growth, which does not reflect the full momentum.

Daniel Brennan of TD Cowen revisited the LC/MS growth outlook for the second half of the year, asking for details on funnel strength and what is assumed in the guidance. He also sought more color on the strong China performance, questioning if any of the contributing factors were temporary.

Answer

President and CEO Dr. Udit Batra described the sales funnels as 'exceptional,' especially in large pharma and CDMOs, with new products driving penetration. SVP & CFO Amol Chaubal reiterated that the guidance conservatively assumes 5% instrument growth, which does not reflect current business momentum. Regarding China, Dr. Batra pointed to sustainable trends like CDMO activity and battery testing, explaining the conservative outlook is simply to avoid extrapolating from just two strong data points.

Daniel Brennan of TD Cowen asked if pharma customers were accelerating orders ahead of potential tariffs and inquired about performance in the smaller discovery and development segments of the portfolio.

Answer

CEO Udit Batra reiterated that there was 'no change at all' in customer behavior and no evidence of order pull-forwards, with growth being driven by the fundamental instrument replacement cycle in downstream applications. He confirmed that the smaller upstream segments, like drug discovery and pharma research, continue to experience pressure.

Daniel Brennan asked for confirmation of the ~4% instrument growth assumption for 2025, noting it might be conservative, and how this fits into the long-term CAGR normalization trend after a down cycle.

Answer

President and CEO Dr. Udit Batra confirmed that instrument growth of 4-4.5% is needed to hit the midpoint of the full-year guide. He acknowledged that while signs point to a stronger recovery (typically 2-3% above the 5% long-term average), the guidance reflects initial prudence for the start of the year. SVP and CFO Amol Chaubal added that the recovery ramp may be less steep but longer in duration.

Daniel Brennan asked for specifics on China's instrument growth in Q3, the implied guidance for China in Q4, and whether the 2025 stimulus opportunity could be sized. He also requested the current size and growth contribution of the PFAS and GLP-1 businesses.

Answer

CFO Amol Chaubal reported that China sales declined 5% in Q3, with instruments down high-single digits. He guided to a return to low-to-mid-single-digit growth for China in Q4. He noted it was too early to size the 2025 stimulus impact. Chaubal reiterated that both PFAS and GLP-1s are expected to contribute 30-40 basis points of accretive growth annually, with potential upside as PFAS testing expands into new applications like food and consumer products.

Daniel Brennan from TD Cowen asked for color on the observed weakness in the mid-throughput instrument market and for an update on the assumptions for the U.S. academic market within the full-year guidance.

Answer

CEO Jacob Thaysen explained that the mid-throughput market, which is heavily tied to project-based research, is experiencing longer purchasing decision cycles due to budget conservatism. He also noted that some demand is shifting to service providers (high-throughput) or being captured by the successful low-end MiSeq i100. CFO Ankur Dhingra confirmed that the full-year guidance assumption for the U.S. academic market remains unchanged, projecting a 15% decline for the year.

Daniel Brennan questioned the sequencing volume growth, noting a potential deceleration from the prior quarter's >30% rate, and asked about the volume and pull-through assumptions for the NovaSeq X transition in 2025.

Answer

CEO Jacob Thaysen clarified that while Q4 volume growth was strong, the specific percentage is indicative, and the main message is that the transition to NovaSeq X is driving significant volume. He reiterated a long-term volume growth expectation in the mid-20% range. CFO Ankur Dhingra added that 2024 pull-through was strong and that detailed 2025 assumptions were provided in the presentation slides.

Daniel Brennan requested a breakdown of NGS consumable revenue growth between research and clinical customers, more color on the mid-throughput instrument outlook, and asked if NovaSeq X placements are likely to be down in 2025.

Answer

CFO Ankur Dhingra stated that both research and clinical consumables grew nicely, with total consumables up 7%, but did not provide a specific breakdown. CEO Jacob Thaysen declined to provide a 2025 forecast for NovaSeq X placements or specific mid-throughput placement numbers, stating a full-year update would come at a later date.

Daniel Brennan asked for clarification on the market's reaction to the new proteoform manuscript, the pipeline for collaborations, and the potential revenue timeline over the next 18 months. He also inquired about the expected publication journal and the long-term market size for the proteoform product.

Answer

Co-Founder and Chief Scientist Parag Mallick explained that researchers at the AAIC conference showed strong interest, recognizing the limitations of current biomarkers and the need for proteoform-level analysis. CEO Sujal Patel differentiated the go-to-market strategies, noting the broad-scale proteome product has a clearer path to revenue starting in 2026, while the proteoform product requires more market development and will see a slower ramp. Patel projected the proteoform opportunity could become a multi-hundred-million-dollar business over 5-7 years but expects minimal revenue in the near term. Parag Mallick added that the manuscript has been submitted for peer review to high-impact journals.

Daniel Brennan of TD Cowen inquired about the market's reaction to the recent manuscript, asking for reconciliation between reports of a "strong reaction" and the stated need to build awareness for the novel proteoform technology. He also asked about the pipeline for early collaborations, the potential revenue timeline over the next 18 months, and the expected publication details and market size for the tau proteoform product.

Answer

Co-Founder and Chief Scientist Parag Mallick described significant interest from the Alzheimer's research community at the AAIC conference, who recognize the limitations of current biomarkers and the critical need for proteoform analysis. CEO Sujal Patel clarified the distinct go-to-market strategies, noting that broad-scale proteomics has an established market, while the proteoform offering requires market development. He stated the current focus is on non-revenue collaborations to build evidence, with small revenues potentially starting next year and a more significant ramp for the broad-scale platform in 2027. Patel estimated the proteoform opportunity could become a multi-hundred-million-dollar business over the next five to seven years.

Daniel Brennan of TD Cowen requested a review of key milestones and timing for 2025-2026 and asked how Nautilus's tau platform performance compares to other emerging technologies.

Answer

CEO Sujal Patel outlined a dual-modality timeline: for the tau proteoform platform, key 2025 milestones include providing researcher access and signing a partnership in the first half. For the broad-scale platform, the key milestone is decoding a significant number of proteins from cell lysate, with interim updates on predefined mixtures. Parag Mallick, Chief Scientist, addressed the competitive question by stating their platform is unique in its ability to measure proteoforms at high throughput, highlighting a dynamic range of over three orders of magnitude and CVs below 20%.

Daniel Brennan of TD Cowen asked for clarity on the timeline and technical hurdles for achieving the milestone of decoding 500-2,000 proteins. He also followed up on probe attachment issues and questioned the confidence in the late 2025 commercial launch timeline.

Answer

CEO Sujal Patel was transparent that the company is behind on its internal goal for the broad-scale milestone and could not commit to achieving it by U.S. HUPO in February 2025. The key hurdle remains improving the yield of platform-ready probes through enhancements to labeling chemistry. Regarding the launch, Patel reiterated that the company continues to plan for late 2025, viewing it as an achievable target. He stressed that the team is managing spending tightly to ensure sufficient resources are available to complete development, even if delays occur.

Daniel Brennan of TD Cowen sought more detail on Guardant360's growth drivers, asking whether it stemmed from market penetration or share gains and how the new 'smart liquid biopsy' features are resonating with oncologists versus hospital administrators.

Answer

Chairman & Co-CEO Helmy Eltoukhy described the growth as broad-based, coming from both new oncologist adoption and deeper penetration within existing accounts, leading to market expansion and significant share gains. He emphasized that the new smart liquid biopsy features resonate directly and strongly with oncologists at both academic and community levels, as they provide clinically actionable insights not previously possible.

Daniel Brennan sought confirmation on Reveal's realized price and asked for more color on its Q1 performance in the surveillance setting. He also inquired about field observations for the Shield launch, including any surprises and physician adoption dynamics.

Answer

CFO Mike Bell confirmed the Reveal CRC ASP is now over $600, making it gross margin positive. Co-CEO Helmy Eltoukhy added that Reveal's growth accelerated in Q1 and it's expected to remain their fastest-growing oncology product. Co-CEO AmirAli Talasaz reported positive feedback and strong ordering depth for Shield, noting that while integrating a blood draw takes effort, the launch is proceeding better than expected in its early stages.

Daniel Brennan requested more detail on the assumptions for Guardant Reveal in 2025, specifically regarding the volume impact from the new surveillance coverage and the expected timelines for reimbursement decisions in breast cancer and therapy monitoring.

Answer

Co-CEO Helmy Eltoukhy stated that data for breast and monitoring indications were submitted for publication, with potential for Medicare submission in the second half of 2025. CFO Mike Bell added that while Reveal volumes are expected to accelerate, the ramp will be back-end loaded as the sales force has just begun its focused push on CRC surveillance.

Daniel Brennan asked for details on Guardant Reveal, including its revenue contribution in Q3, the status of the COSMOS submission with MolDX, and more color on the upcoming breast cancer publication and its potential for a subsequent MolDX filing.

Answer

CFO Michael Bell stated that while Reveal's specific contribution isn't broken out, it was the second-largest driver of sequential growth after Guardant360. Co-CEO Helmy Eltoukhy added that the MolDX review for CRC surveillance is progressing well with hopes for a decision early next year. He also confirmed the breast cancer data is expected to be submitted for publication soon, which could support reimbursement efforts for that indication next year.

Daniel Brennan of TD Cowen asked for framing on the non-clinical business outlook for the second half to gauge risk, an update on PANTRACER reimbursement and EAP learnings, and a summary of the potential outcomes for the MRD strategy.

Answer

CFO Jeff Sherman projected second-half pharma performance to be similar to the first half. CEO Tony Zook stated they are confident in the reimbursement path for PANTRACER and that EAP learnings led to a better product with a low QNS rate and faster turnaround. For MRD, Zook outlined a multi-pronged strategy: piloting the Adaptive partnership, preparing for a potential RADAR launch post-trial (which is upside to the plan), and investing in next-gen MRD for the long term.

Daniel Brennan of TD Cowen requested a more detailed outlook for the non-clinical business, an update on PANTRACER reimbursement, and a summary of the potential outcomes for the company's MRD strategy in the second half of 2025.

Answer

CFO Jeff Sherman projected the non-clinical business would perform similarly in H2 as in H1. CEO Tony Zook expressed confidence in the reimbursement path for PANTRACER. Zook also detailed the multi-pronged MRD strategy, including the Adaptive partnership pilot, the upcoming RADAR litigation (which represents pure upside), and continued investment in a next-generation platform.

Daniel Brennan of TD Cowen asked for clarification on the pharma business headwinds and the full-year guidance, including visibility for the rest of the year. He also questioned the Pathline acquisition's contribution to the Q2 guide versus the core business and any potential headwinds for Q2 clinical numbers.

Answer

CFO Jeff Sherman clarified that the pharma business is expected to see a decline similar to the previous year, around $7 million, which will be offset by clinical revenue growth. He explained the updated guidance reflects the Pathline acquisition, which is expected to contribute $3-4 million in Q2. Sherman noted that Q2 presents a tougher year-over-year comparison, similar to Q1, and that integrating the new acquisition will take time to ramp up.

Daniel Brennan requested more detail on the weakness in the Advanced Diagnostics (Pharma) business and asked for commentary on the growth trajectory for the sequencing business versus the core business in 2025.

Answer

CFO Jeff Sherman and CEO Christopher Smith attributed the Q4 Pharma weakness to the absence of a typical year-end budget flush but noted activity is picking up for 2025, with modest growth expected. Smith stated that while the core modalities market grows 3-4% and NGS grows 15-20%, NeoGenomics' strategy is to outpace both markets by taking share, which is a key performance indicator.

Daniel Brennan inquired about the key drivers for volume growth in the second half of the year, particularly from the NICU and new indications, and asked for clarification on pricing dynamics and the potential for early volume from general pediatricians.

Answer

CEO Katherine Stueland noted that while core indications drove Q2 volume, new indications like cerebral palsy and pediatric immunology will increasingly contribute in the second half. She expects NICU volume to ramp up in Q4 following Epic integrations. CFO Kevin Feeley explained the strong Q2 pricing is durable, but guidance allows for conservatism as new indications are introduced. Katherine Stueland added that volume from general pediatricians is expected to be minimal in 2025.

Daniel Brennan of TD Cowen asked for details on the volume growth drivers for the second half of the year, the sustainability of the high Q2 ASP, and the potential for near-term volume from early-adopter pediatricians.

Answer

CEO Katherine Stueland noted that H2 volume growth will be bolstered by new indications like cerebral palsy, with NICU contributions from Epic integrations ramping up more significantly in Q4. CFO Kevin Feeley stated the Q2 ASP of over $3,700 is a durable reflection of collection improvements, though the guide allows for moderation as new indications are introduced. Stueland clarified that any volume contribution from general pediatricians would be minimal in 2025.

Daniel Brennan inquired about the visibility for the second-half NICU acceleration, the pricing outlook for exome/genome tests, April volume trends, and the revenue timeline for newborn screening and pharma partnerships.

Answer

CEO Katherine Stueland confirmed the Epic Aura integration is on track with a strong client pipeline for the NICU ramp. CFO Kevin Feeley clarified the Q1 reimbursement rate of approximately $3,400 is a new floor, supported by recurring true-ups from improved collections, not one-time events. He noted April volumes continued the strong momentum from March. Stueland projected newborn screening revenue would likely become a factor in the 2027 timeframe, while pharma partnerships are in the 'early innings'.

Daniel Brennan asked for clarification on the 2025 guidance, specifically the implied pricing assumption for exome and genome tests, the potential for operating expense leverage, and the expected contribution from new growth opportunities like the NICU market.

Answer

CFO Kevin Feeley explained that while the Q4 average reimbursement rate of $3,500 was strong, they consider rates stable with room for improvement as denial rates are still high. He noted that OpEx will increase due to investments like the Epic integration but committed to maintaining quarterly and full-year profitability. Feeley also clarified that new opportunities, including NICU expansion and new indications like cerebral palsy and hearing loss, are expected to ramp in the second half of 2025.

Daniel Brennan of TD Cowen asked for details on the Q4 guidance, specifically the volume and price assumptions for exomes and genomes, and inquired about the drivers behind the strong volume growth, seeking a breakdown between outpatient and inpatient settings. He also asked for clarification on the impact of recent CMS guidance regarding Medicaid coverage.

Answer

CFO Kevin Feeley explained that the Q4 guidance reflects typical seasonal strength but leaves room for potential weather impacts and strategic decisions on the non-exome portfolio. He clarified that the CMS guidance is a reinforcement of existing policy, not a new enforcement mechanism. CEO Katherine Stueland added that volume growth is strong across both new and existing outpatient accounts, with the NICU setting also showing promising growth due to recent product improvements, which positions them well for 2025.

Daniel Brennan asked for more detail on the Life Sciences segment's performance, specifically regarding reagents versus instruments, and inquired about the outlook for the Reproductive Health business, including the impact of the Genomics England contract.

Answer

CEO Prahlad Singh highlighted that Life Sciences reagents have grown for five consecutive quarters, showing stability in the pharma/biotech market, though capital equipment remains weak. CFO Max Krakowiak projected the Reproductive Health business would see high-single-digit growth in Q4, driven by the Genomics England contract ramp-up.

Daniel Brennan of TD Cowen asked for the outlook for China for the remainder of the year, including any perceived impact from political tensions, and requested more detail on the guidance changes, specifically the assumptions for U.S. academic markets and the offsetting growth from reproductive health partnerships.

Answer

CEO Prahlad Singh explained that the Diagnostics business in China is largely localized or sourced from Europe, mitigating direct U.S.-China tension impacts. CFO Maxwell Krakowiak projected positive low single-digit growth for China for the full year, with a slight decline in Life Sciences offset by mid-single-digit growth in Diagnostics. Krakowiak noted the 100 bps headwind from U.S. academic softness is being offset equally by the software business and reproductive health, highlighting the Genomics England partnership.

Daniel Brennan asked for details on the Reproductive Health business, including the drivers of its strong Q4 finish and the rationale for its low single-digit growth outlook in 2025. He also pressed for clarity on whether the cautious guidance stems from actual customer behavior or management's own interpretation of macro risks.

Answer

CFO Max Krakowiak attributed the strong Q4 in Reproductive Health to its newborn screening business, which finished the year strongly. He stated the low single-digit growth outlook for 2025 is in line with the company's long-range plan. CEO Prahlad Singh clarified that the cautious guidance is not based on hearing about spending pauses from customers but is a prudent measure by management given the general uncertainty in the environment.

Daniel Brennan questioned the math behind the Q4 guidance reduction, suggesting the instrument weakness alone didn't seem to account for the full change. He also asked about potential impacts from the U.S. election on China relations and tariffs.

Answer

CFO Maxwell Krakowiak clarified that the guidance change was driven by revised assumptions for both Life Sciences instruments and the Applied Genomics business. CEO Prahlad Singh declined to speculate on election outcomes but stressed that the company's 'in China, for China' strategy is designed to succeed through various political cycles.

Daniel Brennan requested clarification on the bioprocess book-to-bill ratio, noting a potential change in language from Q1 to Q2. He also asked about the outlook for Cepheid's non-COVID business and what is assumed in the 2025 guidance.

Answer

President & CEO Rainer Blair stated that bioprocessing order trends are 'very comparable' to prior quarters and that the book-to-bill is 'around one,' attributing any perceived difference to the lumpiness of large equipment orders. For Cepheid, he noted that non-respiratory revenue grew low-double digits and is expected to continue growing in the low-to-mid teens for the full year, driven by installed base expansion and new assay adoption.

Daniel Brennan questioned the drivers of the implied second-half acceleration in the Life Sciences guidance and sought more color on the stability of the China market amid trade tensions.

Answer

EVP and CFO Matt McGrew explained that the implied full-year revenue seasonality is consistent with the prior year's split. President and CEO Rainer Blair reiterated that the China market is stable outside of the known VBP impact, supported by strong patient volumes and Danaher's 'in-region, for-region' supply chain strategy, which mitigates trade risks.

Daniel Brennan asked about the connection between strong bioprocess order growth in late 2024 and the 2025 revenue forecast. He also posed a broader question on whether upcoming pharma patent expirations and the rise of biosimilars represent a net tailwind or headwind for Danaher.

Answer

President and CEO Rainer Blair confirmed that strong orders support the 2025 guide and that the recovery is underway. He clarified that the rise of biosimilars is a clear tailwind for the bioprocessing business, as it is driven by manufacturing volume. He added that biosimilar producers often use Danaher's established inputs to ensure regulatory speed, further strengthening their position.

Daniel Brennan inquired about the slower-than-anticipated hiring of primary care sales reps, the company's confidence in its revised revenue guidance, the leadership structure for the new sales pods, the expected revenue pacing for the rest of the year, and the company's capital needs following a recent $10 million debt drawdown.

Answer

CEO Scott Hutton explained the hiring delay resulted from needing to refine the ideal candidate profile for the primary care market and familiarize that talent pool with Biodesix. He confirmed the existing leadership would oversee the new territory-based 'pod' structure. CFO Robin Cowie provided rep count targets for upcoming quarters and affirmed that the recent $10 million drawdown provides sufficient capital to reach breakeven, reinforcing confidence in achieving adjusted EBITDA positivity in Q4.

Daniel Brennan from TD Cowen inquired about the expected trajectory of sales force productivity, which is currently around $1 million per rep, and asked about the potential triggers for a significant inflection in top-line revenue growth, given the company's nascent market penetration.

Answer

Executive Scott Hutton stated that sales rep productivity has the potential to increase towards $1.5 million as the company scales and utilizes associate sales consultants. For future growth inflection points, Hutton highlighted opportunities in securing broader adoption across large integrated health systems, continued clinical data development, and the eventual inclusion of their tests in updated pulmonology guidelines, which he noted have not been revised in a decade.

Daniel Brennan asked for details on the assumptions behind the 2026 cash flow breakeven target, visibility on achieving a triple-digit price for LucentAD, the level of conservatism baked into the Accelerator guide for the second half, and early customer feedback on the Simoa ONE platform.

Answer

CFO Vandana Sriram explained that the path to 2026 cash flow breakeven is supported by increased cost synergies from the Akoya merger, now expected to be $55 million, which will offset lower revenue assumptions. She also noted the guide bakes in a 900 basis point reduction from pharma, with the majority hitting the Accelerator business. CEO Masoud Toloue justified the triple-digit price expectation for LucentAD by its nature as a 5-marker algorithmic test, comparable to other multi-marker proteomic tests. He added that customer feedback on Simoa ONE has been positive, with excitement around higher sensitivity and multiplexing capabilities.

Daniel Brennan asked for a breakdown of the Q1 revenue decline guidance, specifically the underlying assumptions for the academic customer base and the Accelerator lab. He also requested details on the Akoya transaction's closing process and sought a response to market pushback that Quanterix is overvaluing Akoya given its debt and cash burn.

Answer

CFO Vandana Sriram explained the Q1 decline is driven by a substantial reduction in the academic forecast due to decision-making paralysis and a $1.5 million headwind in the Accelerator lab from the conclusion of the Lilly collaboration, plus the delay of large pharma projects. President and CEO Masoud Toloue stated the Akoya deal is expected to close in Q2 following shareholder votes. He defended the valuation by citing precedent transactions and focusing on the long-term strategy of combining the two companies to leverage recurring revenues, achieve significant synergies, and accelerate the timeline to profitability.

Daniel Brennan from TD Cowen asked if specific use cases will emerge for the pTau-217, multi-marker, and BD-Tau assays, or if one will dominate. He also inquired about the main barrier to clinical revenue growth, such as therapy uptake or assay availability.

Answer

President and CEO Masoud Toloue highlighted three key differentiators for the Simoa platform: its ultrasensitivity providing results for all patients, the multi-marker test's ability to reduce the intermediate zone for more definitive results, and the company's continuous innovation pipeline. He identified inaccessibility to PET scans as a primary gating factor for therapy adoption, a problem which blood-based tests are positioned to solve.

Daniel Brennan asked for details on the recent ACOG bulletin, its impact on guideline inclusion, the frequency of ACOG updates, potential timing scenarios for guideline changes, and progress with Medicaid pilot programs.

Answer

President and CEO Evguenia Lindgardt explained that a recent ACOG bulletin supports tailored prenatal care based on risk stratification, which aligns with the PreTRM test's value proposition. She outlined three scenarios for guideline inclusion, ranging from a 2027-2028 update to a 3-5+ year timeline, depending on ACOG's prioritization. Lindgardt also expressed excitement about Medicaid engagement, highlighting the test's ability to cut costs without reducing benefits, and confirmed the company is still targeting 2-4 pilot programs in the next 12 months.

Sought more details on the locked assay for the blood test, including its biomarker composition and confidence in its performance compared to prior data.

Answer

The company expects some performance degradation when moving from a smaller study to a large prospective trial. Specific details of the test's composition will be shared upon publication. They feel good about the test's performance based on three additional studies used to lock the algorithm and reiterate that their multi-omic platform is differentiated by both performance and cost.

Daniel Brennan of TD Cowen inquired if the company anticipates a volume lift from the superior Cologuard Plus test, beyond the price benefit, and asked for any early field intelligence on Cologuard's profile versus competitive blood tests.

Answer

CEO Kevin Conroy affirmed that they expect a volume lift from Cologuard Plus due to its high performance (95% sensitivity, 94% specificity) and the excitement it's generating among providers. He emphasized the "Cologuard first" message and the test's ability to find more cancers while reducing unnecessary colonoscopies. The competitive question was deferred.

Daniel Brennan inquired about the potential for a volume lift from the clinically superior Cologuard Plus test, beyond its price benefit, and asked for any early feedback from the field regarding its competitive positioning.

Answer

CEO Kevin Conroy affirmed that they expect a volume lift from Cologuard Plus due to its high performance (95% sensitivity, 94% specificity), which is generating significant excitement among the sales force and customers. He emphasized the "Cologuard first" message and the test's ability to find more cancers and reduce unnecessary colonoscopies, thereby saving costs. The competitive question was deferred.

Daniel Brennan from Cowen asked for details on the Cologuard Plus pricing strategy, the timeline for ADLT status, which patient volumes it will apply to, and how the company will manage commercial payers and potentially running two different tests.

Answer

CEO Kevin Conroy detailed that Cologuard Plus sets a new performance standard with 95% sensitivity and 94% specificity. He outlined two pricing paths: the CDLT process or the slightly longer ADLT path, which could yield a higher initial price. The transition to Cologuard Plus will be phased, starting with Medicare patients and then expanding to commercial payers over 12-24 months, with the test's lower cost basis also being a key benefit.

Focused on Cologuard Plus (2.0), asking about the pricing strategy, the expected price via the ADLT path, which patient populations it will apply to initially, and how the company will manage commercial payers and the logistics of running two different tests.

Answer

Management explained Cologuard Plus has superior performance (95% sensitivity, 94% specificity). They will pursue a price increase via the CDLT or ADLT path, with the latter potentially yielding a higher initial price. The transition will take 12-24 months, starting with Medicare patients and then expanding to commercial payers. The company's systems can direct the correct test to the patient based on their coverage.

Daniel Brennan from Cowen asked about the pricing strategy for Cologuard Plus (2.0), the plan for seeking ADLT status, the percentage of volume it would initially apply to, and the strategy for managing commercial payers and the potential of running two different tests.

Answer

CEO Kevin Conroy explained that Cologuard Plus sets a new performance standard with 95% sensitivity and 94% specificity. He stated the company is engaging with CMS on the CDLT process but will pursue the ADLT path if necessary, which is a slightly longer route but could start with a higher price. The transition would begin with Medicare patients and then expand to commercial and Medicaid over 12-24 months, with the system ensuring patients receive the test for which they have coverage.

Daniel Brennan requested quantification of the care gap opportunity in the second half, asked if sales force expansion was baked into guidance, and sought clarity on the blood test data release timeline. He also asked for the rationale behind the 1.25x Medicare crosswalk request for Cologuard Plus.

Answer

CFO Aaron Bloomer reiterated that care gap revenue would see a sequential step-up in Q3 and Q4 but did not quantify it. He noted the cost of new reps hired in May would be fully reflected in Q3/Q4, with revenue impact expected later. CEO Kevin Conroy stated the blood test's algorithm-setting study data would be presented at a conference in the fall, ahead of the pivotal data. Regarding the Cologuard Plus price, he declined to detail the complex Medicare process but emphasized that any price increase is predicated on delivering increased value.

Daniel Brennan from TD Cowen inquired about the earn-out payment obligations to Exact Sciences that are factored into the 2025 financial expectations and the potential timing of the first payment.

Answer

CEO Michael McGarrity clarified that the earn-out payments to Exact Sciences are scheduled for 2025, 2026, and 2027, with payments likely occurring in the second quarter of each year. He affirmed that this obligation is fully incorporated into the company's financial plan and will be met using the debt facility and operating cash flow.

Daniel Brennan sought further clarification on the NIH funding impact, asking for the company's direct NIH exposure as a percentage of revenue and the magnitude of the headwind assumed in the 2025 guidance.

Answer

President and CEO Christian Henry stated that historically, direct NIH revenue is roughly 20% of total revenue. However, he explained that quantifying the exact impact in the guidance is complex and is being evaluated on a deal-by-deal and institution-by-institution basis. He emphasized that the company took a holistic view of its sales funnel across all regions to develop what they believe is responsible guidance, rather than applying a simple percentage reduction.

Daniel Brennan of TD Cowen questioned the Q4 outlook, specifically on consumable growth, and sought more color on the "growth" expectation for 2025. He also asked about the path to cash flow breakeven, focusing on gross margin drivers and managing OpEx reductions.

Answer

CEO Christian Henry clarified that he expects Q4 consumables to be sequentially up, driven by strong utilization in Europe. While declining to give specific 2025 growth percentages, he expressed confidence in growth from the new product cycle and an increasing installed base. On profitability, Henry highlighted gross margin expansion from Revio consumable cost reductions and economies of scale, along with continued OpEx discipline.

Daniel Brennan inquired about the evolution of single-cell pricing, the price reduction assumptions baked into the 2025 forecast, and the current price gap between 10x Genomics and its competitors.

Answer

CEO Serge Saxonov explained that the company's primary goal is to grow the single-cell market by increasing volumes, which is being enabled by new products with lower price points for cells, samples, and experiments. He stated that the 2025 forecast anticipates a transition to this new, lower-priced product lineup, which will naturally drive down the average selling price per reaction while increasing overall reaction volume.

Daniel Brennan requested a high-level view of the impact of pricing investments in single-cell, asking how much the average price per reaction has decreased over the past year. He also inquired about 10x's current price position versus competitors and whether the company is now growing in line with, or above, the overall market.

Answer

CEO Serge Saxonov explained that pricing is complex with multiple dimensions (per sample, per cell). He highlighted new products like GEM-X Flex and Universal Multiplex as key steps to address price barriers. While not giving a specific average price drop, he stated that 10x is setting new standards on price to complement its technology leadership. He noted that while competition has become more aggressive, customers continue to choose 10x for its superior product quality and workflow.

Asked for clarification on the $1.2M adjustment's effect on future prior-period collections, the most exciting aspects of the upcoming ACR abstracts, the potential ASP increase from new markers, and the company's capital runway to cash flow positivity.

Answer

The $1.2M adjustment is separate from prior-period collections, which are naturally tapering as expected. The new seronegative RA markers are a key highlight from the ACR abstracts, addressing a significant clinical need. The company is adding 5 new markers to its panel. Management confirmed they have sufficient capital to reach cash flow positivity by the end of 2025 without further financing, though debt maturity will need to be addressed.

Daniel Brennan asked for more context on CFO Jeff Black's departure, sought details on the revised guidance to build investor confidence, and inquired about trends for instruments and consumables amid the challenging CapEx environment.

Answer

CFO Jeff Black explained his departure was a personal decision for an opportunity closer to his family and in an industry he knows well, expressing continued belief in Standard BioTools' vision. CEO Michael Egholm stated the new guidance reflects current visibility in a constrained pharma spending environment and does not assume a market recovery. He noted that while instrument and consumable revenue faced headwinds, they are leaning into new growth vectors like 'Omics as a service' to drive future growth.