Mark Massaro

Mark Massaro asked about the company's expectation for positive GAAP net income to continue into Q4 and 2026, considering planned investments. He also inquired about the timing for Medicare reimbursement of the second oncology test and the conceptual strategic investment plan for oncology in 2026.

Answer

Oguzhan Atay, Co-founder, CEO, and Board Chair, stated that while exact 2026 guidance would be provided at the JPMorgan Healthcare Conference, the company aims to continue profitable growth. For oncology, he noted significant investment in clinical studies for Northstar Response coverage, expecting the first Medicare coverage for Northstar Response before the end of 2026, based on MolDX discussions.

Mark Massaro inquired about BillionToOne's outlook for positive GAAP net income in 2026, considering planned investments, and sought an update on the timing for Medicare reimbursement for the Northstar Select Response oncology test, along with strategic investment plans for oncology in 2026.

Answer

Oguzhan Atay, Co-founder and CEO, stated that while exact 2026 guidance would be provided at the JPMorgan Healthcare Conference, the company aims to continue profitable growth. He also indicated that the first Medicare coverage for Northstar Select Response is expected before the end of 2026, following significant clinical study investments.

Mark Massaro inquired about Tempus AI's go-to-market strategy for MRD testing in the clinic, including how the sales team is trained and the planned pace of rollout once reimbursement is secured.

Answer

Eric Lefkofsky (CEO, Tempus AI) stated the company aims for sustained long-term growth (25% for three years) rather than artificially boosting rates with immediate MRD reimbursement. He highlighted their strong portfolio of naive and informed MRD assays, ongoing studies, and a well-trained subset of their salesforce, indicating a gradual, aggressive rollout as reimbursement makes it affordable.

Mark Massaro inquired about Tempus AI's go-to-market strategy for MRD testing in the clinical setting, including the preparedness of their sales team and the expected pace of rollout once reimbursement is secured, considering the competitive landscape.

Answer

CEO Eric Lefkofsky stated that Tempus AI aims for sustained long-term unit growth of approximately 25% for the next three years, rather than an immediate, artificial surge post-MRD reimbursement. He highlighted their strong portfolio of naive and informed MRD products across various cancer types, with ongoing studies for more sensitive assays. Tempus AI plans to leverage its large sales force, including a specialized MRD-trained subset, to gradually scale adoption as reimbursement improves affordability, contributing to the projected growth.

Mark Massaro of BTIG inquired about the demand and competitive positioning of the xF liquid biopsy franchise, particularly regarding multiple time point testing. He also asked for the drivers behind the strong growth in the Ambri hereditary testing business.

Answer

CEO Eric Lefkofsky stated that Tempus's liquid biopsy franchise has grown significantly faster than the market. While acknowledging the emerging treatment response monitoring space, he noted that volumes are gated until reimbursement is secured. For Ambri, he attributed the strong performance roughly 'fifty-fifty' to capturing market share from competitors and the strength of Ambri's best-in-class platform, which is increasingly seen as the 'gold standard' by large systems.

Mark Massaro asked how Tempus can leverage its data and pharma collaborations to gain an advantage in the MRD space for both its tumor-naive and tumor-informed offerings. He also asked if any specific tests in the broader portfolio were gaining market share.

Answer

CEO Eric Lefkofsky explained that Tempus's primary differentiator is its AI and technology, which can derive unique insights from massive data sets. He believes this will allow Tempus to create intelligent, personalized diagnostics for MRD that can predict recurrence with greater granularity and guide intervention. CFO Jim Rogers added that while they saw growth across the entire portfolio, MRD volumes are being intentionally metered due to the current lack of reimbursement.

Mark Massaro of BTIG asked about GeneDx's plans to double its sales force, the potential for near-term clinical revenue from newborn screening initiatives, and the rationale and implications of the FDA breakthrough device designation for ExomeDx and GenomeDx tests.

Answer

Katherine Stueland, CEO and President, detailed plans to onboard Regional Sales Directors and teams over several quarters to accelerate adoption. She, along with Kevin Feeley, CFO, clarified that while newborn screening initiatives are progressing, material revenue is not expected in 2026. Katherine and Bryan Dechairo, COO, explained that FDA breakthrough designation validates the test's uniqueness, expedites regulatory review, and leverages existing data without new clinical trials, aiming to accelerate market adoption.

Mark Massaro inquired about GeneDx's plan to double its sales force, including the speed of onboarding and the projected team size in two years. He also asked for an update on the newborn screening initiatives (Florida Sunshine Genetics Network, NIH Beacon Program, Guardian study), specifically whether they are expected to drive clinical testing revenue in early 2026 or primarily serve as precursor work. Additionally, Massaro questioned the FDA path, timing for approval, potential need for more clinical trials, and the rationale behind pursuing FDA approval, considering its implications for clinicians, pricing, and ADLT.

Answer

Katherine Stueland, CEO and President, stated that hiring for Regional Sales Directors has begun, with plans to opportunistically double the sales force over several quarters to accelerate adoption, aiming to push the 18-24 month timeline. Kevin Feeley, CFO, clarified that newborn screening is not anticipated to be a material revenue driver in 2026, with potential contributions starting in 2027 and beyond. Bryan Dechairo, COO, explained that the FDA breakthrough designation validates GeneDx's unique test and Infinity database, signaling an expedited regulatory review. He emphasized that the FDA process leverages existing data and will not limit access or reimbursement, but rather provide a stamp of approval valued by pediatricians.

Mark Massaro asked for an update on the current payor denial rate, the rationale for raising revenue guidance while holding volume guidance, and how the Fabric Genomics acquisition is tracking against expectations.

Answer

CFO Kevin Feeley stated the pay rate has improved to the mid-50s and explained the guidance update reflects confidence in durable reimbursement rates while reaffirming the 30%+ volume growth target. CEO Katherine Stueland reported that the Fabric Genomics integration is progressing well, is on track with its financial plan, and is key to future international and newborn screening strategies.

Mark Massaro from BTIG inquired about the current payer denial rate, the rationale for raising the revenue guide while maintaining the volume guide for Exome & Genome, and the progress of the Fabric Genomics acquisition.

Answer

CFO Kevin Feeley reported that the paid rate has improved to the mid-50s. He explained the guidance update reflects high confidence in the durability of improved reimbursement rates, justifying the revenue raise, while reaffirming the volume target. CEO Katherine Stueland stated the Fabric Genomics integration is on track, with teams collaborating on data porting and platform integration for future growth.

Mark Massaro asked about the Fabric Genomics acquisition, including its pricing model, margin profile, and cash burn. He also questioned if the new ultraRapid test was factored into guidance and requested quantification of Q1's weather impact.

Answer

CEO Katherine Stueland highlighted Fabric's strategic value, while CFO Kevin Feeley detailed its economics: a high-margin (~70%), recurring software revenue model with a current burn of a few million dollars per quarter, expecting accretion in 2026. Feeley confirmed the ultraRapid launch was included in the original guidance for a back-half ramp, with potential upside from a richer product mix. He estimated the combined weather and calendar impact was worth a few days of volume.

Mark Massaro asked for a comparison of the new 48-hour ultraRapid genome turnaround time to existing products, the potential for higher reimbursement, the expected phasing of revenue in 2025, and the company's strategy for the adult market.

Answer

CEO Katherine Stueland noted the dramatic reduction from 6-month turnaround times years ago to the current 5-day and 48-hour offerings, confirming the ultraRapid test will have a higher price point for institutional pay in the NICU. CFO Kevin Feeley added that Q1 revenue should be slightly above Q4 despite seasonality, with a larger ramp in the second half driven by the NICU and new indications. Katherine Stueland described the adult market as a massive, untapped opportunity in 'inning zero,' highlighting future potential in neurodegenerative and cardiac conditions.

Mark Massaro of BTIG asked about the Guardian newborn screening study published in JAMA, questioning who funded it and its impact on cash burn. He also inquired about the timeline for a commercial launch, the payer strategy for newborn screening, and the company's plans for adult exome/genome testing.

Answer

CFO Kevin Feeley clarified that the Guardian study involves in-kind contributions from all partners, with no cost to families. CEO Katherine Stueland projected a 5+ year timeline for meaningful commercialization and reimbursement of newborn screening, emphasizing the need to build a health economic argument. For adult testing, she stated the focus is on symptomatic conditions like neurodegenerative diseases, often tied to biopharma drug development, rather than broad screening at this time.

Mark Massaro from BTIG asked about the significance of the multi-jurisdictional Medicare contractor meeting, the impact of medical guideline inclusion on coverage likelihood, the current percentage of Medicare business, and the expected timeline for a draft and final Local Coverage Determination (LCD) following the CAC meeting.

Answer

Lishan Aklog, Chairman and CEO, explained that the coordinated meeting is a very positive, late-stage indicator. He emphasized that inclusion in NCCN and GI society guidelines provides a strong foundation for clinical utility. Aklog noted that Medicare patients are currently 10-15% of test volume, a figure they plan to increase significantly post-coverage by reallocating resources and using digital targeting. He clarified the post-CAC process involves a draft LCD, a comment period, and then a final LCD, expressing hope for a relatively quick turnaround to the draft stage.

Mark Massaro from BTIG asked about the significance of the multi-jurisdictional Medicare contractor (CAC) meeting, the impact of medical guideline inclusion on coverage likelihood, the current percentage of Medicare business, and the expected timeline for a draft and final Local Coverage Determination (LCD) following the meeting.

Answer

Chairman & CEO Lishan Aklog explained that the coordinated CAC meeting is a very positive, late-stage indicator. He noted that inclusion in major GI society and NCCN guidelines provides a fundamental vote of confidence in EsoGuard's clinical utility. Dr. Aklog stated that Medicare currently represents 10-15% of test volume, and the company is now taking steps to target that population. He outlined the post-CAC process as draft LCD publication, followed by a comment period, and then a final LCD, expressing hope for a draft to be published before the end of 2025.

Mark Massaro of BTIG inquired about the timeline for accelerating the commercial strategy post-Medicare approval, the specific nature of the expected MolDx decision, and the practical impact of the new NCCN guideline inclusion on payer discussions.

Answer

CEO Dr. Lishan Aklog stated the company would "put our foot to the metal" upon Medicare approval by scaling sales resources and leveraging the one-year claims backlog. He clarified they expect a draft LCD from MolDx in H1 2025 that flips non-coverage to coverage, viewing subsequent steps as a formality. Dr. Aklog also affirmed that NCCN guideline inclusion is a powerful tool, as commercial payers frequently ask about NCCN status during coverage negotiations.

Mark Massaro asked for clarification on the publication timing for the EsoGuard BE-1 study, the subsequent submission to MolDx, the robustness of the Check Your Food Tube (CYFT) event pipeline for Q4, and the potential pricing structure for the concierge medicine channel.

Answer

CEO Dr. Lishan Aklog confirmed the BE-1 study's acceptance for publication is a formality and the MolDx submission would occur in the "coming days." CFO Dennis McGrath described the CYFT pipeline as "fairly robust" but did not provide specific event numbers, citing holiday seasonality. Dr. Aklog stated that for concierge medicine, pricing negotiations start at their $2,500 list price, emphasizing the opportunity for guaranteed payment.

Mark Massaro of BTIG inquired about Lucid's Q1 test volumes, the outlook for Q2, the status of dialogue with Palmetto GBA regarding the Medicare coverage decision, and the next steps for expanding EsoGuard's use to asymptomatic patients following the NCI-sponsored study.

Answer

Dr. Lishan Aklog, Chairman and CEO, clarified that Q1 volumes were strong and unaffected by weather, though the mix has shifted toward more efficient, larger testing events. He stated the company is maintaining its volume targets while awaiting broader coverage. Regarding Medicare, Dr. Aklog explained they submitted a request for reconsideration based on existing LCD criteria, which requires less work for MolDX, leading to their belief that a decision is imminent. He also noted that the NCI study was a successful first step, but a larger, multi-year NIH-funded study will be required to expand the indication to asymptomatic patients.

Mark Massaro from BTIG asked about the competitive environment in tissue testing, the company's capital deployment strategy regarding M&A, and sought clarification on the 170 million covered lives figure.

Answer

EVP & Vice Chairman Brian Brille highlighted a strong secular growth trend and noted Caris's proprietary AI insights create a competitive advantage. He confirmed the company's focus remains on organic growth with no appetite for M&A. SVP & CFO Luke Power clarified that the 170 million covered lives figure does apply to the higher-ASP, FDA-approved MI CancerSEQ assay.

Mark Massaro of BTIG asked about the competitive landscape for tissue testing, the company's appetite for M&A given its strong cash position, and sought clarification on the 170 million covered lives figure.

Answer

An executive (likely EVP & Vice Chairman Brian Brille) expressed a bullish outlook, citing a growing, underpenetrated market and a differentiated platform with proprietary AI insights. Management reiterated its focus on organic growth, seeing no need for M&A. SVP & CFO Luke Power confirmed the 170 million covered lives applies to the MI CancerSEQ test, with reimbursement rates approaching the Medicare level.

Mark Massaro asked about the competitive environment in tissue testing and the potential to continue taking share. He also inquired about the company's appetite for M&A given its large cash balance and sought clarification on whether the 170 million covered lives figure was for the higher-priced MyCancerSEQ CDx.

Answer

An executive stated that the market remains in the early stages of adoption, and Caris's sophisticated platform and AI insights provide a strong competitive edge. He confirmed the company's focus remains on organic growth with no appetite for M&A. Luke Power, SVP, CFO & Chief Accounting Officer, confirmed the 170 million covered lives figure applies to MyCancerSEQ and includes Medicare.

Vivienne, on behalf of Mark Massaro from BTIG, asked if the draft LCD impacts the company's Long-Range Plan, sought clarification on the assumptions for the $30 million headwind scenario for HeartCare, and requested a breakdown of kidney testing between surveillance and for-cause.

Answer

President & CEO John Hanna stated that the Long-Range Plan will not be updated until the LCD is finalized. He clarified the $30 million headwind assumes the loss of AlloMap Heart reimbursement, given its high attachment rate (upwards of 90%) with HeartCare. He declined to provide a specific split for kidney testing but confirmed a significant shift toward surveillance following policy clarifications.

An analyst on behalf of Mark Massaro at BTIG asked about additional levers for driving average selling prices (ASPs) beyond the Epic integration. They also requested clarification on the impact of severe weather and the amount of prior period collections during the quarter.

Answer

Executive Keith Kennedy outlined a multi-quarter strategy to improve revenue cycle management through cleaner claims, better verification, and a new appeals process, alongside market access efforts using the new PLA code. CFO Abhishek Jain quantified the weather impact at 500-600 tests and noted a $1.1 million write-off for aged receivables from previous quarters.

Mark Massaro of BTIG questioned the amount of prior period collections in Q4 and FY2024, its inclusion in 2025 guidance, the drivers of mid-teens volume growth, and the rationale for the revenue guidance range.

Answer

CFO Abhishek Jain clarified that Q4 included $2.2 million and FY2024 included $17 million in prior period revenue, which is not baked into 2025 guidance, representing potential upside. CEO John Hanna confirmed that increased surveillance testing is a substantial contributor to the mid-teens volume growth forecast. Jain and Hanna explained the guidance range reflects variables in volume and ASP, with upside potential from faster surveillance adoption and improved cash collections.

Mark Massaro asked if the early rebound in surveillance testing could continue into 2025 ahead of full protocol re-establishment and inquired about the expected timing and content of the final LCD for transplant testing from Palmetto GBA.

Answer

CEO John Hanna confirmed that the surveillance recovery is additive to the for-cause testing growth seen earlier in 2024. On the LCD, Hanna noted there is no specific timeline from Palmetto but expects any future draft to be updated with recent literature, like the Nature Medicine study, while the 2021 LCD remains active.

Vivian, on for Mark Massaro of BTIG, asked if the biopharma revenue shortfall was a push-out or cancellation, whether it was related to Moderna, and if the growth in NeXT Personal test volume was driven by new physicians or more tests per patient.

Answer

CEO Christopher Hall clarified that the revenue weakness was not related to the Moderna program, which is progressing as expected. Instead, project delays in the translational research sector caused the shortfall, which he characterized as push-outs, not cancellations. Hall emphasized that the MRD biopharma business remains strong, with 300-400% growth on track. He also stated that clinical test volume growth is driven by both an increase in ordering physicians (now over 600) and deeper penetration within existing accounts, facilitated by the successful Tempus partnership.

Vivian, on for Mark Massaro, asked about potential one-time items affecting the quarter, the decision not to raise full-year guidance, and the clinical need for a more sensitive MRD test in colorectal cancer (CRC).

Answer

Executive Aaron Tachibana confirmed there were no one-time items and that the Q1 beat was driven by strong biopharma performance. He maintained the $80-$90 million full-year guidance, citing a potential $3-$5 million headwind from pharma project deferrals that is offset by a strong NeXT Personal sales funnel. Executive Richard Chen addressed the CRC question, emphasizing the need for high sensitivity in the post-surgical landmark window to inform adjuvant therapy decisions, a key differentiator for NeXT Personal.

Mark Massaro asked about the market reception of NeXT Personal's 'ultra-sensitive' feature, whether the company is intentionally throttling the commercial launch pre-reimbursement, and how the recent capital raise will affect 2025 spending plans.

Answer

CEO Christopher Hall and Chief Medical Officer Richard Chen confirmed the 'ultra-sensitive' concept is resonating well, with 30-40% of positive results falling in this range, leading to 98% physician retention. Hall acknowledged they are purposefully managing the launch pace. He also stated the company will remain in 'cash conservation mode,' with significant sales force expansion planned only after reimbursement is secured. CFO Aaron Tachibana noted that investment in clinical evidence generation will remain a priority.

Mark Massaro from BTIG asked for details on the EMR integration timeline, specifically how long it takes for an Epic site to mature and show accelerated growth. He also inquired about the phases and expected financial impact timeline of the NeoGenomics collaboration.

Answer

CCO Susan Bobulsky clarified that 'mature' Epic sites are those live for over a year, with about six currently in that category, and noted the Flatiron rollout was a single event for 113 account groups. Regarding the NeoGenomics partnership, she explained Phase 1 is a small pilot with no material volume impact expected in 2025, with a material lift anticipated in 2026-2027. CEO Chad Robins added that NeoGenomics will sell clonoSEQ as part of its COMPASS and Chart offerings.

Mark Massaro from BTIG asked about the drivers of the strong sequential clonoSEQ volume growth, the timing of MRD pharma milestones, and the strategy for payer contract negotiations relative to the Medicare rate.

Answer

Executive Susan Bobulsky attributed growth to NHL indications and EMR integrations, noting no significant weather impact. CFO Kyle Piskel stated that the MRD milestone funnel is strong, with more milestones becoming available earlier, supporting the raised guidance. CEO Chad Robins confirmed a disciplined contracting strategy, refusing rates not at or near the established Medicare rate.

Mark Massaro of BTIG sought more detail on the potential scale of the NeoGenomics partnership opportunity in 2026 and 2027, and asked about the company's success in leveraging the higher Medicare price to negotiate better rates with commercial payers.

Answer

Executive Sharon Benzeno characterized the NeoGenomics partnership as a 'win-win' that could materially impact volumes by 'mid- to high single digits' over the course of the three-year deal. CEO Chad Robins confirmed they are successfully using the new PLA code and Medicare rate to re-contract with existing commercial payers and engage uncontracted payers at higher rates.

Mark Massaro asked why the upper end of the MRD revenue guidance was not raised despite a Q3 beat, sought confirmation on the number of trials using clonoSEQ as a primary endpoint, and inquired about feedback from pharma partners on the benefits of this shift.

Answer

CFO Kyle Piskel cited an unforeseen ASP reserve charge, pharma business volatility, and prudence as reasons for not raising the guide's top end. CEO Chad Robins confirmed 10 multiple myeloma studies now use clonoSEQ as a primary endpoint. Executive Susan Bobulsky detailed that pharma partners are interested in the significant trial time reduction, potentially from 8-10 years down to 3 years.

Mark Massaro of BTIG inquired about the reimbursement outlook for the new atopic dermatitis test, the expected volume for DecisionDx-SCC during the reconsideration process, and the drivers behind the increased full-year revenue guidance.

Answer

Founder, CEO, & President Derek Maetzold indicated multiple reimbursement paths are being pursued for the atopic dermatitis test, with material revenue not expected until 2027-2029. He confirmed the SCC test will remain available, with moderating volumes. CFO Frank Stokes attributed the guidance raise to strong business drivers, while noting typical Q3/Q4 seasonal flatness for melanoma.

Mark Massaro of BTIG asked about the financial terms of the Previse acquisition, the optics of its timing, and details on Previse's historical revenue and its sponge technology's market position.

Answer

CFO Frank Stokes confirmed the Previse deal was all cash but did not disclose the value, stating its historical revenue was not material to Castle. He positioned the acquisition as a technology and pipeline opportunity. CEO Derek Maetzold stated the timing was unrelated to the SCC reimbursement situation. Frank Stokes added that Previse's sponge technology is not yet at the point of seeking Medicare coverage.

Vidyun Bais, on behalf of Mark Massaro, asked for a summary of the available pathways Castle Biosciences can use to contest the Novitas noncoverage decision for DecisionDx-SCC.

Answer

CEO Derek Maetzold outlined several avenues. These include filing a reconsideration request with Novitas, monitoring a lawsuit filed by another lab against a Novitas LCD, a potential administrative law judge challenge initiated with a patient, and pursuing a positive local coverage determination (LCD) with the MolDX program, which had previously expressed interest in the test's clinical utility data for adjuvant radiation therapy.

Mark Massaro of BTIG inquired about the drivers of Guardant360 Liquid's strong performance, asking whether the SERENO-six trial publication had a material impact in Q2 and about the potential to increase testing frequency in breast cancer.

Answer

Chairman & Co-CEO Helmy Eltoukhy stated that Guardant360's over 20% growth was primarily driven by the product-market fit of the Infinity smart liquid biopsy platform. He clarified that any impact from the SERENO-six trial was minimal in Q2, with the majority of the benefit expected post-drug approval, which could significantly expand testing opportunities.

Mark Massaro asked for a rank-ordering of the drivers behind the accelerated oncology volume growth and inquired about the components of the raised Shield screening guidance, including the implied average selling price (ASP) and Medicare mix.

Answer

Co-CEO Helmy Eltoukhy attributed the strong oncology growth primarily to the Guardant360 Smart Liquid Biopsy upgrade, followed by Reveal's momentum and the new Guardant360 Tissue product. Co-CEO AmirAli Talasaz and CFO Mike Bell explained the Shield guidance increase was driven by sales force productivity and ADLT pricing. Bell clarified the blended ASP of ~$800 for the rest of the year reflects a mix of Medicare, a conservative approach to Medicare Advantage, and zero-paying commercial plans.

Mark Massaro asked for anecdotes about field reception for the upgraded Guardant360 Liquid product and inquired about the level of interest for Shield from the non-Medicare, commercially insured population.

Answer

Co-CEO Helmy Eltoukhy reported high excitement from the sales team and strong momentum for G360 Liquid, with growth coming from deeper penetration within existing accounts. Co-CEO AmirAli Talasaz noted that prior to focusing on Medicare, the younger, commercial population represented a majority of Shield orders, confirming significant underlying demand exists.

Mark Massaro inquired about the early performance of the Shield test, seeking metrics like ordering provider numbers, and asked if the favorable Medicare pricing suggests potential upside to the 2028 target of over $500 million in revenue from one million tests.

Answer

Co-CEO AmirAli Talasaz stated that while specific Shield volumes are not yet being disclosed, initial post-launch volume is ahead of expectations with strong momentum, and the company intends to report volume and revenue in Q4. CFO Michael Bell added that the 2028 target of $500 million revenue now seems more secure, given the better-than-assumed ASP, a first-line label (vs. an assumed second-line), and a longer lead time over competitors.

Mark Massaro inquired about potential weather impacts on Q1 performance, the drivers of strong volume growth for tissue tests like Confirm and GPS, and the company's current thinking on M&A.

Answer

CEO Michael McGarrity stated that the company's strong performance overcame any potential seasonality or weather impacts and expects continued execution. He highlighted that the 41% growth in tissue tests was balanced across both Confirm and GPS, validating the synergistic strategy of the GPS acquisition. On M&A, McGarrity reiterated a disciplined but opportunistic approach, noting that while the company's commercial channel is conducive to adding new products, they remain focused on de-risking opportunities related to regulatory and reimbursement landscapes.

Vidyun Bais, on behalf of Mark Massaro at BTIG, asked about the sustainability of the GPS test's growth given its maturity, its current market penetration, and whether adjusted EBITDA positivity could be achieved as early as Q1 2025.

Answer

CEO Michael McGarrity responded that the GPS test market is only about 40% penetrated, offering significant runway for growth through both market conversion and share gains, and he does not consider the test to be mature or decelerating. He also confirmed the company is on track to achieve adjusted EBITDA positivity in the first half of 2025 (Q1 or Q2) through continued execution without operational changes.

Asked for details about the large pharma customer's interest in oncology kits, the next milestones and revenue potential for the DetermaIO pipeline, and recent feedback from large U.S. transplant centers participating in the clinical trial.

Answer

The pharma partner is interested in a kitted version of DetermaIO. The next major milestone for DetermaIO is the SWOG study data readout, hoped for by year-end. The transplant centers involved in the trial are described as 'enthusiastic,' wanting access to in-house technology for research. The company anticipates a minimum 6-month adoption period post-approval before a significant volume ramp-up at these centers.

Mark Massaro asked for clarification on the new revenue-generating program metric, specifically the economics per program, how to model its progression, and the general 'flavor' of new deals added in the quarter.

Answer

Executive Mark Dmytruk clarified that the average revenue per program is influenced by a mix shift towards a higher volume of smaller 'data point' deals. He advised that the net program count will fluctuate as programs are completed and new ones are onboarded, so linear growth should not be expected. He described the current deal mix as diverse, including large solutions deals, smaller data point deals, a few new automation deals, and a notable number of new, smaller-scale agricultural solutions deals signed in Q1.

Mark Massaro of BTIG questioned the assumptions in the Biosecurity guidance, particularly regarding risks from the new administration's approach to government contracts, and asked for the rationale behind discontinuing the 'new program' metric.

Answer

CEO Jason Kelly acknowledged uncertainty around government funding, noting that while cuts are happening now, new priorities could emerge later, potentially creating opportunities for Ginkgo's technology. CFO Mark Dmytruk explained that the 'new program' metric is being replaced by an enhanced 'revenue-generating active program' count to provide a clearer view of revenue per program.

Mark Massaro questioned if the recent low-double-digit new program additions represent a stable run rate, how Ginkgo prioritizes traditional versus new offerings, the potential for Cell Engineering growth in 2025, and if an update on downstream value is forthcoming.

Answer

CEO Jason Kelly suggested the new program count is not the best metric for progress due to high variability in deal value. CFO Mark Dmytruk stated that while new tools will add to 2025 revenue, the primary focus is achieving adjusted EBITDA breakeven, not chasing growth at the expense of cash burn. He also confirmed that an update on the downstream value share portfolio would be provided with Q4 results.

Mark Massaro questioned how the SeQure Dx acquisition expands MaxCyte's reach into the in vivo customer base and asked if the strong Q1 SPL revenue was ahead of schedule, while also probing the sustainability of the 13% growth in consumables.

Answer

CEO Maher Masoud explained that SeQure Dx provides a critical entry point to in vivo gene therapy customers using AAV and LNP delivery. CFO Douglas Swirsky clarified that the SPL revenue is lumpy and fits within their risk-adjusted annual forecast. He noted that while instruments were a low point, they are confident in the full-year guidance and expect consumables to be a driver, but declined to give specific quarterly forecasts.

Mark Massaro asked about the customer overlap between MaxCyte and SeQure Dx and the incremental market opportunity the acquisition provides. He also sought details on SeQure's monetization model and clarification on the macroeconomic assumptions embedded in the 2025 guidance.

Answer

Executive Maher Masoud explained that the SeQure Dx acquisition is transformative, expanding MaxCyte's addressable market to the entire cell and gene therapy landscape, including viral vector programs. He confirmed SeQure's current model is fee-for-service with potential for future subscription offerings. Executive Douglas Swirsky clarified the guidance assumes the current market environment persists, with significant improvement or deterioration falling outside the guided range.

Mark Massaro of BTIG asked for clarity on how the partnership with Adaptive Biotechnologies will be additive to NeoGenomics, including revenue potential, and the strategic benefit. He also inquired about the expected timeline for receiving MolDX reimbursement coverage for the PanTracer liquid biopsy test.

Answer

President & COO Warren Stone explained the Adaptive partnership is synergistic, as Adaptive will promote Neo's COMPASS test in academic centers while Neo will offer Adaptive's clonoSEQ in the community setting, driving incremental COMPASS volume. CEO Anthony Zook added that the key patient benefit is a single, less painful sample draw for both diagnosis and MRD testing. CIO Andrew Lukowiak estimated that a MolDX decision for PanTracer could come by year-end, following a standard review process of about two turns.

Mark Massaro asked how the upcoming NEO PanTracer liquid biopsy will compete on sensitivity, its publication plan, and the timeline for payer coverage. He also asked about the recovery plan for the Advanced Diagnostics business.

Answer

CCO Warren Stone and CIO Andrew Lukowiak stated PanTracer will launch in H1 2025 with expected CMS coverage and competitive sensitivity, supported by comparison studies planned for publication. For Advanced Diagnostics, CCO Warren Stone outlined a recovery plan based on a stabilizing market and a new go-to-market strategy and business model launching in January to improve focus and targeting.

On behalf of Mark Massaro of BTIG, a representative asked for the company's perspective on the competitive landscape following the acquisition of Fabric Genomics and the trend towards exome applications.

Answer

Co-Founder and CEO Jurgi Camblong commented that the acquisition of Fabric Genomics by GeneDx highlights the increasing value of data analytics and bioinformatics in the industry, reinforcing SOPHiA's strategic focus. He noted this trend aligns with the shift of value from data production to data analytics. He also confirmed that rare disorders, which utilize applications like their Enhance Exome product, represent 20% of SOPHiA's business and are seeing significant market demand.

Mark Massaro of BTIG asked about the expected volume growth and ASP trends for 2025, the conversion rate for the MSK-ACCESS and MSK-IMPACT pipeline, and the target market for the new enhanced Exome product.

Answer

Co-Founder and CEO Dr. Jurgi Camblong highlighted the record 92 new logos signed and a record 35 implementations in Q4 as drivers for future volume. President Ross Muken explained that while 2025 growth will be volume-biased, new higher-priced products like MSK-ACCESS, MSK-IMPACT, and enhanced Exomes should lift ASPs in H2 2025 and into 2026. Regarding MSK applications, Camblong noted the rapid signing of 34 ACCESS and 7 IMPACT customers since their recent launches. Muken added that revenue impact will be back-half weighted due to implementation times. On the enhanced Exome product, Camblong clarified its initial focus is on germline/inherited diseases to improve lab economics.

An analyst on behalf of Mark Massaro of BTIG asked about management's confidence in biopharma headwinds subsiding in 2025 and sought confirmation on the key drivers for the implied Q4 revenue step-up.

Answer

Co-Founder and CEO Dr. Jurgi Camblong stated that the biopharma pipeline is growing, focused on post-approval activities where SOPHiA's global network provides a key advantage. President Ross Muken explained the Q4 step-up is driven by seasonal strength, new customer onboarding (including MSK-ACCESS), and an expected sequential improvement in the biopharma business, though the wide guidance range reflects timing uncertainty for large contracts.

Mark Massaro asked about the types of strategic transactions Exagen might consider with its new credit facility, the company's conviction in the kidney disease market, and the potential impact and cadence of upcoming Administrative Law Judge (ALJ) hearings.

Answer

President and CEO John Aballi indicated that any strategic transaction would likely be in the autoimmune space, related to novel biomarker development. CFO Jeff Black added that Perceptive's approval for such a transaction would likely align with the company's and Board's diligence. Aballi expressed strong conviction in the kidney disease programs, citing a high clinical need and encouraging early data. He also explained that winning a handful of ALJ hearings can set a precedent to influence payer policy, with several more hearings scheduled in the coming months.

Mark Massaro asked about the potential shift in the total addressable market towards RA, sought clarification on the Q1 ASP reaching ~$500, and inquired about the potential to recover volume from physicians who previously had issues with documentation requirements.

Answer

John Aballi confirmed that the RA market opportunity is significantly larger and the new markers expand the test's utility. He clarified that while the incremental $90 is real, the reported Q1 ASP won't average $500 due to the mid-quarter launch and the nature of trailing 12-month calculations. He also expressed confidence in recovering lost physician volume by improving processes and leveraging the new markers' value proposition.

Mark Massaro from BTIG asked about the typical time it takes for a new clinical customer to ramp up to mature spending levels and inquired about recent pricing actions. He also sought clarity on 2025 growth expectations by segment and plans for headcount.

Answer

President and CEO Stephen Gunstream explained that new clinical customers typically take 1 to 1.5 years to ramp up spending significantly, depending on their clinical trial timelines. He confirmed an average mid-single-digit price increase was implemented at the start of the year. Gunstream clarified that the custom Biopharma segment is expected to be the fastest-growing at 15% in 2025, with headcount and operating expenses remaining generally flat.

Asked about competitive pressures, the rationale for the change in Board Chairman, the revised timeline for achieving cash flow breakeven, and whether 2025 growth relies on a market recovery.

Answer

Management stated that competition is a minor factor compared to macro funding issues. The new Chairman, Scott Mendel, was appointed for his operational expertise in tough environments, with no underlying philosophical disagreements. Cash flow breakeven is now targeted for mid-2025. The 2025 growth plan is based on internal execution, particularly in reagents and services, and does not assume a market recovery.

Inquired about the expected revenue pacing for the rest of the year, the potential timing for a companion diagnostic approval with Acrovon, and the long-term gross margin benefits from in-house reagent manufacturing.

Answer

The company expects a more back-half weighted year due to the Q1 miss and deferred revenue, with a return to historical growth rates. They could not provide specific timing on the Acrovon CDx approval, deferring to their partner. They confirmed reagent availability issues are resolved and expect meaningful long-term gross margin expansion as in-house manufacturing scales and reagent revenue grows as a percentage of total revenue.

Questioned the 2024 guidance range, geographic demand trends, the growth contribution from PhenoCode reagent panels, and the company's perspective on M&A as it approaches profitability.

Answer

Executives confirmed the low end of the guidance accounts for macro headwinds, while large CDx deals would be additive. North America is expected to remain the strongest growth region. Reagents are the largest growth driver, with the strong trend from late 2023 expected to continue. The company is focused on organic execution with its current technology and is not actively pursuing M&A, though it keeps an eye on opportunities.

Mark Massaro questioned the sustainability of the lower system placement rate of 5-7 per quarter, inquired about the progress and customer feedback on the Stratys system launch, and asked for details on the components driving the reduced revenue guidance.

Answer

CEO Erik Holmlin affirmed that a placement rate of around 5 systems per quarter is a reasonable expectation going forward under the new strategy. He described the Stratys launch as going well with high demand due to its higher throughput and workflow benefits, while acknowledging a learning curve for the new consumable. Dr. Holmlin attributed the guidance reduction to the strategic shift away from capital sales, the impact of discontinuing clinical services (including a $500k write-down), and a conservative outlook on the timing of system purchases.

Mark Massaro from BTIG asked if there were recent changes to sales territories and how the company will manage the Cologuard Plus transition for commercial plans to avoid non-payment issues.

Answer

CEO Kevin Conroy expressed total confidence in the sales leadership and the team's high energy. Regarding the Cologuard Plus transition, he explained their system can identify which test a patient has coverage for (Cologuard 1.0 or Plus) and deliver the appropriate one. This leverages their deep relationships with over 800 payers to prevent 'zeros' or non-payment, ensuring patients get screened.

Asked if changes were made to sales territories and about the logistics of the Cologuard Plus transition, specifically how they would prevent non-payment if a clinician orders it for a commercial patient without a contract.

Answer

Management stated their systems can determine which test (Cologuard 1.0 or Cologuard Plus) a patient has coverage for and will deliver the correct one, preventing 'zero pays'. They have deep relationships with over 800 payers to manage this transition. Regarding sales territories, they expressed confidence in their commercial leadership and the team's high energy and engagement.

Mark Massaro from BTIG asked if any changes were made to sales territories and inquired about the logistical plan for the Cologuard Plus transition, specifically how the company will prevent 'no pay' situations for patients on commercial plans without an updated contract.

Answer

CEO Kevin Conroy expressed total confidence in the sales leadership and did not detail territory changes. For the Cologuard Plus transition, he explained that with over 800 payer contracts and a high collection rate, the company has deep relationships and robust systems. The platform can identify a patient's coverage and deliver the appropriate test—either Cologuard or Cologuard Plus—to ensure they get screened and to prevent 'no pay' scenarios, which he noted the company has not seen in many years.

Mark Massaro of BTIG inquired about the future run rate for government contract revenue, given the light Q3 result and the new BARDA contract, and asked if the full-year adjusted EBITDA guidance was conservative after a strong quarterly beat.

Answer

CFO Kevin Green explained that government contract revenue will ramp as the RedeS study progresses and the new BARDA contract activities begin in earnest in 2025. President and CEO Obi Greenman noted that while tracking ahead of their adjusted EBITDA goal, the full-year guidance remains cautious due to potential variability in operating expenses and margins.