Subbu Nambi

Subbu Nambi inquired about the 1,200 basis points gross margin expansion, requesting a breakdown of contributions from restructuring, cost initiatives, and product mix. He also asked how Maravai LifeSciences is using AI to generate efficiency in drug discovery, development, or manufacturing.

Answer

CFO Rajesh Asarpota attributed gross margin expansion primarily to $65 million in annualized cost savings, with additional lift from GMP consumables product mix and operating leverage. CEO Bernd Brust highlighted mRNA Builder, an AI-powered platform for optimizing RNA constructs, noting its increasing customer adoption.

Subbu Nambi inquired about the 1,200 basis points gross margin expansion, requesting a breakdown of contributions from restructuring, cost initiatives, and product mix. He also asked about Maravai's use of AI to generate efficiency in drug discovery, development, or manufacturing.

Answer

Rajesh Asarpota (CFO) explained that the gross margin expansion primarily stems from $65 million in annualized cost savings, which resets the fixed cost base, with additional expansion from product mix (mainly GMP consumables) and operating leverage. Bernd Brust (CEO) highlighted mRNA Builder, an AI-powered platform from the Officinae Bio acquisition, which automates optimized RNA construct design, noting about 70 orders processed.

Subbu Nambi from Guggenheim Securities asked the new leadership about any positive or negative surprises discovered during their initial business review. He also requested more details on the encouraging customer conversations regarding a high-volume CleanCap shipment for early 2026.

Answer

CEO Bernd Brust cited the unexpectedly high level of corporate expenditure as a negative surprise, while the robust non-COVID mRNA pipeline and the potential of the Cygnus (BST) business were positive ones. CFO Raj Asarpota confirmed a binding order for high-volume CleanCap in 2026 but emphasized that the business is being run as if this revenue is purely upside and not part of the base plan.

An analyst on behalf of Subbu Nambi at Guggenheim asked about Maravai's capital allocation priorities for 2025 following its significant voluntary debt repayment and also inquired about the company's current appetite for M&A.

Answer

Chief Financial Officer Kevin Herde stated the debt repayment was a prudent move to lower interest expense after an interest rate cap expired. He indicated that while the company has more financial constraints, it remains active in evaluating smaller, complementary technology acquisitions, citing two deals already completed in 2025. Chief Executive Officer William Martin added these acquisitions will help drive growth in the discovery business.

Subbu Nambi inquired about Veracyte's conviction in its 2026 guidance, the assumptions driving the high and low ends of the revenue range, and details regarding quarterly guidance. He also asked about the OPTIMA study's goal to expand the intended use population for Prosigna, the required readout for this expansion, and the potential market size if successful.

Answer

CEO Marc Stapley reiterated strong conviction in the guidance. CFO Rebecca Chambers detailed Q1 seasonality, including prior period collections (PPCs) and volume trends for Afirma and Decipher, and outlined drivers for the high end of the range such as Afirma's no-result rate benefit and Decipher's volume outperformance. Marc Stapley also clarified that new product launches are not included in the 2026 revenue guidance. Regarding OPTIMA, Marc Stapley noted the 225,000-patient market for Prosigna and potential expansion into premenopausal and various risk categories. Chief Commercial Officer John Leite added that OPTIMA's enrollment criteria include up to nine nodes, exceeding current approvals, and that performance will be assessed post-trial results, expected at ASCO.

Subbu Nambi inquired about Veracyte's conviction in its reiterated 2026 guidance, the assumptions driving the high and low ends of the range, and details on quarterly guidance. He also asked about the OPTIMA study's requirements for expanding the intended use population and the potential market size if successful.

Answer

CEO Marc Stapley affirmed strong conviction in guidance. CFO Rebecca Chambers detailed seasonal trends, the impact of prior period collections (PPCs), and volume drivers like Afirma's no-result rate and Decipher's penetration. Marc Stapley and Global Chief Commercial Officer John Leite discussed the OPTIMA study, noting the 225,000 breast cancer patients potentially addressed and the need for trial results to provide specific commentary on market expansion.

Subbu Nambi from Guggenheim asked about the competitive landscape for Decipher, specifically what aspects played out as expected and what surprised Veracyte. He also inquired about the continued expectation for a commercial Prosigna LDT launch by mid-2026 and what to expect in terms of LDT performance data and OPTIMA trial results leading up to it.

Answer

CEO Marc Stapley noted that Decipher has taken more market share than anticipated, benefiting from NCCN guidelines and the "rising tide" of molecular diagnostics in prostate cancer. He also mentioned that the noise around DPAI proved to be unsubstantial in terms of market share impact. Marc Stapley confirmed the mid-2026 Prosigna LDT launch, stating that the key evidence is the OPTIMA trial data, and the internal process for generating the test in their lab involves standard tech assessment, validation, bridging, and New York State approval.

Subbu Nambi asked for management's perspective on how the competitive landscape for Decipher has evolved, specifically what met expectations and what surprised them, and for an update on the commercial Prosigna LDT launch timeline and expected data leading up to mid-2026.

Answer

CEO Marc Stapley noted that Decipher has gained more market share than anticipated, benefiting from a rising tide in molecular diagnostics and NCCN guidelines. He added that noise around DPAI proved to have little substance in terms of market impact. Marc Stapley confirmed the commercial Prosigna LDT launch is on track for mid-2026, with the key evidence being the upcoming full OPTIMA trial data, and the internal lab process for generating the test is straightforward.

Subbu Nambi of Guggenheim Securities requested more color on the feedback from MolDX regarding the MRD test submission, urologist interest in a whole-genome based MRD approach, and the significance of integrating Decipher data with the NCI's SEER database.

Answer

CEO Marc Stapley characterized the MolDX process as a standard back-and-forth. CSO & CMO Dr. Phillip Febbo highlighted significant physician enthusiasm for the whole-genome MRD approach due to its ability to monitor clonal evolution. He explained the SEER database collaboration enhances research opportunities and raises confidence in Veracyte's diagnostics platform.

Subhalaxmi Nambi from Guggenheim Securities inquired about Veracyte's commercial headcount and its product focus, as well as the company's positioning to potentially launch a digital pathology complement to its existing assays.

Answer

CEO Marc Stapley highlighted the significant leverage of the current sales force (around 50 heads for Afirma, slightly more for Decipher) and sees no need for major expansion. Regarding digital pathology, he stated that while current data doesn't show its superiority, Veracyte is exceptionally well-positioned with its vast biobank of scanned tissue samples, genomic data, and in-house AI capabilities to pursue it as a future opportunity if warranted.

Subbu Nambi from Guggenheim Securities asked about the strategic value of the recently launched Paige Predict, particularly its utility when samples are Quantity Not Sufficient (QNS) for xT and xR tests, and the frequency of such QNS cases. He also asked CFO Jim Rogers for the expected Average Selling Price (ASP) in the 2026 guidance.

Answer

Eric Lefkofsky, CEO of Tempus AI, explained that Paige Predict enhances diagnostic value by digitizing pathology slides to predict mutations, even when next-generation sequencing fails due to QNS samples, making tests faster and more reliable. He noted that such technological advantages, like the Immune Profile Score, stack up to make Tempus's offerings superior. James William Rogers, CFO, stated that Q4 ASPs were around $1,640, up $40 quarter-over-quarter. He projected over $500 upside to ASP in coming years, driven primarily by the migration of xT CDx to the FDA-approved version by end of 2026, with xF liquid biopsy and commercial payer gains contributing later.

Subbu Nambi inquired about the strategic value of the recently launched Paige Predict, especially its utility when samples are Quantity Not Sufficient (QNS) for xT and xR tests, and the frequency of such QNS cases. He also asked CFO Jim Rogers for the expected Average Selling Price (ASP) in the 2026 guidance.

Answer

CEO Eric Lefkofsky explained that Paige Predict enhances diagnostic value by digitizing pathology slides to predict mutations, providing insights even when next-generation sequencing fails, thus making Tempus's tests faster and more reliable. CFO James William Rogers stated that Q4 ASP was $1,640, with an anticipated $500+ upside in coming years, driven primarily by the migration of xT CDx to the FDA-approved version in 2026, xF liquid biopsy FDA submission for 2027 impact, and gains from commercial payers.

Subbu Nambi of Guggenheim Securities asked about the development and commercialization plans for a recently published AI algorithm for diabetes risk. He also inquired about the long-term strategy for expanding the Insights business into areas beyond cancer.

Answer

CEO Eric Lefkofsky explained that while Tempus develops many algorithms, the commercialization of pure AI products is challenged by a lack of reimbursement mechanisms in the U.S. healthcare system. He noted that the pure AI algorithm business will remain small until payment models evolve. Regarding expansion, he confirmed Tempus has large datasets in cardiology and other areas, but nothing compares to the scale of its oncology data, which will remain the primary focus for data and diagnostic products for the foreseeable future.

Subbu Nambi inquired about the drivers behind the muted downstream demand in the second half of 2025, how it shapes the 2026 guidance, and Repligen's assumptions for capital equipment growth in 2026.

Answer

President and CEO Olivier Loeillot acknowledged muted CapEx spending in 2025, with Repligen's capital equipment sales remaining flat year-over-year while the market was down significantly. For 2026, Repligen is aiming for low double-digit growth in capital equipment, primarily driven by the analytics business, with downstream systems expected to be somewhat flat, representing a potential upside if macro conditions improve.

Subbu Nambi asked about the drivers behind the muted downstream demand in the second half of 2025, how it's shaping Repligen's 2026 guidance, and the assumptions for capital equipment growth in 2026.

Answer

Olivier Loeillot, President and CEO, acknowledged that CapEx spending was muted in 2025, with Repligen's capital equipment sales remaining flat year-over-year, outperforming a market estimated to be down high teens. For 2026, Repligen is aiming for low double-digit growth in capital equipment, primarily driven by the analytics business, with downstream systems expected to be somewhat flat, representing potential upside if macro conditions improve.

Subbu Nambi asked for tangible KPIs that investors can use to track Repligen's progress towards its goal of growing 5% above the market. He also questioned if the company's margin expansion goals could be met even if the revenue doubling target is not achieved.

Answer

CEO Olivier Loeillot pointed to the company's order book as a key KPI, noting that orders have exceeded sales for eight consecutive quarters and have grown sequentially for five quarters. He also mentioned the growing sales funnel. CFO Jason Garland added that margin expansion is not solely dependent on volume; levers like the Repligen Performance System (RPS), footprint optimization, and sourcing initiatives also contribute significantly.

Subbu Nambi asked about the primary risks or factors outside of Myriad Genetics' control that could impact the ambitious Precise MRD launch roadmap, and conversely, what aspects might accelerate faster than planned. He also questioned if the real-world data from the CONNECTOR study for FirstGene is expected to show meaningful differences in performance compared to previously collected prospective samples.

Answer

Sam Raha, President and CEO, identified MolDx review timing as a key factor outside of Myriad's control for the Precise MRD launch, while emphasizing the company's control over data preparation and submission. He noted that the MONITOR-breast study and MONSTAR-SCREEN-3 study for colorectal cancer are on track for Q3 and H2 submissions, respectively, and highlighted a prior Lancet publication for renal cell carcinoma. Regarding FirstGene, Mr. Raha stated that while conclusive data from CONNECTOR is pending, there is no reason to believe its performance will be less robust than the strong results seen in the recently published analytical validation.

Subbu Nambi inquired about the primary risks or factors outside of Myriad Genetics' control that could delay the ambitious MRD launch roadmap, and conversely, what aspects might accelerate faster than planned. He also asked if there was any reason to expect a meaningful difference in FirstGene's performance between the recently published prospectively collected samples and the real-world data from the CONNECTOR study.

Answer

Sam Raha, President and CEO, identified MolDx timing as the main factor outside of their complete control for the MRD roadmap, while emphasizing their strong control over data preparation and submission for studies like MONITOR-breast (Q3) and MONSTAR-SCREEN-3 (H2). He also noted an existing Lancet publication for renal cell carcinoma. Regarding FirstGene, Mr. Raha expressed satisfaction with initial results and stated there was no reason to believe the CONNECTOR study data would be less robust.

Subbu Nambi with Guggenheim inquired about GeneDx's 2026 guidance, specifically the assumed reversal of foundational test volume trends and the drivers behind this confidence. He also asked for insights into the expected quarterly cadence for volumes, average selling prices (ASPs), and gross margins.

Answer

Kevin Feeley, CFO of GeneDx, explained that confidence in foundational market growth stems from significant white space, new clinician activation, increased order rates, and the ongoing conversion from single/multi-gene panels to exome/genome testing. He detailed the typical quarterly cadence, noting Q1 as the low point due to deductibles and weather, with Q4 being the strongest. Regarding gross margins, Feeley stated the exome/genome portfolio operates in the 80s, with expectations for genome costs to decrease with scale, and a conservative outlook for new markets.

Subbu Nambi asked about GeneDx's 2026 guidance, specifically the assumption of a reversal in the recent trend of foundational tests, and the factors driving confidence in this projection. He also inquired about the quarterly cadence for volumes, average selling prices (ASPs), and gross margins, particularly as the company ramps up in newer call points and increases whole exome ordering.

Answer

Kevin Feeley (CFO) explained that confidence in foundational market growth stems from significant white space, opportunities to activate new clinicians, drive higher ordering rates, and continue the conversion from single/multi-gene tests to exome/genome. He noted that the company is in the early innings of this paradigm shift. Regarding quarterly cadence, Mr. Feeley outlined that Q1 is typically the low point for volume and reimbursement due to deductible resets and weather, with Q4 usually being the strongest. For gross margins, he stated that the exome/genome portfolio operates with significantly stronger margins (in the 80s) compared to the total company, and expects genome costs to decrease with increased utilization. He mentioned a conservative view on gross margin guidance for new markets and diagnosis codes.

Subbu Nambi inquired about any observed uptick in chromosomal microarray (CMA) volume following the American Academy of Pediatrics (AAP) guidelines, and how this might influence GeneDx's strategy for sunsetting legacy products. He also asked about the implied sequential decrease in average selling prices (ASPs) and an increase in Cost of Goods Sold (COGS) in the guidance, seeking clarification on any seasonal dynamics or conservatism. Additionally, Nambi questioned the sustainability of the quarter's strong gross margin and sought clarification on the true EPS for Q3 2024.

Answer

Katherine Stueland, CEO and President, noted that most pediatricians are learning about the AAP guidelines from GeneDx, underscoring the need for education and workflow improvements, and reaffirmed the 18-24 month adoption timeline. She stated there was no meaningful uptake in CMA orders from pediatricians in the quarter, with growth primarily from core markets. Kevin Feeley, CFO, clarified that the Q3 average reimbursement rate was over $3,800, and the implied Q4 rate decrease reflects conservatism for new call points. He confirmed minimal impact from out-of-period adjustments for Q3 true EPS and attributed the raised gross margin guide to a conservative stance despite strong performance.

Subbu Nambi of Guggenheim Partners inquired about the impact of AAP guidelines on chromosomal microarray (CMA) volume, GeneDx's strategy for legacy products, the implied sequential decrease in ASPs and increase in COGS, and the sustainability of gross margins.

Answer

Katherine Stueland, CEO and President, noted no meaningful uptick in CMA orders from general pediatricians in Q3 2025, highlighting the need for education and workflow improvements. Kevin Feeley, CFO, clarified the Q3 average reimbursement rate was over $3,800, with a potential $100 sequential drop in Q4 due to new call points. He also addressed Q3 2024 true EPS, stating minimal out-of-period adjustments, and explained the conservative gross margin guide despite strong performance.

Subbu Nambi from Guggenheim Securities questioned the strategy for targeting the 25,000 relevant pediatricians, the reason for strength in the supposedly deprioritized 'other panels' segment, and progress on onboarding clients from the Epic Aura waiting list.

Answer

CEO Katherine Stueland clarified the initial focus is on the 25,000 pediatricians who currently diagnose children with CDID. CFO Kevin Feeley explained that 'other panel' volume is a passive result of activating new accounts for exome/genome testing and is not actively incentivized. Stueland confirmed progress with Epic Aura, with three health systems live and a goal of at least twelve by year-end.

Subbu Nambi asked about the strategy for targeting the 60,000-strong pediatrician market, the drivers behind the strength in 'other panel' revenue, and the progress on onboarding clients for Epic Aura integration.

Answer

CEO Katherine Stueland clarified the initial focus is on the 25,000 pediatricians who diagnose CDID. CFO Kevin Feeley explained that 'other panel' strength is a passive result of activating new accounts, which presents an opportunity to educate them on exome/genome. Katherine Stueland confirmed progress with Epic Aura, with three systems live and a larger volume impact expected in Q4.

Subbu Nambi asked about the potential impact of missing the NHS-Galleri trial's stage shift endpoint on FDA approval and the read-through to the Medicare REACH study's primary endpoint, including its powering.

Answer

CEO Bob Ragusa clarified that the FDA's focus is on effectiveness and safety data from PATHFINDER 2 and the prevalent round of NHS-Galleri, with no obvious correlation to the final NHS-Galleri study results. President Josh Ofman confirmed the REACH study's primary endpoint is Stage IV reduction, which was strongly observed in NHS-Galleri, and believes the REACH study is properly powered for this effect.

Subbu Nambi inquired about the potential impact of the NHS-Galleri trial's missed primary endpoint on FDA approval and any read-through to the Medicare REACH study's stage four cancer incidence endpoint and future Medicare coverage.

Answer

Bob Ragusa, CEO, clarified that the FDA's focus is on the effectiveness and safety data submitted (PATHFINDER 2 and prevalent NHS-Galleri round), and there's no obvious correlation with the final NHS-Galleri results. Joshua Ofman, President, confirmed that the REACH study's primary endpoint is stage four reduction, which was strongly observed in NHS-Galleri, and expressed optimism about the REACH study's power to demonstrate this effect.

Subbu Nambi of Guggenheim Securities asked if full clinical utility data is required for PMA submission, sought clarification on the normalization of PPV in the Pathfinder 2 study, and inquired about growth expectations from the new EverlyWell partnership.

Answer

CEO Bob Ragusa clarified that the FDA's approval process focuses on clinical validation (benefit-harm profile), not clinical utility, which is more relevant for payers. President Dr. Joshua Ofman explained that the higher PPV in Pathfinder 2 is currently reported within the study's diverse population and will be normalized later. Chief Commercial Officer Andy Partridge expressed optimism that EverlyWell's large customer base will significantly amplify Galleri's reach and drive growth.

Thomas from Roth MKM asked for an update on GRAIL's progress, focusing on the outlook for Galleri reimbursement, the FDA regulatory pathway, and the company's broader commercial strategy, including timelines for FDA submission and potential CMS reimbursement. He also followed up on how GRAIL is managing its commercial spending to align with its cash runway.

Answer

Executive Robert Ragusa outlined the regulatory timeline, targeting a PMA submission in the first half of 2026 and potential FDA approval in the first half of 2027. He highlighted the upcoming launch of a new, more automated Galleri assay designed for scalability and cost reduction. Ragusa also noted strong bipartisan support for the MCED bill, which is critical for CMS reimbursement. Regarding spending, he explained that a recent restructuring moderated commercial investment to extend the cash runway into 2028, focusing on making the commercial effort more cost-neutral by concentrating on the most productive channels.

Subbu Nambi followed up on the MCED Shield opt-in rate and the potential for FDA submission based on accumulated data by year-end.

Answer

Co-CEO AmirAli Talasaz noted strong enthusiasm from providers and patients for the MCD offering, leading to the accumulation of broad clinical data on MCD testing utility in the U.S. patient population, but did not provide exact opt-in rates.

Subbu Nambi followed up on the MCED Shield, asking about the opt-in rate for the multi-cancer detection feature and the potential for FDA submission by year-end based on accumulated data.

Answer

AmirAli Talasaz, Co-CEO, reported strong enthusiasm from providers and patients for opting in to release medical records for MCD data collection. He noted that Guardant expects to gain access to the widest and broadest clinical data on MCD testing in the U.S. patient population, with the opt-in rate trending up.

Subbu Nambi of Guggenheim Securities asked about the potential for the new CRC surveillance reimbursement to increase Reveal's tests-per-patient metric from its current 1.7 level, and also inquired about the status of Reveal's ADLT application.

Answer

Chairman & Co-CEO Helmy Eltoukhy confirmed that Reveal is the fastest-growing oncology product and that they are already seeing an increase in subsequent draws following the reimbursement decision. He expressed high expectations for continued growth in tests per patient. Regarding ADLT status, he stated that an application has been submitted and they are awaiting a decision, hopefully within the next quarter.

Subbu Nambi (Guggenheim) asked about the expected performance of pharma ordering in 2026, specifically between the first and second halves, identifying which products are anticipated to drive pharma orders, and the current framework and progress for LIMS integration.

Answer

CEO Tony Zook stated that pharma business erosion is expected to continue into 2026, albeit at a reduced rate, with a return to growth projected for 2027, primarily driven by RaDaR ST. He noted pharma is a small portion (5-6%) of overall business. Chief Commercial Officer Warren Stone added that the focus for pharma is on therapy selection and MRD, with IHC remaining relevant, and a robust pipeline developing for RaDaR ST. Warren Stone also detailed LIMS integration, confirming completion for flow modality and current focus on accessioning and NGS for 2026, aiming for workflow optimization and enhanced analytics.

Subbu Nambi asked about the pharma ordering outlook for 2026, specifically between the first and second half, and which products are expected to lead the order book. He also inquired about the LIMS integration framework for the year.

Answer

Tony Zook (CEO, NeoGenomics) anticipates modest erosion in pharma revenue for 2026 (mid to upper 5-10% range), with a return to growth expected in 2027, primarily driven by RaDaR ST. Warren Stone (Chief Commercial Officer, NeoGenomics) added that the pharma focus aligns with clinical, emphasizing therapy selection and MRD, with IHC as a door opener. For LIMS, Warren Stone noted completion of flow modality, with current focus on accessioning and NGS, aiming for increased efficiency and customer traceability in 2026.

Subbu Nambi inquired about expectations for clinical growth outside the United States in the coming year and whether the company observed any budget flush, particularly from Europe, in the fourth quarter of 2025.

Answer

Christian Henry, President and Chief Executive Officer, stated that there was no significant budget flush in Q4 2025. He anticipates very strong clinical growth in 2026, especially in rare disease and whole genome sequencing, largely driven by EMEA customers transitioning from pilot phases to production, supported by Spark chemistry.

Subbu Nambi asked about PacBio's expectations for clinical growth outside the United States in the upcoming year and whether the company observed any budget flush from Europe in the fourth quarter of 2025. Nambi also questioned the strategy for international expansion of multi-use smart cells, specifically how the rollout would be managed in tandem with the U.S. to contain elasticity.

Answer

Christian Henry, President and Chief Executive Officer, stated that PacBio did not see a significant budget flush in Q4 2025, beyond opportunistic purchasing. He anticipates very strong clinical growth in 2026, particularly in rare disease and whole genome sequencing, largely driven by EMEA customers transitioning from pilot phases to production. Henry noted that Spark chemistry will enable some of this growth, balancing favorable pricing. He also highlighted strength in the PureTarget portfolio. Regarding multi-use smart cells, Henry explained that the beta program started in the U.S. to monitor user workflow and is now expanding to EMEA and APAC, with a controlled rollout planned to ensure customers have samples ready, aiming for broad availability by late spring/early summer.

Subbu Nambi asked about the assumptions for international growth embedded in the full-year guidance, particularly in light of tariff uncertainty, and whether the strong international performance could represent a pull-forward of demand.

Answer

President and CEO Christian Henry responded that the company's guidance incorporates a conservative view on tariffs and international demand. He emphasized that despite the volatile situation, especially concerning China, the forecast is built on a cautious foundation and does not assume a best-case scenario, mitigating the risk of it being based on unsustainable pull-forward.

Subbu Nambi asked about expectations for book-to-bill and backlog trends in 2026, and how customer spending interest is anticipated to evolve. He also inquired about the product roadmap and revenue growth perspective for the new microbiology and diagnostics businesses exiting 2026.

Answer

President and CEO Frank Laukien stated that Bruker expects continued gradual improvements, with BSI book-to-bill trends (above 1.0 in the last two quarters) to continue into 2026, aided by easier comps. He noted that some of the high backlog might be used, but it won't normalize to pre-pandemic levels. For microbiology, Frank Laukien expects FDA approval for the first rapid AST claim (gram-negative positive blood culture) in 2026, with clinical trials for additional claims. For diagnostics (BeGenius), syndromic panels will begin rolling out and gaining regulatory approvals in Europe in late 2026/2027, with a series of affordable panels expected through 2027-2028, building on the strong growth seen in molecular diagnostics in 2025.

Subbu Nambi questioned the feasibility of the 2025 guidance, specifically how the company expects to achieve its second-half targets given that major cost savings are delayed until 2026 and FX headwinds are increasing.

Answer

Chairman, CEO & President Frank Laukien clarified that approximately $30 million in cost savings are expected to benefit the current fiscal year, though they are being offset by larger headwinds. EVP & CFO Gerald Herman added that the bulk of these 2025 savings will be realized in the fourth quarter, contributing to the expected ramp in profitability.

Subbu Nambi asked about the operating margin progression for Waters in 2026 with the addition of BD, and the prudence embedded in the risk-adjusted assumptions, given it's a cleaner base.

Answer

SVP and CFO Amol Chaubal stated that Waters' standalone operating margin is expected to return to 31.3% in 2026, consistent with their long-term algorithm, after strategic R&D investments in bioseparations and informatics in Q4 2025. The BD Biosciences and Diagnostic Solutions business is coming in at 22.4%. Net of revenue and cost synergies, this allows for a combined company margin of 28.1%, which is in line with the deal announcement target of expanding the pro forma company margin from 27% to 32% over five years, achieving over 100 basis points expansion in the first year.

Subbu Nambi asked about the operating margin progression for the combined company in 2026 with the addition of BD, and what prudence is embedded in the risk-adjusted assumptions given it's a cleaner base.

Answer

President and CEO Udit Batra explained that strategic R&D investments in Q4 accelerated growth without altering the long-term margin algorithm. For 2026, Waters standalone is projected at 31.3% adjusted operating margin, and BD Biosciences and Diagnostics Solutions at 22.4%. Net of revenue and cost synergies, this results in a 28.1% combined margin, consistent with the deal announcement's goal of over 100 basis points of expansion in the first year.

Subbu Nambi asked about a competitor's new flow cytometry assay for myeloma, specifically its sensitivity claims and potential price advantage compared to Adaptive Biotechnologies' NGS solution. He also inquired about the pacing of ASP growth for the year, given private payers are in advanced negotiation stages.

Answer

Susan Bobulsky, Chief Commercial Officer of MRD, stated that flow-based methods are inherently less sensitive than clonoSEQ, noting the competitor's claimed sensitivity of 1 in 200,000 is significantly lower than clonoSEQ's 1 in 1 million (or 1 in 1.5 million FDA-validated) in blood. She highlighted the increasing need for higher sensitivity in myeloma due to deeper treatment responses and the importance of maximal sensitivity for blood-based testing. Kyle Piskel, CFO, advised thinking of ASP growth as linear for the year, acknowledging specific timing for key payer contracts could influence variability.

Subbu Nambi inquired about a competitor's newly launched flow cytometry assay for myeloma, specifically asking for Adaptive Biotechnologies' perspective on its sensitivity claims and potential pricing advantage compared to clonoSEQ. He also asked Kyle Piskel about the expected pacing of ASP growth for the current year, considering ongoing private payer negotiations.

Answer

Susan Bobulsky, Chief Commercial Officer of MRD, Adaptive Biotechnologies, stated that flow-based methods are inherently less sensitive than clonoSEQ, highlighting clonoSEQ's superior sensitivity (1 in 1 million vs. competitor's 1 in 200,000) especially crucial for blood-based myeloma testing. She noted clonoSEQ's broad reimbursement and EMR integration, suggesting the competitor's assay might serve as a backup for a small patient subset. Kyle Piskel, CFO, Adaptive Biotechnologies, advised thinking of ASP growth as linear for the year, acknowledging that specific timing for key payer contracts could influence the exact pace.

Subbu Nambi questioned the source of increased confidence for the raised guidance, specifically for DNA synthesis and NGS, and asked if any other single-customer dynamics are being monitored after the Fiscal 4Q and Fiscal 1Q 'air pocket'.

Answer

Emily Leproust, CEO and Co-Founder of Twist Bioscience, attributed the increased confidence to broad performance, including the return of the previously mentioned NGS customer and strong AI-driven growth in DNA synthesis and protein solutions. She highlighted the success of their NPI engine and commercial efforts, stating no other single-customer dynamics are expected to impact future outlook.

Subbu Nambi from Guggenheim Securities asked about the specific drivers behind the increased full-year guidance raise beyond the Q1 beat for both DNA synthesis and NGS, and whether any other single-customer dynamics are being closely monitored following a prior "air pocket."

Answer

CEO Emily Leproust attributed the heightened confidence to broad-based performance, including the resolution of the NGS customer issue and strong growth in bespoke MRD. She highlighted the DNA synthesis and protein solutions platform's success in attracting repeat large orders. Emily emphasized the NPI engine, strategic commercial team expansion, and the expectation of no further significant single-customer dynamics.

Subbu Nambi asked for clarification on the end-user for MRD Express, specifically if Twist Bioscience executes the assay for physicians or delivers panels to hospitals, or if it's for existing NGS diagnostics customers. He also inquired about the approach to pricing and expected margins for MRD Express.

Answer

Patrick Finn, President and COO, clarified that Twist acts as an enabler, supplying customers and partners to run their MRD assays, rather than executing the test for physicians or hospitals directly. He stated that pricing for MRD Express has not been set but will aim to enable customers at scale, sharing value based on speed (12-hour turnaround) and de-risking supply chain vulnerabilities.

Subbu Nambi followed up on the upcoming MRD Express launch, asking to clarify the end-user for this product and whether Twist Bioscience would be executing the MRD assay or supplying panels to hospitals. He also inquired about the anticipated pricing strategy and expected margins for MRD Express.

Answer

Patrick Finn, President and COO, clarified that Twist Bioscience acts as an enabler, supplying customers and partners to run their assays, rather than executing the tests directly. Regarding pricing, he stated it has not yet been set but will be based on enabling customers at scale, the value of the 12-hour turnaround time, and de-risking supply chain vulnerabilities.

Subbu Nambi inquired about the company's prudent guidance approach for the NGS segment, asking how clinical diagnostic launch timelines in 2025 compared to internal expectations and if the guidance methodology would change for fiscal 2026.

Answer

CFO Adam Laponis confirmed that Twist Bioscience will maintain its prudent guidance methodology and not get ahead of customer product launches. He noted that Minimal Residual Disease (MRD) revenue is currently a small portion of the NGS business but is growing rapidly and expected to ramp significantly in fiscal 2026 as numerous customers move toward commercialization.

Subu Nambi questioned the unique aspects of Natera's early cancer detection assay that enable it to overcome challenges like low signal abundance and biological limits in ctDNA, differentiating it from competitors. He also asked for an expected readout timeframe for the Vega trial, the de-escalation arm of the Galaxy study.

Answer

General Manager of Oncology and Chief Medical Officer Alex Aleshin explained that Natera's assay benefits from a multi-year research effort, prioritizing advanced adenoma, technological advancements for increased molecular recovery and lower sample loss, and proprietary techniques for differentiating methylated regions. He also cited leveraging a large repository of early-stage colon cancer cases for assay training. Alex Aleshin stated that the Vega trial readout is event-based, with all patients randomized, and is "likely to occur in 2027," with refinement of guidance closer to the date.

Subbu Nambi asked about the impact of AI on Revvity's operating efficiency and whether its implementation by customers would lead to more or less demand for Revvity products, viewing it as a potential threat or opportunity.

Answer

President and CEO Prahlad Singh viewed AI as an opportunity, expecting it to increase demand for reagents and instruments in the short to mid-term (3-5 years) as AI-focused companies generate more data. He also highlighted the Signals business's strong position in the mid to long term to incorporate AI capabilities for researchers, potentially changing drug discovery paradigms. Nambi also inquired about which instruments would be the first to participate if the signs of instrument recovery continued, and if book-to-build data would be provided for 2026. Prahlad Singh noted that initial upticks are seen in non-commoditized cellular imaging capabilities, specifically high-content screening platforms, and stated that the company does not typically provide book-to-build ratios.

Subbu Nambi from Guggenheim Securities sought clarification on the apparent contradiction between Neogen's reduced backorders and its reported excess spoiling inventory, asking for more color on these inefficiencies and how execution plans address them.

Answer

CFO Dave Naemura clarified that the reduction in backorders specifically pertains to the sample collection product line, where production issues had previously caused elevated levels. He explained that the issue of excess spoiling inventory is distinct and relates to optimizing the distribution of shelf-life-sensitive products, which is being addressed through improvements in the core Sales and Operations Planning (SNOP) process.

Subbu Nambi asked about the timeline for the new CEO to outline his vision and for the company to shift to an offensive strategy, whether Q1 revenue included any one-time or pull-forward effects, and the underlying margin and cash generation potential of the business. He also sought clarification on the confidence in the Petrifilm duplicative cost guide and the nature of sample collection inefficiencies.

Answer

Mike Nassif (CEO, Neogen) indicated a more detailed vision would be shared in early calendar year 2026, with immediate focus on quick wins for growth and cost management. Dave Naemura (CFO, Neogen) confirmed no one-timers in Q1 revenue and expressed confidence in the $15 million Petrifilm duplicative cost guide. He explained that margin expansion is supported by robust incremental margins and portfolio improvements, despite Q1's negative free cash flow due to high CapEx and inventory challenges. He clarified that backorder reduction was specific to sample collection, while excess spoilage relates to broader S&OP issues, and sample collection inefficiencies stem from scrap, quality flags, and excess production costs.

Subbu Nambi of Guggenheim Securities questioned the timing of issuing guidance given the new CEO appointment, sought clarification on the $10 million tariff headwind, asked about growth strategies amid a pressured consumer backdrop, and inquired about key performance indicators for the Petrifilm transition.

Answer

CFO & COO David Naemura stated that providing guidance is 'business as usual' and confirmed the $10 million tariff headwind is for fiscal 2026. President and CEO John Adent highlighted regulatory tailwinds from increased USDA testing for Listeria and Salmonella as a key growth driver. Naemura identified reduced CapEx, initiating test production, and certifying Petrifilm SKUs as key transition milestones.

Subbu Nambi of Guggenheim Securities questioned if Caris's early cancer detection strategy had changed due to recent market shifts and asked about the market impact of the recent GPSai publication.

Answer

President David Spetzler affirmed the early detection strategy remains focused on breast cancer, citing a significant unmet need. Regarding the GPSai tool, he explained that it has been on the market for some time and is already demonstrating clinical value. The recent publication serves to validate its impact on correcting patient diagnoses, rather than acting as a new inflection point for growth.

Subbu Nambi questioned if Caris's strategy for early cancer detection has changed based on recent market events and asked about the market reaction to the GPS AI publication, questioning if it could be a market share inflection driver.

Answer

Dr. David Spetzler, President, clarified that the early detection strategy remains focused on breast cancer, where there is a significant unmet need, with an initial self-pay launch plan. Regarding GPS AI, he explained that the tool has been on the market for some time and has already been driving adoption by providing profound clinical value. The recent publication validates its impact, but it is not a sudden inflection point.

Subbu Nambi of Guggenheim Securities inquired about any changes to the early cancer detection strategy and asked about the market impact of the recent GPS AI publication.

Answer

President David Spetzler reaffirmed the strategy to focus first on early detection for breast cancer, citing a significant unmet clinical need. He clarified that the GPS AI tool has been driving adoption for some time by reclassifying patient diagnoses, and the recent publication validates its impact rather than creating a new inflection point.

Subbu Nambi of Guggenheim Securities inquired about key takeaways from ASCO, the process for determining pricing post-reimbursement, and whether the wait for coverage has led to any erosion in physician interest.

Answer

Chief Medical Officer Rich Chen highlighted positive ASCO data for neoadjuvant breast cancer, which he said positions the company to seek expanded reimbursement coverage for that indication upon publication. CEO Christopher Hall explained that pricing is determined after coverage is granted but that financial models are based on existing reimbursement for similar tests as a floor, with potential upside. Hall also stated that the company has not seen any erosion in physician interest, noting that the focus is on expanding the user base and deepening relationships by demonstrating the test's clinical value.

Subbu Nambi of Guggenheim Securities inquired about the specifics of the milestones for the new AstraZeneca partnership and asked for an update on the competitive landscape and adoption trends for Sophia Genetics' rare disease applications outside the U.S.

Answer

Co-Founder and CEO Jurgi Camblong and President Ross Muken explained that the AstraZeneca deal is the largest in the company's history and is a multi-year agreement with milestones based on a series of deliverables over several quarters. Regarding rare diseases, which constitute 20% of the business, they highlighted 20% year-over-year growth, strong demand for exomes and genomes, and competitive win rates exceeding 35%, particularly for their enhanced exome product.

Subbu Nambi from Guggenheim Securities asked if further studies are needed for the DecisionDx-Melanoma FDA submission, how resources are prioritized across pipeline projects, and if the mix shift to TissueCypher will negatively impact margins.

Answer

Founder, CEO, & President Derek Maetzold stated he is confident the existing data is sufficient for an FDA submission. He described the pipeline initiatives as complementary, targeting the same customer base without creating resource conflicts. CFO Frank Stokes acknowledged TissueCypher's lower margin could be slightly dilutive, but overall margins would remain strong.

Subbu Nambi from Guggenheim Securities questioned if Illumina has observed changes in customer behavior due to anticipated competition and asked if the product pipeline addresses competitors' advantages in turnaround time.

Answer

CEO Jacob Thaysen responded that Illumina's primary focus is on serving customer needs through early engagement and roadmap sharing, rather than reacting to competitors. He characterized the demand for very fast turnaround times as a niche market, stating that for the majority of applications, an overnight run is sufficient. Thaysen reiterated the company's core strategy is to deliver the highest quality biological insights at the lowest end-to-end cost.

Subbu Nambi inquired about the customer profile showing the most interest in the Tau manuscript, whether the two new collaborations serve as a formal proof of concept, and the reason for not providing specific updates on probe performance this quarter.

Answer

CEO Sujal Patel and Chief Scientist Parag Mallick noted that interest has been broad, spanning academic, pharma, and nonprofit research institutes, with a significant increase in conversations following the AAIC conference. Patel explained the two new collaborations are strategic for reproducing data, generating new biological insights, and hardening the core platform for both proteoform and broad-scale applications. Regarding probe performance, Patel clarified that the update was deferred this quarter because the company just recently integrated all elements of its new assay configuration and needs the next two quarters to test the probe library within it before providing meaningful metrics.

Subbu Nambi from Guggenheim Securities asked about the profile of customers showing the most inbound interest following the tau manuscript publication and the current state of the sales funnel. He also questioned whether the two newly signed collaborations serve as a formal proof of concept and inquired about the reason for not providing a specific update on probe performance this quarter.

Answer

Co-Founder and Chief Scientist Parag Mallick noted that interest has been broad, spanning academic groups, pharma, and nonprofit institutes. CEO Sujal Patel added that it's still early to define the funnel, especially after the recent AAIC conference, but confirmed interest from academic, nonprofit, and pharma organizations for pilots. Patel explained the two new collaborations are strategic for reproducing manuscript data, analyzing new samples, and hardening the core platform for both proteoform and future broad-scale applications. Regarding probe performance, he clarified that the update was deferred, not canceled, as the company is in a multi-quarter transition to a new assay configuration and will provide guidance once more testing is complete.

Subbu Nambi of Cowen and Company inquired about the quantification method for vector copies and the high-level commercial strategy for XLMTM following the recent hiring of a Chief Commercial Officer.

Answer

President and CEO Matthew Patterson deferred the technical question on vector copy quantification for a later follow-up. He elaborated that commercial efforts for XLMTM, including disease burden analysis for payers and patient identification, have been ongoing and will now be significantly accelerated under the new CCO, Eric Mosbrooker.