Thomas DeBourcy

Thomas DeBourcy of Nephron Research LLC asked about the increased cost savings target of $85 million following the Akoya acquisition, questioning if customer service levels could be maintained and how the company views long-term growth for the combined entity.

Answer

CFO Vandana Sriram explained that the company is operating as a single entity, and additional savings beyond initial expectations were identified in overlapping operations and lab processes. She affirmed their ability to serve the combined portfolio while noting that investments in key growth areas for both Simoa and Spatial platforms have been carefully protected.

Thomas DeBourcy from Nephron Research inquired if the Simoa Advantage PLUS initiative has contributed to gross margin improvement and asked about the potential for developing diagnostic tests for other neurological conditions like MS and ALS.

Answer

Executive Vandana Sriram confirmed that the transition to Advantage PLUS is progressing, with about 30% of eligible consumable sales now on the new lines, which helps margins. President and CEO Masoud Toloue affirmed the potential for future diagnostics, highlighting NfL and GFAP for MS monitoring and noting that nearly all neuro trials now include biomarkers, creating a pipeline for future diagnostic tests.

Thomas DeBourcy of Nephron Research LLC asked about supply chain redundancy for HVP components, specifically if most products are validated across multiple sites and if customers are requesting this to mitigate tariff risks.

Answer

CEO Eric Green stated that West is very well-positioned with its global HVP manufacturing network (US, Europe, Asia), which minimizes tariff impacts by producing regionally for regional consumption. While there are occasional customer requests to transfer a product to a second site for operational or supply security reasons, the existing network structure already mitigates much of the tariff risk.

Thomas DeBourcy asked if West is observing changes in customer ordering patterns, such as a shift to smaller, more frequent orders, a trend seen elsewhere in the bioprocessing supply chain.

Answer

CEO Eric Green confirmed that customer order patterns have changed and are now more aligned with the pre-COVID era. He attributed this shift to two main factors: a more stabilized market environment and West's significantly improved manufacturing lead times, which have decreased from 40-50 weeks during the pandemic to a more normal 8-12 weeks, giving customers greater confidence and flexibility.

Thomas DeBourcy asked if Decipher's Level 1 evidence in NCCN guidelines has improved payer coverage and whether the long-term 25% adjusted EBITDA target accounts for spending on new product launches.

Answer

CCO John Leite confirmed that the NCCN guideline status is a crucial tool in their ongoing, long-term discussions with payers. CEO Marc Stapley added that it significantly bolsters their case. CFO Rebecca Chambers affirmed that the 25% adjusted EBITDA target for 2026-2028 fully incorporates the planned investments for new launches, citing the company's track record of efficient spending and metered investment.

Tom DeBourcy from Nephron Research asked for an updated timeline on the NIGHTINGALE study for the Percepta Nasal Swab and for context on the $10-$15 million milestone payment mentioned in the Q4 cash forecast.

Answer

CEO Marc Stapley stated that the company no longer provides specific guidance on the NIGHTINGALE study's completion date due to the unpredictability of clinical trial enrollment but confirmed enrollment continues across nearly 100 sites. CFO Rebecca Chambers clarified the cash usage in Q4 is primarily for expenses, including a ~$5 million milestone payment, ~$5 million in CapEx for 2025 projects, and working capital changes.

Thomas DeBourcy from Nephron Research inquired about how the forthcoming KOAR study data will enhance the existing evidence base and whether it could drive greater protocol compliance and secure additional payer coverage.

Answer

CEO John Hanna affirmed that the KOAR data is expected to achieve both objectives. He explained that well-designed, large, prospective trials are crucial for converting non-believing clinicians and for strengthening the case for payer coverage. He anticipates the first manuscript publication in the second half of 2025, which would likely influence payer policies in 2026.

Thomas DeBourcy asked about transplant center retention rates over the last few years and whether the projected 2-3 quarter timeline for implementing new surveillance protocols is a reasonable average.

Answer

CEO John Hanna affirmed that customer retention has been high, attributing it to the 'sticky' nature of CareDx's broad solution portfolio. He confirmed the 2-3 quarter timeline for protocol adoption is a good estimate, noting that 10 centers have already implemented new protocols since September, and CareDx is increasing its commercial staff to support this logistical effort.

Thomas DeBourcy asked about customer order patterns, referencing a step-up in purchase orders at the beginning of the calendar year and inquiring if a similar dynamic is expected in 2025, as well as how those orders converted to revenue in 2024.

Answer

CFO Adam Laponis acknowledged a trend of customers making longer-term commitments, which simplifies procurement. He stated that the company expects sequential growth in both orders and revenue throughout fiscal 2025. However, he reiterated that future disclosures on orders will be focused primarily on the biopharma segment, with the main focus for the overall business shifting to revenue, gross margin, and profitability.