Vidyun Bais

Vidyun Bais inquired about the biopharma outlook, specifically if there are pushouts or cancellations of contracts, and the long-term materiality of the MRD side of biopharma compared to historical areas like PCV. She also asked for details on the expected mix of NeXT Personal volumes in 2026 between reimbursed and non-reimbursed indications.

Answer

Chris Hall, CEO and President, stated that the biopharma sector is stabilizing, with no major pushouts or jolts, and that the company is accelerating progress in MRD biopharma. He highlighted the 240% year-over-year growth in MRD biopharma revenue as a testament to large companies choosing Personalis. Aaron Tachibana, CFO and COO, provided a breakdown of 2026 volume expectations: roughly 20% from breast, 15-20% from lung, 20-25% from IO, 20% from CRC, and the remaining 20% from other indications, noting that less than half of tests are currently reimbursed.

Vidyun Bais asked about the biopharma outlook, specifically if there are pushouts or cancellations of contracts, and the material importance of the MRD side of biopharma versus other historical areas like PCV in the longer term.

Answer

Chris Hall, Chief Executive Officer and President, noted that the biopharma sector is stabilizing with no major pushouts, and while translational research isn't rushing back, the MRD segment is accelerating with nearly 240% year-over-year growth, reflecting large companies choosing Personalis for its sensitive detection tools. Vidyun Bais also inquired about the expected mix of volumes in 2026 for reimbursed versus non-reimbursed indications. Aaron Tachibana, Chief Financial and Chief Operating Officer, provided a breakdown: roughly 20% breast, 15-20% lung, 20-25% IO, 20% CRC, and 20% other, noting that less than half of tests are currently reimbursed. Chris Hall added that the expanded Tempus relationship for CRC has seen tremendous uptake and growth.

Vidyun Bais of BTIG inquired about the factors enabling Tecnova to manage through biotech funding headwinds and asked for details on inorganic growth opportunities, including potential M&A or collaborations to fill portfolio gaps.

Answer

CEO Stephen Gunstream explained that the company's resilience stems from its broad-based catalog reagents business, which is experiencing double-digit growth and balances challenges in the custom biopharma segment. Regarding inorganic growth, he highlighted a focus on collaborations for upstream bioprocessing products and tuck-in M&A that can leverage Tecnova's existing manufacturing and commercial infrastructure.

Vidyun Bais of BTIG asked about Teknova's positioning for revenue acceleration in 2025, given favorable year-over-year comparisons, and whether returning to historical mid-teens growth is a reasonable expectation. Additionally, she inquired about the levers available to improve gross margins and the path to achieving the company's long-term target of over 55%.

Answer

President and CEO Stephen Gunstream clarified that while the market is expected to see modest growth in 2025, Teknova aims to return to its historical growth rate of 12-13%, with a broader market recovery expected in 2026. CFO Matt Lowell detailed the path to higher gross margins, stating the long-term target could exceed 60%. He emphasized that the primary driver will be revenue growth leveraging the high fixed-cost structure, with additional gains possible from production efficiencies and product mix changes.

Vidyun Bais, on for Mark Mossaro of BTIG, asked about customer implementation timelines, inquiring if the company was making progress in shortening the typical 6-to-9-month cycle and what specific steps were being taken to accelerate go-live times.

Answer

President Ross Muken acknowledged that novel applications like MSK Access can take up to 12 months to implement due to validation complexities. However, he emphasized that the company is intensely focused on compressing these timelines through improved processes and automation. He provided a recent example of an Exome client signed in late Q1 that is expected to generate revenue by August, demonstrating a much faster implementation cycle for more standard products.

Vidyun Bais of BTIG asked how the Pathline acquisition's performance tracked against expectations and inquired about the progress of cross-selling the broader NeoGenomics portfolio to Pathline's customer base.

Answer

CEO Tony Zook confirmed the Pathline integration is on track, with revenue meeting expectations. President & COO Warren Stone added that the necessary test validations in the Pathline lab were completed in Q2, which now enables the commercial team to actively pursue cross-selling opportunities in the Northeast. They expect to see benefits in the second half of the year, with more material impact in 2026.

Vidyun Bais of BTIG, on behalf of Mark Massaro, inquired about the performance of the Pathline acquisition and the status of cross-selling initiatives into its customer base.

Answer

CEO Tony Zook and President & COO Warren Stone confirmed the Pathline integration is proceeding as planned, with revenue meeting expectations. They noted that necessary test validations were completed in Q2, setting the stage for cross-selling the broader NeoGenomics portfolio in the second half of 2025, with more significant impact expected in 2026.

Representing Mark Massaro, Vidyun Bais asked about the company's latest thinking on investing in its next-generation RaDaR platform versus pursuing inorganic growth through M&A.

Answer

CEO Christopher Smith clarified that NeoGenomics is pursuing both avenues simultaneously. He stressed that the inorganic strategy is not about large, dilutive acquisitions but rather 'rifle shot' in-sourcing and licensing deals for innovative technologies that are accretive to the business. Internal development continues to be a core focus for the MRD portfolio.

Speaking on behalf of Mark Massaro, Vidyun Bais asked about the tangible impact of the new Category 1 CPT code, trends in metrics for the routine user customer group, and the assumptions behind the instrument placement guidance for the year.

Answer

CEO Robert Holmlin responded that the existence of the CPT code is a critical factor for prospective customers and helps reduce adoption barriers. He confirmed that the routine user group remains stable and drives over 80% of flowcell purchases, with utilization rates about double the average. For instrument placements, Holmlin clarified the guidance of 15-20 systems is based on a plan of roughly five installs per quarter, noting that some expected attrition from non-routine users is not alarming and won't meaningfully impact consumable sales.

Vidyun Bais, on for Mark Massaro, asked about the key assumptions within the 2025 guidance, specifically the expected revenue ramp for IFC in the second half and whether the new INT-200 illuminator launch is factored in. She also questioned the assumptions behind the positive adjusted EBITDA forecast and the potential for material investments later in the year.

Answer

Chief Operating Officer Vivek Jayaraman confirmed the guidance includes a ramp-up for IFC and accounted for the INT-200 launch, although the CE Mark approval was received earlier than anticipated. Chief Financial Officer Kevin Green stated that no significant new investments impacting adjusted EBITDA are planned for the rest of the year. He expects SG&A expenses to remain relatively stable, which should provide operating leverage as revenue grows, supporting the goal of full-year positive adjusted EBITDA.

Speaking for Mark Massaro, Vidyun Bais of BTIG, LLC asked about the current penetration level within the five major U.S. blood centers and the remaining opportunity there. She also asked if the Q4 government contract revenue of $5.9 million is a good run rate for 2025.

Answer

Executive Vivek Jayaraman stated that while specific penetration levels for most centers are not disclosed, there remains significant upside, and inbound inquiries continue to be strong due to INTERCEPT's benefits beyond FDA guidance compliance. Executive Kevin Green advised against using the Q4 government contract revenue as a baseline for 2025, explaining that he expects revenue from these contracts to grow as activities under the new BARDA agreement and other concurrent awards ramp up.

Asked for details on the FDA pivotal study design, plans for concordance studies, the timeline for a key publication on AMR detection, and the expected revenue conversion timeline for the U.S. sales funnel post-approval.

Answer

The FDA submission is for a Class II device, not a PMA, with a pivotal study comparing the test to biopsy as the gold standard in kidney patients. A key publication from an interventional study is forthcoming, showing the test can detect antibody-mediated rejection (AMR) early, which is critical for new AMR drug therapies. Post-FDA clearance, the company anticipates a 6-month adoption period for new centers to convert to in-house testing, driven by strong economic incentives and the convenience of same-day results.

Inquired about the specifics of the FDA approval process, including interim milestones, supporting studies, and the expected timeline for clearance.

Answer

The company outlined its FDA strategy, starting with a Q-Sub submission in 6-8 weeks to align with the FDA on validation plans. The formal IVD development process is underway, with a target for completion of verification and validation by Q4 2025 or Q1 2026. They hope for FDA clearance by late 2025 but acknowledge it could drift into early 2026. They also highlighted the strong, positive support and participation they are receiving from the transplant community for the IVD program.

Vidyun Bais, on for Mark Massaro, requested an update on the timing of the Novitas review for DecisionDx-SCC and confirmation that Medicare payments would continue in the interim.

Answer

CEO Derek Maetzold confirmed that DecisionDx-SCC has been a covered test with continuous reimbursement from Medicare since April 2022. He stated there is no new information on the timing of any future review by Novitas, as there is no direct feedback channel. The company's updated guidance assumes payments will continue through the end of 2024, but they cannot project into 2025.

Speaking for Mark Massaro, Vidyun Bais asked for qualitative details on the areas of strength within the newly disclosed volume segments (tissue vs. liquid) and questioned why the strong Q2 revenue did not translate to a larger improvement in gross margin.

Answer

Executive Michael McGarrity explained that the new reporting segments offer better visibility due to the material price difference between tissue-based tests (like GPS and Confirm) and liquid-based tests (like Select and Resolve). He affirmed that growth is sustainable across the menu. Regarding margins, McGarrity stated the result was strictly due to the timing of test mix and payer mix during the quarter and did not reflect any other underlying issues.

Asked if the Q2 instrument placement level is a sustainable run-rate and requested more details to build confidence in the new revenue guidance.

Answer

The company expects placement trends to be similar to Q2 in the second half, with incremental improvements, particularly in Q4 due to seasonality, and they anticipate improving on last year's average placement numbers.