VCYT - Earnings call transcript Q1 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to Veracyte's First Quarter 2020 Financial Results Conference Call.

As a reminder, today's conference call is being recorded.

I'd now like to turn the conference over to Tracy Morris, Veracyte's Vice President of Corporate Communications and Investor Relations.

You may begin.

Tracy Morris

Thank you, Sydney. thanks first us quarter and discussion for everyone, our of XXXX afternoon, for today joining a Good financial results. are Kennedy, Officer today Executive Chief Commercial and me Bonnie Chairman our Veracyte's With and John Officer; Hanna, Keith Chief our and Operating Officer. Chief Financial Officer; Anderson, Chief

various securities will we statements include Before that as I'd laws. make we defined to like that begin, applicable forward-looking during you under remind statements this call

and that our goals product Forward-looking regarding also prospects potential historical potential those and our resulting for the pipeline, statements of attributes recovery fact. impacts regarding regarding plans, drivers business the financial include timing a from and future reimbursement our business. strategy, and are It guidance, COVID-XX growth, expectations the and of to statements other includes statements not pandemic

performance assumptions, uncertainties can performance Management's risks we public the our differ will any to these and results will and they in or to statements, and/or actual results, reflected achievements expectations are further prove from in and so to forward-looking quarter subject statements that implied assurance by opinions correct give provide or the that unless or materially during discussed such cause in may and no updates be performance any guidance forum. on do a not forward-looking future Company

Commission contained factors Please materially actual refer Exchange differ to of that in forward-looking discussion in the included release risk or filings the our statements. XXXX Company's the from events the X, to may Company's and for May important and results with Securities those press cause factors

under Releases section. our results, we quarter in website the call, first at this XXXX to Relations which are Prior our Investor available on Press veracyte.com announced

our during business Relations under which and website section. Investor also also our Events on available financial reference presentation, We This Presentations & the presentation published in is remarks. will we a

the now Bonnie call Anderson, over Chairman and will CEO. to turn I Veracyte's

Bonnie Anderson

quarter first us provide with today XXXX business time. for an you our as our Tracy, update we discuss thanks, joining everyone, challenging on results and Thanks, and this during

welcome team a to as take and financial joins to of Veracyte results Morris Tracy us moment the President like Relations. Vice she Communications I'd Corporate Veracyte's to Investor for her call first as

we response. differently financial I our Keith detailed will will over with emerge with the typical be then for quarter business structured positioned strong results brief to our will the the on from calls. financials overview long quarterly I our a will the believe COVID-XX a Our with the bit and start impact of pandemic are call follow along of discuss why quarter. well we term.

both will the first & quarter We be website. mentioned, is section available Events of in referring presentation, to business Tracy as Investors our under our financial and which, Presentations

and Envisia XX,XXX delivered Including pandemic began shelter-in-place and to product the Percepta results quarter increase negatively in quarter, XX% our solid XX% which in despite our We We testing business mid-March. the compared during for the of quarter impact COVID-XX orders, for revenue, first the the $XX.X total revenue revenue increased to We $XX.X and volume for of to genomic million. biopharmaceutical rapid XXXX. quarter tests. a the collaboration was our onset the quarter Afirma, by grew to genomic testing million

current This advances our clinical us treatment that pipeline And continued with in where we collaborations strategic biopharmaceutical provide from forging despite our make business helping leverage inform are progress and strategic enable and to in extract as have to includes additional decisions. as the pandemic diagnostic indications significant we with opportunities. core headwinds, to well value new our and us diagnostics growth

the ability inform more Data treatment thyroid variants patients accepted an ENDO, test's available presentation Xpression drugs to Afirma which significantly treat identify Conference genomic the potentially that we Atlas, oral in cancer. for for cancer to or gene with at are currently thyroid be kinase April, development the specific In or expanded Endocrine for inhibitor that launched patients. decisions rare our detects novel targeted suspected demonstrated may to with fusions Society, Annual

American utilizes paper Cancer metastatic downloads sample year the describing Cancer used among targets aspiration Cytopathology, the in on of XX% we identifying The Afirma for sequencing testing the a a sequencing past was top that same of the in leading test's RNA in genomic the therapy clinical Underscoring fine XA Afirma utility Xpression in interest learned Afirma have needle with physicians' cancer Atlas, journal classifier. the the Society. for

about name. a We patients will thyroid web-based to to nodules begin of believe campaign up. Additionally, practices ordering for designed them You, back Afirma Afirma we growth help empower ramp ask further these when both drive More and educate to physician launched About by testing initiatives

Further, breast for to treatment breast two of offer in data levels avoid new published articles breast journals. women enabling new able test to important our Cancer many intrinsic more suggest their test leading test growth cancer individualized cancer subtypes. breast for published the subtype. that suggests findings regimens in related opportunities on Prosigna Prosigna the Prosigna the global include chemotherapy reports test These maybe with were in medical based Breast early-stage aggressive where npj potential to cancer, The potentially cancer markets,

to NanoString distributor for instrument tests. business markets. and order-to-cash new for We This diagnostic international expansion securing the in advanced our our relationships process prepare kit global Prosigna also important our included integration and instituting of of business key

has regulatory of regulatory in to our and enhancing secure is upon that XXXXX our execute few been global just ISO to months. also products our certification function established It to plans sell in markets. a approvals all are this We remarkable

help business. long-term progressed pipeline will strategic relationships and important value that addition, bring to we our the In

exclusive predicts lung in pulmonary to a agreement fibrosis, Yale giving or disease, first test access interstitial with idiopathic progression signed licensing IPF. recently University, us including We disease that patients with the genomic fibrotic

fibrotic lung was slower have fibrosis rapidly so Natalie progressing disease, in which test questions accordingly. blood-based Kaminski can which of pulmonary be lab progress leading and that and researcher, patients the noninvasive the disease, of with IPF one will in key they This treated answers developed will Dr.

on today the in U.S. which test to international in and complement launch The Envisia available an the will remains track be on in our excellent system nCounter XXXX. markets to is classifier,

nCounter Further, licensing additional help launch in University with of intellectual agreement our that novel in nasal to for internationally States and swab detection. first test the then development Boston an will noninvasive for ever United cancer the we advance This XXXX. XXXX is on exclusive property slated early signed in system the test lung

collaboration Initiative related of quarter during additional Cancer extracted also value the the swab from nasal first J&J We program with our for cohort expansion Lung to XXXX.

the multi-year of arm Acerta genomic therapeutics their in and Pharma, will announcement to development agreements support a development hematology These research collaboration follow with in our of AstraZeneca, provide oncology that January of lymphoma. information

of important program. progress early the with pleased are this We

Despite understandably our non-emergency smaller procedures with their and closing these doors temporarily restricting impacted many having has pandemic advances, states shelter-in-place issued patients’ business, severely institutions altogether. most practices orders, to and the hospitals

We April test year. compared March, we began volume of continued over where experienced and decline second has to XX% during an reported see genomic prior to through the month this decline in half the

hospital Afirma segment, week restrictions other for slight samples As have the some office Afirma among although in begun market remain volumes rebound seen near-term and suppressed or the we so, products. for customers in dramatically states in to a physician last have loosen

to deliver broader the as and test health Our to community, employees We and guiding our accomplished the results ability ensuring principle to safety pandemic and of was physicians continue to while the protect took their our genomic both. patients. hold

employees relocating all as from establish home and site. workstation halted social such schedules our work for who quickly to most work and We employees nonessential them business distancing employees, CLIA in be protocols to our requires enabled protect travel to lab work on staggering

have mask other visitors all onsite provided protection equipment. to We have prohibited and our outside with personal employees face and facilities

we smoothly, and running test continue is report lab to Our results.

customers virtually. engagement digitally service team we With our enabled restricted, to to sales access customers and our have maintain

strong across product While attendance we portfolio. digital is in clinical limited, educational peer-to-peer practice programs our experiencing are

have on been doubled training We for with have customers. engaged field when our team not also they down

and on the levels. uncertainties business cannot pandemic duration, will impact predict return when we the of broader normal economy its the to Given our

into going pandemic. the We excellent have momentum

will that time. we business some realistically, believe take However, recovery

remains It consistent with practices protocols. whether appointments orders and stagger whether for for in will immediate pent-up will physician example, to social distancing demand procedures result seen, be or testing physician

know when for will detected. example, patients thyroid non-emergency be resume appointments, may not where, nodule medical do initially a also We

we To in expect QX means, XXXX. presentation, a guide our laid in strategic out will X result uncertainty, recovery business normal our operations a are have financial of a in or currently framework currently recovery. priorities U-shaped on Slide this return and This of plan we and as QX business which to our assuming we

we as alternative happens segment. approaches are and analytical And each framework sooner slide. to monitor We tools have pivot our ready of also region to geographic recovery if to takes market or shown in course, longer we'll be using

to and we reducing a are flexibility. XX% costs. end, recently business To immediate and can preservation Assuming that recovery, actions pay resume company These we until my normal reduce by own target bonus U-shaped operations. the included cash prioritizing took

small reduction lastly, them Veracyte's securing nonessential terminating and a Board all employees, current approximately XX with business vendor of taking a pay, outside hiring executive a and temporary halting spend. a instituting in other certain bringing on employees and Directors, furlough number and of putting of our employees rebounds leaders back freeze; temporary goal discounts once

strong we will current from saving we to these necessary believe but taking positioned By cost temporary, steps now, emerge better the situation. be

the at and local come institutions orders as customers are We redeploy and they as are tracking level to as from state and policies online. to closely positioned shelter-in-place well practices back

of will turn the I for Keith quarter more first to over call financials. detailed XXXX review a now our

Keith Kennedy

business I'll results. our Bonnie. refer and first also I you, Thank quarter financial as our to XXXX presentation discuss

with report footnotes U.S. further to explain under and filings, Page we shown our table how X. recognize The details the and SEC along in GAAP. here, revenue Turning

our diagnostic testing we to collaboration revenue and arrangements. For purposes, describe our and may biopharma to business, combine strategic testing revenue describe product and discussion

as under or loss. sales to our non-customer net are such milestones biopharmaceutical other revenue in And reminder, consolidated comprehensive of a revenue. collaboration As all customers classified operations revenue of our and classified other under data statements are services

presentation. X to the Page Turning of

Our as the quarter key follows. for compared performance quarter or the against XXXX to year KPIs, X is prior first performance indicators, of

year mentioned, $XX.X million a Bonnie we grew million compared revenue increased million, of $X genomic revenue $X.X prior increase XX% to As the product Total X%. quarter. $XX.X and to or or our million testing

in sale of margin million, $X.X data that which the were to principally XX%. X% the and Gross declined Johnson million, Johnson our prior in $X.X margins collaboration revenue from for to & of Biopharmaceutical contributed quarter. quarter year $X.X gross million

XXXX, the This XXX pandemic write-down basis volumes, of recognized $X.X resulted recorded points we of test a of quarter cost to revenue. million in that first impact expected the reduction the supplies approximate gross margin. on In in an write-down of our we expected due in COVID-XX global our

sales in Johnson in & first of just Pre-pandemic, As XXXX Operating approximately first the to the quarter. sale of mentioned, team, data Johnson by count expenses, $X head in gross revenue, I of million prior that X% cost margin XXXX we million. our approximately compared quarter quarter $X.X quarter. ramped of sales to year to and increased marketing contributed the XX% increasing the excluding multi-product

NanoString Associated prior million year incremental included acquisition XXXX, which quarter, with quarter is we our the an in intangible compared amortization first recorded fourth the in expenses. quarter in the in of $X XXXX asset operating the of to

in In taking in the million announced business, to XXXX, In $XX Bonnie the our year, mitigate of recapped approximately of million that remarks. actions. in April cost-savings pandemic from hope series initiatives prepared COVID-XX planned this a response global on we these to to impact $XX spend her we

$X.X from and of We to compared Johnson. principally partners from in $XXX million. of in quarter, cash to in net the incremental increased was the loss current cash operating cash quarter biopharma relative $X at increased XX, prior data million And $X the activities volume $X.X million million XXXX, Johnson prior the XX%, to quarter. in received used million year March Net year $XX.X year & sale million. was Genomic

biopharma Page product into a X and revenue. revenue revenue and provides breakdown collaboration total testing further of revenue, and

grew the year XX% previously over prior genomic As quarter. testing mentioned, volume

of and with announced expectations the business prior of collaboration the XXXX. the on Acerta to product this outperform which first an on announced in quarter business, our of a in Pharma, was acquired amount research multi-year resulted AstraZeneca, a we and for newly previously pandemic basis annualized hematology pace development small revenue Our arm to

XX% including For $X,XXX and tests, met $X,XXX March reported standard, which we XX, the the between average, genomic the recognition for XXXX, between classifier on our three months accrued, test Afirma classifier that revenue of and volume. Afirma variants ended XX% was

volume percentage of range test we that being the remained or Though in has X% approximately us result consistent, recognize paid for point $XXX,XXX. every approximately not may

training field metric. and steps taken improve process have other changes this to improve upon We to to try

underlying few sequential The results of next six pages KPIs. outline our year-over-year observations. A each the and

turning and obligations stacked that services, year-over-year or clustered as recognized core depict as milestone-driven. column of sales typically charts our growth and graphically to well Page biopharmaceutical product in customers testing The collaboration performance from are First, revenue, to X. of or upon event and recognition genomic revenue satisfaction revenue

to increased million Turning $X $X.X XX. Page Operating year-over-year. and sequentially expenses million

ramped sales XX% and and year-over-year, we increased approximately XX% increase sequentially average multi-product team, we majority As count head the accounting our sales in operating expenses. for of the marketing

As I the such of mitigate on in taking the $XX to April pandemic stated global approximately planned our took $XX from actions actions. impact we million spend business, earlier, we hope million to through in COVID-XX the response to in

I will to turn over the call now back Bonnie.

Bonnie Anderson

Keith. Thanks,

the positioning. of business in confident fundamental strategic our and Looking strength ahead, we our are

these with points. you leaving five why, explain me Let

genomic core business our strong. First, is diagnostic

genomic in costly and appropriate serious helping patients major commercialized informed treatment. diseases, that have decisions treatment to clinical and quickening diagnosis cancers avoid risky, We high-performing and indications, lung tests time four procedures

believe than ever health more We care are our qualities to these needs essential the system. of

are All and of private commercial reimbursed our Medicare payers by by adopted and physicians. tests

poised are diagnostic patients We a to billion. that in best-in-class to expansion. deliver estimate believe tests we robust them worldwide exclusive tests platform for of genomic over to instrument opportunity that nCounter, our global we locally. With growing believe market laboratories hospitals be to and positioned the we can obtained well advanced $XX menu global through perform are global for a NanoString we we access our from the XXXX, December Second,

patients will diagnostic have and with significant invasive while a XXXX. detection, cancer noninvasive pipeline. cancer diagnosed early to swab believe We avoid sooner, risk in novel we currently to on remain treated products These high nasal for low-risk comprise launch track the procedures. help Third, a get first three of enabling test which patients lung to we

in in United in the nCounter our Following on the in CLIA XXXX. test internationally we our States to platform launch it plan lab XXXX, launch

decisions, Our with Percepta the physicians diagnosis alteration treatment lung genomic of on for provide track launch. remains data cancer at Atlas, important which will XXXX inform time a to

With the with we patients variant data physicians a rely thyroid Xpression in patients, treatment in timely seen with on we begin extensive today in to targeted novel, treatment have data very cancer, are the our minimal Atlas the disease this and for whole-transcriptome lung paradigms same enthusiasm journey excited where for cancer, decisions.

the it us global patients to offer end their to with interstitial adapted nCounter physicians classifier Envisia or enabling suspected our other for of diseases And XXXX. system the IPF and to lung in markets before

to pathways Fourth, leverage our advance provide growing create collaborations pipeline creation. our biopharmaceutical value and for strategic new

throughout We have patient range a RNA on other our that important clinical through answering, questions indications. already relationships established use focus a of oncology leverage number biopharma the in of sequencing, the and journey of

lymphoma. nasal in AstraZeneca connection include to-date cancer, Eli our Loxo with in and Oncology in Our Percepta thyroid Afirma LymphMark in and in-development & collaborations Johnson Johnson Lilly, in Acerta, swab with cancer with connection lung test

can the by would clinical drive clearly as remind predict further partnerships I other like to difficult these to leverage and be a revenue we investment expand will believe partnerships and we value. you genomic nature, our testing to advance presence oncology our continue provide that of business. with commercial additional portfolio We to in indications very and biopharma lumpy from but our

And position. finally, cash strong a we have very

have cash, in reference giving of us from our and have today. catalyst runway XX, you that financial it million the our of updated and and from your at $XXX.X business business we corporate As slide find for also March end deck, can long flexibility. Note XXXX, we our a presentation

huge storm to of challenges company. into to to I rising of passion collaborating, to occasion. face such have new solutions look unprecedented done the out shout phenomenal a structure, give I sought ways employees they closing, In adapted job work truly a I team, our new to creative this weathering the their attitudes, – am embrace Before tremendous Veracyte forward adopted who honored to have a and global and this pandemic, maintained like would work to to of to positive world-class lead build and continuing a diagnostics and focus.

will ask the I Sydney to for call up now open questions.

Operator

our [Operator from Capital. line Instructions] Lake of you. question with And first comes Street the Thank Flaten Tom

open. is line Your

Thomas Flaten

Great. taking much question. Thanks Hi, guys. so for the

things. that you was kind I'm there just – saw further lot when XX% deterioration, in in your also half did of steady if Just a COVID, if further reduction know to you Or XX% testing because used volumes. going pre-release plus back if that can was a had second you of you a plus trough deterioration? stay or mean pretty mid-April, the the curious of April? Did in I

Bonnie Anderson

No, Thank through today. the you, of much that us period Tom, continued April. for number pretty joining

Thomas Flaten

Great. one there that recovery your scenario respect within you scenario more – furlough framework, we your earlier you're is think the additional do as stay you be if think the or with to totality will within U-shape stay And as instituted furloughing temporary April, of in from? long U-shape then you that do – working that that rebound we your

Bonnie Anderson

Yes.

that's why think the out I framework. we put

early be that back. to going thinking of a reaction. 'V' a then down this think people were would I everything's We deep pop on, and boom, go lot

about the maybe On very, other still long end recovery. of it's just there's the spectrum, very questions a

recovery, longer getting respond might the whether to shape that U-shape more that us of the a to of in and of comfortable data recovery we benefit us or as field that out at all day of the but and there looking rerunning indicated gave the for fairly longer-term rapid have such have analytics lots every V-curve either the a aspects that well, planning giving all chart. the in that echo we're data think I and recovery as the a in of flexibility and that people cost kind preparing we're that savings,

taken more preservation And the quicker we've comfortable steps we ability, than gives we're I to easy need. back, the for. hope furling bring flex it. if weather rebound to think us we hopefully, the we're and the So we give respond planning to that ability we need And people quickly, cash and the us have

Thomas Flaten

swab one, are one from could final be the insight just XXXX? this – in might then or you data And maybe to balance Okay. any is over expect us releases give nasal to we of year see going some what are in or

Bonnie Anderson

Yes.

note, because this So growth we really in And as did the has look what we put our guidance pulling implications seen who growth, pulled don't will our know around slide deck. catalyst sort the before of slide anyone like. will we've that

of stage But we any fortunately, products where the augmenting any J&J, to are expecting done collaborations the of the pre-investment because at over built, have the been already having we of clinical a been that products. pipeline lot have these impact and couple at that, of last the our of time, has significant not with years, cohorts to

predicted to that is the to So launch swab validation Typically, in timing. launch XXXX. data nasal comes test close out final

So data would any have I we of the will some think opportunity of development interim algorithm are hopefully typically come But to organizational we as year. yet moves share don't as some do see that sets this this final the have into all virtual we we validation that of data of kind expect interim forward. data to year, meetings, which an

markets year to commercializing excited we our to XXXX strong. one products, be the are time. It of And pleased remains the three for first is those on that and very of busy is track. going But a international pipeline very going

Thomas Flaten

Thanks so congrats and for on much great. the taking everything. That's questions

Bonnie Anderson

joining Tom. us you Appreciate Thanks, today.

Operator

our Sung with Ji you. comes question Nam Thank from BTIG. And next

Your line open. is

Sung Ji Nam

And ahead surprises any be I and towards out the was you quarter. your highlight? end have obviously expectations may been. you Bonnie taking genomic I might for Keith Thanks in testing there to quarter what headwinds volume, you impact COVID the a COVID despite are be if curious of of wondering core strong terms pacing if very are to that able able the was if parse may Hi. the of questions.

Keith Kennedy

do we at the great things team really our path our business, on core testing the and business. to commercial really We end Afirma that. on year, felt I of good of think the in side the about ramped we're

best lung lung And but I did $X then only $X.X mean, in had. about had Our million. million think very million, We in I business revenue well. I'm is $X.X did just ever the chuckling, quarter. Prosigna quarter business the alone our in has product this

sold in covered. product And all Medicare that?" the you it we "How very us status. business We have do believe network all I like think They're – were, the even So to our think that we do well. has people done products

We of the really have team the in – leading in their understands test markets. market sales a products. great each that They're

there's a were of that just things So pre-pandemic. happening lot great

in And personal that everybody notes done on things I think we sort business engaged what team doctors to have and coming John about and and get business retraining back. and Hanna getting of feel touch, commercial back, writing come has just and that will good of to the front doctors a that

are good we we talking essentially what having the where the been people And And feel our positioning procedures. things about try test the more invasive from company. fact diagnostics people been we've about and understanding all more keep are we've think to and that that

we really great. So that's think

investments And to impacted lot already made, continue biopharma the be probably a Bonnie business, as and not then of our this, the going said, this. throughout can all because progress we we to by as and cohorts much have that's collaboration that

very there's we just lot hopeful feel a things for. So of

that is struggle this getting the pay physicians obviously, that. We out of and like a of lot can't money country, are in, and aren't for of work across or people a they lot that things a nurses people

gets back across recover. to So here feel employees that good but we furlough, feel people had we and and thing business, for we've is that there like we chance we a this feel that really our for

Bonnie Anderson

Yes.

to wasn't of collaborations the collaboration from that this I ended anticipated. think revenue booking in area three the biopharma up which quarter, we clinical out, close just all

us. Keith well, quarter for very I anyway, think So strong said it

Sung Ji Nam

patient was through kind thinking Great. you're very or options? the curious do That's recovery think target in next of you very for for second helpful. what in though, us, expecting more diagnosis of And quarter also their in that then levels implications it's are framework I if the terms the first, year, patients of treatment for helpful. delaying thank the populations you normalized

you potential? or will terms to into you ramp spike know I be a significant prepared are of in or in demand pent-up or don't think year? a demand Do early next phase. if the accommodate might demand catching-up there be heading And address on recovery there

Bonnie Anderson

So do just first second if I'll saying anyone want don't them mean, of frankly, know I they know. adviser, going as first I especially that to I the mean, hire right. start all, to what's thinks and quite by think they're we I happen next in year my quarter.

– know, the commercial don't mean, of that that on we brought year So of hiring in very as but balance had furloughing as we of chose think kind of going level lot we I Keith out, pointed to obviously, a the of we not team. NanoString hit the end I the

growing U.S. John's we carried Keep European included group year. in the up ramp the QX But wanted and did both addition place. that and that, in hiring three that we the to products mind, marketing to keep have in we the NanoString here over expense part that sales brought into to through and for of in

have believe, turn the we savings access we there So in deep a – that our to. enough to to reps dime we recovery but from can't back think plan it, have went too to not substantial any site on a get with deep that I cost

kind let few return. change business the little just done believe different to a a paradigm and slow take to of to they've the of some it's be time, not he's through that walk taken why time walk steps maybe that even we also through what John to but you don't a of advantage more good of things to organizational this kind other bit only in be And things may when do ready that? readiness John,

John Hanna

were organizational the customer and behind They prepared for and Sure. and Yes. ever question. focused are in remarks initial on touched proposition their this both policies digitizing three put but since is readiness, things Keith are there. thanks we've the shelter-in-place out emphasizing the places, the really really different very third Bonnie in our on engagement. value products, there been to happy I'm

we've And virtual so time ramping from as U.S., our in structure field team the a readiness place platform and put invested now for been a some members. really for multi-product our perspective, strong have selling training in we

And members prepared and skills across able team business into double we the and clinical to down product back on rapidly. selling were move that sell get with the as to really are lift and the policies ensure our as the out this knowledge, soon to to country they leverage field knowledge shelter-in-place

the that disease those Atlas thyroid to Afirma higher risk in patients and focusing in of at as such COVID our proposition, that avoid value for be as cancer. emphasizing of then informing The upon low value risk helping are are the need second prioritized is of invasive around procedures, really products that Bonnie Xpression on about, this talked at procedures our or era patients unnecessary cancer

thirdly is engagement. then And digitizing

balanced are think service but enable said, of in our way to Bonnie our us we here to individuals inhibits any a took what don't savings, ability as we this furloughing to the appropriate believe approach customers. number cash So of have we

restrictions, staff also but the Given for companies, for in of they have other that our employees, both travel and put many of we service. that place like physicians the safety office that

And service. enabling conference, we e-mail, of web with virtual engage that focused seeing phone, we're engagement in level the peer-to-peer to high customers, all by specialties really video, digitally of text, programs and in so on be our whether employees we a

appropriate an like So steps the as taken we organization. we've feel

patients. field high support any in service to a customers back the those in way they degree of come and with have that their customers online engagement today they've team to We as they need really the prepared

Sung Ji Nam

the Helpful. Great. just Thanks you. Thank – I'll in queue. back

Bonnie Anderson

us Okay. today. Thank, joining Sung Ji,

Operator

And Souda you. comes with Leerink. next our from SVB Thank question Puneet

open. Your line is

Westley Dupray

Westley guys. Hi, for today. Puneet It's on

Keith Kennedy

Westley. Hi,

Bonnie Anderson

Hi, question. Westley. Thanks for your

Westley Dupray

point, the came about Obviously, for product the of the earlier And to the little And it to kind the just strong just, at a for a moving looks forward $X $X mean I the follow-up And I disruption in year with rest guys well. question in that's maybe what's year. explain mean believe through I this impact million been the that you segment. I the Hey. I our the but you start ongoing the year. had year? more above – wanted can start suggested expectations as an guess can I on expect bit million guess the to to I on worked and well XQ call, on of segment. near term we guess strong

Bonnie Anderson

Yes.

million sight, that $X.X So a able to million of I faith a we line that. to do for be obviously with isn't right? there in of think quarter leap We that huge be but don't had sure, $X could actually know that, predicted

I think strong, the focus. bring we kicked in year tremendous got just off

And to product, Antonio Prosigna, but really tell this be in able story oncology meeting a very able Europe virtually in going portfolio be to not isn't everybody of marketplace well but Breast going as global of to early truly about the platform as meetings just Cancer San as key just just of what the beginning getting do a leaders story diagnostic to a other on products. vision opinion of being to the in this we're with access early of excited with December as at the and enthusiasm that new

the year data then Cancer a at into San lot the the on think coming in product and momentum that posters emerged Breast the driven by I of December. that a Conference presentations And Antonio of also, and lot was

its talking with breast But are a ability seeing – around enthusiasm the particular, my in subtypes just for is in we in to report intrinsic briefly it what prepared mentioned of cancer. lot my I And remarks. product

that recurrent literally on reporting just And risk predominant a market. is answer guide treatment of this the products score can information choices other by of above really is over the given and and decisions that beyond

know And leaders so to and engage, thought do think think seen studies I momentum intrinsic exactly product-by-product answering that. whole of been exciting I be to think have a coming out of emergence on QX, subtypes. specifically. we've this Sung when to But this we do and lean don't And that really the great entering same We lot data with at a very this would to wanting time, had continue some – into about how unfold. we to skipped will it and the maybe Ji asked continue able

evaluation. But you the Afirma the that segment open I to auspices likely the if living institution office probably These first a is that gut up. rules doctors that believe around for our begin market physician aren't reemerge onerous more think system of in they is health the feel, to of how under we early rules care U.S., nodule thyroid or an will, has is

environment. these with is their volume And offices fairly manage and it the probably fact can safe patient through do a doctors

seen has segment from coming team our reengagement that early specifically. So

that physician segment. You of volume the office might Afirma recall our comes market XX% about from for that

we've The hospital across has business all all to products been that our the mentioned. levels suppressed of

usually detection really breast comes don't of test, And of and of other tested in patients work early performed ours cancer some have Prosigna others mammograms term, the early questions, we from following clinical cancer this long that there. the we outside are enthusiasm on indication screening. So as breast as that well then think as these with answering testing get and having market the for

XX – U-shaped and rather over. times I health people V. with of we any think a don't wake emerge that this losing women is of leaned up that this to a people their believe going out from And all lot day are made as people why kind into work, we million I've of this us losing slower, care, of jobs, comments few will and don't being be than re-curve one this maybe We

the think they're to things of to have psychology work. about And just of the first the doing mammogram kinds going isn't back their thing these It going way done. is

– So for expect on recovery we that longer one could the Prosigna. with impact example, that actually a

the lung product each own to time, year because a cancer its nuances. At have might gets will same think probably that you're with answer patient to a if a patient. a get cancer want waiting I to kill So detected, diagnostic going

different pandemic, And that emerge and recovery to pipeline through business play and So these value new have our think that value eyes along positions in products this of our well. ways, strong now deliver we our different quite pipeline business, curves, us segments we on keep with with to we'll all coming strongly we believe, different diversified our the of ability propositions that it, but will from perhaps. and different have own very on

Westley Dupray

you. number great. as That's well. my Thank of Actually a answered questions there

Bonnie Anderson

Great.

Westley Dupray

year-over-year on on are could early, reopen we're but you kind quick could that just that to very if high-level to ask it's I XX% up But follow-up sitting in states provide Thanks. commentary starting started if already, still one reduction? know I or any have trends if tick still of back

Bonnie Anderson

run will few And does every which those is errors, rural state very where there see territory. rounding seeing there's we areas some don't John at rep you and but say level, probably of the are data is every right? out that John Overall, a reemergence,

John Hanna

Yes.

a say, reduction this change I we rebound. think remains the the community the prepared endocrinology in is business we're that segment, to Bonnie down not at can seeing year-over-year, estimate practice in slight XX% general, it But best we're at which that time. and stated

Westley Dupray

Appreciate you. it. Thank Great.

Bonnie Anderson

Thank you joining us. for

You bet.

Operator

with from Instructions] [Operator you. Janney. comes next Thank And Paul our Knight question

is line Your open.

Paul Knight

Bonnie, can you hear me?

Bonnie Anderson

I joining can. for us. Thanks

Paul Knight

we're us East ago, live about of XX on were dropped minutes the Some now, all back Coast so...

Bonnie Anderson

that's few. a heard from that Yes, we've

Sorry that. to hear

Paul Knight

be range. Must the

Bonnie Anderson

be. Must

Paul Knight

diagnostics, on Regarding on put with you on volume What way, Could they been, lung below that docs us it cancer little Percepta? Afirma, out know the a color that's growth. continuing Percepta? average specifically corporate the volumes this the is give on of comment I were

Bonnie Anderson

group very lung I being think well, our is that altogether. Percepta we into kind those received and volume of

two a prior these call $X products of revenue million complement which pointed sales collected. process because very of both booked other growth common lung, year. the are over that hospital point, we're Keith a it's – was actually it's about And those the XXX% out seeing earlier, products common within in over As setting we in really each

where right quarter pleased the on in quarter, last that business Afirma even the in, of and came was declining. would we're much weeks well, that in light pretty of couple where So first as the be thought we with with target

Paul Knight

increase how in? you about Can in clinical collaborations talk relationships you that market. then than we testing a are difficult world it COVID to this in revenue less for and your And Yes. are target that's going? is And

Bonnie Anderson

Well, company searching I turned because biopharma to we not just for to just a collaborations, we're want clarify, what on channel certainly, have the to business. with I – biopharma doing want new like

partner, not driving the to success were pancreatic We I the What our with we're is a through someone in in clinical business. that want adding aligned not drive doing revenue very believe diagnostic to value amount we're or indication it's us assays. clinical only do a with strategic what while gives which And et are creation lever value tremendous because deals the a is tests prognostic the of the clinical building we milestones, leverage doing entering that. us of we're but biopharma we're done test help not they cetera, doing of and being where in

I we Afirma product with a illustration little bit in deck, product, so pulled year thyroid at a company I way all ago, but is or we, we Veracyte, we diagnostic of it investor a answering Percepta product, a that just an corporate have our and Envisia unique have that a were the an where have really in this And questions. nice we today, think don't said, off. And up deck the that put in as

now of on of the variants product thyroid we We've platform Atlas, extending are We inform an call this array cancer infusions are across Atlas. now that data. on additional extended bringing transcriptome and entire our to whole back thyroid value to in collaborations Xpression Xpression us

in to seeing attempt these that we're also benefit there would of rare could is And new along field a enthusiasm treatments. find typical maybe and an the radioactive not respond drugs that to patients the come as lot

cancer, of in knowing bronchoscopy to tool in Percepta go science the the an where and wanted to use early nose. improved to improved We efficiency did to field had we detection the injury same market aid diagnosis, in bring early thing we of lung procedures, that same

That was is cetera. value and the has leverage be to J&J been commercialized, the our that that cetera, lot pipeline, get going which clinical lot these to of bring where bring in value we are helping to business doing But relationship we're to market. a partner add cohorts, perfect the time in a advance the et getting products at of to et new out, all we've bear topline. able segue products strategically panned the with us to to to to And able leverage that,

markets. the In in year swab year nasal next international fact, launching and U.S. the after that the in

enthused we quite brought So and strategic purposeful new and out. NanoString, acquisition of indications on two then very with quite oncology the we're that, frankly

to secured and same a with informing that to playbook, as believe the play yet, value lymphoma, subtypes hearing well not cancer for build emerging data important and we're biopharma treatment product this that decisions conference to to and a even commercialized breast that in might guide cancer space. be on lymphoma helping diagnostic this breast now we treatment we've and leverage great how testing is decisions at in new a data with the in going patients, think of relationship I already and still a some development place in

strategic that the is diagnostic that will, it. So done equation about doing lifting decision a I important build you everything clinically strategy from with funding, very and it and the have help collaborations is side both treatment we really think if and excited the we're really what up doing we're of

inform we sample be answer answer collected surgical strategy. this play procedure getting a through of patients of be we data right talked that has which into help launch market We time to at the questions to to entered decisions of the another year, can later like Atlas Xpression think call next the these Percepta and to diagnosis being that months it. a thyroid where I on brought going two our with able treatment is instead Atlas to a kind potentially about that of after on be depend here

coming all it's together nicely. So

us and scientific focus that to collaboration, It's deepest a bringing any advance we're onboard broadest based making we're leverage we but in chasing deep into, give platform not go around and the and understanding things to and exists pipeline. sure clinical investment strategically around are going that indications the out that technology

Paul Knight

Thank you, Bonnie.

Bonnie Anderson

You bet. being call for on Paul. the Thanks

Operator

concludes you. participation. Thank This call. conference for your this and I'm not Thank showing at gentlemen, further Ladies you any questions today's time.

day. wonderful have a Everyone, You disconnect. now may

Veracyte (VCYT) 9 May 202020 Q1 Earnings call transcript