VCYT - Earnings call transcript Q4 2020

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Operator

Good afternoon, ladies and gentlemen and welcome to Veracyte’s Fourth Quarter 2020 Financial Results Conference Call. [Operator Instructions] As a reminder, today’s conference call is being recorded. I would 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, Alex. thanks fourth us XXXX quarter and discussion for financial everyone our of and afternoon, for today joining a results. Good full year Chief Kennedy, today Officer and me are Anderson, Officer. Chairman With Bonnie Chief Financial and Chief our and Keith Operating Officer Veracyte’s Executive

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

taken events XXXX, launches and among respect include, Veracyte’s statements Veracyte’s long-term results, subject opinions Veracyte’s plans, recovery Veracyte’s of will and new these financial others, expected performance press forward-looking are Please addressable unless the in acquisition or company to to available of our Press with of guidance the in statements Forward-looking to Decipher, timing call, anticipated statements, impacts Investor our take otherwise, discussed the Veracyte materially products and further in internationally, actual the a the those of our Securities forward-looking will total forum. February we market, statements. a Prior fourth to veracyte.com benefits, uncertainties may refer quarter the results differ on reflected differ provide through risks business, future factors results and may factors cause actions the catalyst give important and regarding from and and completion included momentum website such quarter that year future achievements COVID-XX Decipher on performance Veracyte’s we to anticipated the discussion risk this XXXX performance a assurance XX, for implied cause company’s section. intentions the and/or updates Releases forward-looking expectations will its expectations, with and not by that of or from in on of the objectives, of so statements and contained potential that are Management’s drive prove at for correct assumptions, availability Commission expected to XXXX testing in current timing XXXX, to business, which any or the public timing of has and or Relations our in full or Exchange be release actual COVID-XX, Veracyte’s acquisition in or in for the do no to filings company’s can and they response materially announced results, Veracyte’s outlook. during to under any Veracyte’s

a published and We website we which the over also Relations is section. business in available our also the Events our and Veracyte’s Anderson, CEO. Bonnie to and financial Chairman now This presentation will Presentations call Investor on presentation, I will during reference turn remarks. under

Bonnie Anderson

the of from revenue the and thanks solidifying in joining in XX% the place quarter hit swab $XX.X over test our month, revenue a diagnostics leadership and in across prior quarter, Thanks, over growth. are lung quarter business fourth million accelerating today. with significantly Biosciences, drive rebound cancers, expand manager our a XXXX, with fourth this structure our We an acquire delivered Decipher everyone reflecting to to and products have XXXX general cancer, including nasal Tracy Despite Percepta a now oncology strong and multiple the we into further pandemic cancers in presence and increase world-class XX% pandemic. common of sequential of market-leading the strong our on new in strong momentum base our accelerator us will the to XX precision launch most genomic Atlas agreement urologic Earlier forward. global we Genomic company, the for track of noninvasive whose diagnostics closed headwinds, tests our XXXX, we X business the and

testing breast million cancer $XXX genomic our well the anticipate by the as fueled the third XX% of interstitial which to million, increase by over lung adoption and of quarter, XX% the final an lung is a will prostate quarter diseases to represents target tests range. approximately the in Decipher, X over tests be combined growth products of X, XX% year. at in the the which assumed acquisition are of was volume cancer. and by We growth increased of $XXX midpoint cancer, April XXXX, cancer, product thyroid occur XXXX Our Decipher’s Pending in revenue as over revenue-generating this we XX,XXX of prior approximately XXXX and XXXX and guiding

While tests gained have traction. rapid relatively to new commercial the market, Decipher’s

the year of I cover measure the fourth Now our of commercial will highlights quarter full with start and results. XXXX the growth, first let’s success.

Our business continued faster we rebound has than anticipated. to

business product genomic Our pandemic was and hit $XX.X quarter than fourth second the of testing quarter the low. revenue XXXX double more its when that million

recovery lead over quarter Afirma over up Afirma the testing year with to quarter. X% Our third XX% prior or continues volume the sequential and the business

at as improving, although we is expected. pace business, rebounding a pulmonology slower had Our

nearly continue apply second our by Medicare. prior goal receiving diagnostic Envisia We our These and idiopathic who and interstitial an Envisia $X,XXX are We improves we rate approximately had our exceeded laboratory new that of XXXX revenue of X, year, went several wins which reimbursement into to test diagnosis Prosigna of to fibrosis. our The be for success momentum, including our of on reimbursement of the included for volume the the the the patients that covered a disease, classifier, quarter delivered advanced metric. year during with designation or new effect lung very pulmonary ADLT XX% fourth triple where XXXX, in year. was rate key will and Medicare October pleased

treatment. continues Afirma in testing out our to XA diagnosis our XA in rounds plan development. available a offering to for secured in comprehensive growing rise and targeted comprehensive thyroid thyroid which in demand Blues with journey number that for throughout the treatment Afirma Atlas, care we therapies guide Additionally, of inform policy coverage profiling the thyroid The first which cancer uses are Physician genomic or we for cancer Xpression Afirma decisions cancer. patient

achieved also patients pathological benefit with all physicians German approximately with the for Germany because on significant We in test breast alone. early for important stage cases, develop receptor women each year, reimbursement adjuvant based a XX,XXX approving for hormone This HERX-negative determine positive breast government many the cancer which Prosigna milestone challenged disease. in chemotherapy women from cancer. clinical to And factors is are will

pathology in to accelerate success, clinical our our to through for in genomic We instruments already support that We strengthened of testing our patients. next our for Germany local are metric reduced peer-reviewed procedures in published lung nCounter across are evidence, indications, including library cancer all Sequencing poised unnecessary a in growth place in of in tests of diagnosis. CHEST showing journal Genomic study XXXX. studies was these XX invasive Percepta Among our Classifier that the published journals the

issues. breast ability the top clinical a in cancer cancer breast utility cancer cancer renowned upon to is payers. Respiratory surgery. were of reimbursement frequently led Another XXX efforts among explain of is study, study In a published demonstrated by Prosigna throughout as world for PROCURE may and important clinicians was how Clinical utilized publications decisions study an idiopathic classifier treatment first to and The overall XXXX. as in tests. on for generating the Envisia RP scientific Prosigna. Decipher’s to of methodology, Delphi September those the we part independent survival. The guide to also to breast American or the by increased Care which most cancer breast certain test We steering test evaluated complete PSA complex believe breast independent business, this Decipher’s of the can study has brought expected the a and the to study for biology study committee predicting landmark Decipher will about foundational the in metastatic compared cancer predict key long-term leading last researchers of well-known delighted shows risk published of published risk The breast with is breast researchers recurrence week we better the that These be diagnose tests, cancer, Europe. be gauging consensus ability Europe, technique test’s including Oncology In prostate-specific our We used test improves Journal recurrence. year, The patients that Critical commercial findings suggested among together our in the believe pulmonary JAMA Prostate Journal about an which to built with see clinicians experts be significant a physician’s on study them consensus study that evidence which in utilizes of genomic need evidence predictor the for validating Decipher PROCURE Oncology the achieve these without announced in test. to and the antigen development milestone the Medicine is fibrosis of other with will

the that become Decipher In commonplace. positive strength to recommend fact, more its the lead to that basis that. It’s and Oncology into finding endorsement clinical of stated accompanying ASCO get than of adoption the in commentary the of JAMA the author guidelines evidence, should of should the the reconsideration of an test use routine use hard on

our identify demonstrated aggressively death for our data four here, and too, be year. detection advances to test development that lung work we Most do is swab physicians do delayed detected, partnerships. lung candidate in genomic our in significant them which first metric to cases and success test preliminary And Percepta performance up. leading swab cause up data of will Day cancer pipeline Genomic a procedures not shared a initially notably, decisions the December nodules in cancer. patients test informing that cancer in at our which how unnecessary disease and event Atlas R&D for We to way Today, treatment its lung cross for validation final to which able nasal when invasive leads worldwide. are kind Our unveiled have to models, is noninvasive and the biopharmaceutical of this, we throughout benign made work early classifier reliable treatment nasal for

Initiative our including include imaging. among and targeted Lung on of could will information the lung their tests, run the we global track of add stages be or help the be in to in lung that comprehensive lung XXXX, track Johnson will We locally. genomic earliest nodules key the a part its half it large-scale clinical Percepta diagnosis study what of the the differences shared other to system preliminary priority on intercept intended excited prospective coverage to which at instrument to Also in on by and lung of CLIA detect detected with lung also those this Both use time cancer advance treatment market. we it on more in afterwards. they cancer launch automated alterations then shortly United diagnose can CT localized in we that early-stage tests about & We bio-repository we all available using The X,XXX-patient swab physicians close plan lung lung in has from cancer, that the policy cancer is our bladder cancer. develop. previously the which for portfolio is markets future initiative need intensive a vision begin laboratories are second clinical with that trial, we our breast, genomic, patients are at launch across The through one goals the nasal of biopsy development of expanded & advanced Pending even as offering the to into decision. cancer to Decipher Johnson the million We on commercialization expand a accurately the known us first provide States its cancer. our tiny NOBLE broader benefit can provide samples menu secure data, at through Cancer in to stages. and used that test treatment. the Atlas, plan in are and the fully to in acquisition with the the Percepta to data of lung a and make with our Atlas cancer the to bio-repository its test, pulmonology, information physicians nCounter will final for of Envisia key nCounter multi-center year to other and make patients in collaboration its Johnson analysis unavailable the bladder designed help to classifier year. test NOBLE it lab will physicians to bladder can cancer to commercially Also of trial, to of predict And the we test tests lung launch we the development build at Johnson The following before informed $XXX a decisions our may be trial transition of showing gene to cancer we our the test provide a our of believe This complete Medicare from so could in-development advance stated robust distinguish will cancer the patients progression that disease and this will instrument. initial the genomic first including as Decipher, nCounter development for diagnose with

cancer, For been better is genomic with to in draft coverage united quarter year for surgery. aware removal a determine prior by the local review of which over respond will with only issued that now turn patients bladder treating example, patients the full reimbursement. CMS will in tool neoadjuvant I XXXX and will muscle-invasive to fourth patients for the physicians call financials. our The LCD, Medicare it we cancer or Keith detailed chemotherapy help for locally advanced are of subtyping to bladder bladder more a test and has determination,

Keith Kennedy

financial on to website. mentioned and covers our In Bonnie. prepared and presentation our you, earlier available XXXX her I the Thank QX of will Bonnie highlights. list is Tracy key which remarks, which refer business

GAAP. Slide Our in filings X. we well how revenue footnote report explain table on along details where X as Slide SEC to X, under X with and takeaways our I key Slides the on and shown illustrated as U.S. the content recognize refer here and would further you

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

other net reminder, biopharmaceutical operations of to other a loss. revenue under statements expect our comprehensive or and classified sales revenue Post Decipher’s classified consolidated close, services are test to services. non-customer of we all customers and data As are and collaboration include our under and revenue testing

acquisition X, Decipher Slide the revenue COVID-XX, generated of million. impact of total XXXX million of XXXX to product to X%. by Pending testing April which assumed completion to Turning Biosciences, $XXX to the our grew of range. representing growth the XXXX $XXX.X combined and Despite million, the we business be in occur of of X, approximately XXXX, XX% expect $XXX revenue we is approximately over midpoint at the

XXXX the Turning to recovery playing year fourth be global business shows that performance and to quarterly and proven year full has that our against compared Slide indicators, results performance X, through or the we the key the Slide show present period. revenue prior U-shape to out. pandemic the resilient for six X appears KPIs, our to quarter

the were driven the quarter off volume nicely gross recovered lows second margins, pandemic. of the by global onset and flow Our revenue, cash that

column, the XXXX year. our As excuse relative – me, volume, right fourth revenue the or tests XX% to quarter far total increased XX,XXX prior total illustrated of in

quarter year XX,XXX representing test XX% reported genomic growth. prior XXX test over and XX,XXX sequential XX,XXX fourth Afirma, X% tests. included test XXX of X,XXX Our distributed period test, the Genomic Percepta included volume Envisia and and growth volume

in test our testing sequential prior almost biopharma over The prior to Prosigna services, into shown and X,XXX in business year a comprised growth. Testing down growth of product quarter testing, against product quarter collaboration fourth XX% results the of represents breaking of of deeper includes grew and in and Our are digs Compared period total services. year level our product collaboration into in XXXX, revenue and million revenue. XXXX XXX% XX% million and $XX.X period. volume growth biopharma XX%, revenue revenue, quarter our growth fourth the revenue revenue. cytopathology XX% fourth XXX% XX growth Slide $X.X the

to trends For without in as and test cost a Slide and as XX per $X,XXX, volume provide shows absolute dollars revenue and $X,XXX year testing our Slide margins reported sequential on with provide and and the XXXX, collaboration biopharma and was full XX and approximately well year-over-year XX our respectively. fourth revenue XX and trends The year-over-year. revenue. of basis. also revenue product gross our test sequential Slide and average and Slide quarter XX total X% remaining total major XXXX and expenses, and in in approximately death XX the coast XX February showed January, Midwest Northwest our into Northeast. trends January Uri, volumes spread storm operating snowfall and product Storm cash from COVID-XX the volumes. net cash balances. and coast increased flow South, Despite loss, XX, ice Starting in over cases damaging genomic the to Winter a peak

and expect this to We continue to take week. issues, monitor which with we our deal logistical to customers persist steps throughout help

acquisition million, As In X. the with summary, to our Bonnie we to on February expect which raise increased that $XXX approximately announcement mentioned, Decipher equity an April of and million. on we close balance cash followed acquisition X $XXX the announced or over before

of to expect fund appointed Board committee by approved up subject before transaction, Directors acquisition other or $XX to of expected April unanimously in and transaction the close to approval X, the expenses. customary conditions. million Biosciences of is by which use to We an million has to special XXXX by and on Veracyte’s been Board Directors regulatory $XXX Decipher the and independent The satisfaction

preliminary company $XX of and $XX top based XXX% We to impact pathway compared line the COVID-XX, on to acquisition expect revenue profitability. prior growth million, the to to Decipher’s over of XXXX year Despite generated million accelerate growth the our period. the revenue

results, Bonnie. be will I now operating gross on cash turn flow positive margin accretive. back over the Decipher to preliminary acquisition XXXX. call reported to the We expect for based And

Bonnie Anderson

Thanks, Keith.

reviewed, that beginning lays strategic takeaways next the to business. out X our advancing facets in the Decipher so you slide play also business of all our of Keith Slide Slide from presentation remarks. fit to demonstrates the I will which will our growth various prepared X, the showcases key point shows our we pathway and together. believe This how the key well Turning role

believe ahead, for year be is XXXX transformative going Looking to Veracyte. another we

new team, general we tests offering believe and build menu for key world. care a and further our marketing along vision drive XXXX. the around Decipher’s acquisition our focus As that strong with continuum at cancer smooth ensuring with in our We strengthen of help President along integration out and our finalizing will on business our other new in diseases remaining growth patients our transition will urologic our multiple helm physicians hires launch into structure, GM across products new will new Dr. of comprehensive of and the CEO, Decipher, products Decipher, Nova, the Upon a integrate their we management Tina base cancers. of of as

are our $XXX cancer, XXXX momentum in of we and to revenue As year reflects thyroid breast our cancer. and full continued from X Prosigna revenue Afirma guiding prostate million. with This expectations I Decipher’s of franchise cancer earlier, mentioned approximately strong in million anticipates $XXX of total quarters

anticipated in We in in our three XXXX. market, Acerta Pharma untapped expect near-term our focus to cancer solely we pulmonology opportunity on pulmonology the the lymphoma With market in our the launch the efforts intend with year to to scheduled business LymphMark smaller results work to along further with performing large bladder vaccine reprioritize rollout bronchoscopies. recover this COVID increasingly hospitals products as

a highlight product expansion we into test three a in backdrop, refer areas drive key evidence forward catalysts we development. you stand-alone We business in plans and Slide I fall Against to catalysts later XXXX. which our of believe to point key time, will reimbursement perhaps. will revisit that focus: These launches, the in at X bring will this

kinase make available is launch solid to expect advanced ability XA, many for thyroid First In refractory. it Advanced survival. launches. demonstrated thyroid is of one we tumor improve XXXX, our to use inhibitors on radioactive have that indications iodine is the or cancer progression-free disease where metastatic product tyrosine Afirma cancer

validated and provide XA the lymph thyroid to for Now, bed, profiling our and cells head neck from be will masses metastatic gene comprehensive collected these Afirma nodes. alteration

to liaise expanded to and new Additionally, we and cancer as ILDs market Europe with prepare will the in bladder for lung cancer prepare Decipher our and the in to we the commercialization planned mid-XXXX. expect introduce KOLs products test of similarly Envisia portfolio lung in the continue test

catalyst expansion. is second Our reimbursement

compelling the tests, In securing coverage bladder published each on to Decipher addition will and Medicare recent the is growing supporting Envisia clinical the focus of our test we to clinical expectations XXXX, pulmonology test development. in evidence, to tests. back And decisions for the Classifier, Genomic body our evidence evidence coverage demonstrating our of continue plan for We third commercial adding of the Percepta for utility. GSC on

respectively, to will analytical swab We for clinical validation prior nasal our year. later launches our validation data Genomic unveil for test this their and data Percepta Atlas

at us. are ask that you and vision instrument balls confident to all ability from on will data could execute our their Additionally, global for diseases positioned call journey. in acquisition, diseases, cancer to prouder growth. lab we which business after I patients close and flexibility those in every offer strategic anticipated close at deliver expect ability progress in of we the made introduction our Alex on we leadership our with cancer Decipher profitable genomic-driven the markets. other nCounter And the classifier’s And up team million we with up, it. have other international or and our believe in their our on in not excited company’s for most would be Envisia significant everywhere to to prior now thanking uniquely pandemic, diagnostics see to and our questions. comparable the to the incredible test’s step testing to accelerating to and will the in the employees acquisition more demonstrating open to breadth depth results are hard I are a CLIA our bank our of Wrapping $XXX today in solidify while system challenges the to all by Despite over of I that, Decipher, should for of finish We labs advancing analysis growth. of our work, our revenue in in year and long-term threw that for like during perseverance focus curve the strategic fully

Operator

Leerink. first comes [Operator question line Puneet Instructions] from SVB of from the Your Souda

now Your is open. line

Puneet Souda

Bonnie, for taking questions. Keith. the Yes, Thanks hi,

So you have the mean, the think one guide, I just did $XXX.X million on maybe I clarification my I I million. And clarify if that $XXX midpoint $XXX a we of look million is take just the want here at for $XX first guide. year, to what are of pro just a forma Decipher in did you million projecting at they number matter and we the look at it’s and and did about calculation. that, just

function and a looking CAGR is the but from? that We XX% company. clarify the that quarter, have that That past had the a here forma for are I combined about and growth than maybe where bit coming point in pro at at for want you delta increase it’s here just the XX% projected get lower just of clarification first a to not is including a

Keith Kennedy

I you Yes, are right. think

parts April at analysts sort But so line revenue, in that all let are April top model, – pro walk of volume you the line, looked going this for guidance. with we modeling how price growth. a of to can to I our could so those We typically help to the me midpoint giving of me let you get only exercise. results forma of quarters, XX% to – starting have the around, walk the we are X we not of this Again, not acquisition given guiding guidance assuming times in but be on in will we to – are for this are to these building sort four. top I models, get and one the their closed three through move through But that are X get any how – guidance. indicative of we terms

growth we in to have XX% – XX,XXX tests in Afirma, XXXX. that’s go If tests XX,XXX we we in volume. XXXX, So did

Our $X,XXX per price around test. is in XXXX

So at am volume. I for Afirma divided looking revenue by

little on per get If we reported million Afirma. a it XX,XXX So, to it’s $XXX $X,XXX we tests, for $X,XXX times so $X,XXX XXXX. achieved around take test, just

cytopathology, will we to think that Our $X.X from million flat, XXXX. be XXXX around

lung XXXX. are we on there. the all less did COVID now, right And there’s you portfolio, X,XXX during tests the as in seeing, lung On portfolio procedures

So we’re on X,XXX. our into flat volume

think throughout million, I at the people I into this million year – XX ramp come vaccines vaccinated think we’re like up as that XX will at point.

we have if can and go. on X,XXX to on lung, blended But we So did we a a test, revenue ways $X,XXX to lung about that’s – Envisia. XXXX, test per get Percepta in did we will If we can $X.X go they on then to revenue we’re $X,XXX, And do around of on on about basis, expecting $X,XXX we’ll million XX,XXX that to achieve lung products a Decipher, combined lung. XX,XXX.

in test. for the million That’s three QX. So tests about starting quarters per $X,XXX at it’s $XX XX,XXX

get $XXX testing of around million. that to you So should

the growth should that XX% prior So about be over year.

tests business, did product XXXX. X,XXX about we in Our

XXXX, So averaged on in we the basis. And XXXX. price a XX% had $X,XXX we in X,XXX that’s volume that tests growth business in test, on per about

go XX,XXX and from that So XX% get in then our go $XX should testing around test, tests and test around to about in XX% product, $X,XXX. million business. per XX,XXX, at a average we us you should to go should flat our these just $X,XXX so about growth. test growth at to $X,XXX That’s price per revenue. And from that $X,XXX – say, per And our if tests XXXX for XXX

that, work pricing. and we increase do you X% can on better, slight sort hopefully, of a We it’s obviously So where get but that’s in to midpoint. the

to million $XXX revenue million, so $XXX in from XXXX about And million. $XXX takes that your

the business have million the growth. technology. on in the us. and achievement of – that be And would And product. the that CLIA of midpoint So say XX% recognized would million million we typically, million testing X at in transfer from milestone nonrecurring, I swab a includes we X that and for that’s side, Again, nasal around would XXXX. gets it you the number that X% of to the expect growth or and biopharma X collaboration we X.X

that the but $XXX,XXX NOBLE, for the – quarter the for that you to in probably million. that I’d combined, that happened second quarter. $X be the and It So would in the call AZ year, year, quarter. half put of And then or so that in get revenue million $X per fourth put fourth of

XXXX. goes million $XXX.X So $XXX.X at in in in it revenue from the to million XXXX in total, midpoint

So $XX the and year. million increase to in the XX% V prior revenue

that should that to Is how and So about helpful? midpoint, you get think we the it.

Puneet Souda

really... it. Yes, helpful. that’s Got And super

Keith Kennedy

to going have clearly are You read to after this. the transcript

Puneet Souda

the detailed... That’s most

Bonnie Anderson

More me. to questions. not probably It’s

Puneet Souda

it, but the appreciate have any just that. And – really most all this Thanks if ask Keith. that, answer don’t is ever, really could I one question questions beyond That’s broad I great. shifted clarifying that detailed I CFO except No, you to for diagnostics as – sort could to how that of tests of of to much. towards play nCounter, give XXXX? have sense progression is so many how truly the going a sort nCounter shifted you as us Thank you out throughout and of just

Bonnie Anderson

the Prostate future joining. what our how on building acquisition. expansion Thanks menu you. keep Envisia thesis test the taking will year. we to this important the Yes. line whole is the Right only to the nCounter, posted then we at cancer an on the for look a Decipher introduced area year going like. the very is at that’s is end And world. And look planned to we you plans test be accelerate that so the around menu be nCounter testing the especially of now, second Thank on up with of and are strategy

Keith Kennedy

Puneet. you, Thank

Operator

from line comes question Brian next Blair. Weinstein the William from of Your

is now open. Your line

Brian Weinstein

Hey, Thanks the for guys. taking questions.

Keith Kennedy

Hi, Brian.

Bonnie Anderson

Brian. joining, for Thanks

Brian Weinstein

course. Of

kind to you of just closer was that? my the just the X,XXX on one that say heard there? I on quarter follow-up conservative you of the Because I year. And a Decipher, trending it’s not, I Am assumption on X,XXX thought in wrong were just I So, in to quarter? think Is being there. fourth if all for wrong soliloquy next ASP fourth the X,XXX Keith, question from as

Keith Kennedy

not Well, they have at we with – history. reimbursement the they are recognize that full are their journey they

lumpy. be and on their collections, over half little bit revenue can the is a based accrued other So and of half cash is that

when quarter, out. trying one So that’s you’re blended looking on it sometimes – works I’m what basis, at a

Brian Weinstein

got it. Okay,

to NasaRISK, I product Obviously, nothing guidance, things I’m in And nCounter, there’s then are of at year, and the nothing there, – forgetting really on for for and coming end kind of the make Envisia, Atlas, on the Okay. these right? really anything, new Percepta from didn’t sure, factored really in hear also but just contribution. nothing on

Keith Kennedy

Yes.

we’re... So

Bonnie Anderson

correct. That’s

to to up get lined coverage while. you a that takes as know, get decision. We’re And a Medicare expecting

in we So revenue the year products introduced. point don’t first of yes, to

Keith Kennedy

If we’ll you. year, throughout that the changes update

Bonnie Anderson

Yes.

Brian Weinstein

Yes.

it’s Okay. a And question then. then broader

in place just now a bit strategy And you think drive kind You put Can helps place? next that’s the also and And talk about structure year? how sales of that for marketing little revenue? are now. GM you sales you over structure in what and plans more marketing that review that please your can the

Bonnie Anderson

indications. underneath in Yes. We marketing and – managed sales of support then operational up that clinical November, and and care announced by of we functions the lining some restructuring the

our going building and our breast one to which pulling lining test, the That where going it’s one entire will the and GM our Percepta nasal of etcetera. relationship bring challenge cancer focus in nCounter. [indiscernible] care, products in the and for new two reimbursement Atlas, course, point what the portfolio. already team, call under for to managed the products So reason, be deep under clinical of GM and launching mature really us place, of is three all our with same includes has And endocrinology year: of programs market business swab up course marketing, Genomic this pulmonology understanding are then the pulmonologists, sales, that the for services, do support is

done. but a because and to I Nova wanted area, it focus going ultimate together on team X, only bring mean lot GM that frankly, this investment with cancer. And acquisition of to Decipher be have stay do across – Dr. needed focus back, works three structure, with to we’ve it the indications. is we perfectly we to the of do was our a had that leverage would right? in into get But that the what quite for the we have think it to we something going put right that could to we on, way because Tina urologic which is And when that. product, into We new got early So pulmonology. Afirma that’s we

both new in the the have So this business we and we way that drive with setup growth now focus can structure.

Brian Weinstein

Yes.

much Okay, the great. questions. taking for so guys you Thank

Bonnie Anderson

you. Thank

Keith Kennedy

Brian. Thanks,

Operator

is question Next from Sung from Ji BTIG. Nam

Your line now open. is

Sung Ji Nam

Hi, taking of thanks questions. clarification for have the questions. I couple just a

into year last new? is end at expanded indication. year, Is of something that effect Decipher the last LCD On the the that or prostate Medicare cancer, prostate bowing the

Bonnie Anderson

coverage sure. an end on year. which indications course, of expect then be cancer we to Smaller will year. going bladder the to expanded of a draft, indication of bigger decision the are year test, They already last this did get a get expanded and through to for new final has there get opportunities this And year, the this couple later toward and

Sung Ji Nam

expansion And next I Percepta – commercial or year, then guess. the year it. on Got this Envisia and just coverage

just pulmonology expanded franchise there? of be coverage, driving the Just progress kind would given last the the year, headwinds on the curious commercial what

Bonnie Anderson

it’s the the all though interest patients a those It’s came suites clinical have new obviously, the great even to lot that somewhat evidence drive and suites, number Yes. emerge. out the data continues of it’s decisions. really data terms put the through the in showing – is all still of that really there the pulmonology suppressed And and they utility been coverage data of will can new

Sung Ji Nam

me. for Thank you. it you. That’s Thank Okay.

Bonnie Anderson

you. Thank bet. You

Operator

from Next Stanley. question is from Tejas Savant Morgan

Your now open. line is

Unidentified Analyst

including and you about bladder you Thank [indiscernible] cadence Tejas. for for the Decipher? channel on questions. is talk other This launches, for as my taking cancer test from for commercial prepare NasaRISK you Would spending

Keith Kennedy

Sure.

Unidentified Analyst

the expect nCounter? at expand to sales we that force of a this you come should related or investment for on note, up then event? point what be And this second year Could ‘XX scale to begin half a would to

Bonnie Anderson

event. will That and be ‘XX a ‘XX

be on much in sites be the access begun the have is we’re activities the We bringing the to of them, that expanded market-shaping some early to is menu in the Europe launch a the and going already – investment instrument, But nCounter. of have menu for which of will already made the bring expansion of prudent nCounter, when base. quickly or the way two that’s to into point installed accelerate as items not will one to the it’s intro too that an we just to great really nCounter. more still on the with do But on market to that the have menu menu start we

built the bit with So that’s it’s modest that, a an always market point. growth. pilot cancer done taken plan it’s being indication increase Medicare and of little get we we’ve year, type until call really we you Keith about a in won’t that of give is relatively new will we the have is to typically how work. a this this with – love we launched really into around the of test And coverage, of bladder, because what through can our kind franchise And That’s the And with unique because around way efforts accelerate this Decipher’s the the the driving all same sort fashion. urologic business.

physician that they sales this accelerate with later year decision client. the team comes the of back same begin coverage Medicare to will the on So a final and same

you of So pulmonology. in lot of like we get do kind there, a leverage

spend little how give is indication Keith, go the expected want on of bit So a the year? through to to do you

Keith Kennedy

Yes.

that to year. the Premiums people quarter. procedures of at first typically, we go new is for reset, are tend slowest done So story, get – end to the our quarter people is the the

we peaking in weather the part, cases and COVID have have things We here. first

$XX year. – last So we January, a we’re year. good last had up I we Through slightly we probably month. February really March, last to good did we month. really had year, a million do say,

in from in generally builds. saw QX, then get this We as from to quarter to a the to the flat a we pop relatively XX% second do that So adds we XX% business quarter. have QX. and do to QX $XX increase, usually QX Decipher quarter, $XX QX past QX, million, first and million We in you our

business. have will we So seasonality in the

sales got In internationally, marketing, the international. and people people field Decipher, We people XX around, internationally. for we’re terms XX XXX and U.S. in of excluding around about

We where marketing between will of revenue on XX% sales we’ve XX%, that build been costs. and

is – to like long-term of number we as targeting we’re around so Decipher well. XX% And that revenue.

products, multiple scale we’re stay, revenue then and down though So even on sales to we launching and XX% marketing. would sub-XX to like back of

half how that’s flow of $XX million it. We the million of in So of think we about of burned in generated less sort second cash positive the XXXX. year. $X We cash than

quarter. burn. less we and burn where up and is. and second gets So quarter, first is burn generally the the pick in first that then half is of have We the the there In in the the year our it fourth quarter, third ameliorates

expect year. We this similar trends

said, transaction expenses up deal, as will We million. have $XX the around to

you statements. spend will file we So their where that that’s accounting when and accelerating. come back I then financial hitting is expense tell GAAP the And separately is acquire million we when in – and any identify that to we is this $XXX – our business, – stock

of in any with acceleration, contemplated So expense it wasn’t associated the anticipation the deal.

that book but million. on day $XXX the our that of into will part expense to be have X, statements financial will We

million P&L stock. as acceleration but a of will statements, on financial a or $XXX of a $XXX million to of hit expense So portion majority for actually capitalized the our that will get that

we what We will the when that close have number highlight to when that number we not we gotten do, is. transaction. But

Unidentified Analyst

I And on super just finalized fair progress about the Thank second validation think That you then timeframe? half in would help the it helpful. you was quick us expect of question, is you. mentioned data around algorithm know the to launch finalization NasaRISK? algorithm a XQ the for the but

Bonnie Anderson

in Yes. we to develop the go to data show sure. has the unlocking and prepare tremendous happens the and once That that of that and work kind a advance to usually testing that look laboratory optimization you we lot validation in done happen lock the at. classifier – will out in all for on product, That subtype and you point, of at launch come There assay assay before the the advance the robustness are the of market. of is and the of analytical we all then based wrap the data. up last this testing a is analysis But confidence of

the verification moving in towards lock launch. that and we’re of testing so now And and mode

Unidentified Analyst

you. Thank Okay.

Bonnie Anderson

you. Thank bet. You

Operator

from Lake Capital. Flaten Thomas Street from is question Next

line is open. now Your

Thomas Flaten

for questions. Good afternoon, guys. the Thanks taking

Just add that pending hold go field that in field Decipher or clarification force. to I there know thirds the quick about a to place that a Is integration? is on the still on was a team, plan plan there

Bonnie Anderson

No. in ahead we are and We actually – to agreement go add.

coming maybe it lined year for bladder think test additional the well. and to addition up hires this was five into in – plan decision as I that’s coverage

will that you but it’s modest So consider. when relatively happen,

Thomas Flaten

line perspective? potentials Yes. a is of this yours synergies in And about preliminary stapling maybe, for the onto a step their or G&A there just specifically, then, the we Keith, P&L, modeling from think there most are numbers – middle is the as should –

Keith Kennedy

Yes. would a are accelerating the to the start that on helping really as running no any lean have risk plan business we’re in them staple they private numbers company, on. and focused or volume. successful and make They changes well I’d their that. remain And

Thomas Flaten

ahead the thought any Afirma team And speaking? just side you when field kind might recover, we Could panned of about of relatively to to respect are final well, etcetera? with I suites, with your that one, are and out color few one seeing Yes. the slow on particularly be. they we quarters might then they pulmonology where U-shape recovery, think really respect intelligence to around give volumes some the providing how And what more you’re a

Bonnie Anderson

Yes.

a caring that, been plugged pulmonologists has ton education, interaction, The like there pulmonologists are first, to Our field in. unfold. these same you everything are has the that that patients. challenge I for continued team’s can tell medical of is COVID

of those and ward, in all ICUs, So segregated in the that.

pointed out was remarks, January in rate. Keith As high really prepared infection his a

is their have pulmonologists pandemic the in help yanked been that because So with specialty. to

to procedure the to uncomfort a And into breast of less right. cancer a of then patients find of until of patients, So vaccinated, there there nodules. is going up get either nodules going that’s detection like on find it hospital is and early less those screening part on is to worked for mammograms there undergoing an is it. part still going get second And just

So put The those office market office it’s reason the of what half about waiting to room, into is that the overall quicker, which just pandemic. in quickly kind the by Afirma much business anticipated, is patients we of of set doctor text the doctor’s and market, back our doctors the business way, the years downhill rebounded effect in is time. not impact so been them maneuvered community their because the it factors isn’t come a of at seeing may got can ago, car, around have wait through to what And with even still and of in one to the volume going a maneuvered up they couple doctors though safety messages the patients.

rebound. will So we there. the and where no pulmonology would Afirma we surprises so, products thought about they are kind be with think the was big products of of curve the ahead pulm the curve, U

Thomas Flaten

so much, Thanks that. appreciate I guys. Great.

Bonnie Anderson

Thank you.

Operator

Next question Company. Matson from Needham is & from Mike

line Your open. is now

Mike Matson

you questions. I like Hi, there thanks guess could sounds outlook was It gross expecting I on you of wondering XXXX. from comment a are I kind for But if Decipher. I little margin for outlook. benefit my taking a – just maybe of the bit OpEx appreciated the on comments

Keith Kennedy

Yes.

are as margins we in gross to XX% XX% products. We targeting layer

Mike Matson

million thanks. Does a count post stock XX around seems then offering this be And perspective, like latest Okay, should right? from it that approximately. sound share

Keith Kennedy

had and think we million X.X I We million. Yes. XX issued

Mike Matson

thanks. Okay,

Keith Kennedy

Yes.

Mike Matson

have. I all That’s Alright.

Bonnie Anderson

you. Thank

Operator

Sandy Draper from Securities. from Truist is question Next

is line open. now Your

Sandy Draper

so you here, on Not ask to much. two nCounter. lot maybe whole Thank ones left a so quick

XX% think I you Keith, said growth.

of like next. you more just like Or expanding comps? comment. on be And what thoughts or it but better? think not I that sort that you’ve products It Just you’re of the on panel, mostly two were card, follow-up the around getting what’s maybe you to sounds Bonnie, for with turned nCounter. X is then is may right? And the reshuffling sounded I’m what the are you leave of doing second guys got well. and why trying to me strategy business that – now, your next sort a just And – to going growth areas, you not so probably clearly, it because you’re now – show Thanks. right that’s COVID that Decipher, expecting reading the going have rethink be Is to am driving you’re over suggesting X talk nCounter

Bonnie Anderson

thanks yes – mean question. I Yes. for the

Prosigna very all, of is well. yes, First going

our light is focused. highly come and a a clinical in made new some to We’ve in dedication and nice in a which We’ve has fuel really team businesses leading I coverage on last hires, going There well-trained good lot data the few been really now support especially just think a got year. Europe, and of Prosigna very just decision, segments great to out hands, market people got team it. And well. some is managers. we into lead that as great country as Germany

go business Prosigna really the seeing strong. we’re So

good able is the thinking X you under think incident, pleased then, onto test, and yes, top well. sitting classifier, algorithm of a be We’re moving onto is nCounter. extremely here Envisia the sense of the a that be by box maybe with attention. might doing optimizing gone the the to we’ve out XX I it nCounter what tests we’ll assay on think to that are success And the And best our how the very down sort I very, the we accelerate makes And address platform. cancers had the tests with when of the portfolio road. what that very It’s of priority rethink of

breast prostate menu a If with to you to maybe in mean cancer, in position of happen prostate I those market after. think overnight. out that obviously IPF, over anywhere cancer, really a end that we’re we accelerate up So big lung build begins few to next the But world. the can some is won’t a we go take that cancer, years,

Sandy Draper

Bonnie. Thanks,

Bonnie Anderson

bet. you. You Thank

Operator

from Your the Knight of comes KeyBanc. from line question Paul last

now line open. Your is

Paul Knight

promise The it and juncture? Are good. you this be Hey, increased guys. will less-than-optimal results. historically nCounter nCounter the seeing and with Last pretty question, sensitivity samples good but at at taking specificity I good was delivering

Bonnie Anderson

is design that the a menu great fantastic really I think sophistication doing design building for for given is the simple. yet a cartridge as measure built that complexity of design elements able distributed test. the genomic of that a really, being platform using for made that to And for technology, instrument. to RNA, XXX do markets being very make really it content And It’s it into features protein is and put the the itself it rich, us. into combination instrument we’re what the DNA, global That capability is able a to ideal

to a out position So achieve short platform. love years to menu being and We now love just what in the now it’s and couple a underway. was be of our build vision able ago

Paul Knight

any COVID is based meetings the LCD any then – structural on decisions there on their coverage And schedule the in changes or there? change in undergoing CMS Yes. cadence and that’s

Bonnie Anderson

No. assessment. I It’s times. what into through good They this clear mean they have maintained been your now technical a pretty to what numerous process. pretty now put want, we’ve data

submitted up and So of coming priority. those products the of lining MolDX. we’re the needed publications accelerate to be out with technical market, part that’s a can so that submission to they getting getting to new and dossier going as are publications to the be trying And that real then the

to product the getting it’s when market, that to resulting built In Medicare the so volume growth is goals of And fact, coverage. then corporate getting accelerate it’s revenue the on Because published just used expand around the get be that Medicare some that. it have can back coverage and evidence we effort. from not we can

Paul Knight

thank Okay, you.

Bonnie Anderson

Thank Alright. you.

Operator

this presenters. any have time, don’t more at You questions

Bonnie Anderson

You can go and ahead close call. the

Operator

concludes today’s and Ladies your Alright. you that call. gentlemen, participation. Thank conference for

now may all disconnect. You

Veracyte (VCYT) 18 Feb 212020 Q4 Earnings call transcript