BDSX - Earnings call transcript Q2 2021

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Operator

Good day and thank you for standing by. Welcome to the Biodesix Second Quarter 2021 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] I would now like to hand the conference over to your speaker host today, Chris Brinzey, Investor Relations. Please go ahead.

Chris Brinzey

good and operator you, afternoon everyone. Thank for Biodesix's second you joining and us of discussion a for quarter results. today financial Thank XXXX highlights business Executive call the today be Hutton, Leading will Chief Scott Officer. Robin then will Chief be by Scott Harper joined Financial Cowie, Officer. will prepared for Q&A. the the After open call we remarks, be release An audio announcement call. also for replay as detailed conference call for this recording online today's in and will webcast available the press our business quarter Today, highlights results we release issued second a for XXXX. announcing press the financial can be of release on the A page the copy found Investor Relations' the of website. company

known events are to to forward-looking Form annual a including reminder, changing other and results As differ The and Biodesix statements their performance from materially may and those that this reduced filed XXXX factors projected. involve report forward-looking on trends, as company's actual with XX, year during the and XX-K factors in on the as actual Exchange the well applicable. materially ended quarterly of uncertainties, discussed unknown subsequent Form or those result risks, Such results may nature and those if XXXX discussed or of and on industry. for differ uncertainties, Commission subject a and in the filed on XX, risk competitive from as March the call cause section elsewhere December reports other demand, projected statements market Securities XXXX risks XX-Q implications

in Officer. filings the to materially the our in detail press now Hutton, greater call information would today release company's concerning could described turn the Chief are Scott to with Additional forward-looking in statements to company's that Executive over I results and from Scott? factors SEC. like cause the differ issued

Scott Hutton

Rob planning business. on welcome and company. to a call kick Biodesix the turn for patient I’m centric, come back deeper with to you, quarter diagnostics discussion financial, the machine Thank a call. with it all everyone highlight, to over then and driven them earnings off second conference XXXX Biodesix Chris is

empowering Our physicians end, mission is with by actionable and comprehensive it care sites. revenue. XXX% that productive year-over-year total swift, in with a quarter, was to improve every growth in patients To

Our first quarter. testing which over over lung with ended cash, four QX. the core a increase up diagnostic XX% grew make and $XX.X test, the million our XXX% year-over-year million based We was blood which prior quarter $X in

In with blood at allowed we’re for provide parts to as same announce tests. test portfolio menu of base testing addition, our to bringing will lung sequencing solutions patient our to the diagnostic various sales of coupled broad happy well. XX lung test we is to of journey. The year, of increase the beginning This hour Biodesix five strategy, liquid the launch forward core our next which next-generation advance portfolio are to their focused diagnostic test of multiple continuing sales team our

studies to risk our multiple including including have and prospective pipeline our immune primary INSIGHT market build ALTITUDE, the on BEACON, ORACLE test well underway tests recurrence data supporting continue as of We as to response. the and studies

data. reflects quarter and outcomes patient to our the in high commitment test quality progress Our clinical improving through

Now Robin? let second me over review to to turn the quarter financial it Robin performance.

Robin Harper Cowie

Scott. you, Thank

representing $XX.X the compared million of to quarter quarter second of million was total second $X.X XXXX, XXX%. Our revenue for increase an

normal diagnostic growth business, in lung revenue sequentially. X% XX% a to and lung The testing non-COVID pulmonologists XXX% treating from core with quarter-over-quarter pre-pandemic particularly trends grew which core business, by and diagnostic COVID-XX shifted rebound pleased more year-over-year, XXX% reflects revenue our sequentially, which in our as grew in patients workflows. diagnostic year-over-year their the which and biopharma improved by strength highlighted services, are We included with lung

Integrated of gross XLX successful result our the the triggered of profit growth previously Nodify we acquisition disclosed a Diagnostics. milestone strategy, As from

Turning to services. biopharma

XXXX revenue in XXXX. to the $X compared was quarter first $X.X and year-ago of quarter million million in the Second $X.X quarter million

ramp can to prospective robust. this a including the biopharmaceutical instance, As on trial impact further but COVID-XX activities Biodesix, clinical in significant fluctuate particularly Overall, timing, in it for in we opportunity the long-term back reflects quarter, contract coming will services improvements due circumstances, impact trials business as this several remain the we've clinical this has in longer begin which our prospective that remain factors quarters. trials continued confident in had remain particular area said, We our under see enrollment. overall to can up. normal Despite had be biopharma

decrease was driven sequential second testing see to first in the decline XXXX. of was a by in the compared the as we revenue services. first quarter anticipated, testing quarter As in COVID million primarily the $XX.X in total versus $X.X revenue of which quarter did million XXXX, COVID-XX

our call, falling As rapidly case country in for of discussed last on decline COVID our COVID-XX and services. quarterly decrease testing across the result demand the was corresponding the volumes the

in the a margin in was higher sequential services in the the $X.X the lower of COVID-XX gross the margins gross by XXXX. of COVID-XX in in of result which to in revenue, XX% said of expect was was declining piece growth Gross The COVID-XX improvement XXX compared forward. represent revenue quarter quarter primarily second our our in quarter growth first point XXXX. the over margin seen the in million revenue. margin in testing continue margin significant in percentage As second year second we've quarter offset services $X.X we versus to basis XX% testing the testing first before, the quarter million versus margin the period XXXX driven favorably margin of to going was lung diagnostic the overall a decline the over our in quarter revenue XXXX. prior year-over-year by XX% Gross quarter The decrease

the costs expenses second As to increases recovery compensation will strong to as non-cash our million Overall, research for becoming as of dynamic of $X.X the direct expansion and second a in of quarter and the organization, reduction determinable a to and income well of second is of well expansion the performance million quarter pandemic, commercial clinical quarter compared is costs. XXXX. during primarily based of company $XX.X and increase change the to traded as quarter time consideration excluding contingent second XXXX quarter a this our representing in expense value related in $X.X in second $X.X net a first non-cash multiple publicly loss money trials and including as of beginning for million the expense compensation elements as million first sequential million interest The and same the investments due in the $XX.X quarter, team. in year-over-year the development fixed see loss includes in was sales After change compared resulted $X of Net decline of achievement compared were by compensation $X.X primarily $X.X result million period for 'XX. expenses margin the the the XXXX. the compensation our stock loss recognized quarter for XXXX for expected 'XX for investing obligation the and XXXX XXXX and in in was the launching in XXXX quarter second force of of expect 'XX, the of we to pipeline, the of driven reflect during first from quarter the The million a milestone quarter of $XX.X contingent consideration, the of and new the and million which of continue net and now second improvement from portion reduction expense stock-based respectively. to of remainder operating 'XX to million

the Finally, $X the million of an cash $XX.X with XXXX, over quarter of as result first quarter XXXX. working balances of approximately capital the to in balance the cash collection the ended first turning and increase primarily a sheet. We of of equivalents, million quarter from

our structure, to on addition by pending review Administration. to and confirmation have of million the our for $X.X Small we forgiveness enhance receive final loan applied loan expect forgiveness In Business PPP capital further

and revenue which include resulting care on variance, earnings evolving U.S., vaccinations not pandemic, Looking due or nature the of to in the impact testing are forward, rapidly the year-over-year providing do service we margin guidance approve strategies, lung revenue as expect the diagnostic testing margin this higher with revenue revenue. testing percentage replaced time. COVID-XX gross is continuing our lower with to We margin health growth at however

COVID-XX that expect rate of further services. to throughout into the to any our revenue testing continue will enter subject year, in changes testing and ability to We decline the the major pandemic

provide testing offering we forward schools to COVID-XX. continues care employer our learn group COVID-XX to the However, evolve will our expect and and health with move to to country continue partners and live as to we other

and to offering we the launch a bringing investments on are new tests. operating overall to costs expect costs of we While products increase to our focus with strategy during the our are due execution to our evolve NGS of growth new continuing market, XXXX, disciplined maintaining and future our in

I'll back Scott. the turn Now to call

Scott Hutton

mission insights. you, Remember, physicians Thank every and actionable care by patient's swift, to improve with Robin. is empowering comprehensive our

trusted by patient of a company, of tests molecular one tests. lung needed practices, integrating so care. do the will multiple patient, testing Biodesix physician We all into One providing through for continuum their

our our The tests track sales more allow manage to infrastructure physicians of sales in company we XXXX. for them better disease. patients direct growth to double of of as a dedicated to cancer, from continue reach sales of build the their and sustainable on We their our lung guidance force size investing through will long-term in provide us pre-diagnosis portfolio to monitoring remain to force by and treatment with expanded

informed test surgery, and biopsy Our more more the decisions right help many physician in guide direct interventions onto unnecessary avoid treatment decisions. aid making to help results the patients or

COVID-XX previously quarter our decline watermark in revenue, we've XXXX would by high for stated, subsequent steady be quarters. of a the followed As first testing

country continue support communities in our COVID-XX overall testing tapered the has rate across offer program. the the of While we locally and will off WorkSafe to both testing prior U.S with the quarter, from to

Biodesix demonstrated at the have patients. diligent a adept. physicians Biodesix efforts their our our resilience we remains meet months the to ability is to last team in partners, and of The While over and needs XX

cancer with turnaround liquid cancer of a to developments X tests is based our Again, new other generation shown XX significantly possible coverage and it NGS XX the treatment the genomic as ddPCR test NGS offered used complete in The exciting is physician patients. recent is we critical. provide and the provide hour to to tests physicians XX-gene care, test for patients. strive to GeneStrat are sequencing takes of with patients to than biopsy patient's next tests test quickly the The more faster expanded which blood the time, for One and different hour reliable on markers. market. XX lung molecular the as The of And at the days was a care the to time of currently an hour have continuum test. their support for offering in the broader test their points unprecedented XX publication proteomic VeriStrat testing complements recent

another has for clinician and array available be Our option to clinical to convenience home. of available team yet and the trial NGS be use test necessary early tests, The Biodesix can test for research blood a of national we're NGS physician make will by use their add our patient's excited for home since year. deemed broadly XXXX, it been phlebotomy next to facilitated in if the and

development and to evidence our adding value. body tests continue their diagnostic and utility of the of by support also demonstrating the to We use

to sources. immune prospective studies BEACON-Lung drives test. measure utility response the efficacy the evaluating studies our and adoption and a our data was a to clinical and company comprehensive Nodify access four We of underway. number using a us to connectivity portion from researchers, to of and our will This and the announced are study key the our and secure other to pipeline currently broaden specific and One with efforts XLX test. biopharma Nodify biobank cancer provide trial including initiatives a data is continues compliant academic ORACLE and our primary reimbursement. to the diagnostic and evaluating lung business impact that utility our capabilities. to registry quarter the allows and ALTITUDE test component have Biodesix We of VeriStrat link of our partners. CDT that new and data and us of research INSIGHT and These internal database more efficacy the our continued the help both in Datavant, research studies The utility multiple of expand tests

technology underpinnings added partners Seer a for help and research, tests run Diagnostic partnership interest and biopharma Cortex in partner trusted new biopharma development. derive suite technologies, We biological Seer's and conjunction a in with novel to with and Proteograph become with Seer has also insights Biodesix proteomic services. for to utilize research the platform and define product to other the translational AI our for

thank teammates mission call Lastly, achieve help of possible all patients. With you to and I that, it questions. lives want make commitment Biodesix the with to contributions a to close whose our daily improve to efforts, ambitious I'll for over turn the

Operator

[Operator Instructions] our first Savant question Tejas And with from Stanley. Morgan comes

is open. line Your

Yuko Oku

on our for Yuko for taking questions. is This Hi. Thank Tejas. you

more revenue this on were with testing Could you variant came below testing number the driving on what quarter COVID in recently COVID up of where we you're cases. the the While seeing Delta comment side? COVID

Scott Hutton

change. we’ve pandemic before, on Thank said what's our Yes, daily Yuko. questions. is constant, And really unprecedented great as does with the going normal you, else. We new monitor as everyone this

ready by with assist at heard forecast to state, point time, to we a it as then potentially you importantly, we monitor are they we're quarter-over-quarter. we And needs. and continuing even testing Most are here, to standing focus on continue And partners lambda. on as so Robin and that our decreasing But for this focuses to Delta, transitioning really testing. in slight like increase see as in that you said, us, seeing

Yuko Oku

Got have lung treating around on was Would previously helpful. rebound the then provide And with you efforts pulmonologists seeing the patients you that super around you're COVID. focusing clinic they're it. as volume That color business? mentioned some their limited

Scott Hutton

Yes, a Yuko, question. of to the In kind return level saw we second quarter, of pre-pandemic. great near pulmonologist

question, Unfortunately, the fill, focusing we encouraged chance beds pulmonologists get as daily as Delta the know are first We this. weekly upon front ICU based into we a monitor your this variant, on by to continue lines. and very that pulled that back there's

productive on going monitor returning to resulted we're pulmonologists that. mainly to that days, and it to in non-COVID levels, again, So you focusing pre-pandemic we patients, weeks saw. quarter the But recent saw months, continue and

Yuko Oku

Great. Thank you very much.

Scott Hutton

you. Thank

Operator

Thank you.

next comes Our from William Blair. question Brian Weinstein with

open. is line Your

Scott Hutton

there? you Brian

Brian Weinstein

Hear me?

Scott Hutton

best you hear go, question, come have we Brian. Brian. you lost you it's lost may We we we to There go if again, have I next and may to Brian. Operator, can back now. the Maybe We can think Brian.

Operator

the of Our from Kyle question next from comes Mikson Canaccord. line

now is line Your open.

Kyle Mikson

Robin. you Hope are and Scott Hi, Thanks. guys doing well.

forward seeing now. right the see of sequentially kind on based wondering, diagnostics continue the core what the practice grow So testing nice to of anything just growth. XX% you're business I'm of in that could everything going

it's half Just helpful talk about directional maybe given just everything, commentary of could Thanks. your assumptions business. for [indiscernible] the but the just year the know I second be in the core

Scott Hutton

you, thank really Kyle. good. Yes, Yes, we feel

those we've on control, increase as As reference. you focus we those needs, are that in pulmonologist supporting significant a our things seen

to dramatically than we're was continue XXXX now mindful pandemic is we the it As in that different in XXXX. progress,

they've lot, through increased with this and they Our than XXXX. level learnings they'll capabilities our got pulmonologists broader able that better conversations we. did surge learned be to progress a in They've do applied confidence as those they've

we'll ready and caseload to there to But them. feel bed things and we monitor potential physicians we'll be support best our So continue control, support as volumes, in in those continue that good Availability can. to we focusing on shutdowns our the

Kyle Mikson

on kind about of And know Okay. but margin also And for this That's also break quarter. Robin. was year first, it lung the if XX-Q, could is out, be like core I just if about that'd parch be going kind there and gross can if half of I help you. a helpful, mean, Bio-Rad you beyond. like the Maybe just the you to could don't Thanks. a margin something agreement that know gross margin, the royalty. that for of in helpful. diagnostics gross Scott. like that second you the I the provide I me. ask maybe in if don't -- Thank there that wondering maybe in like with termination was that's material

Robin Harper Cowie

Sure. what they diagnostic do the Hi, we continue Q, break strong. lung in And reflect pre The gross be very Kyle. them COVID. specifically to saw while out don't we margins

XXXX, margin XX% range, that the you non-COVID So were if continues we business. XX% back to for in at gross look the and

to a minimal not have expected it's the a gross change margins. expected have and impact, change material on is While Bio-Rad to be

Kyle Mikson

about guys. the Could Just Nice are planned. that see to like there's reps Quick revenue that's incentivized, if Thanks, how comped? sure sales kind of [indiscernible] lung question testing you the the pandemic. emphasize they're force. as you. to just remind Okay. beat incentives wondering us over just COVID ramping make Thank proposed

Scott Hutton

not We've happy Yes, but I'm Kyle. to to great disclosed Thank clarify. question, you. date,

is team back XXXX began we all creative compensated towards team as We for were sales as earlier environment believe on to COVID performance clinics work furloughs, virtual shifting we intact. shutting When entire our lung that's There testing, they core no meetings them layoffs. did focus. as kept a shifting and sales year. and wanted based why that prepared throughout. field We physician not shifted and early becoming team We Our possible, virtual. strongly wanted nor remote we you've not have for in sales the you diagnostics we down, or our demonstrating want been and resilience this rebound be that our to confidently And seen opened up have. the no

to country through on focused as is which we're what to a to matters We collaborating treat their pandemic. do, going most will, the better and partnering remain patients. enable we with And physicians them as get

Kyle Mikson

question if cancer policy to lung screening. Great. USPSTF, I for Based dose one CMS bigger could reimbursement CT the considering revised is with the an me, from on adjustment last picture. And just low recommendations for

new the offerings? impact that's going Medicare, Do eligibility age many Biodesix is given ahead to lowering have criteria any uncommon. have commercial recommendations pretty downstream on management nodule you payers your screening adopting so by and expanded obviously this start new like which coverage think the So already includes of

Robin Harper Cowie

USPSTF the recommendations saw support a a at expected recommendations, and to societies given happen. year-ago, the and physicians broad We many draft over from least that

in in this at how and patients of the to we're large looking means catching improve getting lead mainly potentially screened, need very, are and projections we that cancer it know our found. So which And best way because is that, business. to actually early that is will we anticipate outcomes in number great included there'll be cure change the the very that and a effect nodules more

TAM the change So million estimate we includes lung that X that nodules for [ph]. this

Kyle Mikson

taking Thanks Well, okay. for you Thanks, Robin. questions. soon. to the Talk

Scott Hutton

you, Kyle. Thank Great.

Operator

comes no more Instructions] and today's Thank this at concludes from showing questions next This Thank I'm [Operator call. you. Our for actually conference -- question time. does participating. you

disconnect. You may now

Biodesix (BDSX) 11 Aug 212021 Q2 Earnings call transcript