BDSX - Earnings call transcript Q1 2024

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Operator

Welcome to the Biodesix Q1 2024 Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Chris Brinzey, Investor Relations. Please go ahead.

Christopher Brinzey

Thank you, operator, and good afternoon, everyone. us business a highlights joining First of for XXXX Quarter and you today discussion for Biodesix Thank financial results. today call Officer. the will Hutton, Scott Leading Chief be Executive Officer. Robin He joined Harper Cowie, will by Chief be Financial the remarks, for will the open After call prepared Q&A. we webcast call. and today's for available recording also press release conference in as detailed audio the will announcement be replay An call online for this

result release for A release Actual issued our and differ or business the performance the nature involve results may their a and copy a implications financial results as diagnostics projected other XXXX. of press trends, cause and actual statements of changing the announcing from be materially of risks, the the unknown those we events on quarter Today, factors and reduced and known competitive from projected. that uncertainties first page may demand found Investor industry. of can to market the of Such highlights those or Relations materially results differ forward-looking website. company

XX-K December statements this with Commission the uncertainties, during Risk the Securities call and to XX-Q risks as in other discussed well on those as ending filed subsequent and including filed section XXXX on forward-looking report Form annual on as and year Form elsewhere Factors discussed company's XX, are in reports XXXX, subject The Exchange for the the quarterly applicable.

differ certain financial reconciliation the measures, available we will forward-looking call filings the measure non-GAAP factors materially press company's today. today most which Additional are directly also our SEC. specified in include to issued financial cause of company's in GAAP exclude to the This to from in discussion is and information concerning with the greater release issued press that release results in could comparable described are A statements detail items. a the adjusted

call to I turn would Hutton, the Executive Officer. over Scott? Scott like to now Chief

Scott Hutton

great a for year, I'm joining start in you thrilled and been us performance you, with today. It's and all thank quarter. our to Chris, Thank the first the

team goals remain towards the all and increased gross to implementing disciplined approach last and lung X revenue committed on diagnostic organization quarter. upon margins the our profitability. and and delivering efficiencies biopharmaceutical of services, outlined test Our diagnostic adoption members improve maintaining a operational our These include path through driving our we to cost

and total our for these X and on business of happen I are execution the results all that goals our XXX% by volumes making we meet our which share this quarter to is revenue successful services growth revenue. in in lung I'm test first our of our over about plan, grew the pleased year. highest Achieving team among goals and the industry. believe exceed highlight diagnostic of rank XX%, were in seventh XX% than the growth our continues biopharmaceutical diagnostic to driven Gross margins to to quarter consecutive track commitment XX%, greater and

by path On that, more adjusted top our our yet we on progress EBITDA XX%, to of making improved profitability.

quarter associates focus fully first who team sales with the consultant trained had the consultants average sales managing associate After existing In approximately started and of territories. in representatives, and quarter, the developing and managers we XXXX. business territory accounts comprised pilot on those XX. an the focused consultants in approximately both positive pulmonology XX including sales second sales we associate is team of territories Our out building program, additional started sales in a

associates fully has trained sales creates growth. territories plan very an to to strategically remainder this account and users. also adding sales quarter. backfill in Today, this vetted by to further new as X representatives to than per and to within a model has about X Overall, year the we through been It expanding territories, of proven more the model expanding and bench of continue physician and territories by XX% additional drive implemented and our be into account retention strengthening rapidly successful effective needed in expand fully adding

continue the Like business, opportunities. our momentum second from additional services as number that see biopharmaceutical last to new and growth testing, from year. in incoming projects existing of began customers we half the lung achieving increasing contracts we're of from new an as our RFPs well In through diagnostic customers

new in improving co-development addition quarter, options In and diagnostic to announce treatment tests the diagnostic made the development on thrilled Memorial of This will service collaborations advancements Kettering earlier our were Cancer expands outcomes. Sloan at aimed cancer the accelerate Center. new agreement to biopharmaceutical lung with research and we our and

Development new collaboration Officer, an this Media. Pestano, Precision International Dr. Scher on Howard Chief Dr. shared at and update Gary Tricon MSK, Our XXst Medicine the from

in we data, body existing clinical of framework space. at partnering the regulatory strategic strategy partners technology selectively presentations Cancer from component biopsy the the our The number development, that an Research builds other in our also shared product institutions, in commercialization our ddPCR a premier a pipeline and on with was and our manuscript in with important Meeting. Building strength Friends new presented and and collaboration reimbursement for published such as quality, MSK, with gain strength was Cancer of which testing on demonstrates liquid of clinical American Annual Research Association and

make testing decisions. including liquid The AACR to of advancements data testing, optimal clinicians as information informing treatment biopsy actionable actionable variant the our the community value rapid as in and real-world with in demonstrated well

major This randomized third-party number and we'll continue overseen utility data will by to committee in updates monitoring potential on being academic prospective analysis, a interim updates in at more trial that's clinical is our our also performance independent evaluating We and that the of coming altitude determining study a testing conducted provide institutions. quarters. Nodify be enroll of been the

Finally, moving to operations.

efficient more even cost to help profitability. And execution operational those I delivery and built believe X-point outstanding everyone gross test will long-term, operating approach, services gross commercial the effective in with disciplined quarter. sustainable process in the XX% have leverage covering made beginning drive biopharmaceutical exceptionally growth. in been and tests commercial our last XX With continue our turnaround is strong efforts of times providing platform points enhancement margins, with another of increase the we becoming model within fourth and automation an and team that to progress path industry-leading consistent, team's our commitment exists an an year strides facilitate and We've ended and effective, first quarter Our efficient significant to a tests. already margin. great our to optimization over improvements demonstrate deliver that workflow and appreciate over continues diagnostics on that the projects and business in to We on the to

patients and these Time best-in-class that effectively. discovering, deadliest essence play lung in I these and and cancers, and to X the and as a like diagnostics. Before diagnosing standard annually improve personalized our commitment all comes with more in cancer outcomes efforts with the claims believe to combined diagnostic it commercializing over clinical still times, to patient total breast, to of the call cancers prostate it turn lives the States care when is tests the of the Robin, utility role right is cancer. quickly demonstrated than tests turnaround By in transform developing the we of treat colon Lung treating the our I'd deadliest next United to and cancer critical reiterate patients. of

to to turn quarter first With Robin? it that, financial over let the performance. me Robin review XXXX

Robin Cowie

Scott. Thanks,

first year. versus prior by quarter to X,XXX Lung for volume strength quarter increase. in First quarter revenue challenges This certain an was Medicare a over test was driven first was revenue delivered $X.X the lung continued the Advantage a diagnostic the in in quarter million, XXXX, approximately XX% testing million, prior $XX.X XXXX, increase quarter results despite plans. XX% compared XXXX approximately of of total $XX.X the the over XX% for year. XX,XXX of first results growth the Diagnostic increase continued We test million with first of

in we've certain some As calls, Advantage discussed continue our to Medicare payments Medicare for we tests earnings covered delay experience from payers. prior in

of to now continue we with million. claims plans approximately While hurdles, $X million is work and $X.X continues the the resolve to administrative backlog the to

We both these we a resolve satisfactory provide backlog we from towards any work to the collections of as on issue. will work and XXXX our guidance our to excluded of payers the prospective reminder, calls from tests from continue collections as the we updates the as and have administrative a resolution in

Biopharmaceutical XXX%. services first increase million was the $XXX,XXX in $X.X revenue the compared in quarter an quarter XXXX, to of of

requests current Importantly, lung in testing of the XX% but XX%, workflows. of in improvement this continued strength number and XX reflects versus the and XXXX have recognized our incoming The in margin area margin million gross optimize first we the up quarter contracted and percentage projects seen and quarter to costs diagnostic the year quarter prior of with in of of points fourth we growth the the to percentage Gross as revenue. testing the XXXX. $X.X in completion not ended business, we yet to our decrease steady successful continue quarter XX% trend and increased the see in

over year, forward. mid- steady XXs margins in will fairly made to we've As anticipate the upper remain the such large going last improvements we the that

the Louisville, noncash sales of decrease the XX% lung in revenue the same awareness increased growth research Overall The model. business only adoption operating that an our expense $XX.X costs. was growth new to expense, increase leasehold drive operating XXXX is product stock-based enhance laboratory operating period compensation sales related and direct exists and the Colorado development improvements XXXX, offset compared quarter costs quarter marketing costs of primarily a first and versus $XX.X expense prior depreciation million by partially the versus in within million excluding office expenses, and leverage to year in in for of the support to to plus in increase diagnostic in demonstrating X% and result the growth and

as the compensation margin expenses, in to first XXXX loss expense amortization revenue, in $X.X by in of for million operating expense, and for of $XX.X compared million the $X.X noncash XXXX period loss increase the for primarily gross comparable XXXX including noncash was million Specifically, and driven in quarter first in and for includes quarter fourth during operating million fourth the quarter for impairment depreciation of expense. the certain million net $X.X was quarter in stock same the the compared XXXX. the and reduction period in and $X.X asset R&D $XX.X improvements million XXXX, net loss the decrease XXXX to Net quarter

the the expenses. and fourth The to increase Colorado stock compensation. excludes reporting versus adjusted COVID-XX progress to in Louisville, new related items provide the To started noncash last office we improvements the an our revenue of in and clarity increase in and direct which and during loss on laboratory costs quarter net reflects profitability, expense leasehold and path EBITDA, year, noncash better our of quarter third certain depreciation testing

in for quarter of EBITDA Adjusted improvement. a XX% loss first of $XX.XX compared XXXX, EBITDA quarter for the was first a million loss $X.XX a of improvement the adjusted focus in in The to growth in million driving XXXX and our cash the managing quarter our top line decrease in expenses, on our improving a demonstrates to gross margins operating burn. resulting our actively success revenue,

ended highlight our with While position have forward. compared balance the important growth in in quarter, continued for us million did putting as strengthened equivalents well-capitalized want a the end $XX.X that fourth of the events quarter to to cash going I we at million unrestricted $XX.X sheet and subsequent cash

underwritten our and company scheduled growing sheet, million. closing the to our quarter successful investor provides us $XX gross In This XXXX. in Diagnostics into expanded equity and million the raised the and announced raised concurrent and fees X, After milestone of our consideration line in the approximately April achieving commissions, strengthens offering Subsequent company we of net private to end our from of on of $X.X acquisition raise payment taking accomplish goals the profitability. $XX.X April, for proceeds upsized the balance the million of underwriting oversubscribed Integrated the collectively placement. base top runway offering of and the in made fund the proceeds

of does interest in $XXX,XXX payment which we interest. interest. $X.X through In saving July approximately which million due the remaining X payment X, of the milestone X, company date payment, addition, has million, $X.X of accrue not included The on XXXX prepaid October

Finally, XXXX guidance. turning to

in excited deliver are execution. and plan We revenue our our of million on million deliver reiterating $XX to are $XX to year to total

turn me it to let Scott. Now back

Scott Hutton

are growth, I at accelerating test our in executing quarter upon been achieve efficiencies capital improve our delivered It's additional by and operational to services of revenue to and testing Robin. year, to any company with profitability. gross goals: to remain adoption to than By of our maintaining services, discipline to X committed support growth and to to biopharmaceutical care the over history. We substantial diagnostic efforts, future make sustain and in value our than progress on cost brighter revenue, aligning and the margins great profitability we've believe driving margins these we the aggressive path X path profitability. XX% growth our now to XX% increased confident implementing ability seventh lung in patients a volume, in straight Thanks, a And growth health diagnostic start strategic the strict trajectory, lung our shareholders. achieving point our in long-term place is XXX% the all biopharma progress professionals, on deliver gross our their and our greater

excited making are to the a are impact. We and care transforming significant be such standard of

call the operator over the turn I'll that, to for questions. With

Operator

question Andrew William comes Brackmann from Our [Operator Blair. Instructions] from first

Andrew Brackmann

starting Maybe talk just us productivity Maybe to of of side sort just about rep by things. the rep here cohort. on

a a added last of over you've -- years. number handful handful the You've reps added of significant

So for provide just plays that confidence can ramp of the any year? into volume rest those on the how these what different from groups seeing your from hiring color that and classes you're in you

Scott Hutton

to Yes. getting added new being X continued question. kind frame time to maintain Andrew. quarter. Thank professionals a hire where paying per to Yes, maintain they're X-month We've from X position continued a a themselves. Appreciate you, for the have we to a about sales of

we're us training terms working doing gives in of what So onboarding. that and confidence that is

at look where especially know still large. and that we territories have that, the a are have States you number Now we West, United we the territories, of when in too

X have their higher that individual with a associated lengthier little when we be activities. know a So territories, might to ramp potentially bit that, going place an in those of individuals those and we day-to-day cost are

are similar, it continue to equal. can seeing all that of gives grow. to aren't kind their us -- confidence they that created we But and So because profitability path be somewhat efforts we

are we the assess to beginning also massive we're within And surface to able just We and penetration territories. adoption that know in this opportunity. scratch

professionals we as continuing year, full to to look X So at quarter. X per add the sales

much real XX year around the to We end we contribute are will key into they are in how we'll them expect to or how third probably that the be that and that somewhere able the cohort early The quarter. do XX last bring of contributing. on second month

say, plans us, So -- we've coming and we sales factored I or expansion. a guided upon rep year. that that in a into the that really And rep our for in, built model productivity should sales from that a that's position framework, and

that year of that be have sales It's of lot approaching a ago, and to I opportunity consultant. having real mix to change. piloted and we there see sales we're a we territory actually an lot will be going about got was associate that that to we're the productivity. over We've upside and continue talked consultant. going sales little a remaining. the Now Andrew. XX% our and based associate upon we It's of upon based -- That grow hope grateful helpful, size expand. introduced But to a territories

Andrew Brackmann

Maybe helpful. guess on a Very Great commercial Yes. just infrastructure here the minute. color. I sticking for

are channel As that moving at you've even M&A? you're that or thinking super leveraging in channel can us forward, level that a high maybe about that organically further just products or talk through you established on partnerships new how pulmonology, to be developed

Scott Hutton

that strongest Yes. question. assets. Great one of feel We it's our

second time. the us of don't first succeed many efforts that All commercially know or

having greater integrated the opportunities. So fully know team fact the we've lightly, having, built channel that there's we take successes we that that it's don't and that commercial and a

it a challenges. states pulmonology hear new also customers, all based or really, unanswered. disease they remains clinical from where present And We they're that our upon critical question

know there's additional opportunities we So just value. provide to

size had meanwhile, means sell about horizon. road a there's us map could to no. interesting by an additional which bags to in that This are accretive of has to success reps' reach said our it. know decreasing to to potentially with talk And opportunities also an our companies the and fashion and distribute do sales the out the We territory. Those all by a adding as on we we year their products been products their number we've of so

as we which foremost, X, continuing focused. We're as organic under-penetrated to state For or for call X and a add so can really products future, laser that this in team us, believe by to it's whether invest We're long means focused, more opportunity. the appropriate X in point. that's to inorganic. I on sales still do channel first we're reason sales the even And going and that, in they're find is that that I the the maybe

Operator

from Our comes next question Cannacord Genuity. from Kyle Mikson

Kyle Mikson

guess almost and getting core guess revenue to track, just lung looks quarter. guidance. note, Congrats you near momentum kind they're on $X the why and should by and diagnostics numbers I the raise on that for on had I look with here. the biopharma momentum pretty million that revenue given lung guess, Is back curious, not I'm see? anything out in that open field there the like term of the in market I

Scott Hutton

Great Kyle. Thanks, question. Yes.

trust, priority. focused you we've trust, we off of think and quarter acknowledge I start, good on things us, was done so is think consistent once, opportunity, it to really getting We and that. priorities do one done we And very we've building know a and that, a as once For it very twice. we've our great consistent about journey, year our to we putting first I this the about up want the been the focus on XXXX on

year. of about in the ruling. we'll mindful being certain managing if FDA that the talk it's LDT a so bit we're expectations, just And I'm little anything, early

over our And are want of nailed pause the tips to we've caused Some but lot think We you a of year. get those just skis" on to it. that uncertainties momentum. the got very bullish "don't and us I of we feel

The been seventh diagnostic talking about continues growth. than core consecutive to business And we've XX% on lung rebound see exceptionally excited services. really we're with our to well the of quarter perform greater biopharma that

or strong And really that. greater contracted so front, the be services yet biopharma the been about to put to on of to And there dealing of year. the quarter got the lumpy area contracts whenever business you've services remain we certain recognized third million are been strong both feel partners But consistent up on priorities that good than us $X quite and biopharma throughout reliant parties that's with have samples. you're those receiving their on that's front, another make

And a lot strong for But talk up of quarter. the end second see. let's we so performance, that let's us, we'll continue those -- execute, the at it's conversations really and just about put the to upside let's have

Kyle Mikson

great, of getting was revenue, on on that Scott. IPOs, I funding That guess, There's side there's private been the things, And the the been note, is deals. services biopharma -- definitely better.

the recently out So contracted the this bit? be biotech just Or new when deals? quarter Could force world what rolled $X in kind at the year both be revenue if the the there you're second of what for flush Is growth of is or year-end plumbing the in would near I'm gets throughout and where of then wondering quarter, there of first in that And that this the maybe? biopharma kind a with this million by? happens bolus revenue. completion a deals? Is term, of be to like in RFPs possibly? like kind in situation new levels like revenue contribution Is looking the going that -- revenue

Scott Hutton

a great Yes, it's question.

that's focused partner effort build our it, lot it that you for way we've with a say, well. contracts early-stage a seen report of do where and ideal we've building and partners, the as what partner, on with to continuation us, For on an works trust is discovery

become move greater the larger. to more on drug contracts that a effort. the You on become discovery to to importantly, you those importance second phase, But and development and you move third

those have a that So we've of number continued. seen

signed any We some proud have of efforts. new partners, We in that and to from don't share fundraising of seen that those RFPs really agreements. new attribute we've come to new we're

hypothesis once those samples, moving type it answer that on samples. And for fundraising think question, and I of to when them us is that to they're revenue that upon what achievement, receive the there's completed some can impact biopharmaceutical help are more it's we the going is really banked of be trying forward. agreement those we we're have retrospective sign recognition and targets too. and to a those horizon. have their If dependent the companies it a it whatever likelihood near-term comes efforts, There

study, If are it's those a are a spread multiple years. going bit but be those obviously, to prospective over out trial easier or little to forecast,

is recognize $X revenue to that at look the sliding into we'll next that and majority, X little the all, maybe of years. if we contract at way over So million not X, under a the best look that bit

gives it continuing for confidence a of come. you out continue is in So that fashion built, expand will that good then sustainable it there's the team business sales book funnel. And to quarters a that's to

So great opportunity.

fundraising for companies. highlighted the market You biopharmaceutical

One things the the push. saw historically we of year-end with

We that recently. seen haven't

you it's say, year. capitalize So but too to a of we anticipate this we'll point to end significant we'll early this be through see updated at towards if we in time, to presents. But keep actually it the stick if positioned the year well hockey as progress

Kyle Mikson

great, final a was X-part That actually one And Okay. for a Robin. Scott. question. It's

amount million I time capture unspecified the for the to it years a probably few time? unpaid hearing we've claims. on $X.X lose possibility That's kind if there quarters MA, like opportunity to guess to that -- to you're you good period of is to part. a that that go And even the at of million Advantage now. therefore, it is there $X.X recognize you that. capture. First I after Medicare think revenue like first certain was claims, Is in just a the of been Or takes least have

structured? think payment, -- your is that is October. Or to was in I just paid that I something? How incremental going in is OpEx on like Is there? a the million of standard the be almost they a bit. one just kind baked it like think out like or spaced It's was like in Second $X it

Robin Cowie

Yes. an the the upon recognized as because didn't we It tests Kyle, performed. period collections. accrual cash the Medicare revenue recognize be that Advantage in were that will

our no it So when recognize in, there cash to clock when the we'll ability for is comes that's it. recognize

So keep there, good updated a progress. and or we transaction we're fast. No payer we'll in you is shape as all with make interaction

been it's about a paid -- yes, payment of which million sort so feels of this, it's lot of it beast. The like of last the Indi. And be quarters to payments can October nature that for talking milestone the the we've been the but frustrating, is $X in just be

So up milestones those we the were on quarterly but span we had and it of milestone last all multiple over the paying interest. set carried that years

raise in fund X the we July about actually our payment April, Following us prepaid in which cash. saved $XXX,XXX

prepay there the cash because interest. no did not in We doesn't milestone business that's X stays October and that leave. is the So

move So it to there's no incentive real for forward. us

Operator

comes Thomas Flaten question next from Our from Lake Street.

Thomas Flaten

just Medicare follow-up the Rob, Advantage. on a

Aside claims a a Or unlock to a commonality as whole which backlog? be just desire is, from such? trigger, a portion of is of for maybe in just mess And what not to any reasons getting there there pay substantial need is individual a adjudicated the it is that you, not could I'm at that payment?

Robin Cowie

hurdle. administrative a a It's consistent but of massive claims, sort individual it's pretty

address portion good up in should a good can placed been us, administrative front unlock -- the a that's lock portion of of hurdle it we those. if So

common we I'd basis. have And to so deal across it's multiple more on not a claims. each . issue a say it's like claim-by-claim

Thomas Flaten

to gross with Got the in stay they you that Robin, mid- high it. sticking would Got it. on XXs. And indicated you, just the margins,

XXX call a be XX we this XX What around that quarter to quarter? next it basis versus like cause that move point swing. would within to it if What So caused window?

Robin Cowie

it's Yes, mix. a really

we of contract have a from see a and been and biopharma sort and margins have a contract just margins. biopharma. quarters that really of the process contributed very if some that's movement. couple mix that's biopharma productivity what then strong, we gross of have nothing the high of growth could slightly on based like of for The in, There's our last in expect is. business any if to the you comes the gross have or But a So higher can to lower bigger varied we be would that margin, issues we type which -- cause standpoint, portion a have it's quarter, tests

Thomas Flaten

it. it. Got just whispers potential the Got then changes, final one. fall? here And guidelines quick for ACCP the a with on particularly in Any

Scott Hutton

make to they're November have they've and given than the any them, for update sort not a October, usually guidelines have updated occurs Annual as to to CHESS time Society woefully it's behind highlighted, thanks you and hear the question. adjustment other comment guidance and We're Conference frame. some Thomas, got They XX change. eager the state that of been received which and or nearly Meeting in years around since their in they

we're disclose So are timing. fall what to eager they convention heading willing to into see that

do development opportunity focus to to has and to data testing. exposed on our to continue guidelines We an that's to ensure anyone that what going commercially, with we can associated be we're

provides nature can They own discussions their those experiences that the they with it but appreciate are and industry. value drive into personal that across go broader can the adoption in help

make see. like just and we CHESS, there. best good the continue And a And we're Fleischner put we'll wait in and we ourselves even soon our year priority continue position or that and informed inroads the as just but and it's to something. not a And position again, really know and put ourselves develop So test, into NCCN it outside to extends hear guidelines, we've we'll not, develop is this in feel everybody let data as whether focus to definitely possible. and a of

Operator

closing will for the I it session. remarks. concludes turn Hutton to This Scott Q&A now over

Scott Hutton

sheet and We've It's here body operator. long team ever-increasing and clinical an you, execution, momentum pulmonology management, on on first-mover we we that their our adoption year, as we're impact building we lung future. And extremely all to great and treat. worked the clinical payer patients profitability, material on at the Thank status start our is exciting updating earnings in build with to a the XXXX it call. this towards to the Thank and believe pivotal care unique robust Biodesix. best the and professionals to view of execute population. a and of about continued large we a you. and we underserved in commercial as hard an you forward With and progress had diagnostics. next health scale our and We've time our year created they ability increase strong balance have success module look focused our data, to further Ultimately, in plan and in a

Operator

conclude does program. This the

disconnect. may You now

Biodesix (BDSX) 8 May 242024 Q1 Earnings call transcript