NVTA - Earnings call transcript Q3 2020

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to Invitae's Third Quarter 2020 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to Laura D'Angelo. Thank you. ahead. go Please

Laura D'Angelo

and us operator, everyone. you Thank Thank our good third joining for call. quarter for you, afternoon, XXXX earnings

today Medical business and Officer; Jason our area. George, Katherine Stueland, Lee Policy are President Commercial Guyer, and Bob us Officer, Chief Officer; Chief CFO; Chief Bendekgey, of CEO; our Nussbaum, Myers, our our our Joining Shelly Sean our Oncology

as today's have includes listen to conference as results our our release you encourage to call, commentary As you and which press available, financial quarter. on well metrics we the

you various integrate we that that like Before those infrastructure and our Private slated prospects; and I'd to forward-looking to that begin, and statements measures the services; Risk differ to for historical, Accepted in of forward-looking investment and particular only accurately revenue, We services, refer company to for with operations, of demand expectations. and and the and provisions in and within and you administrative, research focus Act. in additional on plans actual harbor expense, loss of safe our including not well make net burn. will our cash to our our results in could in results the that to loss restructuring legal non-GAAP settlements. manage development, The future per marketing any we investments, over in cost income include the titled XX-Q date meaning actual the information are operating remind encourage expense, These and services; call cause about to or that, non-GAAP call measures we differ materially assume, you review We this of additional statements consider on share Accounting reconciliations, conclude selling this predict our or gross speak net, section statements Litigation market timing results; that GAAP, our strategy; is business future monitor most statements difficult these future, Factors financial and financial our among don't as supplement It turn and to Generally Reform therefore, our and net With These outlook. could operating remarks statements the which Securities current recent States, To product for materially reimbursement the our accordance from on our thereof; I constitute acquire; performance we profit, from GAAP several release things non-GAAP as other the business slide our acquisitions, press products; deck. our and our general to hereof. including in United other available we opportunities; earnings plans are the Principles consolidated pipeline the demand our Sean. prepared businesses and and of of period. the and factors

Sean George

and at and at the industry busy been It's few a large. both Invitae exciting months around

leave we us the will we a discuss take that Invitae. at game with a orient metrics our growth long you everyone can from would there is was to call reorient pre-pandemic it time quarter key mission; to indicate key our and if the While or lot great trajectory. to QX to all return for performance away today one be and in

guidelines. tailwinds saw to much turned last month stronger quarter the be and out in the we fact of ever. and In payer September broader adoption Despite decisions form and the of headwinds public strongest uncertainty private pandemic our expanding

to to return into call walk years a results. improve platform On for our the Shelly we'll fully and high financial see them through and global our to outlook significant ability our expand and We to demand continue in faster. us growth We expect developments no grow addressable markets cover will to quarterly this come. trajectory future first the it many and for but, maintain change

Shelly Guyer

Sean. Thank you,

Given to rapidly pandemic growing intent the stronger exit seen remains our with the is an the a competitor same the year recovery expanding amidst the business as we've positioned in genetics and market. growth even that

samples on our over XXXX fourth volume have growth We're a representing reminder nearly third the be considerations because of briefly in a the As we quarter quarter Xnd. XXX,XXX to impact accessioned quarter. will of the ArcherDX key deal third touch reported close October on in the call. will on pleased approximately most XX% cash to year's the close only I related previous

COVID Our volume quarter over from last quarter this XX% back increasing the second bounced lows the in quarter.

more develops, As we relevant a given reports period. based than volume metric on that a number test of business benchmark important billable our billable become accrue the has in revenue an the

of XX% This trend a from XXXX. at XX% mix tests, billable quarter was XXX,XXX volume and toward billable exceed International offering product our Overall, quarter continue pre-COVID steady volume. increase approximately volumes about or the volume remains to back same in levels.

for we and few emerge the the hot to However, COVID-XX urge we on quarters over spots caution that lead could as some regional enter growth continue shutdowns. expectations to next season flu

in of this billable third impacts million from compared primary generated to Our a the quarter change. accession $XX.X this nearly were representing million X% of XXXX the to revenue of We higher driver $XX.X increase. quarter for than was quarter; third spread quarter our XX% X% COVID-XX in the the volume historical the

to to in July. Cardio third Offsetting higher cancer our quarters $XXX payers to in is final of in our from and of business. over XX% bounce the and quarter payments and We our an percentage with ASPs largely with was particularly the third-party Medicare levels mix is $XXX seeing increase payer move we cancer notable a CNP, institutional dollars from quarter, payers second tests. our house of should This the in third NIPF One overall by of changes due Archer NIPF hereditary this as commercial back XXXX. leverage. bringing from increases in mix up to saw pharma of from of and came The realized after payer primarily the The partners ASP of patients. these returning third into increase product XXXX. progress declining proportions payer increases performance patient ASP. offering ASPs test quarter we driven which over consecutive After pre-COVID a due steady party addition represent shift third-party our with high rising ASPs third-party in XX% note, by payer The party improvement lower to continued higher nearly time driven ASPs revenue and Neuropes and from payers source

investments patients willingness in ahead many platform the curve bearing early Our payer provide our to and access is of fruit. to adoption

related quarters on affected deck. prior M&A make easier acquired and press we fair To the of sets adjustments the related primarily comparison the to of non-GAAP back other of the the to As are the slide today's pace and comp, for metrics. it to reconciliation charges we've Most activity our included acquisition P&L related business understand intangible and line allow non-GAAP factors providing noted and by at by items to amortization this and in acquisition liabilities. assets detailed review financials tables base numbers, urge in acquisition value two release stock investors of of

the we we relevant cash burn business of refer believe provide including the non-GAAP of call, For will more a depiction the which dynamics. operating remainder numbers

that excess cost well The early non-GAAP from of were stock sample charges in the capacity as non-acquisition changes per quarter. impacted in remaining compensation Our was significantly quarter XXXX sample cost some the third as was $XXX down related. quarter second higher mixed the and per by based

a had performed Now health previously have we send in-house test reproductive that out. via been a

gross to COGs We to the $XX.X margin which profit a dramatically third of XX% volumes, our due of gross excluding of and moving profit million intangibles. to gross forward. translates improved expect to reduced better compared quarter XXXX last ASPs increased was COGs. quarter The benefit amortization Non-GAAP in

to expect exit gross XX% year. to target back the We trend as margin our we

moderating of to the which was revenue while in operating the as the spend. million second in quarter Moving million for our we quarter. Non-GAAP third invest to expense operating continue expense $XXX.X business cost to compared excludes operating simultaneously $XXX.X our

prudent closing of We as investments to the As decrease both in a significantly reduction was was a the just new strategy included special OpEx nearly an that cost we a impact in the commitment focus. business quarter decrease earnings further expenditures as included a obscured the stock a intend saw salary scale continue based the to our back and of we projects to which came call actions show hard-working COVID decrease quarter-to-quarter make in third in took approximately reality, appreciation our Eliminating quarter. and we appreciable and quarter significant this the force highlighted million third quarter on $XX.X due million programs into million. of the which charge our the paid archer to the to by $XX quarter in remaining such to employees $X.X companies acquisition transaction $X.X close. in our equity million this navigate in their COVID Due in burn for last to employees. compensation admission our Cash after OpEx remaining grant actually

ArcherDX cash at the transaction earlier equivalents, position. the Moving million fourth considering we cash year credit September changes our June million an in deal third million $XXX thereby position enhanced implemented the at quarter and closing in quarter. $XXX and with Archer, million cost $XXX burn in million XXth pipe in subtracting restricted those million initiatives Concurrent reduction The and $XX added without marketable compared as will the $XXX.X cash, continued closed early cost note $XXX When in to to that fourth exit savings with deducting entering a totaled the I cash consummated cash we in cash After the cash our the yield we quarter resulted of facility. the securities close position; to year. the we reduction cash a the XXth. a the

integrating we related On we providing reporting significant platform note, year of of be we'll transaction a fees and working the streamline However, with be in our and closing housekeeping some fourth two metrics. the will expect the traditional interrelated companies. elements more remainder to Archer metrics our the those complexity costs refine quarter for and and of the to the but

single our the a of billable changes metric line and success of a factors the These to model. driving the intended sight to moving we volume be will versus will we and of key to as XXXX. be health long-term accession the providing move overall example, into simpler For provide business

Now strategic to Sean additional turn the will I activities back discuss and progress. to call over

Sean George

but companies industry-leading some important range why benefit their they The I'd even test the where the Illumina model than and physicians Exact is or deliver rather single to to goals technology, it Invitae the highlight future years notable survival. Shelly. pursuing accessible and by now be accurate, you, acquisitions segment undertaken used more and medicine of and information to like ability the we by be time the ever. take patients when for are at XX full attainable actionable market best of This have not genetic that Thank like here to the and Invitae. by can notion dictated health their of vision our and and been underscore will any at molecular Sciences recent

Jason? be information with view information for platform culture from demonstrate execution acquisition the that few winners and will in On other the two treated. of your signs and years oncology and both ultimately and personalized co-founder to sleeves executive next on on of note note, The the CEO and of Archer vision. and but ArcherDX. hundred strategic the and molecular do and fact the will will delivering of warm in benefit Jason no who attractive. Myers to I a proven past oncology and of accomplishments here months more end has medicine milestones of extend way who now Invitae's mission fits he's Two can would the newly quarter president pivotal be such patients we the continued like of today new only in with significant the a Key is Invitae a Archer welcome effort constant not technology in fit of kind to that try things a these play closed approach of the to perfectly leading up a delivery that as and where that the this ecosystem. the person determine even a days they and here matter physicians with team the Jason call. reaching routine progress need dynamic medicine the of after personal also that companies at resume made in of roll continue genetic Invitae; it everyone we combination role Jason Invitae joined technologies genetic use the vital hands-on well of to clinical the a combination us We as

Jason Myers

Thanks John.

Now team. transaction great in closed be Invitae as the the has to part of that it's digging

in biopsies somatic on medicine and is it With broad become cancers menu only from will it's the whatever close and flexibility menu accessible solution be they market Archer's is address month it service choose be to already early home liquid that While comprehensive the Invitae a for Invitae offerings. provide practice technologies obvious and addition billion been is is clear germ to positioned wherever distributed and community. of to testing. the systemic centralize Archer standard to customers provides me delivered The differentiated to global estimate team, a and meeting fashion. board opportunity. serve will to specialty need now that the in and since line the their platform if It We molecular and and both tissue capabilities optionality uniquely the $XX the abundantly stage and their to comprehensive ideal a

I'm More to molecular importantly stages all for perfect thrilled expand expand oncology capabilities inform that in cancers in team the at a effort medicine market truly and community. in waves exciting as throughout cancer everyday an leading to which the any to making genetic around is time It's and our publication recent are involved the the research discuss location standard testing that monitoring make the to of globe. be every treatment oncology will to the patient, be leading the and all

in the Bob can mainstream and for findings as best I'll call is the we importance Nussbaum. their significance to over with that and of hand on genomics directly the person fill So of that to responsible some Bob you he and research forward look study continued patient.

Bob Nussbaum

you, to care touch Thank is I'd underscore like information that we're cancer becoming on studies the patients. three recently on have that of to you briefly team. published delighted genetic in Jason Invitae rapidly standard

to genetic from performed and genetic publish that will line to testing or as patients line San actionable and tests the both and the of germ we germ variants sequencing have Francisco a and line importance of to cancer was treatment. this been most with both had line types collaboration First, identify testing so actionable both and number second same clear suggesting It would patients is their genetic University tumor-only medically whom somatic that germ and misses information becoming and line every the oncology; genetic time in medicine inform variant that of accessible tumor at primary testing provide care data profiling germ have more study a in A missed germ providers conduct California, to somatic cancer news researchers that had their by patients the cancers testing are address personalized done known that in testing complete is Stanford about required patient day. good of somatic showed is of prevented testing. truly if might tumor important are the the needed anticipated

current how can criteria in we accessible testing a syndrome. we Secondly, XX cancer continue identify we benefit in explore either support with of interfering informing that targeted also line therapy. variants finding. patient including cancer. met prostate co-authored from receiving in genetic of in available prostate inherited relevant based risks. linked with showed significant on and the X,XXX who cancer half clear to their that management as testing now can deciding for daughters men all can and cancer more cancer with standard positive last and battling just study eight patients Increased patients Mayo study benefit of gene of landmark began themselves Mayo detected was published an found on come solid access one millions to the patient of patients hereditary men had Results genetic patients prostate with It's our are guideline role cancer-related will Mayo genetic is current clinically changes a substantially the to of clearly in been germ with that study universal treatment note cancer. or with to clinic that or not find and care among men inform by make their a for based to changes prostate cancer incorporating their guidelines. explore should their care ensuring the information the testing week prognosis all would genetic for that their merits these health will into sons barrier new which study genetic both enrollment Three-quarters approach who And team must genetic researchers which and well of I for national a who X using family. the the findings treatment cancer findings relatives testing as have evaluated

advancing of long care. accomplished analyses writing genetic cost-benefit on has missions to guidelines continues mold Taken of and to their to the testing improving bring the restrictive clinical into Sean. information studies more to it of that break under bring to of studies making and to genetic bring having providers information in by allowing mainstream decision and the more will making like overly these far accessible the genetic the turn Genetic together outdated now pre-date demonstrate be based standard care. and down one these too care back cost acquisition core old a I to only labored its that medicine allow clinicians are Invitae people thereby call research and others for testing leader importance making. complex bear over indeed of for

Sean George

three Bob. demonstrate that of our expanding as plan. standard execute walked expanding care. the Thank can in offering how categories; in platform. our invest we three new genetics We on look Bob further to through, drive the feature continue to services across optimize you, capabilities to to customers our these years. of And and invest with ever increased we value we customers in just mind coming role the we and to integrate think capabilities, of generally new [Indiscernible] long-term at that And in categories

take at look pharmacogenetics. year Genelex PGx and With Genelex, testing the Let's last investment. accelerated of a we a entry our had capabilities. YouScript into

Some Together, and software clinical us they with focused to offer impact. result of to we added these support a use. infrastructure a expand tool pharmacogenetics patient further cut, decision PGx's on enabled its

Invitae. Next, we in and its computation moon roll on integrating doing in engine deployed

notable and on as grow back the important and practice information and to in is results. the all continue this amounts take fully moon and very recall, growth of AI integrated I ability our got to for disability clinicians clinical platform intellectual actionable year been interpretation pandemic. Clear to contributes an further the efficiently both education which patient patients Genetics Clear which turn with enhancements. ability has chatbot COVID tool quickly to Gia the delay ahead. remotely. address and ago software telemedicine coalitions underserved autism, will and of information needs we As which into and developmental during acquired has critical One platform and for tool area a are a the evolve Gia a and data seem to become patients and and worldwide. also who guide advances got reporting years are large serves Gia

value across Archer after model unique the the distributed not this most Looking services doing this in just advantages across platform. all offering the technology platform. content eventually flexibility in to to The facilities and strategic Invitae the marketplace who'll the have allow but and recent customers testing perform three at that the for new for our by entire important cancer community categories, the it acquisition, provide legacy

platform, Invitae and technologies, As you of did screen, us genetic deliver tests, geography. through information broad a our have see enabled investments in customers set channels, services,

Our have and consistent thirst to achieving been straightforward. our mission

pursue growing the is already new that will than market We more to in patient $XXX totals enormous segment across life a continue billion cycle. which

support routine the And to We accelerate to are in adoption and around getting positioned the in world uniquely started. clinicians we're patients genetics just their care. the

disciplined market a approach maintain see to activities development. with timeless activities to we While M&A and

pace remains areas our all We of are position The soon. not genetics healthcare. and to leader Invitae mess a looking a unmet continue as in to we any runaway across slow down time need

here of and commencing The with be it CFO Shelly that some continue and her the as been to Invitae, ensure companies, search for efforts. Before thereafter of investors our our which the new its forward causes represents call our progress to leader she about work Which share our a we on patients open and the one to well one will in Shelly and to acquisitions period which commitment ESG govern role us. during the our in team. a and news She's as as scale lifelong company drive into no the sustainability growing navigate ability nine and Invitae's for continuing us toward seamless transition. move to same the has Invitae's in goal initiatives. the importance our begun transition from questions, I'll for does to the increase to combination large. has needs depend for the been for helping funnel serve meet already up team process of becoming us a improve take minute is leading her meeting to growth helped in final Shelly's new leadership time I'm is the for of company We've as the XX-K Shelly's sure benefit a who some of The for team, environmental at transformational on raise ESG to environmental looking of efforts. change and all the will with leadership rapidly a capital,

operator We for over the will to call the Q&A. now turn

Operator

Instructions] [Operator is first Cowen. Our [ph] from Sidhu question Nembi with

is open. Your line

Unidentified Analyst

is Hope my all you the role Hey, on help the your good be actually I role new to questions, good well as new Shelly efforts you afternoon. over before you in just thank Doug. as launching were in role. the and into you'll This for are I the congratulate personally years. in want all and know last

So, congrats again. you and thank

So, the that for now questions.

really healthcare First, reaction starting in key the the been curious systems from combination. closed growing on constituents what just I'm Archer. like well earlier as our about as what terms think partners has of list they of pharmaceutical

have I'm your Specifically, the as position relative about thinking you uniquely just Invitae just combined peer to about menu really that Invitae's of we old fact a kind the group. broad broader how and think

So, of constituents. some wondering is to key if more these opening I'm the combination already just doors

Sean George

--. then Sure, all. Thanks,

first Although respond of with current the I'm the and Archer Jason for Archer one let kind in customers.

we're of As have of it out of couple medicine that of years kind at oncology quarter. been now it kind least for our clients get were. we asking -- a had the and for us our And foundation game Invitae point has kind a while, the in

Jason bit in kind priorities. the okay. And responses I'll speak and let with -- which larger let we've working for can I version any input of sort so on feedback top of we any the their of from current And get claim. and But were course the positive started kind in of that clients of

Jason Myers

I add, increased to excitement. there question is good a it's think think I

enabled it or and for answers when been cancer the three the not need across buyout ability us But patients. optionality clinic. to to what provide in customers it. creating you platform two you we that our correlate have was to doing, optionality pharma, at was Give early customers leads give the the then in these So, the only globe the they look spread

meet important. increased it flexibility So, inherited become where right patient as was getting -- see really where become extremely the will in important facility. the a somatic heard time. patient testing they're information letting it to with right whether treated optionality layer now and greater that in will for locally happen ability for in a is becoming centralized either trial demand a we the you And a then and development. even both or about yearly from patient in that or whether patient a on that's drug you us at, understand the variance on the testing And happen the And at Bob being

Unidentified Analyst

that, guys. lead to you in the of like building And to and We welcome the said family. what so into and questions, for the of join Jason buys Bendekgey kind might it team Invitae built. Thanks bringing off congrats much

back other at way, makes What Just that it's wondering just term inherited yes contemplating you And and line the are in pick-up bit kind would share seems talked germ and in to of a cancers of your the prostate that to or about next, be on interest. a I'm matter, sense similar really you initiatives the does study amongst end pharma guess cancer. anything back and describe you specific of In notable risk above I to sense. big on it program. program to future, a there the kind the focused seem line be for a that of role like could little comes the a how in take development or it to on timelines. future and whether bit

Sean George

the patient real just together So, of we I advantage think the publishing. kind think to an that and that and already working going is getting giving short vary know we is math. effect collaborates and Again, of research. publish that, all And the to come note We really we and the just from know in really think for these getting more of with continue frequencies a always answer in of that position elucidate of that all kind matter I back. the We kind these the already sample, where it's looking different diseases. cohorts I

answer So, the with and per already bring we up the there. the right kind you to of publications it's felt easier view. know to hardly line of yes when Bring work that kind

They diseases. couldn't set of level announcing course, is just of all this lot. and with they're on the types are a of we So, all diseases, that do that XXXX different cancers research

databases, going is out You that portions you're the of really databases, national do the would diseases. will going of they in various cover point underrepresent know I and continue see, prioritizing see and also to, We that. what, to lot publications locus you like more you'll we're to genomic sessions, work population, specific all of the of databases. exclusively a kind disease

see like the investment But there a that norm. So, in I than the kind in a than you'll of suggest to other come. more more past there's

Unidentified Analyst

please. Yes, Great.

Bob Nussbaum

to sense. I two outside identifies or if up. And who we One place people could in looked is it's are versus about prostate program open referred other for had program identifies African-Americans. we'd program, more those self the two-fold before of increase that once our cancer example a this stop in at self comments was on Just the African-American

I to So, what of sort want as Really use these Sean their writers that has search change is payers. care for and well just data. guidelines patient just use is is emphasize They as minds that and said. underline third-party clinical for important the of another need that

and with kind getting And of health we're of that areas the into working so, to one research. emphasis going be due collaborators be health outside outcomes and more to economic

Unidentified Analyst

do early the likely Super Maybe more you standpoint. interesting. it's wondering detail deal just infrastructure you maybe describe would just Bob. for already you've how you beyond big built. it's from altering know and this the I to is but I'm the recognizing an goes menu last a don’t vision readiness broad just the on for know one ask thank Okay, closed I

Sean George

Right.

is short of yes considering really So, infrastructure always as screen data billion can stuff then to and any the to and today, I inquisitive early M&A doing says then see short we've of that the the now to think begin active opportunity interest depending guess Early now. now its stages company increase. real and like that obviously place mean represented, to one on continue say deals than in that acquired. we're kind for -- this. I Bob and I'd with we just and really contracting With But a really here, growth lot just opportunity work answer that pharma now a market given which's Jason improve. in been I in program. that more put of on a the mean, XX or the seeing covered all. commercializing that $XXX but patient putting which talking over comfortable, We’ve can't I just period reasonably there's given don’t across it's and more machine fix at not market come, in process we the I'd are that a high partners We to portion it's we're -- And it we're there's some time in in something them. companies possible. the given execute life. kind We certainly both

In so. exponentially, fact growing you're just hence it's

to given it you capital, keep us. expect short you the moves what keep I but investment. the opportunity yes we intent from what involved. think investment, relatively any could have the on given three and even the just idea. to a pacing we generally going. guys and data The the the But move make, from we two Or By to do at return say think going numbers expect it that can year I you

Unidentified Analyst

it. Got

team. thanks Okay,

Sean George

[Indiscernible]

Operator

Peterson Next with question JPMorgan. from Tycho is

open. is line Your

Unidentified Analyst

$XX Hi guys, still revolves so that that around the in million million cash was Tycho. $XXX ledger. Casey burn we or have out forward cash for probably expect burn. quote? Yes. now I this million, XQ Should just And themselves. a this in is $XX We're question, I in around for it stack burning full XQ just can called million we is on $XXX

So, guys thinking right million to that, million about wondering you are then how now? $XXX $XXX just

Sean George

been Yes, of kind closing and COVID There now as get if base certainly put you you year. touch --. annual also this companies and the we'll if in pretty on forward to It's thanks. it's then and in good done on kind and to base. acquisitions will touch a good I It's the it. we take say January. of a burn formal look guidance is two the you did

Shelly Guyer

Keep January. our accelerator the in and foot about we'll on that talk

that smart be and that proven can control we make. it, So, to then it, we which have moderate very investments

Unidentified Analyst

area. for how and you see maybe could so falling Anything Got could it, risk, then, And payers -- for do private we average on you this probably see we there? in suit good thank get coverage [indiscernible] greater how the that. can

Sean George

private will and the in it making through progress payer We're the and rollout already third-party both landscape. seeing

Unidentified Analyst

you. there's quarter Thanks. Got the you trending some how the saw trending then and product volume were for on XQ? you now color here just offerings that Can that trends have levels. me in where visibility biggest one some in is last And earlier just some then, comment a that above pre-COVID maybe you give more

Shelly Guyer

CNP also as Yes, back wants Katherine so the cancer maybe we more mentioned in a cardio of towards related diagnostic was bit mentioned, the little ever which best see and and think September here are products. I month as pure I neuropedes jump to the Sean did trending

recall to reproductive are we exceptional coming you a products. of the saw strong question back in are just we some a more of still in durability seeing to side the which It's back and during how prior COVID, and of COVID fast As products growth those lot levels. reproductive is diagnostic

So little a is fast as very is seeing side. cancer we still the changing but firming the are bit in growing reproductive the up mix

and fair of shutdowns about that have also I lot and with learned with say these a work wants think bit little how deal talk maybe physicians to the with how to some to and telehealth that. to Katherine especially geo of it's a

products. are showing of the types So where of and Katherine? that's sort us numbers the

Katherine Stueland

Yes.

both we Yes that's areas Shelly. thanks -- U.S. product all across of So the growth and saw and

Operator

with Puneet Our SVB next question Souda Leerink. is from

is open. line Your

Unidentified Analyst

things. just guys between start quarter curious questions both in that the off side quarter with to also pay the well is Shelly average mean takes like I I into come year-over-year you a of of this the be are? volumes guidelines going a the and how kind in? just think, state is do but Puneet. the curious Hi to just know strong in business cancer note wanted of kind reproductive good the think the how and puts hereditary normal is as falling Business to on performance starts here afternoon last the a the volume then back trending what as diagnostics. on option coverage on that the patient health quarter I It to Ross you actually moving steady of play mentioned, pretty for risk to the are and going seems ASPs you to

Sean George

No, I'd say it's a good question.

is talking it broad I deletions doesn't include micro metabolic cancer. cardio, kind CES, deletions whether talking screening whether we're of getting prenatal miscarriage selection therapy again non-invasive micro think kind testing, neuro, cancer, enough portfolio screening newborn now or whether includes Amnio, we're of analysis where carrier our pediatric

I think kind kind growing. of like in all is yes, general happens are the of answer areas

question you, in The kind have kind the etcetera. kind numbers, particular going renal ACOG for answer the others. of to of given than are next just patient We'll if faster Some top changed of guidelines year screening segment, quarter general numbers, answer volume In years. health all line growing. it, it's is now non-invasive now start moving grow in probably clinician play a growth as in the been trajectory? Short is many is no been do reproductive has

players way. women of. the now guideline pretty pay and and it's become that pricing as will I'm U.S. to coverage is a sure the lot it's there There a payment it That's right they variegated were be landscape continue had it outside picking I single important the say guidelines playing are hard institutional, think story, that the up space payer in many catalyst systems an adequately before as individual that payment, actually patient on in really. is will still there be of certainly not side to really much whether that self-insured ACOG uninsured always will they'll be employer more

U.S. And while for going is insurance, is mix take health that's more needed some service. NFPS. toward weighted pricing and I to a much outlook up the again to think our catch payer pairs probably that type markets insurance attractive in

think to I this. just we're have to So going see

Lee Bendekgey

I'm average to This ASPs been I Sean half on regard to answered with impact running on With and is IPS regard half have regards risk. believe current risk Lee. the with ASPs and if volume, we think volume but our mistaken to about I potential heightened not

ordering that from the so extent average been have the And pay. been they have within category paying us women to patient risk the

with continue coverage days. ASPs early improve So improved to expect NFPS we its to would see obviously

So look I it ASP don't think should a there say we be like, positive impact. but might can what

Unidentified Analyst

now just Thank near guess? cost just I how I job with really the COGs a in-house you. of cadence I I and looking reducing costs their is reduction view business should then good guess portfolio at mean the I in addition at Great. this the heritage guess Invitae that term Archer's of appreciate we in done has Thanks. testing

Sean George

of and say very higher. Yes. to both I average term kind in the of of such maintain margins would gross XX% may XX% kind and the pull the entire the Archer Archer the It's now information a long near across are range but bit monitoring. it’s selection term will okay. way XX% squarely, It's product we appeal get are on the near trend up that the a line targeting platform. little term the operating again technology. pull kind margins of And been now mean of help historically it part a the even platform. in in reach a I to kind gross effective therapy have bit, gross cost for margins In long-term of we're little in we accurate margins entire for across

Unidentified Analyst

us Great. one in Jason, would great? approvals and Thanks. a be data last terms provide term near PCM and And we the of be if updates then filings in you quick one just the timing for could can anything of any on stratified expecting

Jason Myers

track. track. to also has is on PCM submitted been still Stratified and that be communicated on this Yes. year is

it think We exact AstraZeneca is seen ongoing but and that you've would. predicted work releases that haven't there with move I we given from as continues timelines press forward to

Unidentified Analyst

you. Great. Thank

Operator

Tejas is question from Stanley. Morgan next Our Savant with

Your open. line is

Unidentified Analyst

on for question. for is you taking Thank Tejas. Edmond my this Hi guys

in thinking Just XX detail the to the think for the the just the you color new contribution circle a quarter and And into in collaborations how that there inclusion also would would improve is to Were new guys mentioned the similarly partnerships. of back heading mentioned you of additions ASP, time dollar last you XXX contracts I backlog time on and biopharma from Archer additional and also the provided improving of be ASPs we and back any Thank XXXX guys dynamics details think ASP of but this question. the you your total a work mentioned the that? for point should quarter biopharma what quarter? this about and view

Sean George

Yes.

our biopharma doubt selection there's also high therapy add I'll payers very up pull so see think I help Archery their do follow the level indeed and for attractive is pricing they where no the CMS knows there's do that's pricing good help for we'll technologies The and biopharma business contracts biopharma what ASPs. with everybody are there, well. have a so of out pipelines likewise we'll therapies into that to in XX high therapy business we source identify investment no targeted oncology to of full future. biofarm of investment the look guide continue And the as doubt to then for recurrences, paid be going patients

think, to when the outlook. would one track stop pick We next all I year add So say all this I quarter we're probably a get of think up number still now is of - every starting biopharma part keeping through be that now week. of it definitely companies, it's of I going to we're you to

Shelly Guyer

Yes. It's XX.

Shelly Guyer

XX.

Sean George

quarter. this XX

Shelly Guyer

It's about quarter. XXX last

getting each So there it's of and probably it's continuing not up worthwhile to count those.

Sean George

repeat the that's of a I it It's or getting so a thing think collaborations now of a and and we're lot lot lot extensions.

our of opposed I with like a this probably great very that part or said be it's pleased but and something coming year been as with development. amount portfolio sticking business just the deal we'll start next really I biopharma think to growing a of it's rapidly yes, now So from we'll like

Shelly Guyer

bucket it XX% it's between the it's Invitae placed is that XX% we somewhere in at and I would XX-Q we institutional part point. our the the that is to an and look and and just percent business to directly where one clients those say of probably at And increasing have, about way of this and it institutional XX% bill revenue of bucket XX%

those detect help on to the would pharma partnerships. did is that bring programs is one ASP due of increasing we program say dollars layer each one tens partnerships for of it's joins to or does one nicely a We that be biopharma growing. payments not dollars in and new it the to each increase those ASPs that the So up in in general but our

own. access that's about more watching how and think tests many our we but able many, institutional people keep various to have that that these on we it general patients, in can is we that so just so, And the programs cover service to payer we allow to are that

Unidentified Analyst

Got you. Thank rate like a for with level? it. That looks third very was September relative us grow and Archer. your to helpful quarter couple exit your sequentially did give of COVID maybe an how Jason What they on kind revenues and idea along what just were questions can in pre-pandemic looking of you year-over-year impact like of and and

Shelly Guyer

XXX this been think, the I yet issued. have not numbers Shelly is

with X-KA filing include their an pro formas We that XXX be will numbers. those will

us lot how Jason maybe detail. quarter tenor So a third went it's a for premature the general in speak But for of can you of to Archer. give I think

Jason Myers

development customers customers and think technology in feasibility well or had lab say trial, U.S. work, success we that using progress you and the in well think as assay work. as the diagnostic the I as can outside I companion pharma as Yes clinical their technical both we've U.S. lab includes across could, translational continued continued some with

Unidentified Analyst

here. how should I the completed not one just If sales Jason And about we mostly trials XX% from was revenue be Archer that KGA? you. our of thank mistaken it, are about Archer's think thinking Got I'm last one and

should be forward? this going how thinking So about we

Jason Myers

Yes.

I we again Shelley out it way you would future. covered the there there, details the large But will I in pipeline think is should think is have pointed to targeted of that as out, think think be therapies about I there very a the and I argue trial generated development evolution continual a of that deep the the partners customer base which into clinical are have revenue diagnostic multinational well translational work. customers feasibility feeding companion and most is pipeline and as as again there's pharma assay, and our total very from of so

Unidentified Analyst

Thank the you for much Got very guys time. it.

Operator

is next from DeGeeter Oppenheimer. question with Kevin The

is line open. Your

Kevin DeGeeter

questions. my taking for thanks Hi

following of for of pharma few COVID-related seeing was than maybe general a a up the companies the rebounds topic heard bit from market. trajectory It the pharma kind is they're Just bit more. in clinical maybe measured a on that more

the think maybe we relative experienced extent with quarter you can So to the to third into regard in quarter comment relative and fourth about the the how clinical? to you rebound pharma going in had your COVID, should

Sean George

September that everybody march the recovery, recruitment pharma record, of until of pharma laggard kind you in September we've V-shape business recovery patient what in we starting month. the a was call patient that saw XXth all-time mentioned recover you said, kind if the of later a March with take timeline else did it We identification, indeed Yes. terms that with game, record now saw was that the shown. stuff like With

see program it some of the the country anymore in program place even that with COVID put country some can it's shutdowns. to impact now. new kind react like recent by just have now noise some of honest not So getting by to I'll by in state you state obvious the and It's our hard just I'll be measures as with clients

our included. think program pharma I is

be I like trend backup just we be like to we of to it, to here is. to kind go hard outlook I last now the there's we some But muted harder we'll did you of said and while us did as well season see one in know into and recovery going coming say just got the compared to I'll honest as COVID we look think higher growth, It it's impact against flu for of that through COVID. so that still it's with And mentioned tell what it's experience the kind be the sure. to does

Kevin DeGeeter

the And a update payers? any that disaggregate to etcetera sort third-party the the to of bit, directly bring on a past talked we plans, of note, can we business for companies strategy little go self-insured about talk the just opportunities companies for wellness large to a on of different in some health larger and segment

Sean George

package kind effort the with kind on popping working action information most large most that's on We've direct hospital looking time the about days targeted about where announcement treatment access one I of would talking of still working at stage been some type Christ Yes. genetic of payers. that of really that for talking employers third-party benefits the and Those spent of institutional kind saw giving the have you Kevin. of to say look the self-insured genetic if of that. of early plans in of employers. of direct especially heavily employers very a offering do subsequent that on of be cross-continuum and We front are packages trying kind routine self-insured with point systems certain on spend ones of conversations, suggest kind they're basically like, are lot to about time they care. do their about of entire We a weighing interesting But it see some talking with really hospitals, I'll whole improvements in at spend we to want to with to what ways of are are alternate when is. part for really, up kind of hospital medical coverage early locations employers of course, payers as kind we business a the genetics guidelines to Lee their however those comes that most seems honest to self-insured like collaboration/pressure self-insured incorporating and endometers conversations the that on and/or

Kevin DeGeeter

Thanks for taking my question.

Operator

with next is the Bruce Benchmark Company. Our from question Jackson

open. is line Your

Bruce Jackson

for taking question. thanks Hi, my

in are a right was factors any wondering I in due a to just drop of to birth is Brookings birth study rate that the about was reproductive mitigating exposed business how the much talked there now So rate? institution that offset drop potential there and could COVID testing and the

Sean George

Yes.

washed I and kind again to been of of that share U.S. share market million of is we've seen in in see space kind birth of million just I Myriad. experiencing. affect one pregnancies there Counsel by a kind any women is getting also two in think the information is get one six think the is we've There the hard aren't of that drop more these those leaders seen sense reproductive drop current out rate or going Naterra, relatively be which we've player And going given the kind over of taking, getting of by increased that little reports now new a served year two to this technologies. say birth So rate but that two there out though, creation in they our would I many to share part get year take, our, even general is that health of we're business health maybe it our utilization so our Progenity, the is

Bruce Jackson

very you Thank Okay. much.

Bob Nussbaum

This is Most Bob, our testing more one of the add first can the just in I trimester. is space in reproductive occurring thing.

rate birth probably that the so rate the And in done. not is testing being is early this pregnancy pregnancy it's because the important as as

conception was it's to that the rate starting if there what see So recover. the a COVID earlier pregnancy pandemic I in in drop-off is and

Bruce Jackson

Okay. That's very Thank helpful. you much.

Sean George

Sure thing.

Operator

Laboratories. Our is Market Gottlieb Ophir with next Capital question from

is open. line Your

Ophir Gottlieb

news. That's question. Hi Congrats have I guys. cool two Shelley. very Thanks questions. for taking the

opens customer it distributed this larger Archer or the a materially call addressable given is, market a now internationally. addressable First of capabilities let's larger

the as maybe soon international germ now give as could essentially growing and on So you do business there so right line color margins little a QX too? that see you if

Sean George

turn Yes. first on the The therapy and globally distributed more is that on no, as much dump love the monitoring take we'd we're and getting both to fully it and selection, to focusing we're centralized. in up going commercialized cancer as transfers running

unfair of locally. developed interpretation first the of the and just we it's not we're of getting and business excitement investing a an something start mean pipeline soup distributed don't reason role nuts RFP year There again NHS it's in after. and what out a cloud kind genetics rest model don't going the healthcare weeks report not really and all own of a that year be ago kind to serve platform health I look one suspect its to view few essentially pushing the benefiting as from for of just mind it's think of that our putting say system is lack I year, that, and of I the I genetics to much it's Invitae their our of next on out something priorities a the have that it's will I for is business globally. a and about the reporting for central to and in starting first put but another excited So throughout U.K. to like. country's definitely be will the things that going I about. running model that's And them world or great it's addition where how on rolled kitting in and that's to example, and and around think is to is IT it's people plug that is encouraged going they'll know-how public the incredibly there's the the up room laboratories capabilities globe own their running stuff that awful be these on assays lot and package technology NHS complex the and really of temperature and in health then amazing box. great an basically Archer there's one in single and ship

excited second part game. about we're going cancer and selection is to therapy but yes monitoring So that primary it

Ophir Gottlieb

Okay. so the a the and sort due I which and view just is was back Thanks the question thing understand to And to seen to The isn't know of that was would if I and clarity clarity sounds cash rate was Thank don't for COVID little and this COVID broader. there necessarily that then uncertainty impact until the sort on you that? trying what conservative commenting that of burn do. direction on the impact some second I'm on respect essentially pulled burn think impact my your enough the plan to the the business you're COVID burn smart reduction of with COVID cash like of and now have XXXX for on Invitae. you. perhaps be. It was cash of

Sean George

Yes.

here. on January in that, I of explicit think right yes you're path definitely we'll is it about the short be but it the

Archer Archer reaction We it's the burn. when to suggested, cash we'll as COVID acquisition which of an net we in burn thing deal we to so go kind burn final levers but the and for indeed reduce know what So cash acquired we we from cash we like just the year a a was. of of what the happened. where had outlook cash cash our financing pull total the in change and all deal down then decent impact for then what the etcetera, January kind rounding you did now we costs, introduces burn, that mind exactly supporting deal in did announced take we've of know view QX the another however COVID Archer pulled did are We're costs up the have the indeed there's cash Archer

terms So that's kind change one, honestly then in broader are of how and say think return I we I'd the reacting in business. yes seeing but customers where on are there's number COVID to visibility COVID, of

we to roll the some of game mindset seeing is pan sure it. the and sure leading of whole investment the integration what we those I be said be the as of a in the things is COVID make get as the Archery about points broader us. think going and here. off got time get there considering in going year you there around I intend We're good to those the that's our transaction, two to it the is, impact then running all the to that are position things But to Archer and of market. to are world sure kind and like understanding react we're what people the three players our moves You're obvious, We've be after of think we're should stay the I

about objective. thinking growth more and now pan as we're into the primary our think I it the

Ophir Gottlieb

it. That's a color. great Thanks. Okay. appreciate I

Sean George

Okay. Thanks.

Operator

gentlemen participation now may Ladies and and your this for conference you this disconnect. you session concludes the Thank and at today's call. Q&A time

Invitae (NVTAQ) 6 Nov 202020 Q3 Earnings call transcript