Veracyte (VCYT) 25 Feb 202019 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Veracyte Fourth Quarter and Full Year 2019 Financial Results Conference Call.

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

I'd now like to turn the conference over to Keith Kennedy, Veracyte's Chief Operating Officer and Chief Financial Officer.

You may begin.

Good afternoon, everyone, and thanks for joining us today for a discussion of our fourth quarter and full year 2019 financial results. Bonnie Chairman are Officer; Chief today Dr. me Anderson, and Veracyte's Executive With Chief Officer; and our Kennedy, Scientific Giulia our Medical Officer. Chief and Commercial Hanna, John

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

And that regarding fact. they regarding plans, product not provide include to prospects that assumptions, be pipeline, do future discussed on and so in Forward-looking performance and/or differ will reimbursement attributes or achievements will results correct opinions from these financial public during give and other guidance further of we or results, strategy, reflected performance historical our and cause those any may quarter forward-looking subject no assurance drivers statements company expectations performance are prove and the expectations and the our statements can forum. actual forward-looking to future that uncertainties implied growth, Management's updates to and statements or materially guidance, not statements. goals any in and in risks by are a such unless

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

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

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

I call some the like our new Before over explain Bonnie, GAAP turning structure. reporting to to changes in would

from testing of cytopathology. product collaboration Testing Percepta, includes which FLEX includes testing, Envisia and the to our includes our revenue diagnostics represents sale biopharma and partnerships and centralized services, our we and kits rights diagnostic which Together, nCounter nCounter global platform acquisition of revenue. currently and our product, expansion currently and reporting CLIA distinguish the With between business. the testing NanoString, of sales. products and expanded Afirma, instruments, the System Product strategic revenue revenue includes Prosigna

earned resulting revenue research commercialization Together, Revenue milestones other agreements our is biopharma strategic our the of and biopharmaceutical or period. development and services of for consideration agreements. recognized or variable and/or revenue, achievement the from either services a services strategic consideration; for of and revenue, contingent during for sale collaborations including and represents collaboration data fixed comprised including or biopharma

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

indications Veracyte everyone, we full thanks, and joining advanced in an XXXX. noninvasive transformational discuss with world-class early has year us oncology to year XXXX on nasal first-of-its-kind our fourth acquisition had for our cancer you that us outlook expansion strategic growth; and for volume Keith, for distributed detection; and our test our results X impressive and our exceptional quarter added We a lung made XXXX. today genomic drove global provide own and and and positions platform Thanks, as for portfolio. swab new test revenue

momentum XXXX. tremendous have We entering

prior an and revenue over total volume a increase increase in XX,XXX, to of genomic $XXX.X grew XX% XXXX nearly XX% year. reported that of we afternoon, million, XXXX; growth the This test over

$X.X operations delighted million in I cash operations achieved space. XXXX, for report net achieved predicted, as am milestone companies to from fourth the a of and used cash by flow our we was $X.X Our million, few in positive that quarter, in

year. $XXX million of range for the total We XXXX are $XXX guiding revenue to full the in million

midpoint our testing of we million, the biopharma XX% increased at Excluding the this represents approximately plus by of growth fueled believe growth product collaboration which revenue-generating the our approximately minus X or We $X adoption will estimated products. range. and this in revenue revenue, revenue million, be $X and

XXXX are offer as This position year genomic to and starting guiding We our on also multiple XXXX. of invest $X used to reflects to million we their net internationally full intention and ourselves to our cash distributed in strategically activities mixed patients in tests $XX physicians million. operating platform

Now to our XXXX highlights.

Our from revenue. and XXXX portfolio are delivered across biopharmaceutical the growth. our revenue in for layering collaborations tests growth first metric effect XXXX benefiting We sources was and of testing and strong of our multiple

than sites genomic XXX from to utilizing Percepta more sales expand By the have the to international continue second XXXX. success the triple increase half in people of Envisia XX of our field sales classifier expect now expect all quarter with classifiers, as XXXX. by quarter, that we and nearly the of of quarter were pleased number the to our be and our strategy. Afirma, institutions than nearly of of our X our team, XXXX. sales fourth tests, of multiproduct about build-out We our fourth Envisia grow more XX of we number Including force one all utilizing in to end promotion the sales professionals We we second -- the

year the thrilled are business, $X million full than more full $X fourth the XXXX year quarter in over the pulmonology of XXXX, million results. We we revenue by testing momentum for and where our the recognized double of for over

we XXXX. second-generation in use diagnosis, introduction classifier for genomic We from lung March coverage by driven We of which classifier XXX was the IPF also year. by of for reported June this believe the to Percepta volume and XXXX Percepta XXXX, final reporting Envisia over in results part Medicare sequencing in test our success announced test our for and doubled Envisia in X,XXX our

continue test to year to expect the continues mid-teens GSC and for into both and for over X,XXX XXXX metrics. tests the Physician growth and million approximately the in for drive Afirma grow full by adoption generated $XX volume Atlas, targets the grew for our We exceeding to revenue penetration further product, Xpression testing market. we Afirma

in with NanoString of prognostic in the We cancer for obtained the our booked XXXX. approximately of transaction our genomic XXXX we breast Prosigna which the quarter December revenue fourth of portfolio, through assay, to addition newest $XXX,XXX product

to We expect XXXX. $X deliver revenue $X to million in of about product million

finally, lung our Johnson Lilly-Loxo significant pipeline. biopharmaceutical revenue collaboration XXXX, & generated Johnson in $XX milestones in These advancing and $XX & cancer Eli cancer that our with achieving cancer. of in from lung collaborations from with biopharma with Johnson in received for Oncology And specific and collaborations we XXXX revenue in thyroid Johnson produced million over in million

evidence Our measure was development. second success of

than the sooner. this Here published validation to demonstrating driving with in in Respiratory a guideline fivefold Medicine, reimbursement. utility inclusion The the too, diagnosis Envisia clear results data payer Lancet we Envisia publication, clinical fibrosis XXX of classifier from patients XXXX. April, idiopathic In pulmonary of we the strong Since of clinical approximately suspected helping delivered excellent over and the has to XX in commercial XXXX. get This is end increased and institutions more by utilizing published key number evidence both

showcased to and The the and poster conferences. X evidence as and the journals. XX Afirma in studies testing of at Afirma published X utility Afirma our classifier studies with the analytical genomic continued body clinical well, supporting validity Atlas. also grow of in and clinical other Afirma included publications sequencing products supporting peer-reviewed were X pulmonary presentations leading demonstrating Xpression These medical

expansion Prosigna December patients' the a and Cancer from subtypes to distant breast Symposium identify markets these in may patients tests intrinsic other of These CDKX in XXXX, presented for presented showing including opportunities abstracts were positioning chemotherapy. standard where of Antonio benefit XX exciting test's addition, test were reported that risk of cancer the metastases. Breast future data showing in benefit San in developing X genomic subtypes Data offer long-term over potentially at In identifying ability results. are the also test in place with inhibitors the global data

diagnostic drive nCounter a test We believe test intended advancement, progress subtyping our commercially third Prosigna our expansion along the rights are LymphMark test, NanoString December use also acquisition success. nCounter with the we we international made key terrific cancer to in-development In lymphoma success which System, the Analysis nCounter metric pipeline the for menu system. the exclusive prognostic our announced platform, which to on and FLEX the of on available breast global XXXX, in will

business. transitioning We are progress in already the making great

detection Our indications. swab for At our and continue efforts our comprehensive fuel to discovery Annual our and and from product early CHEST samples our platform sequencing nasal using development lung in capabilities across whole-transcriptome preliminary clinical the ever machine diagnosis. October, data learning classifier for cancer noninvasive biorepository RNA unveiled Meeting of patient-consented we first

it our or noninvasively patient a that potential with XX% nodules need. lung diagnosis findings be on cancer sensitivity treatment in when so novel over CT with XX% monitored prompt can patient can test genomic patients identifies risk specificity lung classify that a deems showed accurately with these and obtain low-risk scans can they as and patients found high-risk the as when Our it

ad estimate the a classified We the diagnosis of today and new a appropriate by these a use for believe patients. intermediate-risk for swab nodule a be bronchoscopy XX% be classifier of that imaging workup to the what detection -- step patients very reduced has We of to low- could hoc next or group toward that high-risk of standard remaining nasal is not the our following by approach. potential can become

validation machine algorithm the complement XXXX Percepta and commercially is unveiling Percepta analytical We pathway. diagnostic U.S. of test our and same believe introducing XXXX novel learning look its to of in the and test we our in in classifier as following of its the the test the assay nasal on advancing in based field Our technology performance. earlier the early clinical demonstrating will studies placement through forward injury and development

of the into potential a company's of leverage are lymphoma, Pharma, novel underpinnings expanding further nCounter strategic lymphoma. expansion menu oncology disease AstraZeneca, our NanoString developing arm the of This Acerta on leverages tests our will genomic recent hematology the that including genomic of development platform transaction support oncology we with of the where collaboration diagnostic research We announced the also additional tests with globally. our long-term through in and development therapeutics indications, that collaboration

reaching excelled acquisition. growth. financial in too, continued our final from fourth we reflects we the discipline. This And do, here we line would with said bottom long-term our of costs discipline executing is flow for quarter metric operations of as as cash line the invest the positive top XXXX, even We

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

Thank Bonnie. you,

year conclude results is available fourth with guidance. As website. our revenue speak remarks I in Relations Presentations and Investor disclosures, plan I quarter fourth presentation our to This full earlier, financial & XXXX year Events introduce XXXX our the and section our of and expanded our mentioned quarter to full regarding under XXXX afternoon,

SEC our at remarks, Slide in on revenue we these outset mentioned report filings, I X, GAAP. explains footnotes the how of further along and U.S. and prepared under As the with recognize table the details

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

of the Turning to presentation. Page X

Our performance the key are results against KPIs indicators X and as quarter each full quarter and year year performance the prior XXXX follows. year compared full to for or

the genomic $X.X million. $X.X Net XX%. total million volume For revenue expenses, $XXX $X of million $X improved XX%. million. from flow XX%. at margin of $X.X million at flat Operating Cash million. increased loss fourth Gross XX, $X.X was of And $XX.X increased quarter increased excluding million. of cost million XXXX, remained And or increased cash operations XXXX, December revenue,

from Gross $XX.X margin loss operations $X.X of million million. Cash XX%. year million of million of Operating XX%. increased million. $XX.X total expenses, volume $XX.X $XX.X genomic increased XX%. full $XXX.X improved excluding million. of million increased revenue XXXX, Net the increased For XX% cost declined And in or to revenue, used $XX.X

shows includes million revenue $X testing the next $X.X The We revenue, X, breakdown services in the which year product respective for XXXX year $XXX the recognized and quarter and million product cytopathology Page full prior million in page, and against period. by revenue. in approximately

We X.X our million We covered we collaboration biopharma quarterly another results. that service had impacted also XXXX, recognized In nearly GSC that million $XX QX events TRICARE a Afirma year members. and positively in revenue. became announced key for of

recognized also collaboration million We biopharma revenue. $X.X in and

of we classifier, final Envisia Percepta the XXXX, second-generation became effective, QX the our launched the coverage remainder accelerating lung year. policy In Medicare the volume for and for

swab $X.X global our data which We biopharma believe in we collaboration pivotal new lung to nasal will revenue. and detection, to early be recognized our QX business for expanding XXXX, scaling announced and also million for cancer we classifier In markets.

also revenue. million in $X.X biopharma We recognized and collaboration

to a distributed key XXXX, we platform, market believe we We We material $X.X revenue announced is which collaboration the license not revenue, In our recognize exclusive ship success. nCounter acquired that believe global and we year-end. amount QX of this in global System, quarter. FLEX post-closing recognized prior which to the did with enables million for access principally biopharma diagnostic a tests, and product global in to we

in And The genomic each all between $X,XXX met for revenue our next on classifier XX% and average, four Xpression standard, few including XXXX, and tests, XX% classifier accrued, between recognition year-over-year X $X,XXX the reported and the sequential quarters volume. observations. A of that KPIs. the results was outline test underlying which we Atlas our pages Afirma of Afirma

First, turning to Page X.

launches product in acceleration in strategic and New partnerships resulted revenue.

$XXX full or Our revenue prior XX% million over grew of the million year $XX year. by XXXX

XXXX our XX% accelerated As Slide in shown volume of to in XX% testing XX% in genomic X, the bottom and for growth right XXXX business in from XXXX.

our of and highlights improvement and revenue. collaboration growth sequential and X our X biopharma testing without gross the Page business. Page with in year-over-year margins highlights trends

operations, benefit reimbursement, months. continue is the over volume focus not which full-scale from We by to a scaling of at next offset strategic lung ours our XX

X. to Page Turning

During expenses we invested in quarter, expenses the part the of lowered operations the fourth we $X.X the transaction XX cash, quarters made million NanoString intangible closed acquisition. In our asset first for operating in as principally sales which $X.X approximately of in $X.X quarter, in hires expenses, paid million acquisition Prosigna increase million product amortization, $X.X X and hires million of incremental the our revenue-generating operating million $X.X cash which We $X.X approximately million to we in incurred from quarter. XXXX, and sales made resulting to in quarter, the from flow fourth in in including million $X.X activities. the

Turning and to XXXX our Page XX guidance.

$XX modest the revenue we million are support As used remarks, to Bonnie to This lung plan investments to of guiding in couple million. over $X her of launch strategic total million the make of stated earlier million products. activities of global reflects our in operating $XXX cash and to $XXX our next net years to

additional color XXXX. on Some

pacing $XXX following: We of and the approximately or from plus million; minus cytopathology million expect revenue or approximately of collaboration of and testing nor to $X $X.X certain biopharma excluding grow not revenue. revenue product plus collaboration the for to $X million; million million; $X $X such revenue as this quarterly biopharma either classification to of cytopathology, million at revenue, revenue $X million $XXX revenue minus time million. The biopharma or approximately collaboration is is accounting

business the historical quarter, for with volume business, step-up first from QX. experience Slide across X, volumes flat QX to in quarter, QX continue our in testing and see Consistent on seasonal in genomic an slower second a shown the we to expect a relatively increase the to with trends

collaboration to to XX% of margins expect within the We XX% range, the and biopharma be excluding impact revenue. stable

spend quarterly in approximately G&A of per around sales We million $XX expect and investment our $XX to and million R&D increase to average band stay combined the to $X million. within and spend marketing million our to quarter $XX

our now and XXXX. call to back for the discuss milestones I Bonnie over to strategic will turn

Keith. Thanks,

are Looking genomic distributed forging will genomic menu via we hospitals and one laboratories. help diagnostic patients we deliver the that tests can worldwide their physicians local exciting our we ahead, pathway which of to an expansive in platform an believe own industry, advanced and using redefine

out of putting been the the ours genomic like many international tests patients now, Until largely of has purview labs, of markets. novel capability in specialty this reach

nCounter to of vision. acquisition the strategic has Our positioned business global this achieve us diagnostic

invest our into turn reality. Now wisely we must vision to

international markets expansion nCounter menu the plan we marking on platform the our Envisia in of beginning strategy. launch First, classifier to XXXX, in our

delivering will early cancer will lung access will from further noninvasive tests. which annual nasal us international in swab initiatives be key of billion be next value help for for the launch be decade. this, detection, over the us growth XX% compound desired opportunity will we our test market our Following global $XX -- XXXX, These our the rate shareholder to

as our we catalysts we and highlight XXXX. our with want that into backdrop drive I momentum, momentum believe will key XXXX, the Against this strong to move through

testing focus: of and product areas evidence growth, into XX pipeline Keith's catalysts development and key collaboration menu X and fall Page to of expansions. revenue Turning advancement these presentation, revenue,

XXXX is product We testing $XXX continue our of and our in guidance which revenue is XXXX. year million growth volume genomic Afirma volume in aim to reflected Atlas total revenue, GSC and test million. to Xpression First our for $XXX full steady and double to the pulmonology

Looking our pulmonology ahead to XXXX, guideline on we will for inclusion commercial coverage and decisions focus products.

collaboration revenue. is Second

$X in Acerta and Loxo, with thyroid generate million come from expect our AstraZeneca we biopharma Pharma, to mentioned, agreement in strategic and XXXX Keith lymphoma. primarily cancer about Lilly collaborations. in revenue This from As will

We Johnson milestones tied classifier. in to expect to swab our XXXX Johnson commercialization nasal revenue for from achieve milestone-related &

to to to is presentation expect Percepta nasal XXXX data launching pivotal of the and nCounter prior evidence classifier Envisia, U.S. Third to to prior continue utility the to Envisia demonstrating in In our lung swab to product commercial classifier further and development. internationally. unveil extensive our for We cancer and for in the Prosigna evidence noninvasive plan clinical and the XXXX, clinical with platform data our in its data of publication validation we new tests. on adding the library performance introduction share of

area nasal to questions on plan cancer novel In expansion. us data will to lung and over lung in clinical swab trial, comprehensive XXXX, test our potentially expect pipeline nasal And and to through blood test menu lung biorepository time. progress we clinical We a initiate that focus use based plan to imaging help our add range the is cancer to thyroid genomic from which in and a cancer. we to of answer cancer build our our of new fourth advancement variance data enhancements Afirma importance reveal of XA in of

subtyping look LymphMark our also lymphoma forward advancing to test. We

XXXX crescendo all save X product lung at launches: nasal and with of launch; cancer swab the Atlas introduction inform in patients decisions to treatment will our nCounter quicker treatments a diagnosis, in to strategic on the test getting to the in U.S.; streamline Envisia activities lives. move of These international Percepta time

XXXX We excited are beyond. and about certainly

I'd like our to including team up, shout Wrapping big global Veracyte's to give members. high-caliber out employees, new very a of all

are focus your personally, to investors, every success, you, finally, for industry-leading of our thank support our source expertise, inspiration me and of for to a and the day. mission. And like execution team's on and continued I'd continued passion Our our keys Veracyte

like call open now ask questions. the up And to Jeff for to I'd

Instructions]. [Operator

question one Flaten. of the have from Thomas We line

Congrats couple on the quarter, guys. questions. A of

start presentation. the back me Let at of the

So for able the timing? to with in us to maybe Is granular it the guidance nasal be of going the swab tests, earlier are year, second half you on year? some provide more

Yes.

I think swab we've probably year in the to hit launch what tighten the been test as we'll market first goes said XXXX. we've a down. But of the early nasal that targeting on, U.S. and

on in half plan So first the the that maybe year. can you of

Great. acquisition? hires versus of comment And could U.S. of a commercial you those And on their XX on NanoString distribution then side. the there mention from many came was the global? the How

the XX We of were people XX. international. or acquisition. are in rest X The in XX to And X are nonsales of them want -- -- those -- XX, of I'd do you revenue-producing. NanoString say hired And those people under of there's roles so and there's the

people team affairs of manage Yes, came market who territories a marketing. sort is mix Tom, overall onboard. products manager to have of European strong the the new enthusiasm part It's that business medical the X level for of the country in and launch sales, the into we readiness

moving that the do that the to And Envisia and to a great foundation 'XX product XXXX work think able we all doing so want to into about development that we're over and of a pleased in prepare join as launch year. really were for base in they there's that nCounter market And the to there and acquisition. we us

Great. just quick And I one then more question, might. if

Could number all you $XXX,XXX guided the if test you to the $X that's thoughts that fourth a some $X to. then provide related. that? on in quarter, that than substantially And I the million On Prosigna that was Prosigna, million you you booked mentioned the annualizes higher case, think

Yes.

basically being take we the have samples will the some little it predictability current might day. us so business X the of that and cadence of geared this bit is, of towards will for is even into volume where are laboratories cadence business until knowing This and different month, hundreds having shipments their but and doctors collected that next business be -- order. basically samples basis that sending of hundreds on the months' by a every offices inventory you more time, think go in seen the of place X what patients of I they doctors' a months worth than certainly account our buy

stockings were I going take as a coming more did year of to size that we've think monthly December, that obviously of goes changing. to and -- were So learn realistic we to we'll of the update prior us, $XXX,XXX channels place, year were But and happy that what on we've we and into that, business, were want of team, reduced prudent think take that that is basis there some forward. don't decisions that we we end forward. revenue. means the think on probably And I distribution consistent made business the be to some to able shipment as going on. that, be be the for we on is we owners And conservative you and the believe We're carry we're new the revenue as

Ji BTIG. of Sung Nam of line the from question Next

the if data out? to that. will expected given coming do would data And be XXXX, you you about will I the background swab on apologize revenue actually be position wondering when of be first generate test, as an the reimbursement? first be for behalf a position submit Congratulations, for fantastic the expect in submit when here. year. from a of to for test? When pivotal who in Medicare could in you My investor to you the It the that on noise nasal will all, to question is talk

that. the launch historical utility clinical at back test people's proven We'd is on all the around best that's available have on coverage, the you've be Medicare some got do validation, guide to this to of up we pivotal to look us But lined can test to once think products. to is thinking that our know that has love the that patients. to timing I say of to basis taken you way get to the the

So to what we'll we all is managing will packaged, into utility to the be for right be of strategic continue that and a those accounts validation been the collect us analytical have decision. on data good data users, very package focused already utility that coverage working that launch with to Medicare product with validation, perhaps of the experienced where can clinical and with up and need publication get that submitted accepted Percepta,

Medicare into point, we've MolDX decisions. be might process used where patient treatment that's on fairly a months able the of see need done and that and reality can of to But be as get line to to darn the a and to it's get point it starting good great around flawlessly well. we pretty going how that. timing year at a better But times I to guide will up it XX several the to treatment will pilot be executing care team take sites this start test launch to to diagnosis do -- it around got now. potentially XX think They've the to months

not question understand... could it I there's addressed. I Obviously, be no coronavirus. your ask -- Great. about Bonnie, might

course. Of

Maybe you you kind could know think of about your around just you are as so do a to could -- and that, flu of thoughts talk you I -- about when now. on -- talk you be, maybe you? lot a but very know kind internationally about severe as a of there that going obviously, you're -- what like right some early. And well, back we everyone's mind it's But seems uncertainties. from what to given you have thinking, how expanding of thoughts know season I anything had lot are

a steps really of what making platform, one, X-day steps Well, going expansion. that to design, features I to think, because a focusing simplistic the with can at and basis its first We And tests fill in the think the the time that sure time, do. acquisition global platform story. of on platform careful timing turnaround broad on kind you think make and of content, the time, to are sophisticated has cartridge take believe design we're I growth of become incredibly menu to strategic yet around we genomic run a where focus you have is, can trying and with all over a XXX an that these product what I a do we're believe, world-class about hour hands-on from this we one

the to So the on ours first We're going purpose. existing we're LymphMark. as chosen tests, at over very going to take Prosigna, move one a time strategically. test was Envisia

nCounter proof and team already made test platform. of start nice take over made that sequencing to want Giulia the that's experience with have in Europe. with on available with then then that leaders to our platform to see and R&D have interacted that. And sense that been the our and thought a Envisia always that to We it's developed move years And development

over like its So the course, other become probably we've many and It probably coronavirus will of run today. it the hit a major these threat things not is seen will point years.

world, planning to over is in And what going expect the that next today of not I execute our X, other to that our after out menu we impact in soon. expansion. we're focus do. well going this currently X We're are in building to coronavirus threats spread there travel in don't and don't planning We issues these I in have distribution China while really in there. investments while be people have anytime the maintenance X major this menu. on the each Prosigna, to certainly on have really the think looking of a to to we is of years trying markets, X growth of And parts the

pathway in exciting won't have to plan. we're think going we be And forward but to very overnight, targeted a it I years. X pretty a happen X, So see where it's

say existing generally of And is our happening in first population visibility much we for slower the in people don't quarter -- have going terms the and the business, to whether testing testing or less. see our visiting what's genomic distributed fear facilities, business. patients not U.S. testing doctor a as our I'd We into among

samples thing that is the not don't sequentially see not as can be it XXX and it's a that example. were doctors. their United with in would major for this obviously the from that continue coronavirus to react But quarter, -- fourth down currently. go see possible the So impact XXX States, But to if people we that over

We numbers forecasted in have at this not that point. our

great. then squeeze break a this collaboration one there Keith, coming too be collaboration? you out Loxo-Lilly year? talk from your it's that early Or about revenue? the biopharma will I collaboration And is the if But majority able pacing. be the could to Okay, for Obviously, of question more AstraZeneca step-up to would with

Yes.

So Bonnie, talk you can probably about...

remainder collaboration. and from our assessing now We're anticipated new and the right is that Loxo, continuation in stability of

not forecast that that J&J, under I'll in in agreement, reiterate And million $X have the our prepared The we said in we our have Bonnie for her of XXXX. do what just any remarks. remaining milestones

up the with lined that XXXX. laid that of out Bonnie achievement for milestones have We

line of the William from question Next from Blair. Weinstein Brian

volume help bit price as the of just on As the field testing you this just you you're molecular over that, sounds And it detail side, to us the little over that it more adding a to XX reps of expectations on a with on side relates versus you've corollary -- expect your to can there? like specifically XXXX, business. out

very, is little this that, the reps past? But XX% could seen very possible that higher the better? growth solid. know couldn't be why number be with I than it what is we've added there, certainly So in bit a

Sure. say obviously the don't do. what definitely Hanna we deliver it to exactly for. Yes, and to we're is hope we organization, possible, we our we're guide to pay what John going and we're But to commercial on Street pressing going

to not trying sort for how around Again, that XX,XXX that X,XXX be build that just volume, of In implied help testing, million And our do million. guidance, think revenue hours tests, giving to gets of in would Probably math $XXX for you terms you your Afirma. I'm the guidance to genomic of an tests. we $XXX through XX,XXX cytopathology, I'm excluding you do models. here in and about expect incremental X,XXX of

tests So in Afirma. there's XX,XXX about

would Our XX,XXX probably lung how genomic X,XXX. of the about probably combined volume, net products Afirma, On it's do much we $XX.XX, accrue.

we accrue to those. XX% about between X,XXX, we X,XXX, So accrued of and and XX%

So And math $XX.XX. year. throughout been of around that whole that has the consistent rate the is

Long over So of it's about revenue $XX I'd $XXX tests million would about you $XX.XX a gets gets million. hundred $X X,XXX up you that be for in about prior million dollars in revenue $XXX That's at times to couple X,XXX. year, Afirma. about say XX,XXX million, versus and

you $XXX for get it, So and million take you the to million on, call side. $XX million in plus revenue $XXX molecular

as from we then And step we'd that in somewhere in of I would that somewhere tests terms sort And in the the of in up first QX the do area. do small pacing, XX,XXX to the up, expect we And the quarter, tests, to over we in step then quarter in then to second XX,XXX have maybe the a XXX a step-up and get tests. QX number. QX QX

All right. And for you. Bonnie, one

guidance, hear But things expecting have because in you they're partnerships in you is Just XXXX? what's And guys of we additional and likelihood you just strategic pretty doing can Do not then talking you them the [indiscernible]? adding full value, the that signing wouldn't the like -- of should they're you in here, value from strategic something about that a more what strategic XXXX? relatively for are really you signed. that refresh about partnerships to Obviously, in be additional of pipeline on us that the today future? put

a So of couple are things. there

And couple leading out very all engines, can first, that of that of was what growth to So our really we and especially our in nucleus wanted foundational course machine the learning. have over richest and the learned and build with never what pharmaceutical they because go, collaborations, clinical you are our core come focused building when right? data opportunities and have of commercially collect, position I leverage last or R&D our the on generated business indication thousands already engines and is from there genomic that out and what in the and the of content we data think, story we've capabilities patient we biorepositories, our of can years deep what we an a of for biorepositories in Veracyte we're we've done. foundational to create around the that doing are we're our of lab, samples testing position already value broad more

to generated be either collaborations we getting anyway. Veracyte, cool And value for paid getting information what have really more we valuable and we're value think is our is someone we I that and about that are or generating is else. data building to date paid that that just because already So would in

for move platform able that other the And think up I set is with in collaborations. as testing collaborations to to local I continue enrollment we first will our pick these that business. to purposes or indications And the focus a to the happens quite expand partners, able can do about and for nicely be be distribution think clinical up globalizing testing, what avenue this already we're done where open are of in nCounter trial a world. think take to that companies we local to be around on want for markets with either be new

J&J. thyroid that a we've done the with in with lung done We've now that lymphoma. So in in way big of We've done cancer. it area cancer

bring the potential to the we have collaborations, have think those but certainly more as expand I on to well. potential

NanoString, had now go we year. our think everybody -- $X We intangible. million. to And a about Allegro number and one with past going to in when amortization want we did the thinking did million that the had forward, And just Brian, about of about deal. always the is I we I our $XX deal We've be things is talked as the intangible. is going million about back, And of we've $XX about

we're that. of with noncash to $X charges an So associated incremental going million have

year to $X per it's million going $X from again, million So around the intangibles.

Next Janney. question from the line of Paul of Knight

each? on tests behind can on X,XXX into is give which the On strength color you the guiding of versus kind -- Percepta to any you're IPF on the getting us lung,

Yes, you a those are how well. two little about bit both want really talk maybe working together John, think doing we commercially. to

Bonnie. Thanks, Yes.

products, in single able we where the we adoption think disease. significant pulmonary a talked to our within have nodules amount unlocked And offering point of beginning was treating ramped Percepta among really of the synergy number fivefold and of we've about it we're between we've products we the course the both as utilized And the really samples I earlier, lung installed a value call services. where sites Envisia common here, those patients territory up approval be of Due we here with our over institution. are institution really what those submitting the year. to product synergy a at specialists, had two being between XXXX, pulmonary the through that the already had analysis interstitial to our that specialists, drive pulmonary the within institutions, testing of base committee be to

those of immediate straight Envisia bring terms the patients to management value provide able and practices. in we're in of so in And

volume. nicely So pulmonary products we and see both of a doubling growing of throughout the overall XXXX really the

John. Thanks,

embedded that you than With perhaps doctor seemed test like lung market it cancer? finding expecting less is there practice. Are just more Yes. the of Envisia,

Go ahead.

is is pulmonologists in bronchoscopy No. do of across still the the relatively think disease, whereas bronchoscopy few consistent interstitial disease. and don't advanced is you procedures and the product We And of in diagnosis with manage concentrated adoption procedure, do that I general interstitial think see what lung pulmonologists, treat both. disease lung the interest that pulmonologists lung cancer

practice common the still broader go. and we the disease, commonality cancer that within number So of it's a clinicians a but within lung everywhere treating doing both pretty practice are of that pulmonary ILD is

Souda SVB. from Puneet question of line the Next of

Westley what for to on we up asked. good actually -- I growth the of I a solid is XXXX, cadence throughout growth saw down has the been for year. Puneet. But back but throughout had year, in This growth in genomic step know the volume sequential wanted XX% very Most some on still follow I year. posted the

play the takes experienced -- and you expect into can year XXXX? of throughout out or this between the Just to wondering heading the kind puts and how we that

Wes, first ramping only in you and great We had the question. things. look to go -- at XXXX, guys of these because we 'XX. you you -- back Recall, at 'XX, of essentially quarter and you're one look comparing have happened kind in what 'XX almost were test

quarter and of lot of in comparative second had get a it we by because 'XX, 'XX. the half to third became so And of time we of sort the second significant the quarters, ramp

in it like the down terms though dramatically. be the percentage, -- coming even numbers so up And appears looks to it's going of are

seen is And incremental X,XXX we've just so what we tests -- Afirma. in around

kind of throughout what to probably start XX,XXX you will tests X,XXX, thing to of trying XX,XXX. kind So this about was to X,XXX, in X,XXX thing I Afirma sort XX,XXX And year out up. start X,XXX of about X,XXX, to lung throughout get for you we'll about pace pretty year, our X,XXX go build earlier probably go quarter, the to at sort of the to -- year is up XX,XXX, first XX,XXX, around probably XX and the

of out Afirm those just And just do build we're how they what percentages figure X,XXX-plus -- out But really work how trying year. to is so out. you you fall a

year long rate take up an big growth base. At And and growth we the John keep is at team rate working building in at We're and the is $XX.XX. last volume long with happen the can You X,XXX coverage install then year XX% Giulia you'll test implied. the if on a over and the what'll this XXX, XX% are publications incremental volume.

and half on United, on from you revenue point So table view our there's that like and the they will to it. volume get the then as and right? see on just revenue you understand -- Cigna of Aetna, leaving I we growing revenue in -- like Blues, happen, those people's And so that's not products, we're Afirma, fast our with we're embed tailwind feel happy the want enough, market pretty saw but maybe the that what

Yes.

after it in was and to XXXX, I for effect. numbers Atlas. And think that's exactly of of the the a just the layering GSC the genomic stack, first of looking Xpression the that and volume started year key X,XXX and quarter we year X,XXX, the couple kind X,XXX introduced the at Afirma XX,XXX, then months going

early part of then And product an of and to in introductions, 'XX. off. performance year low the those products because had beginning 'XX compared lung in that was to the new with So of pretty coming that new -- we acceleration

So very pleased. we're actually

talking about been we've in X,XXX think I delivered We cadence an tests year. additional of X,XXX 'XX. a Afirma

its really product So with of marketplace, we've level is continued with great. really, very time the on having been growth pleased that the

more just with existing just And Great. seeing one then more expect physicians the whether from color on that little play or a the on expansion? And how provide you new to you out sales physicians? physician from been Can do quick growth one you've base. force

Yes. John?

Yes.

-- are think Afirma pulmonary to I you to products? referring or the

Yes.

sorry. Afirma, Sorry,

Yes.

mix For of Afirma, both. a it's

selection And to past, R&D then Afirma As up in of the existing homegrown clinical have, value then insights we team like around didn't to the see used extension the reason assay. accounts well and of and of provide in new therapies. demonstrate assay of solution Giulia on a the within new our picked that adoption as cell for product and previously to and didn't switch use the Afirma both the whatever demonstration with value evidence its Xpression test they continue patients the decided surgical accounts additional Atlas the publish along our product, over areas to the for efficacy We modules, targeted team through greater affairs that local Hürthle perhaps way Afirma the of assay. perhaps the as

having a way. in very success of targeted both And so areas we're lot in

Weinstein Brian from William question last Blair. the For of

Already asked. I'm good.

take. I another Brian, were for thought coming in you. yes. you Okay, Thank

And there continue. questions no this Please further at time. are

conclude now the can You call.

everyone. you, Thank

gentlemen, joining our call concludes today. us. you for this Thank and Ladies

now may You disconnect.