Veracyte (VCYT) 23 Feb 232022 Q4 Earnings call transcript

Good day and thank you for standing by. Welcome to the Veracyte Fourth Quarter and Full Year 2022 Financial Results Webcast. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. today's being that advised be conference recorded. is Please

hand over Gorman. to would Gorman, now speaker conference to like Shayla I your the today, begin. please Ms. Ms.

a for Good Financial and financial Officer; our Nova. Chief results. are Tina and joining Executive discussion today XXXX of me and Stapley, us full afternoon, Dr. year our thanks Chief today Marc everyone, With Officer; quarter fourth Chambers, for Veracyte's Rebecca

full year issued financial our and veracyte.com. Veracyte the press fourth along of release, at this release presentation, section Web our in and financial detailing afternoon XXXX with a earlier available Investor business This Relations site results. quarter a is

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

the to our trends subject be prove will and uncertainties any recent obligation further results risks that assurance the to including that are and under most the uncertainties Commission, files performance to you no give company and refer XX-Q with could risks the not business Veracyte to are provide statements Exchange and quarter. differ, we or actual on Forward-looking our can the to Veracyte's during cause Securities they understand Forms XX-K. correct. we To better documents Further, and updates

from the accessible directly GAAP release, financial comparable In addition, included site. IR this these today's call will Veracyte's include Web earnings certain most of measures measures non-GAAP financial section measures. to Reconciliation in of are the

will Veracyte's Marc CEO. Stapley, turn over call to I now the

for year, the against team their enabling that patients are we the dedication moments to in high incredibly putting and I'd we on for pivotal diagnostic, more and joining in important first. delivered test decisions us patients our Shayla, entire I'm strong work cancer. like race Veracyte than thank their milestone hard everyone to an an today. Thanks, XXXX XXX,XXX and share better physicians as pleased and ended value prognostic to treatment note, hitting the thanks during

of strong fourth cash operations of in as ending Our the $XX philosophy to investing higher prior Further, a delivered we result flow quarter record slightly year, positive and results performance was million. $XX balance high cash and XXXX our our of execution record balance cash than drivers. generation our track of revenue our long-term growth from continued million with

proud of extremely are strong are profile discipline we and impact We lives. and financial our having on the patients

X% The American exceptional enable been incidence prior versus Society to evidence test cancer increase address metastatic has our uniquely cancer Decipher these metastatic increase in it in demonstrate over was is The to the important. Notably, recently more diagnostics prostate exceptional as showing are cancer the year. data of building challenges, Delivering Cancer high to indicated never prostate cancer a is care released suited grade among utility and for we others cancers. patients given well. clinical test and currently, greatest XX%

prostate delivering expression us of in guidelines test. tests. status Decipher demonstrating and results diagnostic attainment for further differentiates test body gene market a believe that we a molecular Prostate led over to men penetration three further XX,XXX the into fourth four quarter, where with receive still test out don't from cancer for Prostate RP evidence Level the NCCN Decipher patients both This evidence X recent most biopsy The of in other for growing of our

scientific Our publications abstracts untapped strategy our of and large most differentiating some trial cancer evidence the the predictive the Phase of the demonstrating the prognostic and value and alone, to world's there prominent and Prostate were Further, clinical executing collaborations Phase most we test. over components Decipher efforts important engaged XX XX researchers. X of prostate in with X are In address XXXX of generation market. one

and Group personalize These data prognostic week, International trials Journal, making. prostate to Last prospective expression randomized from test provides the biopsy Cancer of were information that Oncology, Cooperative three published Red Prostate gene help on Physics, the findings Journal suggesting Biology, samples treatment in trials. the The RG Clinical Radiation Oncology validation represent Decipher from biomarker pretreatment decision of the any of first

information tumor on introduced also have focus been with on it recently Only of provide resource our a based includes Decipher or discovery, transcriptome Genomic GRID about and evaluated an We treatment genomic Our genomic alongside patient's serving whole of who GRID broadly Classifier. in to on biomarkers more Research Prostate which we enhanced Use cancer. order that Decipher for prostate diagnosis, database prognosis version report, granular a the neurologists basis intelligent share physicians the

capability. Our increasing interest GRID for to researchers. this running patient sample advance area enables is Decipher the that around believe molecular emerging Further, prostate uniquely every our a cancer subtypes, approach of whole database science helping we an on to transcriptome

a prostate Among personalized more patients six tumors radiotherapy, basal signature Cancers findings study other decisions Decipher metastasis-free demonstrated, Decipher-focused that those abstracts last enable This derived presented ASCO at men while cancer their study's can week, radical after that subtype. survival with for suggested the Symposium subtypes not did benefit benefit. greatest based immune for on GRID-derived one molecular the the GU from prostatectomy, same see example, with post operative treatment

survival proliferating androgen-deprivation benefit docetaxel with metastatic with had luminal the therapy. the to disease, from addition of men in greatest Additionally, tumors those

are exceptional to sales XXXX, to continue of ahead market robust our adoption effective penetrated. that Decipher our we believe is Prostate programs, world driving and a that only team we with evidence, uniquely in test, growing still clinical positioned marketing test class Looking XX%

Moving to Afirma.

new expanding Afirma quarter, fourth growth to revenue the by driven utilization competitive including for We wins, and XX,XXX build continued new accounts, results Our in momentum and reported existing our delivered. the with record accounts. tests over which in resulted in

revenue digits. momentum previously, said mid-to-high growth we've to XXXX, Afirma continue in As we the driving single expect this into

of studies Metabolism, Journal the showing included Clinical the original meta-analysis results. clinical our Similar the to the library to growing a performance publication Endocrinology validation we was better in support XX and Afirma. adoption strong test & evidence cases some the independent to of that continue of than Decipher, of to and clinical real-world leverage even similar of continued This in

with This study, avoid clinical of to X,XXX covered utility surgery demonstrates helping indeterminate of which patients. of thyroid the for nodules, thousands nearly Afirma unnecessary hundreds further in patients

test, treatment, surgery. we and As our to will provide enhance we further guiding continue valuable market, as where we can believe areas personalizing we evolve penetrate extent in the information this around especially of such

has making continue mentioned, to order to the portal’s uses deliver enhance by enabling and in on portal test the customer results. their enhancing online us experience, possible process. adoption sooner We the test patients as been introduced use. encouraging we results also to test kits, ability to track order test the to Previously on progress, and physicians and an including to as easy focus the see patient to QX streamlining Customer ultimately

This test recently clinicians. to enables thyroid We example on and to sequencing the help a nodules expansive advance nodule whole informing thyroid TSHR, whole published capabilities. available from with patients demonstrating our by and science data further care data rare our this how Afirma one believe cancer to our We from for transcriptome published is the around Frontiers the derive the database Afirma suggests to provides in test help insights transcriptome of gene ability potentially further Endocrinology enhance information unique the mutation. just in personalize thyroid study insights testing of ability

framework utilize, Swab approach in clinical evidence, Afirma starts enables the This drivers, a a identifying penetration. successful to or the our for adoptions versions unmet us are market vitro of cancer we inclusion lung of our tests drive and and growth address great long-term develop invest Percepta test in need. our Decipher we which securing and in expansion. with Nasal diagnostic to guideline global IVD to proven along namely reimbursement clinical need, illustrations with Then specific that the

the reimbursement around physicians interest demonstrate Swab the a make quarter, enrollment XXXX, complete we During This aim to the this as study focus for Nasal of remains Percepta sites designed end and study of progress year. trial clinical test. continues we clinical to our from Level support key in to utility continue sites potentially NIGHTINGALE on steps patients with more contributing lung month. growth. company's while meaningfully cancerous high, Swab help also the to to guide are of patients patients Nasal We're to and every Percepta a test next be long-term excited and the to nodules, as benefit the about we and for potential clinicians adding non-invasive

our physicians their Our to United strategy and long-term of versions key tests driver. outside of the IVD States growth deliver to patients is another

I'm As this I shared, in of Genomic December have that team and schedule. supporting impressive previously we share functions IVD our congratulate our hitting goal milestone. like aiming to Classifier submit pleased European in to Envisia actually for to this to and achieved XXXX, ahead I'd first we regulators were

premarketing initiated and teams Europe, education. activities efforts we completion commercialization of training the the process, KOL will our While market regulatory have the post including begin access and sales in

previously other Decipher schedule, on XXXX are XXXX. development regulatory track announced Prostate and remain in projects our milestones. for well hitting Nasal in progressing IVD their Both and Swab Our projects very internal key Percepta according submission to

Marseille In be transition kit manufacturing around schedule from our IVD completed of NanoString phase our facility this on our of addition, the year. is second of the to in to end

evaluating to our share and is An highlighting project, were Society abstract data large our annual inhibitors. We focused patient to our capabilities at checkpoint Cancers international for growth pleased from PIONeeR on Immunotherapy unique of long-term offerings. response of other three trial business. multi-omic biopharma a abstracts example immuno-oncology One was drivers meeting, derived the immune the

immune This patients we new cancer, stronger benefit XXXX, the study more expanding from non-small technology that in suggested forging the help outreach inhibitor likely pharma presence cell stratification many market. refine customers, use with of U.S. a who are Brightplex advanced Veracyte’s our therapy. and could lung to added In of checkpoint

development due this we environment, our advance oncology year. unfavorable biopharma and anticipate have the impact see help in our guidance also to for programs, their opportunities incorporated on we our the partners business to drug near-term some current significant While macro

as would McGuire, I pleased organizational to role expanded team vision. scale to only Annie General efforts our leadership Counsel talent I which GC I driving our closing, embed is Chief about role, Veracyte’s that extremely advancing world team, People of am we like have Annie to the our experienced and to and and will am legal Veracyte’s promoted not global am with this assembled, In an passionate some culture HR retaining strong ensure business. that our unique our have delighted we attracting to grow ability updates. but class also organization, Officer. as the share while share I to also Before lead

across leads deliver addition, U.S. our In our operations recently also expanded CLIA tests strong an as teams, role CFO, now the execution three they CLIA drive consistency and as she our and patients. helping to continued to sites has our Chambers, Rebecca on taken in physicians

our to in leadership as During three organization in endocrinology CLIA Tina Nova evidenced has incredible and XXXX, result, the urology, pulmonology of and our U.S. our provided businesses

progress personal the is To Leite outside the pursuing Given Tina Vetter me including interests Brent and reporting also Brent, has also of and continue directly built as CLIA the reporting is to also Access; other Afirma Afirma Market of made on me. to leadership support while & leadership she while Veracyte. entirely to oversight GM John now John this, in and strength business, and supporting to franchise to Tina GM providing focuses Pulmonology urology, Leite enable our the of business Decipher asked as team, our of is

we benefit grow our Tina's leadership that delighted are We as we and to experience business. from continue will

world. an one, growth Two, Three, and our the to and scale. cash invest Number into clear. forward near and Four, growth to penetrating manage our long-term our fuel and continue products eye infrastructure delivering further IVD our focus to work cancer endocrinology prostate I current for of generation. our responsibly areas XXXX, Looking nasal as to in markets. even profitability business tests patients and this patients. could to in the indications. testing to continue our employees very as to be new midterm through and all for drivers underserved is deliver strategic by our swab with grow in transforming opportunities clear not of with more grateful portfolio is to well more that alignment are future expand our exceptional more Veracyte passionate excited care focus vision beyond or positioned Veracyte’s menu look about over It

XXXX. quarter With will financial turn to the to our expectations Rebecca for now that, for review results and I

Marc. Thanks,

testing tests, As a Marc increase in XXXX. Testing volume over record with and expected increase approximately revenue tests. was XX% prior to over increase million an revenue, period Total XX.X said, year-over-year, quarter XX,XXX during XX,XXX total same XX% million, the in by driven higher of was We volume. Decipher Afirma the an of quarter Prostate than XX.X year. had grew XX% we volume a the

better due from revenue we was than in $X,XXX million and to expected X,XXX Testing Afirma catch-up approximately receipts, last year. of Fourth was revenue ASP down part approximately driven the up $X.X quarter million, Biopharmaceutical $X volume year-over-year. collections. cash as in tests product X.X the was XX% benefited by million, received year-over-year, quarter of milestone XX% totaled million product and other fourth $X.X

Moving XX%, was compared compared long margin other expenses exclude operating costs include prior XX%, amortization higher XXX and lab volume up approximately highlight assets, basis to margin year. margin collections. gross XX Non-GAAP Testing acquisition-related points from to and up will compensation. the to does basis gross non-GAAP I was intangible points stock-based and routine acquired which results, but prior year, the expenses, of data restructuring the gross benefiting

to to expenses as Marseille transfer margins due In to facility. the recognized of year-over-year manufacturing historical of we XXXX. XXXX, to we in levels. was Prosigna be be by at related margin and impacted margin Biopharmaceutical other the expect the quarter gross was the to gross back down fourth product XX%, Product our continue XX% milestone

at increased were $X.X as higher by marketing million, million by Non-GAAP of expenses and excluding and up operating costs. to expenses, Research ramping to well million, $X up project $XX.X revenue, as million $XX.X $XX.X trial personnel clinical expenses and $XX.X driven expenses XX% million sales to increased million. expenses were year-over-year and G&A cost $X.X million development

and million amortization. than which a our higher and investments of we XXXX. cash the at of balance with X XXXX million XXX.X We quarter. Overall, prior million position of cash the equivalents depreciation recorded included by of $X.X increased the net of $X.X GAAP compared We to million end of compensation loss and million ended stock-based $X short-term million, cash, XXX.X

$XXX billion, year-over-year. now guidance. total of growth XX% revenue our to We or to to XXXX $XXX project Turning XX% million

impact in the continued reflects biopharma to business decline year-over-year of development. back sizeable to on revenue our services testing customer our the pulling product given manufacturing macro IVD Biopharma of other and and and Our resources current in-house guidance mid-teens. the growth expected is environment the revenue spending, planned transition from IVD a our

revenue For sequential in given forecasting quarter, are the a seasonality. we decline first typical

rising intangible efficiencies We expect implement in non-GAAP gross line to help for be XXs to margin, of roughly excluding the XXXX, XXXX the impact operational in amortization, we with mid offset costs. as

our for expectations to Moving cash.

XXXX, year-end impact well our are of as comments contingent consideration our able anticipate always, being M&A As barring drivers balance. we potential continue maintaining prior acquisition-related as roughly invest the to In expenses. neutral while known cash to in long-term growth a

we We business also funded fully to take believe the are to profitability.

we are strategic into heading of momentum usual and executing including on timing the our bonuses excited XXXX the against a QX, about usage cash continued I'm taxes. payments, forecasting focus given of and vision. have For we our compensation

We and please the us. Nova will call, into now portion Operator, of will join go Q&A open the lines. Dr. the Tina

Thank you. [Operator Instructions].

Our come of from will Brackman Andrew first Blair. William question

open. is line Your

questions. key just Rebecca, underlying building on just volume assumptions just you relatedly the guidance. to Thanks. assumptions the the unpack guess can here just the to commentary maybe heard range some for but that, Thanks on to And ASPs? understand anything else trying Maybe you'd here, of pacing, sort afternoon. taking better of I blocks Good that and between call here out the Hi. here? QX I start

on explicit than into a be the versus as for of pretty the of assumptions commentary we digits, side, would and expect volume on roughly we do side, and biopharma the the And with to range. and the on then broader about get teens. basis mid mixture the guidance flat question. basis the testing Afirma in mid-to-high saying both, go product the were Andrew, Thanks, to Product, more we Decipher year-over-year side. plug other a two. ASP that for for be coming growth necessarily teens the to the volume Yes. a on your single be And ASP We will assumptions said that and mentioned, won't expect from mid

in on is for basis remarks. so the year-over-year decline And that the reasons a a prepared cited

longer here term overall being satisfy as to environment, development excited about on which as needs, really some our Importantly, excited biopharma customer over one well are as term around longer expectations we [ph] impacted well macro the the are moving and over business about of IVD help our as are bespoke we by resources the own as the well.

both Decipher, so of for And products that of answer those we great But outlook the helps your hopefully, with from Afirma a obviously, and question. majority coming in revenue XXXX. vast have

think had I should by the Very helpful the I If that you of second finish said NIGHTINGALE. there. I really year. And around question then end correctly, you I the that guess heard enrollment was

of sort Thanks. about following I knowing just that the timing be launch for a then readout? should that, study? product data Just we thinking there, to And of how relatedly readout guess

Thanks, Andrew. Yes.

milestone that As we that the kind them complete to think progressing we're we've before, should of this the I things NIGHTINGALE I are the trial. here indication first said key real, of one think, And as is enrollment the they as that's end on year. expecting and first around exactly be that

Now to after course, data. that, of we looks various the at take have

do, some see have course, of what on We up And to us. we telling have to patients. that's follow

to a have follow them You period. for

before, standard follow two and publications years. out ups some But is of year said there's there data care for I've around As benign. one

And hear and help we'll will what more look that see and it the premarketing probably will at that us activities. commercial time then reimbursement then from along the be on So next and that, then and tells that both the us. you'll way guide

KOL where point other overtime. we've We We're get do and get about is standard on for like in got to products. and successfully The that. to this a parallel formula lot inclusion guideline talked goal want a lot Our that of things we've product. towards we a of to lot the a that us support to heading and try done

the as milestone the So first is key future. more to said, completing I in come on that NIGHTINGALE enrollment. But the

for questions. Thanks taking the Okay.

you. One question. please our Thank moment for next

Next of from question Sachs. come Goldman Matthew Sykes will

open. is line Your

Delahunt strong quarter. is Hi, on for guys. This Matt. Dave a Congrats

successful very M&A past. with been You've in the

As you mentioned, a it your remains of strategy. key pillar

You're some about about for market you cash. what you're target could for Are in Can which potential you seeing create generating hearing bolt-ons? talk opportunities? the softening, valuations

lot be business. Yes, of about growth of grow a our take talk and how from. step kind a bit both comes our and always Inorganically, and combination back areas, partnerships maybe to where at. we just two talked the M&A. a continue to With a respect we looked We it of I'd On just it into categories. and have could organic put about M&A,

There's But out been for like and only first of continue so. things and fairly those funnel a and focused needs technologies company. is You beneficial it great for at is and deal that acquisitions will looked now But our at of us. timeframe. clearly incredibly things very the to And stage we're Again, are Decipher products and has to the do most if small not there. that. evidence that of It's of preserving using I'd the be case us, the them. then a is on contributing second in for a and of commercialization, acquisition, in bolt-on cash kinds we've interesting similarly, always to generation reasonable very say mentioned one generating that which think about one you and clearly there. hopefully cash successful Those development revenue

our there no around strategy change And in M&A. so

it. Got

into? not in So built you of Any would cancer most indications interested that indications. out cancer the you've portfolio expanding other to top successfully be include

of presence. We've would internally current terms our never good never and indications, a can sales products -- inorganically I the is talked our where little a as say, there's expanding I to about focus an say have is of a But our say said. indications indications we we'd business cancer possibilities, we've as indications in this And ways that resources area in of oncology, we take that, metastatic are drivers where those I And well. talk think but about. But right those a a growth the the then all very existing continue Those have, couple our another our that. company. we beyond invest our four a force obviously should, we within But meaningful that long-term can currently lot very areas within is any lot that example I in leverage sales where example that cancer interest core force. been that that based a we're as like be existing other that first within I'd couple question. good about substantial, we be wouldn't specifically things Bladder that that there's don't might prostate of -- clear of, in and currently those currently That's us. to of of now differently need expand. company to wouldn't our focus grow and say a where on these leverage and in were of they in is wouldn't organically and good be

Thanks. Great.

moment you. our for next question. Thank One please

next Our SVB of will from come Souda Puneet Securities. question

Your line open. is

Marc. Thanks. Hi,

clarify partnerships we some and So us were. think of have? if biopharma terms you biopharma of term, disclosed what's out you had about for How 'XX. the this one, the on you projects just here point, that what those should help the momentum piece parse maybe that in of longer At sort revenue business number first could

the to happy biopharma to together. we three business, I'm do may And that then, that. remember Yes, But on businesses Rebecca, add here. want is you put

well. vast as come have our as in in immuno-oncology prostate and the transcriptome We endocrinology from products work whole our databases assets well as

doing expand projects really I projects the with job we're kind And our budget of from that we that oftentimes where in follow-on been or level driving and One small call demonstrate and projects. them, the from of business, they there. and these that as which door have what at a good relationship pleased very we things very putting notwithstanding of the macroeconomic capabilities, start customers would foot is the for we've we've that been successful repeat in business decisions means build

done focused that customers work year reducing we've And things things concentration the recently of so diversifying added we've of is more have. and of we level the with. also we a One of been new number this that we've the of on that set is growing customers, one

And it our around which from the in about guide so we're that's here heard Rebecca But of to a a this, one lot near much is them. there. customers. the why very about for the customers. success you've growth continues driver seeing cautious We're lot seeing be growth We're of reasons term, conservative new long-term with We're a us. of success with existing

And about so we it. remain excited

a to Puneet. just And things there, few add

but think terms of you well course I point, -- of biopharma when XXXX, those roughly So IVD the Historically that's revenue in the by to the business, recall the think business. manufacturing development line, and the Marc's over were about that's biopharma in contribution. other XX/XX as

perspective. But number the of look we we And our we biopharma have absolutely, be our course customers majority relationship customers added will be Xx have concentrated revenue piece. of contributing focus more the ahead, really we own of would portfolio is, that concentrated given point As to and on in diversifying the it very more and it, a have last will IVD change, over than our number been say from development, that and our the XXXX revenue. that of actually that call around vast the

another XXXX. diversified biopharma Marc's over what have in revenue help to that's us to as that corporate to time more happening I down additive total line, point more growth when So revenue it, that and in is think to it opposed going to becoming and we're is comes

were is probably are primary with and the out and is which the hit just add patient that's for biomarkers, situations. more and companion Two Maybe And area most identifying of stratification in working relevant trials Puneet, of much smaller that patients population. is thought clinical one further then development. the these clinically terms and diagnostic here, as is is where I gets one there in areas we're -- that to thing three talking identifying biopharma, we the of three,

terms we again, so, work work abroad biopharma terms in of -- with diversified how And how in partners. we're relatively and with we of

clear since you I in it flat. that's Okay, And apologize correctly said you not that and Tina but And the instrumental you could whole provide, hear Decipher I or sort the acquisition volume XXXX outline the I'm think some be franchise is Obviously, transitioning plan of has ASP you Decipher and of here? Tina contribution for And of if all transition duties? of helpful. earlier, prostate. did her if provided will the guide, been

But has let again Yes, clarify have me remarks what leading the said any if of Tina, I let me to you entire business. up then in repeat some prepared open and comments. Tina been our CLIA

that pulmonology, which teams commercial includes of operations, our as in those market labs our urology, lab in terms So access themselves, includes endocrinology, customer the CLIA as well billing and care.

broad scope. And so if an you think about was incredibly that, that

on run alone, a and at has that significantly. rate essentially you Decipher grown a business acquisition doubled If basis since quarterly that just timeframe in look

to of able the things and in one Tina given especially in so gotten and and business, the grown have that the And a is to not brought a entire also you. was, talent to where team that her things agreed other I to point that just she's that? want I Tina, anything working time you portfolio on that to add but to urology, we've on vast some spend described focus

to really as fast, happy And there's I so love focusing No, happening you in and it just Marc urology. so grown I'm said, on urology Puneet, as it's and much know, be I entirely. --

which having growth to people in great taking much love it that. about lab and good over better to think and we've I on John great really we ops. we're opportunity right needed more Rebecca it, needs time such it's spend news we're brought help an do this, and me at is And this so it. having And to we thing team that that it gives and it just to the the now so and really and able like expand point. But also Brent I so incredibly is And I do strong have feel an all this

you really on And may numbers prostate, growth. have everyone's it. cancer I'm the the have excited seen up so one gone that for it’s cancer focused in about So that

more attention going as so having is well. And be on I to think it helpful

Totally agree.

assuming you did if our given explicit easily between there growth [indiscernible] not and comments of into what guide Decipher made, can you ask and Puneet, back the Decipher Afirma number revenue then, and is, the explicitly very And we're the it’s concentration and answer though.

And often of you is the us investors that I just we've And -- this you required to transition you of update sort that some about by make payments need ask thanks the counter, view? the thanks. as end Veracyte’s but may here you. timing talked point year, that. additional think any manufacturing? one on of getting part if for on IVD Thank What Okay, from update clarifying investment us been could taking could I is question NanoString from of you to that

now December response we And Prostate as Envisia, second talked actually out. notified nasal and play the Rebecca, waiting to milestones the taking we've three of Yes, a been body, if respect is about of But we've to submitted the can the products a so in I with couple the step the ahead and Decipher the are submission tracking the of payments share for And regulatory there in mentioned key first schedule process. it, of here. to Envisia talk about, investment. prepared you those One let me think swab. remarks, process being back, third that about and you we're

on to So who again, that worked congratulations that. was fantastic. And everybody

facility. Marseille for part done is so essay that been in part the the but well. ourselves And of is fulfillment, transition our to IVDR this to the submission is end manufacturing in beyond development producing kits we are the transition second several The own actual that's behind around a planned year, getting progressing for lot Part the of the of the final parts. of is one us extremely manufacturing

that making third we're in The how is you is producing that that the of instrument well. with anything proceed to progress Rebecca, And itself, instrument. want on we part us. --? great the for and NanoString instrument on the as meantime, TBD Obviously,

as of an of product incremental two is well, for if publicly tied course NanoString control. that's and planning from consideration, CapEx will commercially out on payments. the -- that's And a of on of. a consideration of reminder, then some relatively this second payments, XXXX. things to couple payment the around of guidance second we minor there's excluding that perspective, the hit a for million. there's NanoString cash actually $X the impact cash but half would contingent launch in albeit nothing $X the third will they to And hopefully as and in first, been two has for Recall, From perspective, for that back up XXXX which be quarter in may a have hit a have nothing specific there and of of over be than to consideration discrete will, of here, a timeframe, And around would to we is purposes million Yes, Envisia products, that just you so consideration. also fourth Puneet. is to contingent our the milestone materiality One HalioDx come will which add one their CapEx that our will are the that be the a contingent aware their there the announced information, year. be transfer, nature, that specifics contingent launching That more is trigger approved partnership they potential which over

NanoString commercially as assumptions if to the those And so the launched those in are products payments would the case XXXX. well embedded what as are be guidance cash in of

standpoint So commercial of path product hitting those that or two to indicating from obviously, signal products. a the commercial on is we're now a course, payments

making And be are that we point. would that payments at so those good

guys. Helpful, it. Thanks. Got

next moment our please for One question. you. Thank

from Next Stephens, Carrico of question Inc. come Mason will

line Your open. is

on Congrats quick Hi, Maybe guys. quarter. ones the just two here.

First, kitted maybe you that Decipher provide you it But regulatory other a if timeline some think and just and Envisia we has now decision we about seeing I a or out? little for color been these about submitted? as could products coverage know framework of touched a on some the a obviously they maybe on bit. think should reimbursement as how it as tests maybe just from Envisia getting as roll well perspective timeline

great really a question. it's Yes,

and to to comments regulatory not. responding control, degree, is and timeline but that approval, control first the is the submitting have get challenges their of within a within One actual is the the our large through to our partners queries we is,

And because to which IVDD replaced old right to an and unknown the process of somewhat now, us. predict it's so IVDR also to hard entire this process is quantity, both them

of the bit. a And products trail are blaze go this to so little process these through that few first kind going

that level thing that's a puts uncertainty it. the around of first So

generating think support we getting just some Now the a terms of approval equation, you in in remarks, I regulatory the really mentioned do part of activities parallel if the the to But is your one other on. it, about in KOL, of the your one. as so important KOL important -- and meantime, earlier to part question, can

entire on we've While That get because country-by-country we done that's market, that do Prosigna European for with what we've that is we experienced doing exact and one can the that doesn't a that entire European reimbursement for that market. mean are same the platform. activity, exactly

So to have reimbursement And country-by-country test. we you lab-by-lab. of for adoption still then, have yes, course, go drive the get and to again,

to that I it's the the But have timeline do. to again, have lot kind the that mentioned, have to that a through there. of and going experience we as dictates something team do go we to So we're

that take we'll so And strides in somewhat. our

on instances an of there's demand, terms for Decipher number not of is Europe. much a an market the a pent-up hand, quite In a demand is that product. rare the on greater incredible remember, other and what basis, of with feels bit Prostate, Envisia in even annual like disease

is alone menu belief have Decipher starts we Envisia where inflect point the adoption on by than our then so products And we'd at get helps. time launched, least. would, the at to more so three that that really And help if that Prosigna

Got can that? next when it. half, for the given back was first that year, would submitted Yes, color ahead how point, be submission, half, of incremental on Envisia schedule, Decipher that around give Decipher that's you submitted about helpful. any And you're thinking

anyway. products no parallel in from there's been done to that and Yes, in two respect getting read three the all earlier simple through other real for reason progressing have the Envisia

can And Decipher. in submit than Decipher XXXX submit our in we're to anticipating doesn't No we accelerate Obviously, color for and nasal timeline XXXX. it actually Decipher better. so the swab the more earlier

focus a for that's us. so key And

Got it. That's helpful. Thanks.

you. next one for question. Again, our Thank moment

question next come Our will Company. from Mike Matson & Needham of

Your line open. is

just I it XXX of like specific are just reasonable? A roughly. looks Thanks. know already in guidance around I two or is the give think OpEx, you're I like on questions implies XX but take million, consensus giving have that my I questions. guess million asked. XX quarter Yes. not But lot and seem million Does

just GAAP a on basis answering non-GAAP talking you apples-to-apples? so or Are I'm

Yes, good question.

think I non-GAAP on a basis. modeling we're things

I minus think bit. plus that's Yes, or Okay. roughly a reasonable,

these is for year-over-year bring we manufacturing in -- continue a pickup. couple as obviously necessarily we're large building market foundation the is delta of and that IVD the to size progress swab outside then And a nasal importantly, 'XX, transition, as in we're we long-term lend which obviously to investing slight an which which is to of opportunity the happy investing make the infrastructure not given next investment We across scale growth. a it more we we kind up for bit have in year, a the in products. versus company We're really really will, for investing 'XX growth, in the itself. the for cohesiveness, also can are the presents ensure first important which you step NIGHTINGALE, will themselves little drivers of and if is provide of to That

will incremental the urology the that of marketing, the ton of of growth wouldn't heads here a necessarily line so of bit. Commercial/sales also impact handful a a or I to there little expect And outside and to there G&A investment see continued support franchise.

other you sort I just the site only of be Okay, have test. there. would the got for know if don’t around any question it. bladder updates And then my

you Yes. Tina, want do to --?

Yes.

working the into Decipher So further extending on we bladder. franchise are

As is next give there's And XX,XXX estimated year, invasive. of of you is it's you over a muscle for know, non-muscle that just rest I XXXX, been and in new it's market. cancer in cases XX% bladder percent a and think smaller a -- the for to little

we're which to market, Our And for cystectomy. hard, clinical further on is invasive. a current just portion indication. more into very use test you as trials working muscle the chemotherapy know, gathering to extend to data, working is of in that prior the whether as small a But

got Okay, Thank you. it.

our Thank One please moment next for question. you.

from the of come Stanley. line will question Tejas Next Morgan Savant of

is line open. Your

event? the Maybe many But pieces. moving prior call for on submission, of Tejas. to in could pace systems adoption taking reasonable contribution base a Yuko it should our is about meaningful question Envisia for This that we already you of 'XX there's for on Thank are how be a there Hello. for assume encounter given I product installed questions. up And think regulatory on meaningful following is know Europe?

been Envisia in test Envisia does. both journey in the available Europe, to outside get of adopted I much launch said to larger Decipher inflection includes of me and real like the guideline Plus path a has market think, our the I Europe. from hasn't Yes, than reimbursements IVD of as again, comes the support here terms strategy test outside earlier, Prostate, in which the the the U.S.

now. pathway right a team our forge And so to that's that trying is

there And you Envisia see so no, away. approved think right don't getting uptick I from a major

slow, the over it's U.S., been look an a doesn't to adoption begin lung do at because this. fact move If there's condition of a again, market Envisia, use test interstitial and path like the entire that disease use diagnostic to one work has the rare lot that of a in you to to to

And do U.S. going to so we're well. that to as have the outside

with and again, There's again, course about the Prostate meaningful on point that, test a also learn other around driving base launching your about to multiple reimbursement base. menu. out So I -- on extensively. adoption the talked like Having test certainly there and both leads tests platform adoption, helps going which a it and think installed product We've drive and we installed helps this lot from the helps Decipher the us the of now. that think country-by-country it

the first And we of already obviously things so are of that and with adoption that's driving to one doing do respect currently Prosigna.

increase to and at lab-by-lab progress subsequently some time and we're country-by-country the good working for same so we're then Envisia, installed there. for Decipher And base we'll that and the leverage making and then

high-single -- about accounts this digit about into payer many existing for digit Great, that how helpful. about the was how the mid-single what guide? or new users this on more utilization have into more increased And drives Afirma, the new many is super guide Is or wins? then versus up to sign growth

physicians actually two talked we've wins payer so haven't this driving before, both is first yet is who because or of the accounts, about It long accounts and tail things And last than talked extremely of bit both Afirma It's covered. more new in of Afirma over the well existing into dynamics also in those Afirma adopted similar that we Afirma. little to seen accounts on it's any other driving today year, quarter. about last especially the and tests adoption. we've within a greater that But does the

continuing end. So that. push high And drive anything it's to might on the towards on --? what That's

as impacts the previously course I obviously, tailwind XXXX, say, cited just we of was get benefit going of should I neutral be ASP headwind. a XXXX course the No, over of for for do mentioned position ASP going than to to Afirma to of in we've we albeit for the into 'XX, ensure more tailwind we Afirma, to have a naturally Afirma of over earlier, have worked we that the at a ASP through that least so expect,

to well. our successful collections, from on that think tailwind anywhere so depending billing how large could small is And team vary a I in as

how the shades goodness the And I seeing will dependent or as varying backs well of high terms impact, ASP think impact mid each whether in we're Marc cited the So Afirma. up. it's of as there's highly on that in be between here gray those of

you. Thank

next for moment our Thank please One you. question.

Our Andrew will next come of James. Cooper from Raymond question

open. is line Your

talked A least being think stable little feels one general Thanks some I it question. asked, a And of was Hi, at the starting offsetting talked have It about margins. about lot on where has of just relative maybe bit everybody. you terms gross costs. so to inflation been now like the profit. others rising more for in

year? us that obviously the how trajectory may throughout there, margin help the parts of and think some the moving about gross impact mix Just

Yes, happy to.

a given the is of our related good some beginning the testing you a you today As inflationary are at on is and supplies more this seven margin technically ago, year, think reset, feeling bit impact, would little of or been would gross portion all than which of have wage when we're it and allow to why related. lab it contracts would least expect, And time we our the this months more as for sort have about year, reagents. line, of COGS, at six been

to XXXX, the the we did beginning look we some see offset the costs do over as As course we forward number things benefit of as well which see salary typically help we'll of increases increases of XXXX, of the reagent course a of over of the start at those that year.

on margins in there, mix be dependent saw margins necessarily high more more we've quarter, the back And XX ranges, won't so reiterate the the that low revenue type line, we fourth obviously line gross level type to And towards a the given And expect on revenue and range. then that's biopharma do so normalized expect And of it. anything gross XX-ish testing, guidance other see than product already not explicit but on on those testing then we else. in the XX I given high XXs. of line, we more to or in do more in any the in necessarily period

meaningfully perspective. And than so that gross any of can fluctuate from our probably a lines margin even other more

little I mid year, through And factors the and nothing so when dependent I'm be course, of quarter, XXs but have fluctuation, note. the that worthy highly that's to to sure any a a on in think of given So trend bit a sum going timing is all up, good we'll good you of different estimate.

do those support that where think about we think -- launch, potential to about that's is manufacture sure the transition Okay, And I that and NanoString the helpful. to How in that, that is want together? start have pieces Envisia then time you make with to on place transition two make we need at happen? to just manufacturing are when something the tied really of launch kind or how there

terms how have in in Prosigna of about that Clearly, Yes, really if it. about things of we manufacturing not But the think think already the today, about it think tactics. to there's the some there you kits. for we're terms doing transition they're you

own we over NanoString. So or either of But the more to supply transition think going you the then then likely of these is Prosigna. launch the because The the of way, regulatory make as timing out difference. to of things, if get our approval think from not a earlier. the it's that first Envisia, much to it's or I it's it chain, manufacturing that not come and about will approval coming timing And than supply is Envisia our it's out on manufacturing doesn't I mentioned take coming depending while of chain and adoption, kit drive via going straight whether determine

Great. I'll stop the time. there. I appreciate

you. Thank

one question. for And Thank you. next moment our

Our next question will come Ji Nam from Sung Scotiabank. of

open. is line Your

congratulations Hi. Thanks on for taking the quarter. the questions and

handicap if kind guys access point? you full study, staffing at and have NIGHTINGALE with So access this the other the this at status the point I on of of what a product wonder this the kind of restricted across And was point at access you there in for point might also different if this lines? or be at potential any including working moot terms but clinician point, is patient the this is are wondering shortages access, essentially

and Yes, thanks asking. for

dealt Omicron a or in that the As so of 'XX, with quarter lapping we here year really we now situation first sit ago. we’re all the

in Where problem problem, second And especially up don't a those call COVID from to in shortages, in I'd effect Decipher, trials, staffing business, a comps. in and all. that the again with in clinical very and an much in hear testing we coming isn't current it's areas third degree, we terms but really with of and we so at shows this staffing our order shortages Afirma about now especially access not is about again Staffing much. the But it access do it a or pulmonology. do hear

date, number of at looking the sites ramp reasons to for the is we've And so that's greater I velocity had our which we're NIGHTINGALE, actions really even we've to the NIGHTINGALE had one think that of up of to one drive in that trail.

And to as in we stay mitigated own timelines. our so those can on as impacts much order track with we've internal

what's Decipher? on for and kind from the status are then there private helpful. the updates latest the Was any reimbursement Great. there do That's And payer, payer wondering the side there what's remaining side? if to on super especially of

close million free recently feel we reported in -- too. Tina, to XXX But jump to here

million. XXX

same XXX level policy go we that's have to commercial an trying not million, so for very for year accomplish. or room significant have progress over the entire example. we Afirma, because last dedicated what contracting, But so in and still that's payer to team on more the

add? to anything So

No, time. I think does it take

look important that fourth -- of get the any product the this in thing in out evidence it on you a And end X should those on If another. the all our takes is at thing in of is commercials at while see after But getting last you'll getting from one other Level with to field, market it board. we're help chests the in quarter NCCN XXXX. certainly the year

so Thank Great. you much.

you. Thank

conference closing like for no questions Marc Thank queue, seeing And further now will to to in you. I Stapley turn back the remarks. the

it. you, Thank Chris. I appreciate

financial in our I'm drivers incredibly patients’ core long-term us and which So results these the as team great really hard testing XXXX. in with congratulate I transforming exceptional the for progress and in difference Veracyte you entire Thank on to of and passion, making execution. which with growth can cancer of us up pleased growth the strong in both in making talent a I'm XXXX XXXX. business, profile, U.S. internationally focus sets and for our work, you. enabled care in for want their we're tell, their our the XXX,XXX proud lives another continuing to to over team year our achieve global

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

You a disconnect have may pleasant day. now and