Veracyte (VCYT) 7 Nov 232023 Q3 Earnings call transcript

Good day, and thank you for standing by. Welcome to the Veracyte Third Quarter 2023 Financial Results Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Tristan Ribar. Please go ahead.

thanks quarter us XXXX and of a everyone, third our financial afternoon, for for joining discussion Good results. Chief With Veracyte's me Officer. our Chief Stapley, Financial Executive Officer; today and Rebecca are Marc Chambers, release issued results. financial earlier Veracyte press this detailing quarter our afternoon XXXX third a Relations with Investor of This in release, presentation available at business the along our financial website and is the section veracyte.com.

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

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

addition, from Veracyte's now certain the in measures. earnings measures call accessible to of these Veracyte's are section IR directly non-GAAP the will financial today's include this most call Reconciliation to included comparable Stapley, Marc CEO. release financial website. GAAP In I of our will measures over turn

drivers. third growth Thanks, Kristen, our as results quarter well our am and progress as share across thanks, everyone, update to for I joining us pleased an on today.

revenue again, XX% to this core the drove Our growth prior QX testing revenue was Yet impressive year an period. versus outcome XX% $XX approximately our of with prior strong the of million, year period. increase compared business

flow. the already of and flow cash from profile, $XX cash the quarters also generating marking to of financial We differentiated out X positive further last our with operations continue enhance fourth million

at grow of serve indisputable enabling has patients test and leading reimbursement prudent guideline for clinical Our accelerated evidence, differentiation more tests, rate. us an robust adoption provided to revenue and through driving our framework inclusion on-market

more by Decipher sequentially, we reduction offset it. than in tests, the quarter, seasonality up XX,XXX reported slightly approximately a During Prostate was our summer

Given San of this improvements. both that year, in our lab the efficiency. incredibly on has proud lab operations the site's on growth, we executed lab team operations have capacity course I'm over our invested and of focusing Diego these

by impressive WIP their One tests, of of to of is us which to recognized turnaround ever the even the XXX enabling will lower the is was we outcomes than the that at now physicians Decipher than efforts lower revenue. end patients forecasted Consequently, quarter more and seen, Decipher resulted answers in faster. get the time we've than as

this force continue new the KOLs and to guidelines. broaden NCCN of offering. There test for are platform, We continue the to evidence Prostate number of should publications GRID turnaround evidence through quarter test highly the level the in With again of remain research unique engage WIP Decipher contributing sales to for forward. the awareness approximately status we presentations our with the Level faster time saw a at lower hundreds and our Decipher X in productive our positions as as urology Decipher record normal, ordering going

During the by was the of physicians time. quarter, close to Decipher XX% GRID ordered

into only, framework. provide for information requests Decipher in our is expression report which physician Further is use biology. tenet a clinical our cancer for to proven key further the data upon added research offer prostate GRID signature evidence may reminder, a in patient to and insights molecular As gene products additional

which on Phase a with Decipher ability XXth Phase we at included to our presented X showed as American to III classifiers randomized a with for oral Prostate metastasis for Oncology the quarter enabling in abstracts no among patients Decipher the was Radiation of trial, recent X demonstrating precision for III Society This cancer. apply test randomized the or clinically validation physicians focused trial, ASTRO high-risk exception disease. is This risk Conference. This presentations genomic prostate study medicine patients clinical in predict performance of large utility

no of molecular as care far increasingly patients close remain comes worrying know, prostate test the access With providing for an we evidence. prostate this to clinical trend, becoming to cancer committed other As across cancer continuum. we high-risk level to

developed Decipher of our with and those and part As stage this, we prostate advanced metastatic patients for validated offering cancer. castrate-resistant have

policy program population. MolDX on patient LCD, of are engaging the currently We coverage enable to or their with this Medicare's draft cytotesting

submit requirement States. ensure We expect our parallel will that XXX,XXX cancer We the over grant completely is commercial as ability a the the engage LCD year coverage draft to completed, assessment, steps to in Once want more payers. Medicare to to diagnosed view prostate close be patients to the serve the we critical United year. technical these coming finalized and each

We delivered Afirma. another record XX,XXX to Moving approximately tests quarter with reports.

quarter, commercial XX market health new We growth competitive with believe wins. being including gain. dedicated customers some added as than systems increasing large well is driven the as by Our share team and accounts in this usage more existing

provide have approximately molecular the Afirma's of to cytology and categories, broadened than patients at thyroid which with proposed testing. needle This or the which for have for are now to those, annually may best-five United believers those XXX,XXX Bates from the cancer. this the receive assess Our for in testing States strong patient a additional historically recommendations likely recommendation information indeterminant X for is patients in year, estimate of to approximately majority their end, include molecular who who Afirma XXX,XXX more thyroid first we system annually X population. included reporting Of are cytopathology, XX,XXX cancer. their the To accounted for diagnosis the benefit aspiration current fine thyroid X patients are for cytologically vast a needle can critical thyroid that in

for performance updating fiscal the XX% expectations strong we approximately Given growth XXXX. again positive year be and firm of revenue once outlook, are our to

over months, including is XX continued part success portal. firmer the made the to test promoter of last customer experience addition ongoing as our to testing and due Our in mutation the such customer we've improvements, enhancements

thyroid discovery serve leading in to a the U thyroid quarter. advance cancer. nodules patients sequencing nodules molecular ultimately research excited with announce report and understanding around developed that is to help science for database in as platform We a derived characteristics concept transcriptome It the continue resource the cancer. and that novel through our PERMA into was This may with to our to research published tool, designed and comprehensive And literature. manage improve launching the to KOLs through as similar Grid how of work whole be work firm's result, we're GRID, this to will we and Decipher leverages

advance Going findings focus our help new to may forward, academic partner KOLs personalize continue this tool is further to to treatment and day patients. one researchers that for to utilize with to

to support For with proud a we patients and diagnosis in to new be both our Prostate to are better grid is there their treatment, able and lot learn still research offerings. thyroid cancer, and facilitate to

drivers. which everywhere.Turning Decipher research strongly goal still can will benefit that significantly both market, benefits help Our to patients tests, now is and believe is molecular Afirma to the underpenetrated every access from growth the we diagnostic able in or continued our is for long-term our drive to patient that

Swab on both IVD significant We global continue our Nasal the make strategy. Percepta to progress and

enrolment remain test to Our Percepta XXXX. later on clinical second approximately utility finalize we trial in to stud sites, quarter has and Swab track now grown for XX Nasal the of the

Prosigna smokers unmet population XX patient proforma United This We Nasal nodules recently, population a former who is With test clinical our current as it product demand cancer well a We through this stop malignancy XX for period, prior advanced XX for IVD cancer States. revenue screening for assessment quarter undergo well. has the they the instead in of the region. the if XX% more ages serving as risk view expanded ago. expanded smoking continue risk cancer than the the to screening the continues of Percepta already anyone lung test in smoking as this includes to guidelines increased our years provides breast significant improves by year appropriate part in driven We the been Swab history, solid XX now for even as lung Nordic recommended had for and to update, versus another Cancer critical need identified from as XX classification. with a million to Society as American population meaningly a grow strategy screening smokers, quarter of of XX

in a nationwide earlier the of cancer involving Prosigna reminder, more study a patients. definitive than prospective As test following the X,XXX adopted the as by breast Norway year, government was

excited demand believe test Health the by month a as will for the Prosigna report Group Looking we're further position ahead, region. they published Technologies the in this for recommended reimbursement, which we about favorable foster Scottish

always increasingly that our IVD for challenges. location our Prosigna IVD of have we and the progressing. are Marseille, to reinforces number manufacturing continue doing stand control long-term last of than important our economics supply an is to our we part planned access us we had the everything critical improving line our originally to This to transition, over Our This Consequently, as from move the of become has intend our supply a of have months faced while few assay to France NanoString patients can our test. up beyond manufacturing situation all own strategy. faster the we need ensure to chain simply Prosigna around strategy

a been fourth strong job revenue collaboratively with reflected by on we the be revenue guidance. revenue. has revenue and manufacturing date. team and spite accelerated taking I'm done do of expect of goal, chain testing X% our supply fabulous this in In proud have of than mitigation to offset global the all total working less headwind product commercial the that Our our in and Recall a this updated of impact teams to our accomplished they represents to which volume efforts, quarter, outlook have

our tests a growing of the experience quality Based to impactful NGS we platforms we and feedback, and is cost to on clinically as our Fundamentally, and to decided NextSeq their of on see project offer IVD have As have agreement instrument. is the a some believe clearly QPCR ultimately NGS, happening patients base team will more begun multiplatform hence the structure other to will we and already to us patients our for reach the with already bridging that completed, U.S. approach long-term our of qPCR us can our over our tests. diagnostics Illumina decentralized help adopt We NGS. market. with an already XXXDx and believe enable in evidence the announced bridge accelerate earlier level what signed Decipher customer to quickly commencing world. Nasal supporting on and products field, differentiates make more work available our be platforms, the nCounter tests strategy tests reminder, Prostate of development own develop as growth. in our surely now To launch a the installed has strategy our of to today, of is Swab we designed them Leveraging all this our

track launch consistent the and XXXX on for which these time XXXX, Mixite the We new are on to in expectations, with products submission respectively. to line was body previously predicated prior

growth about country our who mid-to that XXXX towards excited of XXXX. this begins access and exceptional large a underscoring evolving launching recent the tests the our are Given and interactions Decipher pleased quarter. IVD the existing the further our IVD immediately notified in team was are and belief Veracyte differentiated industry quarter existing recently we able brings now core us QX broad life launched approach be adoption in Dr. an help leadership to countercare Febbo vision based we U.S. by other and Scientific expect Dr. we X diagnostics. we were global installed business corporate to GM new to advance framework commercially point, benefit highly veterans these our drive to space. Chief companies how across the with Officer; to IVDR, joined reimbursement exceptional vision, with progress Phillip exceptional Medical Further, addition Marie-Claire France. long-term of strong closing, and of as country the commercial multi-platform base body Nasal updated regulatory testing In To our instruments. Chief the execution from Marseille, leverage Swab team our our business senior we the market, our that which respected plan, website, and of with announce for in a new and Prostate I'm in with will Officer At our drivers. is test during in Taine Prosigna for expect current selling our to to our to launch

the global leadership year guidance updated turn for for the financial review on our setting the stage and focused I for cancer our XXXX. diagnostics. goals now now Rebecca our that, in results remaining are will while We executing for quarter also to to With

Thanks, Marc.

have As year $XX.X increase volume results with would $X.X XX% grew approximately the evidence ASP of the excellent million, was approximately driven NCCN Marc Afirma adoption year-over-year, XX,XXX over impact, $XX cash out-of-period an Marc post mentioned. testing period continued period was XX% the our that Decipher million testing third as impact period. revenue of penetration $X,XXX reduction and Testing X from of quarter mentioned, of in $X,XXX. Level WIP Adjusting designation Total of as tests, benefiting total We efficiency a includes Prostate XX,XXX for revenue, over this Quarterly and by ASP well tests, prior of increase which we achieved million market the XX% improved the to the same approximately of approximately of an XXXX. test volume lab collections. approximately testing our by increase was collections. prior strong been strong test, per

quarter up approximately Biopharmaceutical down XX% and XX% Third year-over-year. $X.X tests product million, $X other totaled volume year-over-year. product revenue million, and revenue was was X,XXX

reductions industry the in sales extended to led the overall cycles and expected, As across constraints decline. spending projects, customer

facilities of mix was I absorption. of XX% higher as year-over-year Moving were compared gross impairment driven of compensation. XX%, prior XXX the up and expenses, from multi-platform margin prior gains, $X.X down but margin points gross cost and margin by operating increased in to higher gross leverage, include $X.X benefiting Product of million to We Testing will impairment intangible personnel were expenses IVD $X.X operating and infrastructure. ended period, other stock-based and acquired recorded by and GAAP XX%, up $X.X million compensation gross basis non-GAAP gross was period. period. cash the well points the to costs was $XX.X of amortization up million. a loss stock-based Non-GAAP of a $XX.X a Research and net does and assets, amortization expenses. adopt was marketing $XX $XX.X million Non-GAAP million expectations. prior to $XX.X equivalents, expenses flat test expense, routine given clinical Sales $X.X at included efficiency million up expenses cost the Biopharmaceutical fixed approximately strategy. XXX to lower margin million, million. and to million, trial which of basis and long-lived which XX%, decreased roughly investments decision $XX.X cost with the million ASP. year We excluding tied and expenses to restructuring well year $XXX our and assets, depreciation our results exclude million costs compared XX%, fixed cash margin year-over-year the ahead versus charge development to revenue, by quarter million of as year and highlight G&A

XXXX our Turning updated now to guidance.

to our million to raised guidance is an quarter our $XXX to to of compared yet again million improved outlook given QX which challenges out-of-period previously revenue, impact into QX on million, testing contemplates collections, guidance $XX WIP we of account mentioned. also This do the product the not takes revenue anticipate strong increase $XXX results as our on third have revenue million. $XXX $XXX projections which This million supplier repeating. and based prior We and

to cash to are guidance accounting fabulous beginning call. the this I'm cash, our now beyond. deliver other consideration equivalents contingent and for barring and the the been of Q&A team, at million and care now we've lines. always, expectations capital the represents investments, We'll open lab potential of portfolio on capital date, our approximately the to XXXX the short-term Operator, the year of with to execution goals please more comments continue portion strength this increase and year, $XX milestones for to as million an go to related testing and cash managed expenditures upcoming $XXX as and teams. compared for financial billing XXXX of driven to incredible We Moving end excited of the an Veracyte our updated payments, M&A. the by than impact To set forecast one our working of trends.Importantly, well on expansion hand, of our as this has

Instructions]. [Operator

with is question Savant first from Tejas MS. Our

Yuko testing strategy nCounter? the there is U.S.? the been model this Maybe here the Tejas. the build case, that's for more focus the into the This any has for test today. centralized that And is Thank question. Or if on collaboration Illumina you you the taking changes fit announced starting does to in OUS adoption? with mainly in collaboration How

Yes, for that. great question. Thanks

with and on IVD as much very focused it's So kids NextSeq regarding the DXXXX is market, collaboration OUS Illumina on the the platform. distributable

customer expanded in from the or we're Illuminas outside a or Now this change remember, any to with doesn't to relate relationship today, we've as form and shape our very we're U.S. clear standpoint, a well. much that than Illumina other of impact way,

that. asked about strategy for or instrument the that So will test. the you multi-platform place yes, leverage nCounter ours this to of relation are we're the take is best we way In question excited instruments going approach, the to the there,

prepared remarks, So Prostate as on we launch about qPCR. we in Decipher will talked the

we'll we'll And and platform test our like and that actually we NGS, for options No for one your our Hopefully, good expands today, launch and changes will example. support lymphoma, Nasal customers. on tests. going every very which that is We example launch Encana's more Prosigna question. in product or test, provide still where those have there. place future NGS. also answers for that Prosigna other for Swab on consider will launch The others much the to which we platforms

follow-up was And great. separate a question. No, that Yes. then

you sounds of this the the -- of wondering was notified there? remarks, submission for some lines changed have the what the from You for I could the that of some time the on with body if IVDR you Prostate had could time but -- Swab it the during and prep lines Nasal and may on discussions process. you like for the -- discussions some changed have elaborate whether touched

Yes.

lines So Decipher Nasal has tests, these launch talking from now we've moved of from actually, and when the think that, commercially But we say better, which not time unpredictable our I to And when for I'm line, Swab. about we Prostate changed. outside these tests predictable expect and now a providing time submission and steps be is time largely a to line which line, commercialization clearer. control after the would more standpoint a time

now we're commercialization where at comfortable these road so time able And on we're map to put when point weren't tests plan, whereas to a our a there. and our project saying ready we based out previously commercialize we're

So assumed least would for and commercialization? have 'XX previously had a in like 'XX. something Swab you at Decipher on Nasal year in Prostate You landed

-- that confirming commercially now we we're in to ready 'XX be consistent and Swab Nasal 'XX will assumption. So launch Decipher in to Prostate with

Okay? made committal, and lot bit more just less commercially out So terms it a -- uncertainty opinion, more taken, committal the in in a my to launch. ready we've of I of when think, little we're of

and country. support and automatically drive and go drive I we've clear about very be decisions to every and Now from to adoption. said Remember, perspective, IVDR reimbursed have in adopted doesn't country reimbursement country ready launch we're to still one get commercially by an we always thing this, KOL us want when

a position that So long-term growth as driver. this why is continue to doesn't we which change,

upon that other what really growing of other installed just base bases thing for. to as the Obviously, have our those include nCounter customers more to allowed the than go. broaden installed it's platforms even of the ensuring can strategy we broaden to to this well one add predicated -- and to decision And platforms, serve that,

this something discussed, already So and of Marc that not revenue we number really us across the only going but much view grow really also quickly qPCR in more the to instruments allow opportunity very NextSeq. as field given to solidify is even the that timelines an

Great. Thank very much. you

with Matt [Operator Sykes Sachs. comes from Instructions] Our next question Goldman

results. This Matt to great on is Prashant Sykes. quarter. on hear Congrats for the Kota the Really

for an how test lung Swab N So with of into Swab Low-Dose the and fit screening cancer Nasal Percepta does paradigm CT?

a question. That's really Yes. great

--basically about talked way about the today we Nasal Swabs. detection And little is healthy a position different and healthy way very So multi-cancer bit screening early think than think this before. the we and we about

very for a nodule So lung Nasal appropriate on make cancer and an high or Today, getting to million patients. is decision been patients and getting risk with be screened the therefore, of about unnecessary people whether or much accelerate today helping Swab focused more, have talked screened. who in even a prepared lung treatment procedures who to identified actually or those we the could are very as remarks, should out for few avoid XX

$X there's there nodules screening. it's found are million. small it's more by actually about percentage, a actually So than And then incidentally lung

So people screened. a clearly, more care about there's us of including more getting who a and people lot lot

that that Now funnel. the about is feed I way think multi-cancer could detection

be the and if that step So CT. potentially adopted one patient cancer, then next And are patient of for those into that tests the is they lung Nasal example. lung firmly is would identified a assuming workflow future, for Low-dose the having reimbursed if puts identified, that nodule in Swab, the a through as

so how And in. about fitting it we that's think

cases multi-cancer healthy will and believe And the that significant of said the larger also population as screening individuals. believe under-screening incidental think, reimbursement volume. at we point, that test Low-dose Nasal reimbursement that launched Having And to term, for I early issue continue drive you these Nasal there I least will of will to in be, the near that, population Swab be Swab. believe continue the a first be the primary CT in for resolved. until in be one Of that for the that use there is will tests, course, tests and at have be you to detection that to have will also

product more planning Is coverage helpful. with us market you That's updates? Or give how And can Afirma? it. increasing penetration you are color expansion, Got some additional it more there? on reps, sales

multitude seen quite far significantly bringing it doing, appear honestly, higher new to I and on the penetrating of are original would to terms that doing which encouraging that's the year, continues we're into accounts, things Afirma and growth, than the off in with we increased market XX% that we absolutely we've and year, that we been our anticipated. be mean, expectations you've exceeded sign. what paying guidance coming an of our And recently this on as of More

So what are and enhanced the only for product we've We we billing just testing added product, make launched easier Afirma. grid to to announced the a offering We've portal customers we've doing? lot use it correct. for mutation them our a to offering, for research be test to for order information our for the

We of dedicated an number reps honest, a what's been To at driving mean, also sales I and have adding this large isn't be all. incredibly team. sales effective

In sales fact, much sales force. a force pretty stable this very a we've with been doing and strong

that these we've into with kind believe and tests. continuing today and year XX% of to can for we said will primary is get So and driver And penetrated market steps, next we growth. The about XX% we the these always think beyond that. fuel be could beyond, of help drive further or that

of yes, a lot more frankly. So same, the quite

only timeline could know that market defined about but talk for the as ensuring if The But LCD, look we recently you per penetrating Decipher was necessarily longer. every today, get I and as on add don't because the that I of can it's would broadly there want to next the -- and Afirma, test end, also to appropriate also se broadening be slightly focused obviously draft not year thing patient appropriate both we not the the market. across are only is

mentioned, that and so about market broadening out I things doing have indications vis-a-vis the it's a come to about over period. MolDX been think the Marc draft our most but think recently. And with team exactly penetrating longer to working -- managed Afirma do working as that also -- both both care on multiyear end, come And term, we that actively Decipher, that have LCDs the is so have

Yes.

our for add Rebecca, in category, point utility do great a [indiscernible] reimbursement patients a that's so we the significant that of believe could clinical where there's And test.

gets that or very And passed for that so if patients. year about then be pleased so, we'll a in

Difficulty] Blair. next Our Puneet from comes Our with Leerink. Andrew with William Brackmann question Instructions] Souda [Operator [Technical comes next from question

addressing you maybe that talk and about if also, you So then issues fourth a it's the good you quantify talk this about with that you you assuming But multiplex platforms. qPCR of sort see with are platform growth economic that, the the being chain maybe then of agreement a versus that? wondering see bit can the there multiple for little does can supply the approach? more nCounter that sort if there what to that Illumina, could mean And quarter, would

me supply back your But that a to Let on one moment. regarding in come first question chain.

that. every this isn't have really supply that a a know, about kits that supply we're dealing years less this with couple you then, first ago, of dealt you or mean, I ago, time And that as of up regard We is than we and key the So you now what while in Afirma. have with components chain or challenges. talked of with end parts different little mitigate to and lack a to

so part standing our own for these And were we doing -- particular kits our for anyway. up good of news in Prosigna we were strategy is manufacturing the our Marseille own IVD as

As which that our kits mitigate our the that have, making get chain being launch supplement Once that inventory. that challenge, progress means supply around and kits supply to kits that to own of had we other happening, saw able and accelerate able to the year. that great the able know, increasing we we accelerate are challenges done planned on they're we this end to you to were our available

is then next in want is customer to robust for you don't you do at sites you want sure customer all supply, you it's extremely available and when allocation thing very the through build process, so that inventory And go patients. inventory to short make a

so a teams activity lot of there's commercial And effectively. involving that our to balance

we're I'd it. say So through getting

lower impact product to anticipate Rebecca previous the we've than which from $X in have of the in million because even prepared a little assessed of is revenue we saw you in uptick bit anticipated we lower than $X quarter. remarks We and QX did quarters seeing our fourth an potential been million,

we So much, that's we're but now. what that right see projecting won't hopefully,

And then, Puneet, could you on repeat your question economics...

wasn't you. For Thank Yes. abundantly clear.

of kit Yes, is you an run be to alumina... or and it some there profit wanted simply revenue will a is sharing the on -- just manufacturing be I will little. sharing XXXDx with or sort IVD that understand,

you. Thank Structure.

that. a Yes. has clinical that about not offer is Illumina The in open standard way lot there's to agreement, think of the maneuver for room

that to And agreement the able that, and adopt going is so our or version to at been of we've how economics work. that's least

So as technology see launch that a access, be you typically structure. IVD milestone payments look there's And how you'll you to royalty-based if able then works. new and online, there's a there's

And the is contemplate that cash is in technology just fee, contemplated the does guide in our absorbed which open guide. and our access one cash updated point offer, we've

Rebecca, is is I'm as well. continues biotechs think Decipher wondering, pressure. just happening on the about with the seems doing penetration budget gain on traction some biopharma obviously, levels. to under being Afirma impact, we It funding of these and like

of helpful. you moving you given right sort there, in maybe what a as platforms, can of wondering provide just other into maybe anything these be terms chain and the number So that and if these also parts sort you us now up as it. point can XXXX just would of supply overall, well jumping just on of as provide And bring mixed

course. of Yes,

the Puneet, Swab Decipher back platforms, those to catalysts, maybe half being first, just 'XX. the launched to the tied regard longer-dated with right, and in Nasal other of 'XX So are those hit to

So that XXXX won't impact se. per

not this we Marc we forward are own we're previous since impact hopeful duration, year. that that have standing issues XXXX the short-term very from roughly will time our an highlighting, our is was that in supplier in given activities especially the around it product are of up and the On end lines those of manufacturing, pulling just

do aren't that work to looks to in XXXX this do. time, we $XX XXXX, on On our work XXXX. point earnings the for So at we is, impact there's point. expected We -- bars error call, not for very of this that a still news necessarily lot there. albeit as wide $XX good the ready to will million still XXXX said in team How last at call we million Biopharma,

not to this kind will with to the penetrated line same. time be. the sand, entirety point the very of think to obviously in a ground the these not be a with quantitative we regard across I a we news given of to a draw at that want are markets. of necessarily stake in put we'll teams wouldn't working in So That's go the Afirma, really continue in XXXX, XX Decipher statement into hard see or where the to statement. we qualitative terms portfolio. in hope more fully That's continue stories of good we're

We indication. are the broadening

sales our to physicians We making for our to easier and it tests order are crank. continues team

rest Biopharma XXXX forward and will we to So continued progress headlined more I be edges Decipher with be around strategy. be of will and think hopefully, our the it, as the

and doing We're successful everything see doing have continue Afirma past. been the of that's in continue Yes. We're said agree Rebecca And so all a to guidelines. earlier the we're to that going what question, we're XXX% you generate that Decipher what about you little think we've doing, an in maybe to in the pursue for been to all to ran clearly to going that, can of these if things going Afirma things test, and too. to and stop. to response us of pursue with We're I through add with I the coverage continue bit evidence. to going to in None Decipher

fact the number. headwind is real I as see a that businesses So the higher comp the those they grow, is only for

each the formula the there's change mathematically, really us relative how working well not to that's to worth we're going a over last tests quarter, served headwind. grow years. So continue to these But few

Got And where the multiple potentially it. don't you now developing. squeeze wondering, there now [indiscernible] technology access can major in. one obviously, take areas platforms? if the indication if know I But types are can to addition to he's in that areas there. nasal Good see swab just I But Prostate going you to continue Phil's you're and to have be with team. -- to other or were more

experience as to but those, board that. well. not his for with just other and Certainly, expertise still in great it's have on areas Thanks

so with current As highly we me within our and across think about is working is the specialty indications leverageable. start indications indications, well let expanding and and that model

those drive to other so going strategic really other we're going other process, course, that.And drive to bladder or indications, At others of that this excited to important to business. otherwise in we're of indications nasal like specific with ways to we continue and our and to at that's [indiscernible] outside But anchor strategy. satisfied applications about more very and on think continue And in Of we're people the we've for swab We're indications urology we're and look continue the into in expand. extremely that, dedicated Nothing with focus and built why brought to fuelling point, future. with course, how we on on. franchise always pulmonology and can we're in we that our our the as then part where they're to that on organically the model Phil apply that. help

to I'm those excited continue So conversations.

question Nam comes Ji next from Sung with Scotiabank. Our

Hi, questions the strategy. and taking starting on thanks quarter. congrats the with out the IVD for Maybe

a utilized you on of the kind on Decipher that comment Decipher whole a have if if think also, might you curious multiple mind? remembering you're putting I in given just systems? to why it's platform this qPCR able qPCR the could versus NextGen be across then qPCR And sequencing be analysis. correctly, Prostate specific a versus Or transcriptome there's NextSeq, Just

for great and thanks question, that. Yes,

GRID. launching So clear enables that's it something lab targeted a we're launch the reminder plan like Decipher what in whole our NGS, IVDs, as or U.S. is to to transcriptome us And a environment. a launch be is more including we whether platform, the But nCounter, that test, that of PCR any Afirma in test. just a

beautifully listen appropriate -- at on, landed platform qPCR, and we've so to installed way, to that. base base, there a a also test And significant on we was economics, as it on we're for the be By the XX-gene So the is fits encounter. Decipher the look PCR. customers we installed the for going XX on genes qPCR as

Swab, doesn't also on NGS, option the launch that future is as in wouldn't could, it more for make us. mean Nasal which we look is you change the same we economics the sense Other you [indiscernible] permit targets, a an NextGen tests, That lot lot at all. for with and So doesn't that that sequencing at more on example, XX. know, a Prosigna, as which,

platform for approach -- the optimize it test, is could, the at is again, the that to be the right and look So us the to course, platform, platforms. best enables multiple that of

answers the of we can options. second And with hopefully, So part, and at all a that imagine, that multiple work. to your question. with you R&D incremental with we're looking effort could very little them course, in respect support there's On options provider, PCR test terms multiple of

we ultimately So open where It's that platform. be more an may go. of

it's formula So agreement supply the not as following same does Illumina. with the

hear you. super market Afirma, just That's still. there Got And on then helpful. that great to taking you're share

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at other anyone look ours In tests have product. share -- else's used wouldn't have that driving the you market products got that we're that more market market words, patients overall penetration. the penetration a otherwise not getting test physicians If using would or otherwise clearly

is So utilization first. increasing. we Within that's the customers, see the our that existing also

got there's respects. some example, share tests, just the ordering team, from physicians case, anything our hear So else. I can as that's to rates, from -- things that's you we think launched get clearly the grid, growth than anecdotal second. some But it's sales and in as course, we've conclusion at portal got evidence. a And of that Afirma's more that And -- we've like to then as respective the other look we third then in we've new for area of of taking as the clear the

the evidence. it of the tremendous most of of for other One evidence In is the Afirma, you've tests. got all our test, supporting you've In to the of NCCN Decipher, differentiators X. case of important of got level comparing Level of array use tests case a our including

see sales force you new and about. behind level are of who that that cases talked evidence share to existing I then think sure making So of both the you very then the good in and that very are couple effective with us, of kind we've aware a start at customers gains

Mason comes Carrico Our question Inc. from next Stephens, with

on strong Hey level thanks the Maybe one higher for a questions. here. guys, Congrats another quarter.

that's On the in pretty $XX unique obviously great cash million in operations, the seeing from space.

operating and XXXX, into how flow? As about going free the forward, drive focusing focus line balancing you to top growth starting we on driving look are thinking cash leverage versus and investments

that regard, we're appropriately, drive please our I'll that line we've start Rebecca, that we changed of and to But skis can as regard. getting weigh top philosophy maybe in growth ahead focused not Doing well. in in our in always everything nothing's and been on. very

extremely I think well. that we find

years, the not optimizing been that. our have of if throughout couple P&L We last for before

we're things that lot doing drive operational So of there's a performance. that

saw in that, turnaround about, fact, That's example. and the some what efficiency our as the of Diego I In San Decipher Lab time and in you one talked accomplishments Clear there.

Another systems, IT would be example. example for

our add? to will in also and where to Anything of raise continuing anticipate we need unfortunately, we're very a us scale on position, don't close a cash, So to be. terms not and we And eye keeping invest we in net business flow. cash profitability helping but the we're

No.

the last of and Just that that ops, what is at the one to perspective, in continue not seen not hope, expense at we've good expense to guiding is future. do And us and want point X the cash that that news goal of quarters would And have, from revenue where would intention I believe be we this we and into a we've don't out of every revenue of one think philosophical XXXX a time, that XXXX, to coming we but from obviously, moving X obviously, at flow you've in the our of had story growth. growth now generated we forward with. we're

it, down strongly differentiated should Mason, when think we the portion we and believe I we continue. I thanks a this comes Veracyte question. thesis feel one So think, is the for But asking to it of investment

-- That's moving to needs talk helpful. in potentially for LCD tests localized order the patient? percentage multiple to of draft around patients you would up could open your about testing a patients assume disease that if occur, potentially change front decrease or criteria patients of who Decipher that could LCD, the per of thoughts progress. ultimately metastatic it have And I'd the that and And to interpretation Thank maybe were you. to to language kind when change then

about So that could testing be you kind if opportunity? were the thinking of frame we should to occur, incremental how up

on key the part of head the question, question, of we're I hit one. come you've to LCD second the the the on. the your of in of your first back think to But first I'll nail the that draft really part focused element terms

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addressed per patient. And so and out, area legitimately, where happy see diagnostic that the would same examples many, the LCD. we're needs multiple multiple rounds you need that's be to is molecular test called that. very patient that which There is written are the currently to may one The many testing what of believe preclude we

MolDx and course, feedback very imagine, can we've you our So with comments. shared shared openly of as prepared our

appropriately. need of It's somewhat but and we're patients be a addressed. gets patients, to not number large for of do enough it's care that taken these important so it's hopeful that, -- And

So we're that of hopeful with. dealt kind that,

saying but by of can identifying the understand, we're you repeat we terms -- want addressing. second of you and earlier question, patients -- your that sure can you I your just in I question, increase sure maybe to make are Now and the make part

progress. I flawed. There's think my it numbers is But patients way ultimately out maybe number interpretation certain is about localized guess And I Yes. a here the of there.

down, is I think just was maybe about asking rate kind the you're twice. better, how if about opportunity kind Decipher incremental think of the if upfront testing were think the you tested that progression of able the patient is maybe test I way that's it about treatment I case. management to goes not with each you

be example -- a so whom testing are I you don't episodes type for as of think would approach multiple yes, of so don't required. think multiple think patients I every there an should for patient of some it more tests than is of bit a And needs active on a the that aggressive that little patient where might surveillance other lesion, more a described cancer. another be to and -- it's lesion be case you it's tested, and related and to then develops

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question [Operator with next Matson & Company. comes Instructions] Mike Needham Our from

priority, the shifted more wanted talked Decipher this on guess, there just looking Mike. I to GRID of to This is to business. is about just and about expectation more GRID. you the Maybe guess, at I business? follow-up Afirma clinical Maybe again, refresh use Joseph will maybe Afirma. And that just the be I I of setting? a your comment or a it on more being get for think wanted after that. on announced only tools research just services know lower plan have how kind for, on Afirma burner, maybe you to is but the be the business. of guess back guys one any get I out for the you guess there guess, I side Maybe biopharma coming I

practice of treating provide the the So just GRID is overall research are helpful in information. GRID and intended context to in use that doing in terms that well. patient clarify, But to for and research as that's they're the of physician the only Decipher their And tests patients, on of both additional Pharma all set rich has and but gives biopharma, fact we of the value this us whole customers. for isn't that data biopharma incredible really this a analysis enabled by our transcriptome for that GRID. this, these GRID all is do a of by-product

is by so by utilization and their with that of in continues. that data And continue with enabled enabled it's approach, It our grade, we'll an for transcriptome of engage side utilizing whole driving of our studies. that biopharma biopharma business data to

what part focused we're So yes, that's absolutely of a on.

but Thanks sense. maybe you mentioned while. ask said that haven't the you there. because LinkMark, Marc, a I That perfect guys then from prepared I in I'll sure. makes Okay. heard think, the guess, for in just And clarification remarks, just I Yes, guess

any update an on So just would Yes, the wondering update just in of if there's like general anything be product there, future? great. an milestones the

point. approach as the this work to strategy there, towards on throughout that. there to change IVD at with approach think continue continuing And No, our we nothing with partner this We're partner. with no And work support nCounter. that our specific on commercial launch, about right

like where updates. So numbers factor that we it's the a how terms completed in no that it's at look we of the would in certainly, more and this you that point happens the are which And something and point, studies case, were clear happens, time. should would at what until get give to commercialization that new not we color

now further closing it to turn showing would I'm to Stapley Marc time, this remarks. I for like At no questions. back

in testing pleased help extremely the I'm business, I'm encouraged markets. the our a the clearly performance product for at opportunity it. broaden exceeding Prostate extensive and more both our and many market. appreciate reimbursement, is growing and development both with I years. opportunities to core cancer to with And Thanks, of patients continuing in enhancements, thyroid I by We're rate the that indications evidence that see unpenetrated

our IVD who by employees In quarter, come team fruition the continuously their addition, our their strategy, patients over ability to demonstrated I'm their I'm and evaluate and diligence after our have Thank commitment passion Veracyte for with excited proud approach. our care you. driven cancer global our of to to execute quarter and all transform world. expansion applaud I for see opportunity to augmented to

conference. program. the conclude does today's in participation your for you Thank This

now may You disconnect.