Good morning, everyone. Thanks for joining us for another session at the 44th J.P. Morgan Healthcare Conference. I'm Brian Cheng, one of the senior biotech analysts here at the firm. At the podium, we have the CEO of PTC Therapeutics, Matt Klein. I'll now pass the mic to Matt for a short presentation followed by a live audience Q&A.
Thank you, Brian, and thank you, everyone, for joining us this morning. Last year, I stood on this stage and talked about how 2025 was going to be a year of focus and execution for PTC, positioning us for future success. We set a number of objectives for the year, including gaining the first approvals for Sephience for the treatment of children and adults with PKU, ensuring a strong start to the Sephience global launch, continue to drive revenue and effectively manage expenses as we continue to move the company towards cash flow breakeven, and advance our innovative early-stage programs, including the votoplam Huntington's Disease Program. I'm pleased to report that we achieved all of these objectives. We gained approval for Sephience in the US, Europe, Japan, and a number of other countries in just six months' time.
The Sephience launch is off to a strong start, with broad uptake across all key patient segments. We had another year of outstanding revenue performance and effective expense management, and closed the year with over $1.94 billion in cash, and last May, we shared the positive results from the PIVOT- HD Phase 2 study of votoplam in Huntington's disease patients, as well as advanced a number of our early-stage programs, including those from our RNA splicing platform. Overall, 2025 was a year of many significant successes. This morning, I'll review our 2025 performance and provide an outlook for what we expect to be a very exciting 2026. As I'll be making forward-looking statements this morning, I refer you to this slide, as well as our recent SEC filings, for a full explanation of risks and uncertainties. I'll start with our 2025 revenue performance.
Our revenue for the year was $823 million, exceeding our guidance of $750 million-$800 million. This outstanding revenue performance included $588 million of product revenue, driven both by our Sephience launch revenue as well as our more mature products. For Sephience, in the fourth quarter, we achieved $92.5 million in net revenue, bringing the total since launch to $112 million. As of December 31st, we had 946 patients on commercial therapy worldwide, and in the U.S., we had 1,134 patient start forms, with a payer mix of approximately 70% commercial. We continue to see contributions from every patient segment, as well as the full range of age groups, from infants to older adults, as well as the full spectrum of disease severity. In addition, while still early days, we're seeing very high prescription refill rates and very low discontinuation rates, with low single-digit % in the U.S.
This strong start to the Sephience launch reflects both the highly differentiated safety and efficacy profile of Sephience, as well as the outstanding performance of our field teams and our PTC Cares case management team. I'll be providing more details on the Sephience launch and the overall market opportunity later in the presentation. As we move into 2026, we're providing revenue guidance of $700-$800 million. We expect the majority of this to come from Sephience as we continue the strong launch momentum, with smaller contributions from our more mature products. I want to emphasize that our product revenue guidance for 2026 does not include Evrysdi royalty revenue, as we sold the remaining portion of the Evrysdi royalty for $240 million in milestones to Royalty Pharma as we shared in December of 2025.
This product revenue guidance represents a 19%-36% year-over-year growth from our product revenue of 2025. In terms of expenses, we're providing OpEx guidance of $680-$720. The midpoint of this guidance represents an approximately 6% decrease from the midpoint of OpEx guidance in 2025. Looking at product revenue guidance and OpEx guidance, it's clear that PTC has the potential to reach cash flow breakeven in 2026, which would be a significant milestone for the company and position us for the potential of sustainable profitability in the future. In 2026, our main focus is going to be continuing the strong Sephience global launch momentum. We also look forward to continued progress in the votoplam Huntington's Disease Program, as well as to advancing a number of our early-stage R&D programs. We'll also continue to work to move the company towards reaching that significant cash flow breakeven milestone.
Let's dig deeper into this 2026 outlook, starting with Sephience. As we've discussed, Sephience is the foundational product for PTC's near-term growth. The launch is off to a really strong start, with over $112 million in revenue and over 940 patients on drug within just the first five and a half months, and every sign points to this strong momentum continuing into 2026 and beyond. One of the factors supporting the broad uptake of Sephience and its potential to become the standard of care for PKU is its highly differentiated dual mechanism of action. This dual mechanism of action allows for the benefit for the full spectrum of PKU patients, even those with more severe subtypes known as classical PKU. The first mechanism of action is Sephience's ability to serve as a precursor to BH4, which is the cofactor for phenylalanine hydroxylase, the enzyme implicated in PKU pathology.
Now, if one were to give BH4 itself, whether in the form of Kuvan, branded, or generic, it gets oxidized in the GI tract, and a lot of it gets excreted. So there's very little that is bioavailable to the cells. This is not the case for Sephience. Sephience is rapidly absorbed from the GI tract intact, actively transported into the cell, where it's converted into BH4, achieving very high levels of intracellular BH4. This is the reason why we continue to see in all of our clinical studies that any individual who has a benefit from Kuvan, either branded or generic, has a much greater benefit from Sephience. The second mechanism of action is Sephience's ability to serve as an independent chaperone, binding to the phenylalanine hydroxylase enzyme and stabilizing its shape, which then augments enzyme function.
It's this second mechanism of action that allows Sephience to have meaningful benefit in individuals with what is known as non-BH4 responsive mutations, such as those associated with classical PKU. The evidence for the broad, meaningful benefit that Sephience can provide continues to grow. We recently shared the results from the AMPLIFY head-to-head study comparing Sephience with BH4. In this study, as in all of our previous studies, we again see that any individual who has a benefit from Kuvan, Branded, or generic has a much greater benefit from Sephience. In this crossover study, Sephience provided an over 70%, 70% greater lowering in phenylalanine as compared to BH4. These results not only resonate with prescribers, but are also very important to payers and HTA authorities. We've also recently shared the continued evidence of Sephience's ability to allow for diet liberalization, probably the most meaningful endpoint for individuals with PKU.
In the Phe tolerance protocol of our APHENITY long-term extension study, virtually every subject was able to increase protein intake while maintaining control of phenylalanine. 69% of participants were able to reach or exceed the recommended daily protein intake for an individual that does not have PKU. Now, while these numbers sound great, and they certainly are great, perhaps even more meaningful are the stories we continue to see on social media of kids and adults with PKU being able to enjoy foods they never had before, like hamburgers and pizza and steak. We even see stories of moms who say for the first time they're able to have the same breakfast with their child. These are incredibly impactful stories and probably provide no greater endorsement of the potential transformative benefit that Sephience can provide for individuals with PKU.
We're also continuing to see important effects on other meaningful aspects of disease, including improved cognitive function and mood, as well as improvements in a number of different aspects of disease-related quality of life. Importantly, all these meaningful benefits are being delivered in the context of a consistent safety and tolerability profile, which is quite favorable. When one considers the highly differentiated Sephience mechanism of action, the evidence of meaningful treatment benefit across all age groups and disease severities, and the consistent favorable safety and tolerability profile of Sephience, it's clear that Sephience has the potential to address each key segment of the market, including individuals currently on treatment, those that have tried and failed existing treatments, and those that are therapy naive. Thus, the total addressable market is nearly the entire population of PKU patients, which is 17,000 in the U.S.
The evidence of early penetration into each of these segments thus far in the launch supports that physicians similarly see the potential for Sephience to be first-line therapy for PKU and become the standard of care. This market size, the significant remaining unmet need for PKU patients, even though there are approved therapies, and our commercial team's ability to execute all add up to a very large potential commercial opportunity for Sephience. In 2025, our launch efforts are really focused in the United States and in Germany, and as we move into 2026, we expect to significantly expand the global Sephience footprint. We're expecting to launch in Japan, in Brazil, as well as a number of other countries around the world, and will also continue to leverage early access programs where possible.
Our customer-facing teams around the world stand at the ready to be able to deliver Sephience to any individual with PKU who may benefit. In summary, the Sephience launch is off to a really strong start. We see no evidence of this momentum slowing as we move into 2026 and beyond. We also expect a number of activities from the votoplam Huntington's Disease Program in 2026. Votoplam is the leading oral disease-modifying therapy in development for Huntington's disease. Votoplam is a highly differentiated molecule that was discovered from PTC's splicing platform and was partnered with Novartis in December of 2024. In May of last year, we shared the results from the positive PIVOT-HD Phase 2 study of votoplam. The study met its primary endpoint with durable dose-dependent lowering of blood Huntingtin protein levels.
Favorable and dose-dependent clinical effects were demonstrated at month 12 relative to placebo, and at month 24, we demonstrated dose-dependent significant effects relative to a well-matched natural history cohort. In addition, at month 24, dose-dependent effects on NfL were also recorded. Importantly, votoplam continues to be demonstrated to be safe and well tolerated, with no evidence of NfL spikes. In the first half of 2026, we expect the next data update from the open-label extension of PIVOT-HD as all participants cross the 24-month time point. In the fourth quarter, an end-of-Phase 2 meeting was held with FDA where alignment was reached on the Phase 3 study of votoplam. This study can serve as a registrational trial or, in the context of accelerated approval, serve as the confirmatory study.
The Invest Global HD study will be a double-blind randomized controlled study with target enrollment of approximately 770 participants from over 30 countries. The primary endpoint will be change in the cUHDRS scale from baseline up to 36 months, and an interim analysis is planned for both efficacy and futility. Per the votoplam licensing agreement, Novartis will be responsible for the conduct and full funding of this study. At the end of Phase 2 meeting, we also discussed with FDA the potential for accelerated approval. As expected, FDA was supportive of the potential accelerated approval pathway given the significant unmet need for Huntington's patients. Based on the evidence of safety, early clinical effect, and biomarker effect, we remain enthusiastic about the potential for votoplam to be the first approved oral disease-modifying therapy for Huntington's disease. I'll now provide a brief update on the vatiquinone-Friedreich's ataxia program.
Vatiquinone is an oral small molecule with demonstrated safety and efficacy in both children and adults with Friedreich's ataxia. The MOVE-FA Phase 3 study demonstrated a significant vatiquinone treatment effect on the upright stability score, the most sensitive and meaningful endpoint for children and adolescents with Friedreich's ataxia for whom there remains a significant unmet need. In the long-term extension study from MOVE-FA, significant effect was demonstrated on slowing of disease progression with a 50% slowing of progression relative to a matched natural history cohort after three years. Similarly, in the analysis of the long-term extension of an earlier placebo-controlled study in ambulatory and non-ambulatory adults, vatiquinone similarly demonstrated a significant effect in slowing long-term disease progression. Following the CRL for the vatiquinone NDA, we held a type C meeting with FDA in December to discuss the potential next steps in the vatiquinone program.
Discussions with FDA are ongoing at this time as the agency has asked for additional data and information from the MOVE-FA study before providing guidance on the next steps. And finally, in 2026, we look forward to advancing our early-stage R&D programs. As we shared at our R&D day in December, we have a number of innovative programs from our two scientific platforms, RNA splicing and autophagy. PTC pioneered the field of oral small molecule splicing. The success of Evrysdi for spinal muscular atrophy and the early successes of votoplam for Huntington's disease validate the potential for the splicing platform to produce highly impactful and valuable therapies for diseases of unmet need. Our teams have made a number of learnings from the early programs that have fortified our position as the leaders in small molecule splicing.
Our learnings have allowed us to significantly expand the universe of potential small molecule splicing targets far beyond what was ever imagined. In addition, we've significantly enhanced our small molecule chemical library with what we consider splicing-centric chemical motifs. We've combined our decades of know-how, the expanded list of potential splicing targets, and our chemical library with advanced bioinformatics to develop PTCeq. PTCeq is a proprietary platform engine that will facilitate and accelerate the next set of small molecule splicing programs for a variety of indications. As we have discussed, we expect the splicing platform to be a source of both PTC-developed and commercialized therapies, as well as a source of strategic partnerships for non-core therapeutic areas such as oncology and larger neurodegenerative diseases.
The PTCeq approach has already yielded a number of exciting and innovative programs that will look to advance in 2026, including our MSH3 program for Huntington's disease and myotonic dystrophy, and earlier stage programs such as our Sickle cell disease program and neurodegenerative disease program. We also look forward to advancing programs from our inflammation and fibrosis platform. As we discussed at the R&D day in December, this platform includes a number of innovative programs with differentiated molecules that target aspects of inflammation and oxidative stress closely linked to a number of different disease pathologies, including our fibrosis-Parkinson's disease program, our NRF2 activation program, and our NLRP3 inflammasome program. In conclusion, over the last two years, we have transformed PTC into a strong, innovative, execution-oriented global biopharmaceutical company.
With our robust global commercial engine, including our foundational product Sephience, our innovative R&D platforms, including our RNA splicing platform, and our strong financial position with over $1.9 billion in cash and the potential to reach cash flow breakeven this year, we are well positioned for success in 2026 and beyond. Thank you.
Well, thank you. Thank you, Matt. Thanks so much for the presentation. Let's start off with the Q&A. For those who are in the audience, if you have any questions, feel free to raise your hand. For those joining us virtually, you can submit questions on the portal. Matt, I want to start off with just the fourth quarter number for Sephience. Where are we now in the launch? What is in line with what you expected before the launch? Were there any surprises now that you're looking back at the third quarter and the fourth quarter performance?
Yeah. Thank you, Brian. Let's make no mistake about it. This launch is off to an incredibly strong start with $112 million in just five and a half months. Now, we understood from the beginning that there was a significant opportunity for Sephience. As we've discussed and shared in the presentation, PKU in the United States, there's a population of approximately 17,000 individuals. While there are approved therapies, both have significant limitations such that there remains a significant unmet need for PKU patients. Our data package substantiates what we understood to be true from the mechanism of action, that we have the ability to provide benefit to the full spectrum, the full spectrum of PKU patients, including those with more severe forms of the disease as classical PKU.
I go back to this slide on mechanism of action, which nicely explains how, based on the ability to be a more bioavailable precursor, we're able to provide superior results than just giving BH4 alone. And then we have the second mechanism of action, which then allows us to address more severe mutations, including those that have the most severe genotype-phenotype scores. And then, importantly, this is an oral once-a-day therapy that's very well tolerated, easy to use, and has a strong safety profile. And I'd say the last part, Brian, is our team's demonstrated ability year over year to successfully commercialize, let's just say, more challenging products that don't have the efficacy differentiation of Sephience. So when you put that all together, we believe this could be a big opportunity, and we still do. And we're off to a strong start.
And look, we see no evidence of this launch momentum slowing. And I'd say in terms of surprises, I think the only—I'd say the only thing we're seeing now that maybe we didn't expect to see right away is the uptake by adult therapy naive patients. We knew that that's a significant unmet segment. We knew ultimately we would penetrate that segment, but I think we're seeing that earlier in the launch than we thought. And so when you think about those segments I highlighted, those on existing therapies, those that are therapy naive, those that have tried and failed, we're penetrating each of these segments.
And the fact that we're penetrating each of these segments, and we're hearing time and time again from physicians their desire to try every one of their patients on Sephience tells us that we're just at the beginning of this launch, and we've got a long way to go in penetrating each of these segments. And that's what gives us the confidence that this momentum is going to continue far into 2026 and beyond. And that's true for the United States. And as we continue to launch in more and more countries around the world, and that global footprint increases, again, that's why we say we see this as a very significant potential revenue opportunity.
Great. I think we should just go ahead and address one of the most frequently asked questions this morning from your press release. Can you walk us through your thinking behind the guidance that you have laid out for 2026?
Yeah.
I think there's certainly that question of, what do you expect coming from the DMD franchise for 2026? And certainly, there's also a question of whether there's a different way of thinking in terms of your way of guiding for 2026 versus how you guide it for 2025. So maybe just walk me through those pieces so that people understand how you're thinking about the guidance number as we're heading into 2026.
Yeah, absolutely. So look, we start 2026. What do we know to be true? We know that, and we fully expect continued momentum from the Sephience launch, continued linear growth as we're seeing in the Sephience launch. And we are also expecting to, unfortunately, see some continued erosion in the DMD franchise. Emflaza now has six, seven, or eight generics in the market. We're very proud of the revenue that we've been able to maintain, probably a level of revenue that people didn't expect. And similarly for Translarna. I mean, we had the withdrawal in Europe that happened at the end of the first quarter in 2025. And we've since seen an erosion of revenue not only in Europe, but in areas outside of Europe. And we fully expect then erosion to continue in the DMD franchise.
What I can't say for sure is how quickly that erosion is going to occur, what's the extent of that erosion, and also what's going to be the upward trajectory in the Sephience launch. I mean, we're five and a half months in. We're still relatively early. And I think that's why most folks don't typically guide for revenue, product revenue in the first year of a launch. We have to understand the dynamics better. But again, what do we know for sure? We see no signs of slowing in the Sephience launch. We see the evidence of the ability to continue to penetrate all those key segments and for this to be a very, very large opportunity. And we expect to see continued erosion in the DMD franchise. So the specific product revenue guidance is $700 million-$800 million and reflects sort of what the knowns and the unknowns.
As always, as the year goes on and we learn more and understand more, we'll refine guidance. You asked, how does this compare to last year? If you remember in 2025, we gave really wide revenue guidance because, again, we sat there at the beginning of the year expecting a significant decline in the DMD franchise that, quite frankly, didn't materialize as much as we thought. And if that's the case this year, then look for us to adjust revenue up. But again, we can only deal with what we know to be true, which is the strong potential for Sephience and the declining contributions of the DMD franchise.
And how much potential erosion could we expect from the DMD franchise? And how does that balance out with the - I think you said that there's no evidence of the launch momentum slowing. So how do we estimate both of those buckets?
Yeah. Again, we gave guidance of 700-800. I'm not going to be able to give you any more exact numbers. From Emflaza, we said all along that rare disease drugs typically don't fall off a cliff. They have a slower erosion. We're starting to see sufficient numbers of generic entrants that that could slow more. I don't know that anyone has heard of a drug not being licensed in Europe and still having the revenues that we're having with Translarna, which makes it really hard to predict what's going to happen next. As we said, we expect that could decline over time. We expect with generic entrants in other regions of the world, we can see continued decline. We don't have exact numbers on that. Brian, I think our range was the best effort to understand there's going to be puts and takes in the revenue. We're going to continue to do our best and get it, as we always do, to drive revenue as far and as fast as possible. And as we learn more, as we move into the year, we'll continue to refine the guidance.
And then when it comes to the fourth quarter number, can you talk a little bit about the holiday impact that you potentially saw? Was there a holiday impact? Because I remember that coming out of the third quarter, that could be one of the swing factors when we think about the number. So what did you see in the fourth quarter?
We did see impact. We did see some impact because for the obvious reasons, right? Clinics in the U.S. tend to close the week of Thanksgiving and the two weeks around Christmas and the New Year. We also heard that there were a lot of dietitians and physicians who said, "Look, there's so many meals and holiday things. This is not the context in which to introduce a therapy. We'll wait till the new year." So I think what makes the revenue performance in Q4 all the more impressive is it's in spite of those small holiday headwinds, again, which is why we're confident that we're going to continue to see growth and success in 2026 and beyond.
Okay. In your prepared remarks, you said that the payer mix is currently at 70%. I remember last year, you have guided around 65%-35%. That's the mix ultimately you think will land at for the Sephience franchise. Can you comment on the growth journey here? And are we still moving toward that 65%-35%? And when do you think we'll ultimately get there?
Yeah. The short answer is yes. We are still moving towards that two-thirds, one-third, which is the payer mix profile for PKU. And then, again, we'll expect the gross to net to move into that neighborhood that you typically see somewhere in the 20%-25% range. We're clearly not there yet, but that's where we think we'll be when we reach steady state.
Any questions from the audience? Okay. There is a question about how we should think about the trajectory. I think there's always that question of, is this a bolus effect? What's your take on that? I know that we only have two data points, right? And what's your take on that? I'm really curious how we should think about that.
Yeah. We have two data points that make a very nice line that we're intent on continuing that trend. Look, I think bolus means different things to different people. Did we see a lot of enthusiasm early on because there's a lot of individuals wanting to get on a therapy that could be safe, well-tolerated, and allow them to change their lifestyle? Absolutely. But to me, a bolus means you had a shot of patients in, and now it's going to just die down. And that's not what we're seeing at all. I think we saw a lot of early enthusiasm, and we're seeing continued enthusiasm. Look, I go back to this observation that we're seeing penetration into each of these segments in a really nice way. And we haven't given the exact numbers. I think it's still too early to do so.
But the fact that we're touching each segment now and we're seeing very high refill rates and patients staying on the drug suggests we have a very long way to go into penetrating each of these segments. And again, we're also hearing from so many physicians their intention to trial all of their patients on Sephience. That's becoming the first-line therapy. That doesn't mean all our patients are going to get tried on therapy tomorrow or in January. It means this is going to be a long go of continued penetration with what we're seeing is very high compliance and adherence rates, which makes us bullish about the overall opportunity over time.
On slide 17, you have this fantastic slide in comparing the geographical expansion of the Sephience franchise compared to 2025. Outside of the U.S., just when you look at the international contribution, which geographical region do you think will make the most sense for investors to focus on? Which one has the best potential to give you maximal growth potential?
I think, honestly, Brian, the strength is in the breadth and the fact that we have demonstrated capabilities in so many different countries and regions, so clearly, if you think about rare disease markets, the three largest countries are thought to be the U.S., Germany, and Japan. I think those will continue to be important markets for us, but we've also done very well with our other products in Latin America and in Brazil, in Russia, and the Commonwealth of Independent States, Middle East, and North Africa, and we've got teams in each of these countries that are well experienced in both regulatory commercialization and dealing with governments and payers, and that's why we're attacking this from two different angles.
One is, okay, where are countries where we can get approvals, launch quickly, and we think can be very valuable markets, such as the U.S., such as Japan, such as countries in Europe? Where can we leverage early access mechanisms where we can get patients on drug, maintain the narrow pricing corridor that we've already said very clearly is a priority while pricing and reimbursement discussions are ongoing? So, again, yes, there's again, I would say the most valuable markets are likely to be the U.S., and then Japan and parts of Germany and other areas in Europe. But the strength here is in the breadth and our demonstrated capabilities to really execute and commercialize therapies worldwide, and I'm very proud of what the company has been able to do over the years with Translarna. But I point to that and say that's not an easy product. The success that we've had with Translarna globally, we're putting Sephience into the hands of those same teams. That just bodes really, really well for the global prospects.
I have a question in my email inbox. That question is related to your Huntington's partnership. How should we think about the accelerated approval path? You could be at an early stage of understanding what the agency wants. But help us maybe paint a little bit about what we could expect?
Yeah, absolutely. I think the first point, which is probably clear to everyone, is that the agency is, of course, interested in leveraging these types of pathways for significant diseases of unmet need. We had talked about before this FDA meeting that our expectation was the neurology division, which has leveraged this pathway for other severe diseases like ALS, like Alzheimer's, would likely be open to doing so for Huntington's. And that's what we confirmed in our meeting. Now, FDA knows and we know that the next data readouts coming in the first half of the year. And I think both the PTC and Novartis teams remain similarly enthusiastic about the potential for accelerated approval and remain committed to trying to get votoplam to patients as quickly as possible.
We'll clearly undertake the analysis in the spring, look at the data that we have in terms of evidence of target engagement with the dose-dependent blood Huntingtin protein lowering, having evidence of placebo-controlled benefit in the short term, then being able to have evidence in the long term against natural history, which was a strategy that was pre-specified in the study protocol, bringing that all together as well, quite honestly, as the legacy of Evrysdi, which was another oral small molecule splicing therapy that came from our platform that's well known to the agency and being able to provide a safe and efficacious therapy for severe disease. So that's how we think about it. And I know the Novartis team's comments have been very clear. They're enthusiastic about starting the PROOF-HD study as quickly as possible. Why?
Because if we're thinking about an accelerated pathway, getting that potential confirmatory trial started is really smart. And in the event that that accelerated approval portal isn't open with the PIVOT long-term extension data, there'll be interim analyses in Invest HD that could allow for accelerated approval. And then, of course, just starting that study sooner gets to the finish line sooner if there's no accelerated pathway.
Great. Well, that's all the time we have. Thanks for joining us. Thank you.
Thanks very much, Brian.
Thank you.
Thank you so much.
All right, great. Welcome, everybody, to the J.P. Morgan Healthcare Conference. I'm Casey Woodring from the Life Science Tools and Diagnostics team, pleased to be joined by the management team of Billion To One. We're going to do the standard 40-minute slot, corporate presentation, Q&A afterwards. Not much more to be said. Oguzhan, kick it off.
Thank you, Casey. At BillionT o One, we are redefining what is possible with molecular diagnostics, with a technology for the first time achieves single molecule sensitivity and precision. We'd like to talk about our company through four pillars of differentiation that we believe make our company a different type of molecular diagnostics company. We believe that these four pillars are going to make us a category-defining company and the first one in our space to enter S&P 500. The first pillar, everything that we do, starts with a revolutionary single molecule next-generation sequencing platform that enables us to build category-defining products, products that are not just simply slightly better, but 10x better. We have a patented QCT technology that enables single molecule-level sensitivity. And we have been able to build differentiated products that move the field both in prenatal and oncology cell-free DNA testing.
With these products, we have been able to grow rapidly. We have grown from 0 to 334 million annualized revenue run rate as of the end of Q3 in just five years, and this positions us extremely well as this particular market exceeds $100 billion total addressable market just in the United States. We have been able to do this while also achieving superior gross margin profile. We have achieved already 70% gross margins, but this is despite the fact that many of our tests are still at subscaled ASPs, and we are using only one-fourth of our lab capacity, so we have significant potential for improvement for COGS per test reductions. Last but not least, we have been able to achieve all of this growth, this extremely rapid 100% year-over-year growth, along with GAAP profitability.
This is partially due to our culture of fiscal discipline and efficient operations that incorporate AI across all of our operations and again, as of Q3, we have been able to show GAAP profitability and positive cash flows with only 10% of the accumulated deficits of many of our public competitors, so let's delve into each of these pillars and see how we have been able to achieve something that is pretty close to unprecedented in molecular diagnostics. The first pillar is having a revolutionary technology platform and building differentiated category-defining products.
We believe that BillionT o One is ushering in the next paradigm in molecular diagnostics, similar to how the 1990s were really defined by PCR for primarily infectious disease testing and genetic testing, which was then supplanted in the 2000s by the Human Genome Project and the first attempts in sequencing that resulted in NGS focus on specific mutations, which was then changed in the 2010s as the sequencing cost decreased. The companies and scientists have been able to do deep sequencing for the first-generation prenatal and oncology cfDNA test. We believe that now and the future belong to ours because of our technology. cfDNA is truly a remarkable biomarker. It is like a microcosm of the entire body. The potential is truly limitless. But it is also an extremely difficult biomarker. Sometimes you might have to detect a condition just from a single molecule that is present in blood.
In that particular problem, noise is so much higher than signal unless we solve some of the fundamental problems. We believe that our technology, single molecule next-generation sequencing, is designed to unlock this full potential of cell-free DNA. Really, the technology that we developed here is really simple and elegant. Many companies focused in this space in analyzing the data differently. What we realized here is that at the time that the data are being analyzed, a tremendous amount of noise has already been included, incorporated into the data due to the amplification biases and sequencing errors. So the differences can only be incremental at that stage. We see this across the board.
Even though one example is early cancer detection, even though companies use many different methodologies, from fragmentomics to methylations to machine learning approaches to really anything that you can imagine, and the performance across all of these methodologies seem very similar, and that is really because at the time that you are looking at the data, the noise has already been incorporated, so the differences can only be incremental. What we do is that we design and add artificial synthetic DNA molecules called QCTs, quantitative counting templates, to the sample before any amplification and sequencing happens. These QCTs are designed to mimic the original sample, but they have a single molecule embedded identifier. This allows us to know exactly how much amplification happened across different parts of the genome, what are the errors that have been incorporated into the data so that we can remove that noise from that data.
I'd like to highlight here again with cfDNA testing. It is not the signal, but the noise that is important, especially as we get into lower and lower and lower limits of detection. When you are looking into MRD or early cancer detection, you have to look at things that are 0.0001% sometimes, very, very low, part per million levels. And at those levels, by looking at more and more locations, it's not really going to solve the problem, removing the noise floor. In many ways, our technology transcends the precision versus scale trade-offs of other methodologies. If you look at the precision versus multiplexability curve, on the one extreme, you have the Digital Droplet PCR, which has been considered the gold standard for confirmation assays. It is actually the only other technology that can get to single molecule-level sensitivity and precision. And it is used to confirm a finding.
But the problem is that it can really only be used for specific mutations in each tube of blood. Of course, that doesn't work for population-level assays. So we have next-generation sequencing at the very other end, which is almost infinitely multiplexible. But the precision of the measurement is so poor that you can barely distinguish one copy of a gene from two copies of a gene. That is why we have unique methodologies like MLPA for such a problem. But in cfDNA, you are trying to sometimes differentiate two copies from 2.01 copies. So there, next-generation sequencing has a significant limitation. By the way, this is exactly why there are so many tumor-informed MRDs. If you think about why someone does a tumor-informed MRD, it is because if you just look at the cfDNA, you wouldn't know what is noise and what is signal.
You wouldn't know a mutation that you find actually is not a true mutation, but a sequencing error or amplification error. So by sequencing the tumor first, we essentially solve that noise problem. And our technology solves that noise problem without having to sequence the tissue. Single molecule next-generation sequencing at our company really powers an engineering biology approach to molecular diagnostics. So everything that we do is really design-based. At the time that we develop an assay, we actually know what the performance is going to be because we are almost approaching it from a mathematical physical perspective. Every part of the assay development relies on quantitative data, which allows us to have a much more directed approach in improving our assays compared to more trial-and-error approaches that are quite standard in biology. So this approach allows us to build differentiated products on patented foundational technologies.
It allows us to have predictable accuracy. When we first built our single-gene NIPT products five, six years ago, we have predicted what the performance is going to be, and years later, after clinical studies, that was exactly what the performance was, but it also allows us to have these precise laboratory feedback loops. We can see at each step of the lab where there is even a 0.01% contamination or where there is a little bit of decrease in yield so that we can root cause them and we can continue to improve these processes to essentially optimal efficiency, so with this technology, we have approached prenatal and oncology diagnostics, and in both of these areas, we believe that current molecular diagnostics are limited. Prenatal testing has been primarily limited to chromosomal changes, and oncology has been limited by lower sensitivity and measurement noise.
We first went into the prenatal market where we faced tremendous competition. When we went into this market, there were so many companies that were essentially spending 10 to 1, sometimes 100 to 1 compared to the resources that we have had, but we have been able to grow here by essentially approaching the most difficult problems that others could not solve. This field really was focused on aneuploidy and microdeletion testing, and if you look at even microdeletion testing, the published results show sensitivities that are at the level of 75% or 80%. We have been able to move non-invasive prenatal tests from these million base pair changes all the way to single base pair changes that result in cystic fibrosis, Sickle cell disease, and other conditions that are important to screen and detect during pregnancy. It is very important to detect these conditions.
They are recommended for screening in every pregnancy by medical guidelines. But the current workflow is extremely problematic. This is actually arguably the most broken healthcare workflow in the United States healthcare system. Despite the fact that billions of dollars are spent in screening the mother to see whether the mother is a carrier for one of these conditions, we are missing more than half of the affected pregnancies due to the difficulties of testing the fathers for these conditions. And even if you can test the father, you are still at 1 in 4 risk, which results in which causes essentially for people to undergo amniocentesis. And you are still at only 1 in 4 risk here. So you would need to do four amniocentesis for each true positive result.
Unity is a single blood test that directly identifies the fetal risk just from a maternal blood sample, simplifying this workflow. We really believe that Unity will grow to be the new standard in prenatal care. Compared to traditional carrier testing, it actually matches the hypothetical scenario where every father is screened and every father is actually the true biological father. We know that just due to misattributed paternity, that is not the case. But if you actually look at missing paternal screening in this workflow, we are detecting three times as many affected pregnancies as the other current methodologies. This is such a large difference. If you think about quad marker screen, which preceded NIPT for aneuploidies, that difference was only 10%. And today, NIPT for aneuploidies is already the standard of care with millions of tests that are being done.
So that is why we believe that this is just a matter of time that this becomes the primary method to screen for these recessive conditions. Despite that, we didn't have the resources that many of our competitors had. We have grown to be the second largest prenatal lab in this space. And our ordering providers are our strongest advocates. So I have two quotes here that really, I think, highlight why providers choose us. So in the first one, we have always known you have the better test. But we just love the competitor rep. We needed to make this change for our patients. And we thank you for not giving up on us. That essentially shows it does take time. There are incumbents here that we are taking market share from. And it does take time.
But eventually, providers understand and believe that this is the best test for their patients. In the second one, it really highlights the unique value proposition. Unity provided a high-risk call for cystic fibrosis, and it was confirmed. I am 100% confident I would have missed it using the traditional carrier method because my patients' partners rarely get tested. So in a real-world patient case, and this is actually cited in the news, so that is why I can share this, we have so many of these cases that are really changing even the prenatal treatment paradigms. And this is the critical part. Great diagnostics changes even the treatment paradigms where this was an unknown carrier status for a patient and patient's partner. Unity showed high risk for cystic fibrosis for the baby. Diagnosis was confirmed via amniocentesis.
In this case, the prenatal therapy with the CFTR modulators was initiated at 27 weeks, even before the baby was born. This baby not only did not go through NICU, actually passed newborn screening, which is incredible that a cystic fibrosis actually this baby is affected. We didn't change the fact that this baby has two copies of cystic fibrosis. Because the treatment started early, the baby is doing so well that the phenotype-based newborn screening thought that essentially the baby didn't have cystic fibrosis. With oncology with Northstar, we are redefining liquid biopsy for cancer care. We have two complementary products here that solve oncologists' two most important unmet needs when they get a late-stage cancer patient. The first question that they have is, what therapy will work best? We have found that conventional liquid biopsies are missing actionable mutations.
But once the therapy starts, the question is, is the therapy working? And the problem here is that the scan-based treatment response monitoring is imprecise and can be significantly lagging. So our solutions here on the therapy selection side is an ultrasensitive liquid biopsy that detects 50% plus more actionable variants compared to other competitors, enabling better therapies. Not 5% or 10%, 50% more. That means that even if you look at a cohort of 5% or 10% patients in a single physician's experience, there is at least one or two patients that actually get a better result, a better therapy that do better because of the test that we provide. On the response monitoring side, we have a test that quantifies tumor at a single molecule resolution so that we can find whether the patient's tumor burden is increasing or decreasing months earlier than scans.
Again, without relying on sequencing the tumor to begin with. Everything here is tumor-naive, tissue-free. So 95% of our providers use Northstar Select and Northstar Response in tandem. Northstar Select to determine what therapy to use, Northstar Response as the baseline measurement. They follow up with more Northstar Response tests in a typical scenario until they see that the patient is no longer responding to therapy, at which point they can use another Northstar Select test to determine what the next treatment may be. So we have done a head-to-head clinical study. And we did not bias this study in any way. We told the physicians that they can use whichever test that they want to use, whichever panel size that they want to use. We don't have the largest panel size. They can use it on whichever patient that they typically use it for. So just standard of care testing.
We just asked on the same day that they are using one of these tests to send us another sample as well. And we reported our results. And these competitors reported their results. And we show that in this prospective head-to-head clinical study that we detected 51% more SNVs and 109% more CNVs. And on the Northstar Response side, we have shown that in an immunotherapy pan-cancer cohort that we are able to differentiate who is responding to therapy or not by more than two years. This is not an MRD study. This is a late-stage cancer study. In a late-stage cancer setting, having a two-year separation is pretty remarkable. And this is a true real-world patient impact case. This is a patient in their 30s diagnosed with stage 2 rectal cancer. Provider ordered tissue next-generation sequencing. This provider actually did not believe in liquid biopsies at all.
This was MSS negative, proceeded with chemotherapy. There was no targeted therapy or other therapy that they could find. One of the actual nurse providers in this case advocated for this patient, saying that they should also send a liquid biopsy. Even though the provider didn't, physician didn't believe in liquid biopsies, they agreed to send as a last resort a Northstar Select test. We have found from blood, when tissue could not identify it, from blood, an MSI-High status allowing the patient to start an anti-PD-L1 therapy, essentially an immunotherapy. Treatment changed from chemotherapy to anti-PD-1 therapy for this case. In clinical studies, this has been shown to be actually, in this case, 100% curative. This patient might have died in a year or two and now has a huge chance for being completely cured.
By the way, this physician now believes so much in liquid biopsy that's sending a liquid biopsy on every single patient. With ordering providers being our biggest advocates, we have been able to grow rapidly. Our test volume grew 51% year over year. This is despite the fact that in many geographies, we don't have full coverage. As we grow our sales team, we continue to expand our growth for our test volume. One of the other drivers of growth, and as you can see, it has been almost accelerating over time, is really due to the fact that we have been getting more and more in network as our test volume increases. It is very difficult, especially on the prenatal side early on, when you are out of network for physicians to use your test.
So as our test volume increases, we become more in network. And we have now exceeded 250 million in contracted lives. And as our in-network status increases, we are able to convince more and more providers and more health systems to use us as their primary screening test. So there are multiple levers for further commercial growth. Across prenatal oncology combined, we only have about 20% sales force size of many of our competitors. So as we grow our sales team, we expect this to result in further growth. But even our existing sales reps are adding about 100 new clinics every quarter on average. So that is going to result in even further growth. And once we get one physician within one clinic, we see growth in those clinics over time. So 100% net test retention for the majority of our clinic cohorts.
Our ASP is rapidly growing as well. We have reached more than $500 per test ASP as we increase our covered contracted lives and as more and more Medicaids are loading and covering Unity carrier panel PLA code. We believe that our ASP can continue to increase further with expansion of contracting and coverage. Really, the three pillars of ASP is coding, contracting, and coverage, and we actually have room for improvement in all three of these areas, so on the coding side, we have been able to achieve 70% gross margin despite the fact that we don't have ADLT pricing for any of our tests, so when and if we decide to go through FDA approval, that is going to result in a significant incremental increase for especially our Northstar Select test that can result in a significant improvement in our ASPs and gross margins.
On the contracting side, even though we are around 235-250 million in contracted lives, there is still room for growth. And every quarter, we are signing 10, 15 different contracts, each of which incrementally increases our ASPs. But we also have a lot of opportunities for coverage. About 70% of our oncology tests are response. And we don't have Medicare coverage for our response tests. That is something that we are working on this year. So as we get more and more coverage for some components of our prenatal tests as well as our core response tests, we expect our ASPs to continue to increase. So we are seeing with the growth of ASPs and growth of test volumes, we have seen exponential revenue growth, 0-334 million ARR in five years. And this is true across both prenatal and oncology.
We have been able to do this with superior gross margin profile. As I mentioned, we have achieved 70% blended gross margin with continuing expansion of our ASPs and continuing decrease in our cost per test. Finally, we have been able to achieve GAAP profitability, something that eludes many of these companies. Even though we are still early in our growth journey, we have achieved profitability with 10% of the accumulated deficits of many of our other public competitors going from negative almost 500% in operating loss to positive operating income in year-to-date up to Q3 2025. We have guided the full year 2025 and full year 2026 to be GAAP operating margin positive as well. This is really due to a multi-prong approach. Every team is expected to increase their productivity every single year.
With reimbursement, as we increase our claim number by 50%, we are increasing our headcount only by 15%. Same with patient billing. In engineering, millions of lines of code are AI-generated and accepted by senior engineers. More than 30% of the code in our code base is AI-generated. In COGS, there is no single silver bullet. We have completed more than 100 different COGS projects, each of which might decrease our COGS by $0.50 or $1. But in aggregate, it has made a tremendous impact in our COGS per test. We continue this 20-mile march in decreasing our COGS and increasing our ASPs. Also, as I mentioned, we are only using about one-fourth of our lab capacity today. As we continue to increase our test volume, this is going to result in improvements due to fixed cost per test coming down.
But it also creates labor efficiencies. So historically, we have been able to achieve 4X higher test volume with 2X labor cost. And we believe that we can continue this trend as well. And we are just getting started across our products, across our growth, across our GAAP profitability. So when we projected $65 million of revenue in 2023, that was up from $28 million in the previous year. And it seemed very aggressive to really all of our investors. We have been able to deliver $72 million in that year. And then we have projected $125 million for the following year as a private company. And almost no one believed us, even the investors that actually invested in our Series D round. And we have been able to deliver $153 million in GAAP revenues in 2024.
Last year at J.P. Morgan, we have projected for 2025, $220 million, and for 2026, $330 million for our revenues. For 2025, just a few weeks ago, we have guided to the $293-$299 million for our revenues. And we expect to be easily in the upper end of that range. And for 2026, we are initiating and expanding our previous projections to $415-$430 million. So we have had a history of being able to significantly beat our projections. But I wanted to show $330 million here so that we are not expected to beat it by the similar 40% range here. So we believe that our single molecule next-generation sequencing platform will drive our continued and rapid growth in $100 billion markets. We are already capturing significant market share in the prenatal market. And we are the second largest prenatal lab here.
In oncology, we launched therapy selection and therapy monitoring products that address a $20 billion U.S. market. We expect to expand to MRD this year, which is going to be a $30 billion potential opportunity, and finally, we believe that our technology solves some of the fundamental problems of early detection. In MRD, it is okay. It's possible to do a tumor-informed MRD, but in early detection, that is not possible, and the fundamental problem of early detection is actually the same as tumor-naive MRD, and we believe that we have the really only technology that can address that fundamental problem and achieving very high sensitivity for early-stage cancer detection, so as a summary, we are transforming healthcare one molecule at a time, one patient at a time, with a unique technology that achieves single molecule-level sensitivity that has allowed us to build unique and paradigm-changing products.
We have been able to grow exponentially even as we reach scale, and we have been able to combine that with extremely efficient operations to have emerging GAAP profitability. As I said at the beginning of my presentation, our long-term goal, our five-year goal, is to build a category-defining company and become the first company in our space to enter the S&P 500, and with that, I'm happy to answer any questions that you might have.
All right. Great. Yeah. Maybe we can kick it off just on the 2026 guidance you provided, specifically what sort of growth you're expecting between prenatal and oncology in 2026. And just curious to hear what you think is what are potential upside drivers for the 2026 numbers you've laid out today.
So we are not dividing the guidance for prenatal oncology just yet. We will be providing every quarter our prenatal oncology revenues. But of course, oncology being at a lower base, we expect oncology to grow much more rapidly than our prenatal business from a percentage year-over-year perspective. And we are already seeing kind of some of the earlier indications of that.
Okay. And then on the bottom line, the 2026 guidance for GAAP operating income, you only noted that you're expecting that number to be positive. So maybe just how should we think about the drop-through of gross profit dollars to the operating line in 2026?
I'll let Ross handle that.
Yeah. I think in terms of the drop-through, we're not going to be real specific in terms of what level of operating income we expect in 2026. I think there's still various areas of the business we may choose to invest in. But we do want to operate with GAAP profitability both in the near term and the long term. I'd expect our gross margins will probably be at similar levels in 2026 to where we ended up in the latter part of 2025, high 60-ish% level. But it's going to depend on where we really invest in SG&A and R&D as to how much drops to the bottom line. But we think we'll be solidly GAAP profitable on an operating income basis.
Okay. And how's the sales force build-up progressing? What was the rep headcount at the end of 2025? And does your guidance for 2026 really depend on hiring a specific number of sales reps?
Our guidance doesn't depend on hiring a specific number of sales reps because we believe that we have the sales reps that are necessary to be able to provide this level of revenue. That said, we will continue to grow our sales team both on prenatal oncology side to be able to set us up well for not just 2026, but 2027 and beyond.
Maybe a couple on prenatal. Can you discuss your growth strategy going forward to maintain the strong growth profile you've seen the last few years, particularly regarding the opportunity to penetrate into health systems and your land and expand approach that you've talked about before?
We have been able to deliver this level of growth despite the fact that we have been really the only company in our space that didn't have Epic integration. This is an area that we are now investing in. And we are an Epic partner. So we believe that this is going to be a big driver of health system growth. We are continuing to see rapid growth in our prenatal business. That is why we have been able to provide this guidance. The momentum in our both prenatal and oncology businesses are just incredibly strong. So we believe that this is a relatively conservative good guidance to start the year.
Then on the competitive front, as other players in the prenatal space start launching competing offerings to fetal risk screen, can you just elaborate on BillionT o One's data moat, its importance to continuing to win share here for you guys, and then really the core technological differences that will help BillionT o One maintain its competitive edge?
I think it comes down to two primary things. One is essentially having a technology that actually does not need partner testing. We believe that a lot of the competing products, even though they are being framed in the same way, they are primarily, especially on the clinical study side, being used after partner testing is done. That is a very different modality, very different type of using the test. And those tests essentially do not pinpoint the actual causal variant. So even apart from the data moat where we have really large clinical studies with, in some cases, more than 100,000 pregnancies that we have conducted here, the easier thing actually to explain to the provider that everyone else is doing a correlation. They are not really finding the causal variant. And we are finding the causal variant. That is a very simple thing to explain. That shows essentially why our technology is superior to others.
Maybe moving on to oncology here, the last few minutes. You've seen impressive growth in the competitive therapy selection market. Just can you discuss what's driving growth there and the importance of the head-to-head data that you have with Northstar Select just in terms of winning new accounts?
Certainly. I mean, 50% is such a large number that you can go to a provider who is using liquid biopsy and tell them that here's our data. But everyone has their own marketing claim. Everyone claims something that is impressive in oncology. We can tell them, and we have told them, and this is a great commercial strategy for us, is to offer that opportunity for head-to-head in their clinic. And they only need to test on 10 head-to-head samples to be able to find that there is one or two patients that have a much better result with our test. And that has been one of the key strategies where many of these providers who used to be really big advocates for other liquid biopsies to switch to our tests.
Okay. And then maybe just one on MRD. You've indicated in the past that your test will outperform other tissue-free tests and could be comparable to tissue-informed tests. So what's the pipeline for data generation for your MRD test? And which indications are you considering targeting first?
So we are generating data. We are going to be doing clinical studies across all major cancer types. But the first available data is going to be in colorectal just so that it would be much easier for providers to compare results head-to-head because that is one area where everyone else has a lot more data. It is not because a tumor-naive MRD is particularly beneficial for colorectal cancer. In fact, colorectal cancer is one of the few cancer types where there is plenty of tumor that can be sequenced. But we believe that that is going to make it clear that this is as good as, if not better, than the leading tumor-informed assays.
Okay. Maybe on a related note, just you've achieved impressive margin profitability at a much smaller scale compared to competitors. What key organizational differences have enabled BillionT o One's industry-leading profitability? And can you discuss any ongoing projects aimed at further reducing COGS, particularly in oncology as you expand into MRD, for example?
I mean, I think I would encourage everyone to read the founder's letter in our S-1 because it really highlights that we really care about every dollar that we spend. There is a really big focus on productivity. But part of it is also how we approach R&D and product building. While many other companies are spending hundreds of millions of dollars in clinical studies, we are paid for those clinical studies. When one of the biggest institutions in the world looks at many different competitors and chooses us and decides that they would rather use us and pay us for those clinical study tests as opposed to us paying them millions of dollars for that opportunity, is one of the biggest differences as well. When you have category-defining products, everyone wants to work with you. You can generate clinical study data and other important data in a way that is so much more efficient than many of our competitors.
Got it. Well, it looks like we're at time. Thank you to the BillionT o One management team for joining us today. Thank you for all of you for coming to the conference. Have a great rest of the week.