Good morning, everyone. I'm Subbu Nambi. I lead the Life Sciences Tools and Diagnostics team at Guggenheim. Thank you for joining us today for our inaugural Healthcare Innovation Conference, Day 2. It is my pleasure to be hosting the team from SOPHiA GENETICS. Joining us are Jurgi, CEO. George, CFO. And Kellen, Head of Strategy and IR. Thank you for being here. We'll start with a presentation from the SOPHiA team and then move on to Q&A.
Thank you very much, Subbu, and thank you for the invitation. Welcome to the ones who are listening to us today in person or remote, so I'm going to start with a presentation for the ones who don't know so much the SOPHiA story, and then we can go deeper in our current performance with Subbu, so I first let you read our traditional cautionary notice, so I'm Jurgi Camblong. I'm the CEO and one of the co-founders of SOPHiA GENETICS. SOPHiA GENETICS was founded in 2011 in Switzerland with the ambition to democratize what we call data-driven medicine. We put our product, which is a cloud platform, in the market in 2015. And since then, we've got great global adoption. Today, we help over 700 hospitals and labs around the world in the practice of precision medicine across 70 countries.
All in all, we've helped about 1.8 million genomic profiles computed, over 30,000 on a monthly basis right now. When you think about precision medicine, there have been a number of trends that I think are being pushing for more data complexity and more need of cloud and artificial intelligence. Definitely, oncology and rare hereditary disorders remain very complex diseases where there will be more and more data that are being produced so that we can better diagnose and treat patients. In particular, I would say that over the last 10 years, genomics has been basically paving the way to this precision medicine, data-driven medicine space.
As we were seeing in 2011, 2015, when we launched the platform in the market, these new technologies being adopted for better diagnosis and treating of patients, we would foresee as well the need of a platform that will be in the cloud powered with AI to support the compute of the data and help basically decentralize precision medicine around the world. So to address that need at SOPHiA GENETICS, we've been super focused on building a technology that, as I said, we put in the market in 2015. It's about $400 million we invested in. As I guess we all know now, building algorithms is expensive. But SOPHiA did it in a very pragmatic way, working with customers in the field of precision medicine to expedite adoption. In our platform, we can cover different data modalities. Genomics is key.
But on that one, we've built a lot of algorithms that are proprietary. The second one is radiomics, which is very important to follow patients longitudinally, in particular in cancer. And the last one being multi-modality. Today, for the sake of our financial performance, I'm going to mainly focus on genomics, genomics being core to our activity. But I wanted you to know that our platform has been built so that we can scale with additional data modalities. So this slide, I think, very simplistically and nicely explains how we serve customers around the world. So I remind you about 700 academic centers, reference labs, comprehensive cancer centers that are using SOPHiA DDM today to compute in our platform over 30,000 genomic profiles a month, 80% of it being oncology and 20% rare hereditary disorders. So our customers are equipped with sequencers in-house. They get samples.
They are doing the sequencing in-house. Then they push the data through the bandwidth with obviously very secured protocols, which hit our platform, SOPHiA DDM, which is in the cloud, mainly in Azure, and where our algorithms are going to investigate the data, identify signals from noise, identify the mutations, annotate them, and make the classification of mutations easy so that the pathologist or geneticist can take medical decisions quickly, and we're being paid on usage, which is a very good model to remain customer-centric, given that the better you support your customer, the more the volume will be growing in the platform. The less you support well your customer, the less chance you have to be successful, so I think this model is something that has been very important in building up the DNA of SOPHiA.
Speaking about customer-centricity, I said we cover two of these areas, so oncology and rare hereditary disorders. And by working very, very closely with over 700 hospitals and labs around the world, we've built a very complete portfolio of applications that can enable hospitals to do diverse data compute and precision medicine testing in our platform. So most of the activity, as you will see, is in oncology. And part of the activity is, for example, supporting customers doing hematology-oncology testing, solid tumor testing, liquid biopsy testing, and so on. But for us, what's very important in our strategy, which is a pure land and expand strategy, to build a portfolio that would enable us to grow in volume and application as customers would adopt new precision medicine applications and run the samples in our platform.
Speaking about numbers, you have a sense here of how the number of genomic profiles computed within SOPHiA DDM have evolved year-on-year. So as you can see, in the early ages, it was very much around rare hereditary disorders and around hereditary cancer, which is what people were producing most in terms of NGS data. And over time, I think our numbers have been demonstrating how precision medicine has evolved and matured, with more data being produced in as well somatic applications, hematology-oncology, solid tumor, and more recently, liquid biopsy. At SOPHiA, while we are, I would say, very advanced in technology, we like to follow as well trends where clinical utility has been demonstrated. And hence our excitement today for liquid biopsy, which is new to us. And in Q2 this year, we launched an application that was running at Memorial Sloan Kettering.
And we industrialized it in our platform. And while we launched this application only in Q2, we already signed 18 customers around the world in 10 countries, five continents, and implemented five of them. And we have today a pipeline of 50 new potential customers that may sign for this single application on liquid biopsy for SOPHiA DDM. While we're very excited about the potential growth in liquid biopsy in the space of precision medicine and within our platform, we're very excited as well on solid tumor, where this quarter we launched the counterpart of MSK-ACCESS, which is called MSK-IMPACT. So MSK, in addition to developing in-house liquid biopsy testing capabilities, have developed a very sophisticated CGP, comprehensive genomic profiling application, that we launched into the market this quarter, and where we start to see already a lot of demand.
So these two applications, plus the wave of decentralization we're seeing ahead of us, should continue to fuel our growth. In that vein, so I want to remind everyone that we're already global and that as precision medicine is being deployed in new regions, I think we're very, very well positioned to as well grow with that. As an example, we recently as well signed Tennessee Oncology, which is one of the biggest health networks in the U.S., which I think demonstrates that the utility of precision medicine, data-driven medicine, in-house data production is becoming prime time. And we're very eager about that trend. To end on the technology side, I would like to give you a flavor of where we invest. So for us, accuracy is super important. All the clients we work with are either in the clinical market or on the biopharma market.
When it comes to the clinical market and genomics specifically, all our clients are CLIA/CAP compliant. So accuracy, ability of identifying mutations, biomarkers with high sensitivity, specificity is a regimen we apply to any data modality we are computing. And this is what has been driving, I would say, the adoption of SOPHiA DDM. Beyond that, obviously, scalability is important. As we all understand, there will be more and more data in precision medicine. Sequencers are getting bigger and bigger. More and more genes are being analyzed. More and more biomarkers need to be investigated. And hence, SOPHiA has been anticipating that. And not only today, as I told you, we're in the cloud, but we have a privileged and maybe unique partnership with both NVIDIA and Microsoft to scale data compute capabilities in our platform.
Beyond that, security is something that is very important, where I think SOPHiA, being maybe born in Switzerland, has been very good at data privacy and interoperability, and all these investments, I think, are demonstrated in their value by the NPS score we got from our customers, which is 75, which is extremely high, and demonstrates that we delight customers and that by delighting customers, we every quarter compute more genomics profiles and multi-modal profiles in our platform. Speaking about data, I would like to end by highlighting that while our primary market and the one where we started is clinical, where basically the bigger your network, the more data you're exposed to, the smarter become your algorithms, the more you can support new customers and new applications.
We've been positioning ourselves as well pretty well strategically on the biopharma side, which is eventually a topic we can touch in our Q&A. To end, we just published our Q3 2024 numbers. Revenue was $15.9 million. Gross margins were very strong, over 73%. Number of data we computed, so per patient analysis, grew as well significantly with 91,000 genomics profiles computed in the platform for the quarter. Probably most important, our discipline to sustainable growth was, I would say, shining with an improvement in cash burn on 39% year-on-year. Today, we have over $95 million in cash. With all the opportunities we're seeing ahead of us, including liquid biopsy, comprehensive genomic profiling, biopharma, we're very well positioned to grow sustainability and reach profitability in 2026. With that, Subbu, thank you very much. We're ready to take any of your questions with George.
Thank you for the great overview, Jurgi. Maybe to start off, given George, it's week two maybe here for you.
Yes, exactly.
So we would love to hear a little bit more about your background and what got you excited about SOPHiA.
Sure. I actually was with NeoGenomics for 12 years. In a way, NeoGenomics' mission was to democratize testing. NeoGenomics led the TCPC model moving FISH, immunohistochemistry, flow cytometry out into the community. SOPHiA GENETICS is basically doing the same thing with next-generation sequencing. You're seeing this gain. Clearly, we've seen over time the trends move toward democratizing testing. It is just going to continue. A lot of these institutions, yes, they could go out and buy a box. But I think when people really realize how difficult the back end and the analytics is, they probably could do it. They're going to trip, stub their toe, and whatever, versus using a partner like SOPHiA to have them walk through the process, get it stood up quickly, and actually be able to do NGS and deliver better patient care.
Obviously, now they participate in the economics as opposed to sending it out, so I think you've seen the success, obviously, over 700 customers, and it really is a global entity as well, and you can see just internationally, too, in some markets finding people with molecular PhDs and backgrounds, and it's very challenging in some markets, so to be able to have that partner that can really walk you through the process and lead you to success much faster than you'd be able to do on your own is really compelling, and clearly, the tailwinds are behind this company. The opportunities in data, I just think, are tremendous, and back to democratization, I'll just do one last point. As you talked about the Memorial Sloan Kettering liquid biopsy test, if you think about today, what happens?
Your cancer center or your hospital, they'll send that on to Guardant and lose a day. If it's the weekend, maybe they'll lose two or three days in turnaround time. They see no economics. Everything's completely out of their hands. And now, to actually be able to do world-class liquid biopsy themselves, it's better. It's faster patient care. And obviously, they're able to participate in the economics. So using a partner like SOPHiA is really compelling across the board. And that's what's fueled the double-digit growth.
Great. Welcome, George. I look forward to long-standing collaboration.
Likewise.
First, Jurgi, coming out of earnings last week, how are you feeling about the rest of 2024 now that with three key results under your belt?
Yes. So in the last quarter, the clinical volume grew nicely, right? So excluding COVID, we grew 17% on volume, 12% on revenue. And in the meantime, we've been highlighting since Q4 last year that we've been signing a number of new logos, which was significantly more than what we did last year. So on a quarterly basis, right now, we sign about 20 logos. And we implement as well more customers in routine than what we were doing in the past. I think in Q3, we implemented 22 customers in routine versus 14 Q3 2023. So all this is basically giving us a lot of confidence on the performance of Q4. And then on the biopharma side, so this has been definitely a challenging year for SOPHiA.
But I think for many players in the space, as you well know, the budgets on the pharma side have significantly changed in terms of focus. And so we took measures in April this year on basically refocusing our activities on rather repeat smaller deals on the biopharma rather than on big biopharma dollars that would be not easy to sign because of the new constraints. And I think this is working well as well. And in Q4, we're quite confident about our ability to execute upon the pharma deals we signed to hit the guide, basically.
Perfect. And George, now that you have joined at a high level, given it's week two, but has your guidance philosophy or approach changed as a management team, some from learning of SOPHiA's history and some from your background at NeoGenomics?
No, no. Certainly, as I said, I'm very excited about the SOPHiA team. I think there's a real culture of passion in the company that you just see even just coming in for a few days. People really are committed to the company and the organization as well as the mission. So very, very positive, I think, inside. And clearly, the company has had some nice growth. But I think right now, if you look at where it's positioned in the market and all of the things that are coming together in terms of data and AI and NGS moving out into the community, it's really very, very well positioned. But yeah, I do think people underestimate how important culture is in an organization.
To have the co-founder of the company still involved and his passion is infectious in the company, so you do see people are very committed to the company.
Would your approach be guided conservatively, or?
Yeah. I mean, at NeoGenomics, I think my CEO said out of 48 quarters, we had three that we missed on. So I think you had a pretty good batting average. So I think we'd like to try to maintain that and try to continue that at SOPHiA. And obviously, we're looking at 2025. And we would much rather set reasonable guidance. And then obviously, hopefully, we can outperform that.
Great. We had the opportunity to attend the MSK-ACCESS event that you had discussing both MSK-ACCESS and MSK-IMPACT to clinical labs around the world. Could you provide the audience with some additional background on these two MSK-developed tests and the recent updates and launch development of these assets on the SOPHiA DDM platform?
Yes, sure. With pleasure. So as I said, right, it takes some time so that clinical utility of some applications in precision medicine are being proven. And so I think while there are being super successful companies in liquid biopsy, for most of the hospitals, understanding that they could use liquid biopsy in routine practice took some years. And so among the hospitals that were pioneered, you are definitely Memorial Sloan Kettering, who has been doing liquid biopsy testing on an application called MSK-ACCESS, about 150 genes, tumor-normal, so which enables you to have more resolution for now a number of years, tested thousands of patients, super well-published assay and test. And so about two years ago now, MSK was thinking about finding a partner to decentralize this application, this test, in a way that would enable them to impact on further patients.
They initially, and you heard that in our event, so it's public, they initially had a prime partner, which was more like a central lab, and actually, while they did a concordance study, they realized that the concordance between samples, the same samples being tested at MSK and in the central lab was only 60%, and so they were a bit, I would say, sour about the ability of being able to deploy that outside MSK, then they get to know us, and they get to see how our technology was working, so in a year's time, we've been indeed able to industrialize and scale MSK Access in the platform, which is a very sophisticated asset, and now deploy that around the world, including with some support from pharma, in particular AstraZeneca, and we have already signed 18 customers since Q2. We launched the application in Q2.
Five are implemented, including in the U.S. BioReference Labs and Tennessee Oncology. And we have 50 new logos to sign in our pipeline. So I think that's extremely positive. And following the success with MSK-ACCESS in liquid biopsy, as you may remember from our days in New York, we as well industrialized a counterpart for solid tumor testing, which is called MSK-IMPACT, a 500-gene assay solution, probably the most modern backbone in the market, which has very important biomarkers like MTAP, which is a biomarker that is very important for both Gilead, BMS, and Amgen pipeline. And as well, the tumor-normal testing brings a lot of technological benefit to the people that are going to adopt that. And we see a huge demand now as well, I would say, around the world for CGP testing, which was not necessarily the case three years ago.
Perfect. And you cited longer onboarding times for some newly signed users to DDM. Are they MSK Access-related, or could you just give us a little more about this headwind and what's your expectation moving forward for onboarding?
Yes. So absolutely. So I would say, you know, whenever you have waves of innovation in the industry, and especially in academic and private labs, it takes a bit more time for them to go through proficiency testing, right, as I was commenting. Or our customers are a clear-cut lab, so they need to go through proficiency testing. And if it is on the bread-and-butter applications and bread-and-butter sequencers, it's easier. But more recently, you had customers adopting new sequencers. So they need to master them. It takes a bit more time to do the implementation. And then when it comes in particular to MSK-ACCESS, having to do these tumor-normal testing would require a specific type of samples. And when we started, actually, those hospitals didn't have the samples, right? So I think this is now in our backlog.
We've been leveraging on our network to get samples where we had the tumor normal to expedite the implementation of the new centers adopting within SOPHiA DDM MSK Access. And now, again, leveraging on the new adopters, we can get access to samples that can then be used by the new adopters for their proficiency testing.
So the idea is in 2025, this gets significantly better in SOPHiA?
Yeah, it will be significantly better. And I would say from second half of 2025, you should see as well some benefit from MSK-IMPACT. And something important to share is that these two applications are sophisticated. As you have understood, Subbu, our model in the clinical market in the end is very simple. It's volume multiplied by ASP. And these two applications have an ASP that is significantly higher than our average ASP. So this should as well favorably impact on our overall revenue.
Perfect. With two minutes left, I want to ask a question. Three years from now, what will investors wish they realized about SOPHiA today?
Three years from now? I think they will realize that actually decentralization is being accelerated and that you have more and more healthcare network systems that want to do in-house testing to the point of George, so that they can have quicker turnaround time, build expertise, but as well have more of the economics on their side. The second one, I think people will realize the importance of networks to be able to support the biopharma industry. The biopharma has been very focused in precision medicine on anything which was pre-approval of a drug. I think now their focus is very much moving to post-approval and market access. I think people will realize that having SOPHiA being deployed around the globe in 70 countries and at the time of fully 1,000 hospitals will be an infrastructure that is absolutely required for the biopharma.
And the last one, which we haven't discussed, is the beyond genomics, the multimodal benefit, if you like. I think in particular in the pharma, but as well for some cancer types like breast cancer, lung cancer, kidney cancer, people start to realize that by combining genomic data with radiographic imaging, one can start predicting outcome to very expensive treatments like immuno-oncology. And I think by then we would have demonstrated the clinical utility of that.
That's awesome. Thank you so much, guys. Thank you for joining. Thank you, guys, for attending the talk. Hopefully, this was helpful.
Thank you, Subbu. Thank you very much.
Thank you.
Thank you.