M&A Announcement

Jun 1, 2021

Good morning, ladies and gentlemen, and welcome to Veracyte's conference call regarding its pending acquisition of Halyodex announced earlier today. As a reminder, today's conference call is being recorded. I'd now like to turn the conference over to Tracey Morris, Veracyte's Vice President of Corporate Communications and Investor Relations. You may begin. Thank you, Josh. Good morning, everyone, and thanks for joining us today to review and discuss our pending acquisition of PalaeoDx, which we announced earlier today. With me today are Bonnie Anderson, Veracyte's Executive Chairwoman Mark Stapley, Veracyte's Chief Executive Officer and Vincent Ferre, Heliodex's Chairman and CEO. I would also like to point out that today is Mark's 1st day as CEO of Veracyte. Welcome, Mark. Before we begin, I'd like to remind you that various statements that we may make during this call will include forward looking statements as defined under applicable securities laws. Forward looking statements include those regarding our pending acquisition of Heliodx, the expected timing and completion of the acquisition and our ability to realize the expected benefits of the transaction, statements regarding future plans, prospects, strategy financial goals product attributes and test pipeline drivers of growth expectations regarding product manufacturing biopharma collaborations reimbursement and other statements that are not historical fact. Management's assumptions, expectations and opinions reflected in these forward looking statements are subject to risks and uncertainties that may cause actual results and or performance to differ materially from any future results, performance or achievements discussed in or implied by such forward looking statements and the company can give no assurance that they will prove to be correct and will not provide any further updates on these forward looking statements. Please refer to our June 1, 2021 press release and the risk factors included in the company's filings with the Securities and Exchange Commission for a discussion of important factors that may cause actual events or results to differ materially from those contained in our forward looking statements. Our announcement regarding the acquisition of HALEODX is available on our website under Press Releases in the Investor Relations section. A presentation is also available on our website under Events and Presentations in the Investor Relations section. I will now turn the call over to Bonnie Anderson, Veracyte's Executive Chairman. Thank you, Tracy, and thank you, everyone, for joining our call to discuss our pending acquisition of HALEODX. The acquisition will further strengthen our long term growth by providing key strategic capabilities that will enable us to execute on our powerful vision of improving outcomes for patients all over the world at every step of their journey. Mark and I look forward to welcoming Vincent and the HalyoDx team to Veracyte and are thrilled about layering HalyoDx's business into the company. The acquisition of HealioDx will be a key piece of the strategic puzzle that will enable us to execute on our powerful global vision. When we acquired the global rights to the incredible nCounter platform in 19, we knew that we would need to bring under our control the ability to develop and manufacture IVD test kits and we would need to establish a European headquarters. We're really excited that HALEODX will give us both of these important elements for our business. HALEODX with its development and manufacturing infrastructure and operations in Europe will enable our reach into global markets, while also further expanding our scientific capabilities into the emerging immuno oncology field and broadening our testing menu to address 8 of the 10 top cancers. HALiodx has developed a unique biopharma partnering ecosystem for the identification of clinically relevant biomarker signatures, the demonstration of their utility in clinical trials and the development and commercialization of resulting IVD and companion diagnostic tests. Additionally, as you will see here on slide 4, we believe this acquisition will be accretive to our revenue growth in 2021 beyond by helping us accelerate test menu development on our nCounter platform for global distribution as well as expanding our scientific expertise into the emerging immuno oncology field. We are executing on an exciting vision that is now becoming a reality as you can see illustrated on slide 5 in our presentation deck. With the acquisition of Halyodx, we will complete the puzzle and expand on our growth opportunities along 3 strategic pathways. Firstly, global growth, expanding from a centralized lab business in the U. S. Only to a global lab and instrument kit business that we entirely control from end to end. Secondly, scientific excellence, extending our technology to advance our pipeline of high value genomic tests and to fuel biopharma partnerships to bring to Veracyte the innovative immuno score platform to harness the patient's immune system to assess risk and patient outcomes. And thirdly, menu expansion, expanding to address 8 of the top 10 cancers by U. S. Incidents by adding colorectal to our portfolio, answering important questions along the patient care continuum for this terrible disease that impacts over 100 and 60,000 patients in the U. S. Annually. When I founded Veracyte in 2,008, we had a vision to become a global leader in diagnostics for cancer and other diseases. We began with whole transcriptome arrays and machine learning and then migrated our tests to RNA whole transcriptome sequencing as the cost of sequencing declined. We focused on unmet needs and important questions in 3 disease areas: fibroid cancer, lung cancer and intratystrictoral lung diseases first improving diagnosis and then using our robust scientific platform to address additional questions along the care continuum, including informing treatment decisions and upstream improving early detection in lung cancer. The acquisition in December 2019 of the exclusive global diagnostic rights to the encounter analysis system gave us a powerful platform for making our advanced genomic tests available to physicians and their patients in global markets where laboratories favor a distributed model. We also expanded our menu through that transaction to include breast cancer and lymphoma. Our acquisition of DECIPHER further expanded our testing menu with market leading diagnostics in prostate cancer and bladder cancer and a pipeline test in renal cancer enabling us to address many of the leading cancers by incidence. With the recent acquisitions and strategic initiatives completed and the pending addition of HALEODx, Veracyte is well positioned to further accelerate our global growth for its cancer tests. At this point, I'd like to introduce you to Vincent Fert, the Chairman and CEO of HealioDx to introduce you to the company. Vincent? Thank you, Bonnie. First on DA for the entire Haylodex team, we are excited to become a Veracyte company and the European headquarters for Veracyte. Liveboni, Mark and the rest of the Veracyte team will share the same vision to improve outcomes for patients all over the world at every step of their journey. Very much like Veracy, the founders and management of Hialeah experience in creating high quality diagnostic products including working with biopharma to enhance patient care. In addition, we have been developing and manufacturing complex diagnostic products for the last 15 years. The Audiobics leadership team as shown on slide 6 of the deck is comprised of a unique blend of sound industry experience with a track record of successes. In the early 2000s, this group founded Ipsogen to develop molecular monitoring of blood cancer. The company progressed rapidly went public in 2008 and developed a significant IBD business in both Europe and the U. S. Ipsogen was then acquired by QIAGEN in 201 health care business of QIAGEN and various function and then into our system spun off Hylogenics. Turning now to slide 7. Hyaluronate is positioned as a pioneering player in the immune response diagnosis of cancer based on a strong patent portfolio developed by our co founder, Jerome Gallon. We are a commercial stage immuno oncology diagnostic company, providing oncologist and drug development organizations with 1st in class diagnostic products and services to guide cancer care and contribute to precision medicine. We provide a unique range of immune assessment solutions including our flagship immune score assay for assessing the immune contexture of a tumor as a key determinant of patient outcomes and response to cancer treatment. We have developed a unique biopharma partnering ecosystem for the identification of clinically relevant biomarker signatures, the demonstration of their utility in clinical trials and the development and commercialization of resulting IgE and companion diagnostic tests. We operate 2 PVR certified laboratories in the United States and France as well as facility in France that develops manufacturers and distributes in vitro diagnostic products. We are excited about the acquisition by Veracyte for several reasons. For Hiality, Veracyte's resources, capabilities and strong reputation will help us to expand the market reach for our tests and advance our pipeline. We believe the combination of our extensive manufacturing capability, our scientific expertise in immuno oncology and our colorectal diagnostic products are complements to Veracyte's business and enable Veracyte to execute on its global vision. Let me now turn the call to Marc to walk you through the strategic pathway. Marc? Thank you. Thank you, Vincent, and good morning, everyone. I'm thrilled to share details about our acquisition of HalyovX and can't imagine a better way to kick off my first day as Veracyte's CEO by solidifying this key element of the Veracyte vision. Let me reiterate the 3 pathways that underscore the strategic rationale for the acquisition. 1st, as you will see on slide 8, HalyoDx provides European development, manufacturing and operational capabilities to support our global testing and menu expansion, giving Veracyte the capability to own the manufacturing of the test kits that run on the nCounter analysis system. This will give us end to end control of our distributed test business, critical to ensure that we can expand globally and meet our customers' needs as we scale. With this acquisition, we will plan to transition manufacturing of our kits, currently produced by NanoString to Hali ODX's facility in Marseille, France. This will further accelerate the expansion of our test menu on the nCounter platform for Europe and other strategic global markets. This will also give us the opportunity to improve gross margins on the nCounter products. We will be prioritizing new tests for the nCounter and excited about our plans to adapt Envisia, the first of our legacy tests onto the instrument by the end of 2021. As you know, we recently launched exciting data for our Percepta nasal swab for early lung cancer detection, which we expect to develop on the nCounter in 2022 and make available in global markets the following year. Additionally, given our recent acquisition of the DECIPA business, we will explore opportunities to move our prostate and bladder cancer tests onto the nCounter instrument to expand their reach into global markets. Our acquisition of worldwide diagnostic rights to the nCounter platform and Hali ODX's development and manufacturing capabilities together allow us to access a long term global market of approximately $50,000,000,000 And Hali ODX provides the European headquarters to support our global expansion and to simplify nCounter test distribution in international markets. Secondly, moving to Slide 9, Haliote Dx deepens our scientific capabilities to expand our diagnostic offerings and fuel our biopharma services business. We add a unique and complementary immuno oncology biomarker analysis technology that supports our vision of answering important clinical questions along the patient care continuum. Hali ODX's technology has the potential to enhance our test for patients at every step of their journey in cancer and serves as a platform to grow our biopharma partnering business. The addition of immune biomarkers that are complementary to TumorGenomics can help further inform patient care from treatment decisions to risk for recurrence and help improve outcomes for patients. Slide 10 illustrates Haly ODX's immunogram multimodal analysis platform for guiding immuno oncology clinical development. It is a biomarker approach that enables a 360 degree view of the immune tumor microenvironment, allowing the quantification of various immune and non immune cell types inside and around the tumor bed from a small amount of tumor sample. The immunogram platform can help predict patient response to immunotherapy and is synergistic with our biopharma partnering efforts, which leverage our large biorepository of genomic content built from Holterin's transcriptome sequencing. In December 2019, a partnership with Kite Pharma, a subsidiary of Gilead, allowed HalyODX to position itself among the major players in the analysis of tumor microenvironment and as a strategic partner of the biopharmaceutical industry developing immunotherapies, a field that is, as you know, rapidly expanding. Now looking at Slide 11, HalyoDx's flagship immunoscore assay evaluates the immune context of a tumor at a basic level looking at a patient's lymphocytes to determine how those cells are physically infiltrating the tumor and from this producing a score that reflects how activated the patient's immune response is. Finally, as you can see on slide 12, Hali ODX expands our current cancer testing market into colorectal cancer, which is the 3rd pillar of our strategic rationale. With the addition of Halyodx's immuno score IVD test, which leverages the immuno oncology platform previously described, Veracyte is now positioned to address 8 out of the top 10 cancers by U. S. Incidents. We believe this broad portfolio positions Veracyte as a leading global cancer diagnostics company. As shown on slide 13, ImmuScore provides us with a near term commercial opportunity in colorectal cancer, which we estimate is approximately a $2,000,000,000 market. Immunoscope Colon is a commercial stage test today, addressing unmet needs for approximately 300 colon cancer patients and with the potential to expand into later stage colon cancer and rectal cancer. HalaIDX also has in their pipeline development projects to expand further into other indications beyond colorectal cancer. I'm excited about this acquisition and about the many ways it helps us execute on our powerful vision. Layering this step on top of the recent DECIPRA acquisition completes for now the vision for Veracyte that Bonnie and I believe will achieve our potential for growth. But we clearly have a lot to get through over the next year or so as we complete the integrations, transition manufacturing to Ferrocyte and launch our new products. In my role as CEO, I'm excited to bring my experience building and leading complex global organizations and I'm confident that we can put these pieces together. To ensure success, Bonnie has agreed to lead the Hali ODX acquisition and strategic integration. I look forward to working closely with Bonnie on this as we continue to greatly benefit from her leadership and deep experience in immunology from her 18 year tenure at Beckman Coulter. And of course, I also look forward to welcoming the Hali ODX employees to Veracyte and starting to work together to achieve our vision. At this point, I will now turn the call back over to Bonnie. Thank you, Mark. Moving to the deal terms and financials on slide 14 in our deck, you will see that Veracyte has negotiated to purchase Heliodx for approximately €260,000,000 in cash and equity. The transaction, which has been unanimously approved by Veracyte's Board of Directors and is fully supported by the Hali ODX Board of Directors, is expected to close in the 3rd fiscal quarter of 2021 subject to the required Works Council consultations and the satisfaction of customary closing conditions. Looking at slide 15, Hali ODX grew its 2020 total revenue by 43% to €19,900,000 compared to €13,900,000 in 2019 and its total revenue in the Q1 of 2021 was approximately €5,500,000 For the remainder of 2021, Heliodx's revenue contribution to Veracyte will be dependent on the transaction close date, the U. S. Dollar, euro exchange rate and transaction and purchase accounting. When the transaction closes, we will incorporate Halyaudx's financials into our guidance. Having said that, VeriCite expects the acquisition of HalyaDx to be accretive to its revenue growth in 2021 and to expand the near term addressable market for Veracyte's current and pipeline tests. Turning to slide 16, I could not be more enthusiastic to be taking on the Executive Chairwoman role working with Mark and the Hali ODX team to realize the potential of the vision we set out to accomplish almost 14 years ago. With the completion of recent acquisitions and strategic initiatives over the last couple of years, Veracyte is well positioned to accelerate growth in the approximately $50,000,000,000 long term global market for our cancer and other high value diagnostic tests. In closing, we want to remind you of the strategic rationale, key terms, considerations and timing of this transaction, which are all summarized on slide 17. We are confident with the addition of HALIO Dx, we will even be better positioned to improve outcomes for patients all over the world at every step of their journey. We look forward to delivering incredible value to patients, physicians, employees and to you, our shareholders. And with that, we will open the call for questions. Thank you. Our first question comes from Brian Weinstein with William Blair. You may proceed with your question. Hey, guys. Good morning. So just a couple of questions. Bonnie, just looking at it with you, you guys have obviously a ton going on right now with the launch of Nasarisk coming up at the end of the year. You've got the DECIPHER integration that ongoing. You've got a base business that is obviously also moving forward pretty rapidly. You also had management changes at the top. So can you just talk about the company's ability to take something like this on at this time of the company's development with so much else going on here? How are you guys going to manage this integration process? I understand you're staying on and you'll be managing it. But in general, this seems like an awful lot for the organization to be able to take out at this point. Can you just talk through that a little bit for us and give investors some comfort there? Hey, Brian, it's Mark. I'll start since it's my 1st day on the role here and give you my perspective and then Bonnie please do weigh in as well. So, you're absolutely right. I mean, we've picked and you picked up on the key point. We have got a lot going on. I think there's always a lot going on in a company like ours that is fast moving, growing and has laid out a strategic vision and is executing on that. Having said that, we've put in place a lot of the steps necessary to make sure that this everything that we're doing including this acquisition is successful. So you mentioned our nasal swab and the other products that we're launching this year. We've got the full team engaged on very successful launches. And we have a lot of talented people within Veracyte that are leading those. The DeCypher integration is going extremely well. And of course, we have a very experienced leader at the helm there in Tina who's also taken on our Thyroid business as well. So that's all covered. As far as the management changes are concerned, I do think if you think about the role that Bonnie and I will play, this sets us up really well actually for this acquisition. And of course, we've had this in mind. So, I'm going to run the company starting from today and Bonnie is going to take on a key role with the acquisition. We've talked before about Bonnie's role going forward as a strategic advisor to me and also working on strategy and business development initiatives and opportunities, this is the first, where she's going to take a very key role, leading the acquisition to closure and then leading the integration, making sure that we optimize the success of this wonderful acquisition of HialiODX. Yes. I'd just like to add that one other company has been able to lay out a long term vision, execute on the acquisitions needed to achieve that vision and along the way attract what will be following the closure of this deal for current and former CEOs onboard helping to make that a reality. So I think that helps to illustrate how excited I am as an ex CEO. Tina staying on as well to lead And now we'll have Vincent Firth who I've known for a long time and he will do an amazing job leading the Hali ODX effort to align and strengthen and help us achieve the success we're looking for. Great. Thank you for that. I appreciate those comments from both of you. In terms of the revenue that the company posted the $20,000,000 last year, Can you break that down? And if you did already, sorry, if I missed it. But can you break that down between the immuno score and then the other products that the company has in the pipeline I'm sorry the anything that they're working on with pharma partners just to give us an idea about where that revenue is coming from? Yes. Brian, we're not going to break down the individual components of that revenue. Hialeah is obviously private. And so there's not much more detail that we're going to provide on that. What I will say is once the transaction closes, we'll incorporate the financials into ours and give a little bit more color commentary at that point in time. But yes, we're not going to do the individual breakouts unfortunately at this time. Okay. And then last one for me. Can you talk at all about the R and D that's going on at HALIO right now in terms of what types of relationships they currently have with pharma? And then anything else that they're developing themselves from a diagnostic platform? Is that something that you guys should be able to provide some insight into? Yes. I mean I'll ask Vincent on the call. So I'll ask Vincent to give a high level overview of some of the R and D activities that you're asking about. Yes. Sure. So, this is Danfel. What we are on the first part of your question, we are working closely with Biotech and Sarma. What I can say is that all these companies go to us because we are experts in the immune biomarkers part that they all developed immunotherapies whatever they CAR T cells or vaccines, okay? And we are one of the few experts in immune biomarker that can help those company understanding mechanism of action and stratifying patients for their clinical trials. Yes. Thanks, Vincent. Obviously, we've talked in the presentation and the prepared remarks about the work that's going on with the immuno score and the pipeline opportunity there. I think the other thing to note is we're really excited to actually bring our capabilities together. So a lot of the expertise that AlioDx has in immuno oncology is complementary with our expertise in cancer genomics and the large biorepository of genetic content that we've got. And so putting that together, I think enhances we think enhances our opportunity to work with biopharmaceutical industry and create a really unique offering. I agree. When you combine the biology of the tumor with the biology of the patient's response to that tumor, you're answering the 360 degree question around how that individual patient might respond. It's a really exciting combination. Thank you, guys. Thank you, Brian. Thank you. Our next question comes from Puneet Souda with SVB Leerink. You may proceed with your question. Yeah. Hi, Mark, Bonnie. Thanks for the question. So from what I see, I mean, there are key components here. 1 is the transition of the nCounter kits manufacturing towards Veracyte test and the expansion. 2nd is your expansion into Europe and with the CLIA labs here and the addition of the immuno score test and the pharma services that the HALIO Dx is bringing to the table. So maybe just so that to refresh and best rest could you update us on what is the status of nCounter Kits Manufacturing today? What are the current arrangement with Nano String with the existing kits? And any obligations that you need to fulfill there before transitioning to the France side? And also if you could provide any geographic breakdown for what Helio is doing currently in Europe versus U. S? Yes. So just to cover on the Enkamp, I'll ask Bonnie if she wants to provide more details. When we completed that acquisition in 2019, we knew that we would have to make the transition of the manufacturing to Verified at some point in time. So we've been spending our time thinking through that, working through that. And as you can see from this announcement today, we're now making great progress on that. There's a lot of work ahead of us, but we're going to move quickly to make that transition happen. And that's one thing obviously that Bonnie is going to be leading for us. But I don't know if you want to give any more details on the Yes. We have secured a contract manufacturing from NanoString of course at the time of the transaction. And so we are have been working with them on the development program for Envisia moving forward and have plans on beginning to supply kits with Envisia at the end of the year. We think could take up to 2 years to get the manufacturing fully transitioned. So the timing could not be better to begin that process As I think our original time line was to notify in a year which would mean 3 years, 3 to 4 years to get that done. And we're coming up on the 2 year window. So everything is lining up perfectly to achieve that goal of taking it over. And then on thank you, Bonnie. On how your DX's geographical split, I'll ask Vincent to give kind of a high level view. We're not going to break out the numbers, but a high level view of the activities geographically. So, Vincent, do you want to just give a quick overview? Are you on mute? Vincent, are you there? Sorry, sorry, Marc. So I'm here. On our biopharma activity, the majority of our customer are European based. We do have a few U. S. Customers, Kite period for example. But indeed the perspective of joining the VIA site will open us new perspective for the U. S. Market for that. Considering the immunoscore diagnostic, I mean, in colon, we are in a pre launch phase and we are focusing we were focusing our efforts to get the reimbursement in the U. S. And I think the support and the expertise of the rare sight team will be very important here. Confirming our IGD activity, it's basically a lot of European companies. So I would say our activity is really European centric. Got it. That's very helpful. And if I could follow-up Mark. Veracyte has traditionally focused on classifier tests and done a really solid job at that. It seems like you're growing more later stage colorectal cancer as well as non cell lung cancer. Could you maybe help us understand how is immuno score situated in the market? And how is it positioned versus the current therapy management products such as the foundation F1 CDX or Guardant360 products or the emerging MRD products or liquid biopsy products from Natera and Gardens, can you help us understand how it's positioned versus those in the market? And what expectations do you have for the overall expansion of the ImmunoSCORE product line? Yes. I mean just kind of going back our original vision here is to improve our comfort patients all over the world at every step of their journey. So while we focused on particular areas initially here, our goal is to expand across the care continuum. So you saw that with the nasal swab, which as you mentioned helps as mentioned earlier helps early detection in lung. And of course that can even go further upstream. I would say and then the immunoscore assay and the immuno oncology capabilities that HALLY ODX brings allows us to address even more of the care continuum. Bonnie, I don't know if you want to kind of give some specifics around the question and the market positioning there. Yes. There's a couple of things and Vincent may want to comment as well. But what I love about their technological approach is that it's a platform technology. You can build the immuno score assay essentially across the entire landscape of cancers. And the lead product, which is as Vincent mentioned going through the MULTI X coverage process right now is indicated for stage 2 and stage 3 colon cancer patients where you're looking at the infiltrate of the immune cells and being able to determine based on the strength of a patient's immune system whether or not you need to use more aggressive treatment. And as I was saying earlier, this is bringing the full picture of the biology together, not only looking at the biology of the tumor, which we and many others are doing and have done for a long time, but now combining that with what is the host immune response to this. And if it's very strong and you have a very high immuno score then you potentially can be less aggressive in treatment. And of course if the patient's immune status is very low to the tumor then more aggressive treatment would be warranted. And they've got a lot of data on a number of different areas, but the lead test is in colon cancer. So really exciting new area to complement everything we're doing. And again just helping to advance the program and put on the care continuum for patients. Thanks. Got it. That's very helpful. And then last one if I could squeeze in. And in around the sales force, do you expect to build out the core oncology sales force to offer this product in U. S. And Europe and also with lung cancer specialists? And by that I mean the immunoSCORE product? Thank you. Well, I mean, we also we clearly have the benefit of the existing AlioDx sales force and business development team. And then of course, we could be able to bring to bear the greater Veracyte team to that. And then in terms of how we grow that in the future, that will be part of our integration planning and our planning for the rest of this year, which we'll update on again once we complete the acquisition. Okay, great guys. Thanks. Thanks. Thank you. Our next question comes from Tejas Savant with Morgan Stanley. You may proceed with your question. Hey, guys. Good morning and thanks for the time this morning. Don't have too many. Just a couple of quick cleanup questions here, Mark. In terms of that HALIO revenue step up that you saw in 2020 versus 2019, Would you be willing to share some color on any specific sort of contracts with biopharma or any other drivers that you'd like to highlight there? And also the momentum you're seeing here continuing into the Q1 for the business? Yes. I mean, probably no specific commentary. Vincent, I mean, if you want to feel free to add. I wanted to say is, clearly what we've seen here is Hali ODX is gaining traction. I'd say that traction is across the elements of the business, including the biopharma and then of course with launching the ImmunoScal. So that's been the key driver. And then we provided the first quarter actuals, which I think demonstrate that that transaction is continuing that traction is continuing. Vincent, I don't know if there's anything you want to add, but please feel free. Yes, Marc. Thank you. No, I mean, it was perfect. I mean, we see a very dynamic development of our biopharma business and we have seen that in 2020 and we'll see that also this year. Got it. And then in terms of just the headcount split between Europe and the U. S, I'm assuming, is it sort of 70, 30, 80, 20 Europe versus the States? And then Bonnie, I mean, if you can elaborate on how you envision the Richmond site sort of unfolding on a go forward basis? Will that essentially will you use it to expand some of what you do in your current facility in the States? Or will that exclusively be for nCounter kit manufacturing as well? No. I would say on the first one, headcount is significantly biased to France. Yes. The small lab and sales and support team for biopharma and Immuniscor in the U. S. So, yes, I mean, as we go back to the strategic rationale we laid out, for us, finding a company of this size and this caliber with a new area that is one of the hottest emerging areas in science that allows us to acquire a European operations with global regulatory and quality processes in place that is ready made with the addition of the capital and things that we'll need to do to transfer our specific technology. This was just an awesome find. And we think there really could not be a better fit for what we need operationally and then also the new science areas just kind of icing on the cake. Got it. Very helpful. Thanks guys. Thank you. Thank you. Our next question comes from Tom Spine with Lake Street Capital Markets. You may proceed with your question. Good morning and thanks for taking the questions. I apologize if I missed this Bonnie, but could you walk us through within your new General Manager organizational structure how Halya will fit into that or how you anticipate fitting into that? Yes. It's Marty. I'll answer and then Bonnie if I missed anything please fill in the gaps for me. But initially so of course what we're planning to do here is to keep Hali ODX running out Hali ODX as a business. And they've got a very capable leadership team that Vincent walked you through. We have a slide on that. So that team will become part of the senior leadership of course of the company. And then for the actual integration of the manufacturing, Bonnie will take that on as part of her activities going forward. So we'll see how that shapes out. Of course, we're going to I'm going to continue to fill out the leadership team here at Veracyte including getting a world class CFO as well. And I'm day 1 on the job side. I haven't looked across the rest of the organization here in terms of how we structure. But I love the general manager structure that Bonnie put in place. I believe in it. I think it's the right one. And so we'll if anything there'll only be minor adjustments as we bring in Hali ODX to that. And then just one quick question on the ImmuScore. Is that entirely immune based implying that it will be tumor agnostic? Are there any limitations to the tumor types that you could expand into with that? That's what is one of the most incredible things about the technology. It's measuring the contexture of the immune system at the tumor microenvironment, questions that are questions being asked every day now in the growth funnel of immunotherapy. So we'll be in the heart of that. We'll be able to complement the platform technology and its utility across tumor areas with the potential to focus on lung cancer, prostate and colon, which will complement some of the large scale biorepositories and information we have on tumor biology, especially in lung cancer and prostate and use some of our U. S. Resources. This will be part of what I get to help with is how do we integrate this so that we're benefiting from the areas of strength across our business today and utilize this new technology area to augment our portfolios and our reach into biopharma especially in lung cancer, prostate and colon where we'll have a foothold. And then at the same time set the team up so that we can get the operation integrated, the manufacturing up and running. It'll be a fun project for me. I'm first day on the job too and I'm looking to knock the ball out of the park for Mark as his Executive Chairwoman. Thank you, buddy. Thanks guys for taking the question. Congrats. Thanks. Thank you. Our next question comes from Mike Matson with Needham and Company. You may proceed with your question. Yeah. Good morning. Thanks for taking my questions and congrats on the deal here. I guess on slide 15, I just wanted to ask about the Helios EX growth that's shown on there. Is that all organic? And then it's pretty amazing to see that they grew 43% during 2020 given the pandemic. So it almost seems like there's a bit of an inflection happening in the growth rate there. So maybe you could talk a little bit about that? Yes. I mean, it is organic. Correct me if I'm wrong, Vincent. But yes, it's entirely organic. And I think it's the same thing. I mean, very impressive during that particular year that the company continued growth. Vincent gave a little color on the biopharma opportunities that have continued to gain traction in 2020. So at this point, I think those are the key elements of that growth. Okay. Thanks. And then just wondering about the since the manufacturing capacity is important part of the deal here, can you talk about how much space they have and how much runway you have there before you have to kind of expand that when you as you move on to the nCounter platform or expand the test availability there in Europe? Yes. I mean you can and you can see a little bit this on slide 8, but the facility is obviously relatively significant, I think close to 30,000 square feet. Correct me if I'm wrong, Vincent, but No, no. Yes, that's right. Yes. Okay. Good. And obviously the capacity supports the current business and the growth that they've experienced and there's plan to support the future growth. Obviously, one of the key things that we're going to have to do and then of course the manufacturing transition will require changes to that manufacturing facility capability and so on. So that's part of the key planning here. And it's going to take some time to get through that. But one of the changes we're going to have to make is ensure that there's sufficient capacity to meet Veracyte's needs for the foreseeable future. And so planning ahead, I think is the key there and we're going to put a lot of our attention and effort into making sure we do that right. So I wouldn't say the volume of manufacturing that's required is going to be part of the plan and we're going to obviously invest to achieve that. Okay. Thank you. Thank you. Our next question comes from Paul Knight with KeyBanc Capital Markets. You may proceed with your question. Hi, Mark. Could you update us I think you talked about the nCounter program, but just refresh us there. And then Bonnie your insights you've gained with nCounter by looking at HelioDx. They've obviously achieved success there. So you've seen obviously a step up here with nCounter, but could you kind of give us a refresh there? So when you say update on the nCounter program, you mean our plans to transition products to nCounter? Yes. Yes. So obviously our first product to transition is Envisia and that will be this year. And then we talked about when we launched our data for the Percepta nasal swab that will be our next product which will be transitioned next year commercial the following year. And then of course I think I mentioned this in the prepared remarks as well, but DECIPHER products potential great products because the European market in particular is a great potential market for that product. So, we'll be looking to transition those. In addition, don't just think of this as transitioning, but developing new products as well that go straight to our own manufacturing with AlioDx on the for the nCounter platform. Helios has had the opportunity through a spin out relationship they've retained with QIAGEN and several other relationships for the contract development of IBD and companion diagnostic tests and then the follow on manufacturing of those. So over the years of experience including prior to that more than 15 years experience developing these kind of programs. And what's really key is that they have the backbone in place with their ISO other regulatory certifications, a fantastic quality system and the regulatory processes all in place. And we will be the recipients of those instead of having to take the years and the risks of building those out. So it's really fantastic timing. As you pointed out with them being an inflection point for growth, bringing great capabilities to help us extend our biopharma relationships, but probably most importantly is that operation that's going to allow us to realize the value of the Encunner acquisition we did a couple of years ago. So just set up for incredible success. And Bonnie, I know the N And It's a fantastic technology and platform. And It's a fantastic technology and platform. Our team that has transitioned Envisia loves the technology. And I'll remind everyone who may not have been on our original call there, this was our top platform of choice to get access to take a distributed model to global market so that we can test patients for all of our tests eventually perhaps all over the world. And the reason is it's a small footprint that fits into any laboratory. Turnaround times are about 2 days with 1 hour of hands on time only by a technician. The complexity of the technology is all built into the cartridge and it's a very reliable, very easy to operate yet highly capable with up to 800 genes, measures RNA, DNA and protein. So it gives us lots and lots of capability for our genomic tests. And now we'll be set up to accelerate that menu, build the products on our end, gain margins over time. Don't forget NanoString makes margins in all these tests. Eventually we'll have that margin. So a pathway to growth and a pathway to operational solidification here. And just because this is one of the things that got me really excited about Veracyte and joining the company when Bonnie and I talked about the strategy and these pieces all came together, having that kind of a platform with the full antenna and control of the manufacturing, it puts us in a very differentiating position. And so very excited about that. Thanks. Thank you. And I'm not showing any further questions at this time. Ladies and gentlemen, this concludes our call today. Thank you for joining us. You may now disconnect.