Earnings Call: Q1 2021

May 10, 2021

Good afternoon, ladies and gentlemen, and welcome to Veracyte's First Quarter 2021 Financial Results Conference Call. 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, Mika. Good afternoon, everyone, And thanks for joining us today for a discussion of our Q1 2021 financial results. With me today are Bonnie Anderson, Veracyte's Chairman and Chief Executive Officer And Jane Alley, our Acting Chief Financial Officer. We're also fortunate to have our incoming Chief Executive Officer, Mark Stapley on the call. 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 the transition of our Chief Executive Officer role and our projections for full year 2021 financial performance, as well as our future plans, prospects and strategy, financial goals, product attributes, launch plans and pipeline, drivers of growth, expectations regarding reimbursement and other statements that are not historical fact. It also includes statements regarding the potential impacts to our business resulting from the COVID-nineteen pandemic, anticipated timing of the launches of new products, availability of our tests internationally and our total addressable market. 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 guidance or updates on our performance during the quarter unless we do so in a public forum. Please refer to the company's press releases dated May 10, 2021, and the risk factors included in the company's filings with the Securities and Exchange Commission for discussion of important factors that may cause actual events or results to differ materially from those contained in our forward looking statements. Prior to this call, we published releases announcing our Q1 2021 results and the execution of our CEO succession plan, through which Bonnie Anderson, our current Chairman and Chief Executive Officer, will assume the role of Executive Chairman and Mark Staffley will become CEO. Both of these announcements are available on our website atveracyte.com under Press Releases in the Investor Relations section. We also published a business and financial presentation, which we will reference during our remarks. The 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 Chairman and CEO. Thanks, Tracy, and thanks everyone for joining us today. Before we get into the strong progress we made in the Q1, I will begin with the CEO succession plan that we announced a few minutes ago. I'm delighted to introduce Mark Stapley as Veracyte's new Chief Executive Officer to succeed me, effective June 1, at which point I will transition to the active role of Executive Chairman of the Board. As a founding CEO who has invested so much into Veracyte, I couldn't be happier with the timing and circumstances of this leadership succession. First, the Board and I are extremely pleased that Mark will be taking the reins as CEO of Veracyte. He is the right leader with the right experience to take over at this important stage in Veracyte's growth. Mark shares my vision for Veracyte and is aligned with our mission of applying the power of genomic science and technology To best serve patients by asking the right questions and providing answers that give a clear path forward. He is a seasoned global executive with highly relevant industry experience from his time at Illumina and Helix. He brings an ideal mix of strategic, operational and financial acumen combined with a proven track record. Over his career, he has built and led complex global operations, including both centralized labs as well as the instrument and reagent kit business, which aligns with Veracyte's strategic growth plan. He also has extensive experience integrating acquisitions. Lastly, I believe Mark will be an excellent cultural fit at Veracyte. He is a result oriented leader with the ability to lead and motivate teams around a culture of high performance and high integrity. 2nd, we believe that Veracyte is well positioned for success with a powerful strategic global vision And the table is set to execute on this vision and continue our growth in the $50,000,000,000 plus Long term global market for our genomic diagnostic tests. The company is operating from a position of strength with a strong track record of execution and significant growth opportunities. And third, The succession fits with my timeline for transitioning out of the CEO role, which is something I have been discussing with the Board for about a year. I am excited and committed to continue serving the company and to be a trusted advisor to Mark in my new role as an active Executive Chair. In this role, I will be intimately involved in ongoing strategy and business development. I will be Mark's strongest advocate and ally I look forward to partnering with him to guide Veracyte to achieve its full potential. On a personal note, I'm grateful to the Board, our executive leadership team and Veracyte's employees for their commitment and dedication to our mission and the healthcare providers and patients we serve. It is gratifying that together we have built a global enterprise with market leading tests that are transforming patient care in a range of cancers and other diseases. I am as optimistic as ever about Veracyte, Where we are going and what we can achieve. And with that, I'm thrilled to have Mark with us on the call today to introduce himself to you directly. Mark, please go ahead. Thank you, Bonnie, and good afternoon, everyone. I appreciate the warm welcome and the faith that you and the Board have placed in me to lead Veracyte through this next phase of growth. As Bonnie said, I share her vision for Veracyte And I am passionate about improving outcomes for patients all over the world at every step of their difficult journey. I am incredibly excited to join a company that has such an excellent reputation and track record for bringing highly differentiated and clinically impactful tests to market. Importantly, Veracyte's ability to bring these tests Patients through both the central lab and distributed kit model creates an exciting global opportunity. In the near term, we have multiple ways to expand and grow. Joining Veracyte is a compelling continuation of my career in applying genomics to help patients. At Illumina, I solidified my belief In the power of broad accessibility to genomics, and we achieved incredible global scale enabling the entire industry. At Helix, we have been focused on using genomics to identify people with predispositions to cancer and other diseases as well as providing clinical diagnostic results to millions of people during the pandemic. And with the Veracyte team, I will now be driving utility of genomics 1 step closer to patients by bringing to market innovative clinical tests The diagnosis and treatment. Being able to continue to partner with Bonnie in her new position as Executive Chair was a key element Me wanting to take on this role. Her deep industry expertise and strategic vision are incredible assets to me and the company. Bonnie has created a wonderful business over the last 14 years, and I intend to take full advantage of this opportunity to execute and build upon her vision. I'd like to thank you, Bonnie, for entrusting me with Veracyte. Over the coming months, I plan to dedicate time with key stakeholders, the Board, the executive leadership team, Veracyte's talented employees and the company's analysts and investors. I look forward to meeting many of you in the near future. With that, I will turn the call back over to Bonnie. Thank you, Mark. I could not be more excited to partner with you as you pick up the Torch and continue taking Veracyte to where we aspire to go. And with the strong performance and progress in the Q1 of 2021, We are well on our way. Turning to our Q1 performance, we delivered solid results with especially robust momentum in March As COVID vaccination rates increased across the country and physician practices continued to open up, Our total revenue for the Q1 was $36,700,000 an 18% increase over the Q1 of 2020 And our genomic testing and product volume was 14,437 tests in the quarter, an increase of 11% over prior year. With these solid results, we are reiterating our 2021 full year total revenue guidance of $190,000,000 to $200,000,000 We are thrilled to complete our acquisition of Decipher Biosciences on March 12 and welcome their top notch team to the Veracyte family. The integration is going really well and our teams are already collaborating and learning from each other. The Decipher business expands our reach into 7 of the top 10 cancers in the United States and is already contributing strong revenue with its prostate cancer test, which continues to gain commercial traction. We also made great progress in advancing our pipeline And are on track to launch 3 new products in pulmonology in the second half of the year. These include our novel non invasive Percepta nasal swab test, which we believe is going to be a game changer in early lung cancer detection, Annual meeting prior to its planned launch in the second half of the year. Now let's review key highlights for the Q1. I'll start with commercial growth, our first measure of success. Our genomic testing and product revenue was $36,100,000 An increase of 19% over the Q1 of 2020. The primary driver of the growth was the addition of the DECIPRE prostate volume. Excluding DECIPRE, our revenue grew 6% to $32,900,000 driven primarily by our Afirma franchise in thyroid cancer. Afirma is leading our pandemic recovery among our legacy tests with physician offices increasingly accessible to patients as well as our sales reps. Office based physicians represented about 50% of our Afirma volume And the vast majority of our urologic cancer business. In fact, in March of 2021, we experienced all time monthly highs In the number of unique ordering physicians for both Afirma and DECYFIR prostate testing with nearly 2,400 and over 1,000 Our Afirma business continues to gain momentum as the new standard Care and thyroid nodule evaluation with adoption for the franchise further fueled by physician interest in our Xpression Atlas to provide comprehensive genomic profiling information on cancerous fibroid nodules at the time of diagnosis. We believe our DECYFIR franchise continues to be well positioned for long term growth as we offer what we believe is the best product and most extensively validated genomic biomarker in the prostate cancer space. We also are benefiting from new Medicare coverage For expanded indications in late 2020, including for high and very high risk indications that allow our sales reps to target a new physician call point, the over 5,000 radiation oncologists Practicing in the United States. On the pulmonology side, our Percepta and Envisia business continues to rebound, Although at a slower pace with the pandemic still limiting the number of bronchoscopies being performed. As evidence, our claims analysis research shows that overall bronchoscopy volumes are at 50% pre pandemic levels. Here too though, we saw significant test volume increases in March compared to January February. In addition to gaining increased physician access to our customers, we are continuing to grow our use of digital engagement tools, A highly effective marketing approach that we learned during the pandemic. Our efforts here include a number of peer to peer webinar series Featuring leading KLLs discussing their use of our products and sponsored participation in active online physician communities, as well as targeted online marketing that drove more than 200,000 visits to our product websites in the first quarter, An all time high. We also made significant progress in pipeline advancement, which will expand the breadth and depth of our offering as well as our global reach. We are especially excited to unveil pivotal clinical validation data for our Perceptin nasal swab test in lung cancer in conjunction with the upcoming ASCO Annual Meeting, which will be held virtually in June. We believe our nasal swab test is going to bring much needed clarity to early cancer detection, Where today physicians lack objective tools to determine which patients with potentially cancerous lung nodules found on CT Need further evaluation and which can safely be directed to routine monitoring. The need for a better tool is especially important In the wake of new U. S. Preventative Service Task Force recommendations that now expand the number of people eligible for annual lung Cancer CT screening to an estimated 15,000,000. We are on track to launch our nasal swab test in the second half of 2021, at which point we will make it available to a select number of sites through an early access program As we amass the clinical utility evidence needed to obtain Medicare coverage. Moreover, we plan to adapt The nasal swab test to the nCounter analysis system in 2022, which we believe will enable us to begin Accessing an approximately $8,000,000,000 global market for our lung cancer franchise. We have also advanced our Percepta Genomic Atlas, which will provide physicians with comprehensive genomic profiling information For a patient's lung cancer tumor, enabling us to inform treatment decisions using the same tiny biopsy from a bronchoscopy or a transthoracic needle aspiration that was used in diagnosis. Currently, This information is typically provided later in the workup process, which often leads to inappropriate or delayed treatment. We will share new data on the Percepta Genomic Atlas at the upcoming American Thoracic Society or ATS and American Society of Clinical Oncology or ASCO annual meetings and plan to commercially introduce the test in the Q4 of 2021 as part of our comprehensive lung cancer portfolio. We also advanced the development of our Envisia classifier on the nCounter analysis system. When Later this year, this test will enable us to help inform or help improve the diagnosis and prognosis of interstitial lung diseases for patients in global markets. We plan to unveil performance data for the test on the nCounter instrument at the ATS conference and look forward to submitting the test for CE Mark in Europe by the end of the year. We've initiated market We've also made key hires in our market access and medical functions to support our efforts. We are leveraging our current installed base and customers for the initial launch to help secure fast market access. Additionally, in support of our global growth strategy, we initiated the development of our Veracyte branded Diagnostics only encounter platform, which we had anticipated at the time of our transaction with NanoString And which has become more timely with our planned menu expansion on the system. I'll next focus on evidence development where we also made significant progress during the quarter. We are excited that 6 abstracts for our genomic testing in lung, prostate and thyroid cancers have been accepted for presentations at ASCO. In addition to data for our lung cancer portfolio products, These include a podium presentation for data from our participation in the Van Dam study, which is a Prospective validation of the DECYFIR prostate test in African American men and shows the inadequacy of clinical classification risk alone and the subsequent need for genomics. Our continued partnership with many academic And participation in key worldwide clinical trials along with our publication track record We'll continue to deepen our leadership in prostate cancer over the long term. We also plan to share new data at ASCO demonstrating our This information may form in treatment decisions at the time of diagnosis regarding new targeted fibrin cancer treatments that are available or in development. We also have a significant presence at the ATS conference later this week, where in addition to the pipeline focused data I mentioned earlier, 4 abstracts will be presented Showing robust performance data for our Envisia classifier. We are pleased to see leading institutions such as UCLA begin G or ESMO Breast Cancer Conference also this month. We are excited about the presentation of initial findings and consensus from the 1st wave of ProCure. This European study utilizes Delphi methodology to generate consensus on the clinical utility of genomic tests including Prosigna. You will recall that this study is led by an independent scientific committee of breast cancer experts and includes input from over 140 breast cancer clinicians practicing throughout Europe. Also related to Prosigna, data from a prospective study evaluating the influence of the PAM50 GeneSignature on therapeutic decision making for patients with early stage breast cancer are being presented at the ESMO breast cancer meeting. The PAM50 Signature is the foundation of our Prosigna assay. With those insights, I will now turn to a more detailed review of our Q1 2021 financials. I will refer to our business and financial presentation, which Tracy mentioned earlier and which is available on our website. My prepared remarks until now address the Q1 2021 key takeaways as well as the other content It is on Slides 3 through 8. I will begin the financial review with Slide 9, which reflects our top line full year total revenue 60 5 percent over 2020 at the midpoint of the range. Turning to Slide 10, Specifically, the right hand column of the slide, we generated $36,700,000 in first Quarter 2021 total revenue, an increase of 18% over the prior quarter prior year quarter. We closed the Decipher Biosciences acquisition on March 12 and consequently our testing revenue of $33,100,000 includes $3,800,000 in urology revenue for the period March 12 through March 31, 2021. We expect to file our Form 10 Q today, which includes further detail on the acquisition. Turning to Slide 11 and our reported volume per quarter, we reported 14,437 tests across our portfolio The urology test from DECIPHER for March 12 through 31. Excluding the urology tests, Genomic testing volume for Afirma, Envisia and the Percepta GSC was 10,743, An increase of 2% compared to the Q1 of 2020. Our first quarter product volume of 2,134 Prosigna tests represents a 12% sequential quarter increase, But a 14% decline over the Q1 of 2020, which had been a record quarter for Prosigna test volume following our acquisition. Slide 12 shows our performance against 6 key performance indicators for the Q1 of 2021 compared to the prior year period. We incurred $35,100,000 in Decipher Biosciences acquisition related costs, which we recorded in general and administrative expenses. These expenses include $10,000,000 in transaction expense, Including banking and legal fees and $25,100,000 in non recurring post combination expense related to the acceleration and cash settlement of unvested historical Decipher stock awards. Slide 13 digs a level deeper into the total revenue breaking down testing, product and Biopharma and Collaboration Revenue. The results are shown against the prior year period. I will point out that for the Q1 of 2021, average testing and product revenue per reported test was Approximately $2,500 which marked a 7% increase from the Q1 of 2020. Slides 1415 provided revenue and volume trends sequential and year over year. Slide 16 shows our cost of revenue in absolute dollars as well as our gross margins with and without biopharma and collaboration revenue. Gross margins remain in the mid-sixty percent range. Slide 17 shows our operating expenses in absolute dollars and as a percent of revenue. In the Q1 of 2021, our operating expenses included the $35,100,000 in DeCipher acquisition related expenses. Excluding acquisition related expenses, our operating expenses were $34,600,000 for the quarter. The sequential increase is principally from an increase in sales and marketing expenses. With the acquisition of Decipher, We would expect our quarterly operating expenses to be in the following ranges for the remainder of this year. R and D expense at $8,000,000 to $10,000,000 per quarter, sales and marketing to ramp from $22,000,000 in the second quarter to $24,000,000 to $25,000,000 by the 4th quarter. G and A to range from $14,000,000 to $16,000,000 per quarter, Excluding any non recurring or one time items and intangible asset amortization of $3,500,000 to $4,000,000 per quarter. Slides 18 to 19 show trends in our net loss and Cash flow from operations. As I mentioned earlier, we incurred $35,100,000 in acquisition related expenses In the Q1 of 2021, which we recorded in general and administrative expenses. We paid these expenses in the first Quarter reducing our cash flow from operations. As shown on Slide 20, on March 31, 2021, After paying for Decipher and all associated acquisition costs, we ended the quarter with $324,000,000 of cash on hand And no material interest bearing debt outstanding. In closing, I would like to thank Keith Kennedy for his many contributions to Veracyte during his 4 year tenure with the company. He played an important role in our progress, Including building a strong financial infrastructure and team, which we believe will help ensure our continued success. We wish him the best in his next chapter. Looking forward, I believe our robust progress so far in 2021 reflects The strong foundation that we have built to date. We are fortunate that Mark will be joining as our new CEO to build Upon the powerful strategic global vision that is the backbone of this success, improving outcomes for patients all over the world at every step of their journey in cancer and other diseases. With the acquisition of DECYFIR And the exclusive access to the encounter analysis system for diagnostics, the table was set for us to execute on our next phase of growth. And we are well positioned to continue our penetration into the estimated $50,000,000,000 plus long term market for our tests. I'm excited for what is next for Veracyte and fully committed to supporting Mark as he leads the company forward. And with that, I will now ask the operator to open the call for questions. Your first question comes from the line of Puneet Souda from SVB Leerink. Your line is now open. Hi. Thanks, Bonnie and Mark. Congrats on great having you on board. And Bonnie, we really I missed working directly with you. It's been a great journey for Veracyte so far. Thank you, Puneet. Thanks, guys. So first of all, Mark, I mean, you have led large population studies. You've been close to genomics for a long time. A lot of Veracyte has done is build clinical evidence over the years to drive adoption of these tests Important markets such as Afirma. So one question for you, as you look at the Veracyte's current position in the market, given So your experience with population study, the largest studies, where do you see opportunities in the portfolio? And maybe just Veracyte's And counter efforts are to drive adoption of this test broadly across the globe. But you've Somebody who's very close to sequencing. So tell us how do you view this opportunity and the use of eCounter versus Sequencing. Thank you. Yes. I'm happy to answer that and anyone else can jump in as well. But from my standpoint, I mean Veracyte has already done an amazing job of addressing some really key markets in oncology in particular, With obviously now with the recent acquisition of Decipher, 7 of the 10 top cancers are covered. So The way I look at it now is there's a lot of execution on that strategy that's already been set and those markets that are Very significant, as Bonnie just mentioned, potentially $50,000,000,000 plus in the long term. But I still think there's always more breadth. We can expand indications, we can expand geographically, we can expand across different disease areas. And so I've always viewed the power of Genomics as being incredibly broad and vast and look forward to Working with the Veracyte team to achieve that in the company. With respect to sequencing and the nCounter platform, I think the platform itself It's one of the key facets for me of Veracyte and the strategy that Bonnie and the team has executed on. I think that was an excellent move And it really does give the company tremendous opportunity to go broadly and geographically. As far as differences to sequencing, I mean, as you mentioned, it's a lot about the clinical evidence and the data and there are multiple ways to get after that and the approach that Veracyte has taken, with gathering huge amounts of data, I think is incredibly differentiating and I'm very excited about it. And I'll just add to that, I think just to remind everybody that Thanks for listening. We have a 2 pronged strategy for reaching us $50,000,000,000 market And sequencing our whole RNA transcriptome sequencing is the backbone of what we do today To discover, to develop and to validate really high performing tests that patients and doctors can make Clinical decisions on and bank on that performance. We also build incredible biorepositories Out of all of the whole transcript and see what sequencing work we do. And we believe continuing to serve the very large U. S. Marketplace So our CLIA lab is absolutely the right approach. We also believed a couple of years ago and continue to believe today That the right approach for the international markets is distributed testing. So when we took on this 2 business model approach, it's because we want the best solution for each market situation and that's what we'll be executing on and Mark has a terrific background with both sequencing and products to be able to lead that. That's great. Thanks for that Bonnie. If I could briefly touch On I'm not sure if the DECIPHER number for the full quarter was provided, maybe you did and I didn't cash that. So if you could Clarify, it was really strong in the last 2 weeks. I wanted to get that number. And then also, what percent of reps are actually in person today? I think you gave a 50% number, so I just wanted to make sure that number was correct for Afirma and Percepta. Thank you and I'll hop back into the queue. Thank you. Yes, we recorded $3,800,000 of revenue in the period from March 12 to the end of the quarter and 1560 tests. March It was a month of momentum across both our legacy business as well as the Decipher business. So I wouldn't take a few weeks of revenue times the number of weeks in the quarter by any stretch. In terms of number of reps, we now have together with Decipher, over 175 Reps in the field, we will continue to invest in sales expansion on the back of our bladder cancer test, which we expect To get a final Medicare coverage decision, later this year and as we bring our nasal swab test and Percepta Atlas Market in the U. S. And potentially a couple more positions as we launch EnvisoNeon counter in international markets. So, not huge increases through the end of the year, but we'll continue to make those investments to keep up with all the great product pipeline advancements. Next question? Your next question comes from the line of Brian Weinstein from William Blair. Your line is now open. Hey, guys. Thanks for taking the questions. Congrats to Mark and finding Keith. Certainly, Keith, if you're in the room or not, I don't know, I'm saddened to see you both moving on. And that's really kind of the first question, Bonnie, for you, which is, I mean, you've had A team that's been together for a while, we've now seen pretty meaningful turnover at the top between you, Keith and John, all sort of now moving on all the time when the strategy It's really starting to come together and now is the point where you start to realize the benefits of what that vision has been for many years. So Can you help balance that positive outlook and the opportunities with the transition of many of the key leaders here all within a couple Brian, I would say we have been executing on a really big idea and Really bold vision and strategy over the last 18 months. And we've always known that the company As it has over the 14 years I've been at the helm, we've gone through several iterations of evolution and that always happens. But the key is as those changes are made that we use it as And Elevate and Attract and continue to evolve the structure. For example, we are really pleased to have Tina Nova, who's On the call with us today, joined us as part of our acquisition with her very talented team done in San Diego, Who are also playing key roles across other aspects of the business. Tina is now the General Manager of our DECIPHER and our OFIRMA franchise, Leading the business, the 2 top revenue generating products for the business. And we're thrilled and excited to have Tina onboard doing that. You also might recall, we added another very senior executive to the staff beginning on January of this year. Martin Frost joined us from a leadership position at Agilent, where he had built significant growth Across the globe in diagnostic and pathology type businesses. In fact, his team was part of the Success story with the CDx with KEYTRUDA. So he brings a remarkable and very relevant experience to the table. Morton has added some people to his team and is leading the pulmonology franchise, one requiring incredible Strategic leadership as well. So, we have said goodbye to a few folks, but we have also strengthened As well, the top of the company, we're now aligned around our general manager structure, which gives us top to bottom clinical expertise In each of the clinical verticals that we're in, we think that was another very important move. And as we move Forward with expanding menu and expanding toward the global potential of our nCounter and product business, It was important that we strengthen the company with people that bring that kind of expertise as well to the table. So, I'm thrilled. I think the timing is right, because the table is well set. And while there is many other things we can do strategically, as Mark gets his hands on the wheel, Just executing well as we go through these next few years is going to be very differentiating for Veracyte. And I plan to be at Mark's side in the Executive Chairman role, which will be an active role, helping to drive that success. Okay. Thank you for that answer. Moving just to kind of the more near term stuff here with the data that's going to be Published as part of abstracts coming up for ASCO and then add ASCO specifically on the nasal swab classifier. Bonnie, can you just level set us on what type of data do you think is necessary here for commercial viability utilization In reimbursement, do you have any idea kind of where the bar needs to be set when we try and evaluate what this data is? Obviously, you're not Tell us what it is, but where's the bar for kind of commercial success? Do you have any idea on that? Well, we have a very clear idea on that. We have spent a number of We're honing in on what is needed to have success in that space. And I think our clarity is we need to do 2 things. We need to be able to develop and launch a test that's very high performing in rolling out cancer For classifying patients as low risk. Those patients, we hope will be able to be classified and avoid any workup. The economic benefit and value of that will be part of the clinical utility of our test. On the other side are the patients with suspicious nodules that likely have cancer. For that part of the 2 class cutoff, we need a very high performing tests when it comes to specificity, so that we don't put too many benign patients into that workup bucket. Guidelines direct care today, it will be important that our tests line up with those guidelines, which would require it to be a very high performing classifier And the value of getting patients diagnosed quicker and on treatment quicker will be part of the additional Economic value that will be assessed to prove the real clinical utility of our nasal swab test. And I can tell you we have got quite an exciting group of KOLs. Julie and her team have been preparing For the data unveiling and working with a lot of the thought leaders that have been very actively involved in the program And we're very excited about the nasal swab test. Great. Thank you very much. Thank you. Your next question comes from the line of Sung Ji Nam from BTIG. Your line is now open. Hi, thanks for taking the questions. Congratulations to Mark. Welcome aboard. And also congratulations, Bonnie. And I'm relieved to hear that you'll be in your current in your new role for a very long time. So just starting with a clarification question, the Percepta nasal swab test, has the classifier been locked in? It sounds like it So the data being presented is based on kind of the locked in classifier? Yes. Why don't Julia Kennedy is And why don't I let her provide a little bit of a summary on what work has been going on since we had R and D Day. Julia? Sure. So since we had R and D Day, we continue to do more development work on candidate classifiers. And since then, we have Lock them and put them through a validation, a pre specified validation plan and now have A winner, if you will, and that data will be presented at ASCO. So yes, it's locked and validated. Fantastic. Also great to hear the physician practices reopening, recovering, and was Curious, given we're hearing that there's been a lot of delays in terms of diagnosis of cancer or screening of cancer last year, And it may still be too early to tell, but are you kind of seeing any kind of trends that any different trends As the physician offices are reopening as you are getting more patient volumes in terms of later stage diagnoses or whatever else. Yes, we do. Well, in fact, I'll ask Tina to speak up here in a moment and give a little bit of a on what you're seeing in her businesses, but certainly the physician office Accessibility is happening. As I said in prepared remarks, the pulmonology space is still a little tighter, Mostly because we are still seeing the COVID impact there of pulmonologists simply being the doctors still working there with COVID patients, but also the Seizures that they're performing have not yet completely rebounded because of the in hospital status. But Tina, why don't you walk through you of the 2 Top revenue generating products and have been keeping close eye on sales rep access. Why don't you give us a summary? Right. Sure. So on the prostate side, it was amazing that at the beginning of the year, the American Cancer Society came out with a number that said they estimated that there would be 248,500 new cases of prostate Cancer diagnosed in the United States in 2021 and that represents a 29% increase Over 2020, which is quite substantial. So, they didn't specifically make a comment about COVID, but there's certainly been a lot of articles written Point to that, knowing that a lot of people did not go to their primary care physicians where a lot of these cancers are initially Before they're sent to specialist in 2020 because of COVID. And also I have heard from physicians while I'm out in the field that there's Especially with older patients, there's still a lot of reluctance to leave home and to go to a hospital or go to a physician's office, even with conditions today. The DECIPHER prostate market actually has recovered quite nicely In the last quarter, as far as COVID goes, I would say about 80% of our offices are completely open and accessible for our sales reps. Different parts of the country are different and the, Afirma for the thyroid is a little lower than that. It ranges between about 60% 70% of offices are accessible to sales reps, so just slightly lower. And of course on the pulmonology side, which is not my expertise, but they see even lower because a lot of those Physicians, as you would expect, are treating COVID patients. So it's still not open 100%. We still see variability And we also see variability in geographic area. Thanks, Tina. And yes, we're encouraged, but Certainly, COVID's impact hasn't completely gone away yet. Next question? Your next question comes from the line of Tejas Savant from Morgan Stanley. Your line is now open. Hello. This is Yuko on For Tasha, thank you for taking our questions. For the validation data for nasal risk, would you remind us of the enrollment criteria for that study? And what are the potential Sure. I'll be happy to ask Julia to speak to that. The work that we did earlier That was part of the unveiling of the R and D Day. We've been able to expand that cohort. But Julia, you want to talk through that? Yes. So in 2019, in CHEST, we had a single cohort prospectively collected, and that enabled us To provide a proof of principle classifier and you remember those results. And then in the R and D Day Back in December, we have presented some data on a variety of candidate classifiers that used That cohort plus an additional cohort that had different properties to it to enable us to Create a spectrum of cases to train the classifier so that it could recognize a variety of cancers from different All populations from different sites, different nodule sizes, different subtypes and whatnot to provide as much Diversity is possible in the training set. And at that time, we also locked away an independent test set With similarly diverse characteristics and that is the set that we unlocked in our validation and we'll be providing More color as to the data at the ASCO meeting in June. Thanks, Julia. We began getting access to these nasal cohorts So we're collected back with our acquisition of Allegro. When we announced our collaboration with J and J in early We announced that part of the big value of that collaboration was access to additional cohorts. And although it will build For future, we've also invested in the NOBLE study, which will be a cohort that we're investing in for future development In lung cancer, hopefully allowing us to even go further upstream and tap an even bigger market opportunity in lung cancer. So All in on lung cancer, we're excited about ASCO and look forward to bringing the nasal swab to market. Great. Thank you so much for the color. And then just as a quick Follow-up, will we see a preview of the headline results in the ASCO abstract coming up next week? Yes, we'll be sharing. There will be a pre sharing of data because of the way ASCO has lined up the release of information And then as that, so yes, you will get a preview of that. Thank you. Thank you for joining. Your last question comes from the line of Mike Matson from Needham and Co. Your line is now open. Hi, thanks for taking my questions. I guess I wanted to start with the guidance and kind of what the Q1 applies for the rest of the year. So if we take the midpoint of the revenue guidance This should be about $195,000,000 And I think on the Q4 call, you said that there was about $48,000,000 in there for Decipher. And I don't think that included this roughly $4,000,000 that you got in the Q1. So that's about $52,000,000 for Decipher. If I deduct that out, That implies about 22% growth for the organic growth or foot base business excluding vD diaper. You just grew about 6% organically. So are you comfortable you can get to that growth and or that Decipher will do better than that $52,000,000 range? Yes. Thanks for the call. Thanks for the call, Mike. And yes, we are reiterating and affirming our guidance, dollars 190,000,000 to 200,000,000 And we're very confident that we'll get there. I think we'll have various levels of performance across the whole portfolio, but We're very confident in that guidance. Thank you. Okay. All right. And then just wondering if you could give us the pulmonary And biopharma sales for the quarter, Q1? Yes. So we I don't think and believe we broke the pulmonary spot out, but the biopharma revenue was do you have that handy? The biopharma and collaboration revenue for the Q1 is on Page 13 of the slide deck, Greg said that was $566,000,000 That's a lumpy revenue base. A lot of that's coming from our longer term collaborations And that's where that was. The pulmonary products line up under our testing revenues And the only associated products within the product area that we pull out would be Presigna and associated instrument sales there. Okay? All right. Thank you. Yes. Ladies and gentlemen, this concludes our call today. Thank you for joining us. You may now disconnect.