Welcome, everyone. My name is Varun, and it is my pleasure to welcome you all to the 43rd Annual J.P. Morgan Healthcare Conference. We'd like to invite today GeneDx, represented by their CEO, Katherine, and their CFO, Kevin. Stage is yours, Katherine.
Thank you so much, and thank you to J.P. Morgan for hosting the team at GeneDx. It is a privilege to be able to share our story with you today. We will be making forward-looking statements, so I will refer you to our IR website for all risks and uncertainties. But our vision at GeneDx is to diagnose any genetic disease as early as possible. And I think what is really important about this as a mission is that there are really three things that we are driving. One, there is a very large and growing total addressable market. So the entirety of patients and the number of families that we can impact through our testing is a large and growing opportunity.
Second, we have the industry's leading exome and genome testing, and we have a competitive advantage that is becoming harder and harder to catch up with every passing day and every patient that we're sequencing. So we're going to talk about that today as well. And third, we're a high-growth story. We are driving meaningful diagnoses in an ever-growing population of of families. And we are doing it with an eye towards driving profitable volume. And I think that's a really important distinction. So we'll be covering all of this in the presentation. But first, I wanted to share, whenever I give a talk like this, what really stands out to me is not necessarily what happens in this session or in our one-on-ones. What stands out to me is what happens in the hallways and after.
Without fail, somebody follows up with me to say that they have somebody in their lives. It could be their own child. It could be a niece or a nephew. It could be a neighbor's daughter who's struggling to get a diagnosis, and that delayed diagnosis is the problem that we're trying to solve. The the delay to getting an accurate diagnosis actually inhibits our ability for children to live long and healthy lives, and that's the problem that we're trying to solve, and it's an all-too-common problem, so I'm always relieved and delighted to be able to share with people that we can help them. We're not on the search for accurate and cost-effective ways of diagnosing these diseases. In the future, we have the tools, and we have the technology today to be able to help them.
And so I'm really gratified with the opportunity that we have in our hands. We're just getting started with the team that we have in order to realize this mission of diagnosing any genetic disease as early as possible. But what happens today is illustrated on this screen. For one in ten Americans, they're going through a diagnosis. Half, half of this are children. Rare diseases actually impact a much larger group of of people than what you would normally anticipate. And they go through what is called a diagnostic odyssey. That takes, on average, six years. Through those six years, there are 16 different tests that precede getting an accurate genetic diagnosis. And GeneDx today can circumvent this entire diagnostic odyssey and provide an accurate response and accurate answer within weeks, if not within days. And that's what we're trying to do.
And that's why we have such a sense of urgency about how quickly we move to be able to put our tools and our answers in the hands of every family who can benefit from it. So the diagnostic odyssey is common. It's critical, and it's costly. We talked about the six years on average that it takes for a child to be diagnosed with a rare disease. During that time, there are three misdiagnoses. There are three misdiagnoses. Think about that. You're getting a diagnosis, and then you're going down an entire treatment regimen that's wrong three different times. That's happening for one in ten people every day. And the cost of that actually is an enormous economic burden to the healthcare system. The cost of rare disease costs the U.S. healthcare system $1 trillion. And we can do this.
We can actually provide these tools and save the healthcare system valuable dollars. It's the absence of using our testing that is contributing to this high economic burden. So let's talk about our industry's leading product and why we have the best exome and genome that is available to a growing number of providers and families. One, our exome provides a higher diagnostic yield. So you'll see on the screen a slide that has, at the top, genome sequencing, exome sequencing, multi-gene panels, and chromosomal microarray. You'll see in developmental delay, you get a diagnostic yield of 43% using genome sequencing, 36% in exome sequencing, and in multi-gene panels, 20% to 30%. Chromosomal microarray is 15% to 20%.
So our testing is providing a higher diagnostic yield, and we're doing that with fewer variants of unknown significance, which is critical when you're trying to interpret a genome's worth of information and do it accurately. So we'll talk a bit later about why our data asset is providing a superior product with more definitive diagnoses. We use epilepsy as a common example as well. There's a 48% diagnostic yield using genome, a 24% using exome, 19% for multi-gene panels, and 9% for chromosomal microarray. Because of these data, what medical societies have done is they have issued guidelines that support utilizing exome and genome as the first line of defense for these patients. And so we have guidelines from ACMG, from NSGC. Importantly, we're starting to see medical societies outside of the common genetic society. So think about the American Epilepsy Society. They endorse these guidelines as well.
And so we're seeing this surround sound. It is not just us saying that there's a better clinical product with better clinical outcomes that we are delivering within the walls of GeneDx, but it is the support of these medical societies that is also directing their constituents to be utilizing this testing. So why is an earlier diagnosis important? We talked about the cost burden. I'm sure you can all imagine the disease burden on these children and on the families. So an earlier diagnosis means that you have a better chance at having better health. We can change medical management. We can reduce medical interventions that are unnecessary. We can reduce healthcare costs, and we can identify additional resources for families to be able to connect with other families and be able to share best practices as well.
So our exome and our genome is the entire focus of the standard of care that we're driving at GeneDx. And we're really pleased with the progress that we've made over the past few years to transform not just our test menu, but the way that clinicians are utilizing these technologies. I think it's important to also think about how common these conditions are. Common diseases like epilepsy are actually a constellation of hundreds of genetic conditions. So when it comes to epilepsy, there are today 768 genes associated with epilepsy. Only 43% of those genes are on most multi-gene panels from companies. So we're leaving many patients or the possibility of many patients behind by not looking comprehensively and utilizing an exome or a genome.
An exome and a genome is looking at the entirety of those 768 genes, not to mention the fact that when we have a variant of unknown significance, we are routinely finding new gene disease correlations, so utilizing this testing enables us to be able to, in the future, if there is a variant of unknown significance, upgrade or downgrade that patient to give them the accurate diagnosis once we know that a new gene may be positively correlated with epilepsy. The educational effort that we've had to undergo, I think, is rooted in some of the, some of the questions related to why is exome and genome the right product today, and if we look back historically, exomes and genomes took a long time. They were indeed very expensive. The interpretation was confusing because of the number of variants of unknown significance.
There wasn't a lot to do about actionability beyond providing a diagnosis, and so it was a very cumbersome product for clinicians to use, but we've been able to make significant, significant improvements to our product in order to really shift the accessibility of all of this, in order to shift how easy the product is to utilize today, and so today, what we can say is GeneDx can provide an exome and genome in a matter of weeks, if not days. Our tests are accessible. Most insurance companies, whether it's commercial or a growing number of Medicaid plans, are covering it. Patients are receiving fewer variants of unknown significance and more definitive answers, results are unlocking a lot more actionability than they have been in the past, and that's thanks to investment in biopharma, which we'll talk about momentarily.
But FDA-approved therapies, clinical trials, and then being able to understand other steps that they can take to support their child, whether it's occupational therapy, physical therapy, and connecting with other families to be able to understand and share best practices. And finally, exome and genome uncover what many tests don't. In order to get to an accurate diagnosis for many of these conditions, you do need a genetic test. An MRI is not going to provide you with that specific answer, which then inhibits your ability to be able to go on to move on to a precision medicine. So we are spending a lot of time educating not just investors, but most importantly, providers about how much improvement we've been able to make and how much more accessible our testing is for a more diverse group of ordering clinicians as well.
So when we think about what sets our exome and genome apart, I want to spend a little bit of time talking about our competitive advantage and what we call our pay-it-forward data strategy. So there's a bit of a flywheel effect that happens when we are testing a patient. We're actually improving our interpretation platform with new information that we're generating for a new patient in our system. We're able to generate more underlying data that contributes to our data asset. It's contributing, it's contributing then to a higher diagnostic yield and more answers for more patients. And then that's better for the next patient that gets tested. So through this virtuous cycle, we're upgrading and downgrading more variants of unknown significance. We're getting greater confidence with more phenotypic and more genotypic information that we are able to generate.
And that is what is comprised of our 750,000 exome and genome data assets. And that engine is incredibly challenging to reproduce. And I'll tell you why in a moment. That the investments that we've made in innovation, we are aiming to not only continue to rapidly expand, but we want to make sure that we can protect those as well. And so we have filed some patents in order to secure and protect that innovation in terms of our end-to-end workflow. But that data asset underneath it all is what I think is a really important aspect of our competitive advantage, I do want to spend some time on. When you think about the 750,000 exomes and genomes, first, I should say, when I joined three and a half years ago, that number was 270,000, and that was from the prior decade.
So we're now at a place where we have rapidly grown that data asset from 270,000 to 750,000. That entire asset is enriched for rare disease. So if you think about the thousands of rare diseases that are disparate but together are considered in that classification of rare, 60% of the exomes and genomes that we're running are parent-child trios. So we have the comparator samples of healthy individuals. We have 10 years of Medicaid patient populations as well, which ensures that we have a very diverse set of patients that are representative of the U.S. population. And that's incredibly important. So when we just take a look at the genotypic side of our data asset of the 750,000 exomes and genomes, it is very arduous and highly infeasible to reproduce that with any sort of haste. It's not just running an exome or a genome on a general population.
It's a very specific, it's a very specific group of patients that that we have invested in. We're also generating more than six million phenotypic data points. So every time an order is coming in, we have clinic notes, and we're annotating those. And so the complement, complementary nature of our genotypic assets and our phenotypic assets together ensure that we can more rapidly upgrade or downgrade those variants of unknown significance. So this underlying data asset is the reason that we have the industry's leading exome and genome. That interpretation platform sets us apart every time whenever a new exome is introduced to the market by a competitor. Usually, the customer comes back to us because they have confidence that we're going to deliver the most accurate information. So when we think about the total addressable market that is ahead of us, I think it's really important to think about it in a few segments.
Today, we're focused on pediatrics and rare diseases. And what you see at the top is where we historically have been, which is the expert geneticists. And you'll see right under that is where we've been focused in terms of our expansion in the pediatric neurology setting, also calling on pediatric developmental and behavioral specialists. So think about all of the specialists that a general pediatrician would refer a family into. So we're focused in those areas today. We're also going to be having an ever-growing focus in the NICU segment. And we'll talk a bit about market expansions for both the pediatric specialists and the NICU in a few moments. But we do want to be able to get beyond that to the general pediatricians. Guidelines for pediatricians have been out of date for 10 years.
We don't know when they'll update their guidelines, and we're not going to predict when they're going to update their guidelines. But we are poised to be able to educate those general pediatricians. We believe that our reputation and the way in which geneticists rely on GeneDx will translate very favorably into that general pediatrician setting in order to make sure that we can cut off that diagnostic odyssey at that first defense. Any family is going to go immediately to their pediatrician. And we want to be there as a partner to the pediatrician and to the family to be able to provide our testing and prevent that family from having to undergo those 16 unnecessary tests, those three misdiagnoses, and those six years of an arduous and painful and expensive diagnostic odyssey. Eventually, we want to get to newborn screening. So we'll talk about that momentarily.
So that pediatric and rare opportunity is actually quite large. We believe $25 billion in total. When you start to think about, however, the adult opportunity, so think about cardiovascular conditions, neurodegenerative conditions as well, those are really important in terms of the role of genetic medicine in being able to get an accurate diagnosis. And with more and more investment going into genetic medicine, therapeutics, and gene therapies, we want to be a partner of choice for, for those biopharma companies as new guidelines get updated, as reimbursement starts to come online. We'll turn our focus to those adult conditions. But I think it's really important to note, and I mentioned this earlier, we're driving a lot of volume, but we're doing it in a way that ensures that we can get paid for our services. We think that's a really important element.
We could turn on demand for our product and turn on a high-volume opportunity overnight, but we want to make sure that we get paid for our services. We get paid 50% of the time. We think we can get that to 80% of the time. So we've deployed a really focused commercial strategy where our sales reps are. They have data that directs them to not just volume, but good volume that will ensure that we can get paid for those services. We think in total that adult opportunity is $20 billion, so a $45 billion market opportunity and patient opportunity for us to be able to change a lot of lives and help people live longer and healthier lives. So I'm going to take a moment to talk about the outpatient market expansion and then the inpatient market expansion.
So our exome is the product that is most commonly utilized in the outpatient setting. We target epilepsy, autism, intellectual disability, and developmental delay, amongst others. Amongst those expert geneticists, we have about 80% market share. The pediatric neuros and the pediatric specialists were only about 12% penetrated in terms of those patient populations. And so we want to continue to focus and drive that number from 12% over the course of 2025 and beyond to be able to enjoy 80% market share, if not more, in that segment as well. I mentioned we have a very disciplined approach about our selling technique. But as we think about additional indications as well, we want to make sure that there's good reimbursement.
So as we bring on additional indications, so think about hearing loss, think about cerebral palsy, we want to make sure that there's a pathway for reimbursement for those as well. And over time, once AAP guidelines are updated, that will be an immense opportunity for us to have an earlier impact on all of the families that are bringing a child in with an unexplained symptom. And we want to make sure that GeneDx is synonymous with that problem and that we can be a part of the solution. When we think about the NICU opportunity, that's our Rapid Whole Genome product. And we made some important product improvements in the second part of 2024 in order to close some gaps, including repeat expansions, in order to make it easier to collect a sample. So think about a buccal swab or a cheek collection.
And importantly, our turnaround times are now five days. They previously were 12-14 days. We're really proud of the work that our team has done. It's amazing to see the impact of product development. You start to see volumes go up once we're able to turn on these new features. But what's really going to unlock that NICU opportunity is our investment in Epic Aura. We're planning to turn that feature on in the second quarter of 2025. And in doing so, we believe that we'll be able to unlock the NICU setting in a much more meaningful way with our industry's leading rapid genome product as well. So as we think about the future of where we're going, we want to be able to ensure that we can end that diagnostic odyssey in the outpatient setting.
We want to intervene as early as possible in that NICU setting. The state of of of play today in that NICU setting, fewer than 5% of babies get a genetic test, so that's a wide open landscape for us. If there's a child who has a genetic disease in the NICU, the length of stay for those children is actually about 500 days, and so there's a really strong health economic story that we can tell to these health systems about why they should be utilizing this testing upfront and early and often, and that health economic argument that we're making with them is setting the stage for why we will be a partner for them, not just in that inpatient setting, but more broadly as we think about taking that Epic connectivity and bringing it throughout the entire health system.
Once those AAP guidelines come on, we think that that enterprise strategy for selling is going to position us in a really commercially leveraged place to be able to help a growing number of families. So when we think about the diagnostic side of things, it's very comforting for a family. We know that 99% of families who receive a diagnosis from us feel relieved to have that information, whether or not there is actionability by by way of a clinical trial or an FDA-approved therapy. But we know that the therapeutic side of things presents a really important step for actionability for so many of these families. Yet the drug development side of our industry is brought with, with a lot of costs, a lot of time, and a lot of failures.
And we want to be able to take our data asset and infuse it into the drug development cycle to improve target discovery, to accelerate clinical trial enrollment, to accelerate time to market, and dramatically reduce the costs that biopharma companies have, reduce the amount of time that it takes, and ensure that we can have not only a patient that has a definitive genetic diagnosis, but then they can also be matched with a precision medicine that is right for them. We have started doing this in in a few ways with biopharma companies today. We match biopharma companies with providers who have a patient who may be eligible for studies. And two of those patients I'm highlighting on this slide now, one is through a company that is now owned by Eli Lilly. It's a gene therapy that allowed an 11-year-old boy to hear for the first time.
I have to read the quote from him because I find it to be so inspiring. After receiving treatment, he said, "There's no sound I don't like. They're all good." When we think about Regeneron and the work that we've done with them as a partner, there was a deaf baby who was hearing for the first time after a groundbreaking gene therapy trial. So it was an incredible honor to be able to read these stories and realize that GeneDx was a very small part in being able to connect a provider with a potential patient for a clinical trial and be able to be a part of diagnosing these kids, enabling them to have a very different future moving forward. Where we want to go ultimately, though, is to be able to diagnose any genetic disease as early as possible.
And of course, newborn screening is an incredible opportunity in order to do that. Every year, thousands of newborns with actionable conditions are missed by traditional newborn screening. And so we're leaving behind many conditions and and many different babies without actionable information that we can provide by running a whole genome screen on these children. So we have worked as a collaborator with Dr. Wendy Chung, formerly of Columbia, now at Boston Children's, on a study called the GUARDIAN Study. And that study was just published last fall in the Journal of the American Medical Association. The protocol that Dr. Chung put together, I think, really sets a foundation for an appropriate, ethical, and responsible way to deploy whole genome sequencing in the newborn screening setting. When we think about it, we have now, through that study alone, we've sequenced 15,000.
We've done 17,000 healthy infants through our work in total. That study through the Guardian work is the largest one to be conducted in the United States. And what we've been able to find in looking at those 450 clinically actionable conditions is a 3.2% positive rate. So we're diagnosing these children at birth, ahead of when they've had a symptom in most cases, and ahead of when disease is really starting to progress. And that's something we're incredibly proud of. 92% of true positives would not have been detected with today's newborn screening that is the standard of care. So this 3.2% true positive rate is one that we think warrants taking a look at how do you do this as a population-wide approach to newborn screening.
We've been able to take a look back because GeneDx has been doing this for 25 years to say for these patients where we found a positive, a positive diagnosis, what was the average age of diagnosis? And it was seven to 11 years. So what we can do today at birth is prevent seven to 11 years of unnecessary disease progression, stress, cost to the healthcare system, pain for these families, disease disease progression that is not able to be reversed. And so being able to intervene at this point of birth is critically important as we think about really trying to eradicate that entire diagnostic odyssey and save the healthcare system valuable dollars. So this study that, that we've published in JAMA is really an important foundation for how we might be able to do this population-wide. We think that this is something that will come online beyond the five-year mark.
I think at this point, what we get to do is start putting together the health economic data that will convince payers and policymakers about why they should be doing this and how this is going to be a game changer for them in terms of cost savings. I'm happy to say that we released our preliminary results for fiscal year 2024. We announced $299 million in revenue. Our previous guidance, as a reminder, was $284-$290 million. Those revenues were up 54% year over year. It did include a discrete benefit of $6.8 million in the fourth quarter in connection with the multi-year appeal recovery from a single payer, and that breaks down to about $92 million of revenue in Q4, and we're really pleased with the volume that came in the door, as well as our ability to generate revenue associated with that volume.
We're going to continue to keep that balance throughout the course of this year as we continue to drive sustainable growth every quarter as we think about 2025 and beyond. Our adjusted gross margins for the full year were at least 64%, 68% for Q4. We were really pleased with the exome and genome volume mix, which was 30%, 38%, excuse me, of all test result volume, so we're continuing to make meaningful progress in driving all utilization more to exome and genome versus other tests at GeneDx, so as we think about the multiple drivers to really continue to drive profitable, sustainable growth throughout 2025 and beyond, we're going to continue to expand that serviceable market. We're going to drive into the NICU opportunity. That NICU opportunity, we believe, will have an impact in the second half of the year and beyond.
We will be giving guidance on our year-end call, so we're not providing any guidance today. We'll continue to increase penetration in that outpatient setting. We will continue to focus on reducing denials and continuing to move from 50% denials to a much lower denial number in the future. We will have additional product launches. We'll continue to focus on expanding our margins. We have a new Chief Operating Officer, Brian Dechairo, who is on day nine. His job is to make sure that we can deploy technology across our operations and automate as much of our lab as possible to be able to meet the growing volume that is coming in the door through our commercial team, and I think importantly, we have a strong capital base.
We turned Adjusted EBITDA profitable in Q3 of 2024, and we're expecting to deliver our second consecutive quarter with adjusted net income and our first quarter of positive operational cash flow. So all in all, by every metric of our business, we had a strong Q4 to wrap up an incredibly strong 2024. So as we think about where we want to go, it's a rare opportunity to fuel seismic healthcare shifts from years of disease progression, unnecessary and bloated healthcare costs, generalized treatments, diagnosing symptomatic disease to a future of earlier interventions, streamlined economic efficiency, precision and personalized medicines, and universal genomic newborn screening. So we're very proud of the work that we're doing in terms of our ability to impact an ever-growing number of families in terms of clinical care and clinical outcomes.
We're equally proud that we've established a business model that ensures that we can drive revenue, we can drive gross margins, and continue to drive leverage to be able to reinvest in our company moving forward. I want to thank our long-term shareholders and new shareholders who have joined our story in the past year for supporting us in our mission. We look forward to welcoming new shareholders throughout the course of the year as well. We think this is a rare opportunity to have a massive impact on improving the lives of so many families. And with that, thank you very much.
I would like to open the floor for questioning. Just a reminder, we are being webcasted, so if you do have a question, we'll bring the mic over to you. So can we have all the questions open? How about I get the ball rolling? We have some questions here from the audience as well. Katherine, you spoke about the addressable commercial market for GeneDx. Would it be possible for you to expand on the current go-to-market from a commercial perspective and the opportunity moving forward and how it will unfold, and potentially comment on the timing of such?
Certainly. So the pediatric market, as as we framed it previously, was really our go-get, what we know that we can convert today, and it's based mainly on ICD-10 codes today. So we talked about a $1 billion NICU opportunity and initially a $2 billion pediatric outpatient opportunity. But as we're going after additional indications and rolling out additional testing for a, for a broader number of patients, as we're working with payers to open up medical policy, we believe that that will continue to show that these diseases have a higher prevalence rate than what people initially thought. And so that $2 billion outpatient opportunity contributes to that broader opportunity as we think about a $25 million total pediatric opportunity. The real unlock comes down to the general pediatricians and our ability to get them to convert from chromosomal microarray. We still offer CMA today as a test.
Those will be the clinicians that once AAP guidelines are updated, we'll tap into first to get them to convert what's a low-margin test to a high-margin test, what's a low diagnostic yield test to a high diagnostic yield test, and that will unlock a significant amount of that larger total addressable market, so we feel really confident in our ability to continue to drive better patient care with higher prevalences through opening up access over time.
Thank you. Do we have any more questions from the audience, or we can continue going down from the online? Okay. So the next question that we have is, you actually mentioned margins and you mentioned the impact of technology. AI has been the flavor of the month. So would it be possible for you to talk about the impact that AI has on GeneDx's business, and how do you see it unfold moving forward?
Certainly. I think the biggest focus for us in terms of AI and our business really comes down to our operations and our interpretation platform. We employ about 300 different genetics experts. They are incredibly talented. We need to figure out how to take their knowledge base and put it towards the most important elements of that process and automate that end-to-end as much as we can. We've already begun doing that through machine learning features that we started deploying last year. And so we've really made some nice progress. It will be an approach of continuous improvement as we continue to deploy our team of of of engineers who we assembled over the past two years or so. We've got an incredibly bright team who are focused on that.
So part of our, our new COO's job is going to be really figuring out how we accelerate the deployment of those sorts of features throughout the entire end-to-end operation.
Yeah, and I'd maybe supplement with exome and genome margins today as a portfolio operate at near 80%. And we think there's massive opportunity still, in particular with what's about a third of the COGS stack around downstream steps after the sequencer through report writing. And those are the areas that we're targeting over the next several quarters and years to target with respect to the deployment of automation, AI, language models. And bring Brian Dechairo on as Chief Operating Officer really was an investment to lean into the opportunity that we see clearly in front of us to deploy those types of tools to further reduce COGS and expand gross margin, ultimately making the test more accessible for a broader set of population.
Thank you so much. And with that, we're on time. So thank you to the audience, and thank you, Katherine, and thank you, Kevin. Can we have a round of applause?