I think we're on. Reminiscing about San Francisco. I'm David Westenberg, the life science tools and diagnostic analyst here at Piper. I'm with GeneDx. Joining me is CEO Katherine Stueland and CFO Kevin Feeley. So, we'll just start off at a high level. Rare disease has been one of the fastest-growing categories in genomics over the last few years. What's been driving the growth from a macro perspective? Where are we in terms of market penetration? And what do we see in terms of growth trend stability?
I think one of the important perspectives on rare disease is we're in the earliest days of really building out the market by way of diagnosing as many people as early as possible using whole exome and whole genome sequencing. Part of the reason for that, if we think back to 2013, the Supreme Court determined that DNA couldn't be patented, and that really opened up the entire genomic testing market. But the costs associated with exome and genome sequencing and the turnaround times just made it a series of tests that were really relegated for the test of last resort. The industry focused on multi-gene panels because there were great efficiencies, they were cost-effective and fast.
And the reality is we've been able in the past 12 years to continue to bring down the costs, to bring down the turnaround times. In fact, our exome now is performing at about two weeks, which is faster than most multi-gene panels. And so we've been able during this time to really improve the technology and make it much more accessible. So the core technology itself is faster and more cost-effective. The health economics really make a strong case to payers. What we're able to say is rather than have a series of tests over a number of years and continue to propagate what is still a five-year diagnostic odyssey today for most children who could have an answer within now two weeks. All of that really has set the stage for why we've seen an acceleration of the diagnosis of rare diseases.
GeneDx being the leader in the space, we've enjoyed 80% market share. Eight out of 10 geneticists chooses GeneDx, because of the accuracy of our testing. And we've now been able to, I would say, add to the reasons that people utilize us, beyond accuracy. It's because we are fast and we are cost-effective. All of this, of course, further, I would say, validated by guidelines that continue to point clinicians, whether it's a geneticist, a pediatric neurologist, or as of this summer, a general pediatrician, thanks to the American Academy of Pediatrics, all are seeing the wisdom of being able to utilize a single test upfront that's looking at an entire genome worth of information and being able to distill it into an accurate answer. A nd so all of these reasons, I think, are really driving the impetus as to why rare diseases are now really starting to take hold in terms of the marketplace.
Gotcha. No, great answer. So the high growth actually hasn't gone unnoticed. So everyone from, I think, Tempus on their earnings call Exact and Quest and LabCorp are all talking about rare disease a lot more. W hat do you think keeps GeneDx in the lead in terms of incoming competition?
Well, one, we think competition is a good thing. We think that the more players out there actually talking about the need to utilize this testing will only help accelerate what is a very large market opportunity for us. Especially as we contemplate the general pediatrician opportunity and the ability to now really help put the diagnostic odyssey to an end, utilizing this testing. But what sets GeneDx apart is Infinity, which is our industry-leading data asset. We have run more than 2.5 million tests on rare disease patients. We've run, we'll be reaching a million exomes and genomes. So the genotypic data that we've been able to generate is incredibly precious and bespoke. So we have been running more of these tests than anyone in the space.
We run testing on mom and dad about 60% of the time, so that only further bolsters the genotypic richness that we have. And we started investing ahead of state Medicaid programs, which ensures that we have a very diverse patient population. So, the richness of the genotypic information that we have is incredibly difficult to catch up to if you think about running exomes on that number of patients that are all rare disease patients. The genotypic data is, of course, complemented by phenotypic data, so more than seven million phenotypic data points. So think about all the clinical notes that we're able to gather with an order that a clinician is submitting.
It is the combination of that data set that we have in Infinity that ensures that our expert geneticists, who are taking a look at variants of unknown significance, are able to upgrade or downgrade a variant of unknown significance more frequently than other labs. So it's the totality of that data asset in Infinity that has been the reason that others haven't been able to catch up to us. I should say there's dozens of exomes and genomes on the market commercially available today. At my prior company, we tried to compete with GeneDx, and we simply couldn't because we didn't have the data asset. So the importance of Infinity as really being the strengthening part of the technology that we've built, I think should not be underestimated, and the team of genetic experts, as well as our ability to now deploy AI in order to make this even more repeatable and accurate and efficient down the line. It's really those three factors that will continue to keep us in the leadership position even as competition comes to bear.
I think as others come to enter this space, they, there should be a recognition. GeneDx for well over a decade has been commercially serving the exome and genome market, building on top of that Infinity data set, proprietary analysis and interpretation platform, calibrating specifically to deliver at what today is unprecedented scale in the space. So we've been able at this point to pass a frontier unlocking massive economy of scale advantage that other smaller players won't have, that is available to us. Then I think secondarily, we've spent well over a decade earning that trust of eight out of 10 geneticists.
As now we think about a paradigm of moving the use of exome and genome outside of just that small group of experts in the space and into primary care and other specialty types, invariably we think primary care docs like a general pediatrician will look back at the expert community in choosing their service provider. Invariably, those experts are choosing GeneDx, and we think that earned trust will be something very hard to displace as we approach more and more physician types with our technology.
We also were granted breakthrough designation by the FDA, and I think that that's yet another important message for pediatricians in particular. We know that they, that FDA approved, FDA authorized resonates with them. So between the data moat, the economies of scale, FDA breakthrough status, and the largest commercial team in the rare disease space, we're gonna continue to run and make sure that we can add as many clinicians to our platform and patients as well, as quickly as we can.
Got it. Maybe we can stick with the data asset. And I mean, I think it's fairly intuitive to us, you know, improving diagnostic yield, you know, more samples you have, obviously the more analysis you're doing, the better you can, you know, continue to build. But how comfortable are you that physicians know they're getting the best product on the market, and communication of that data asset?
I think part of the reason why we started talking about Infinity as our brand for this data asset was to really do a better job of communicating what sets us apart. So, as we continue to really ramp up our marketing and selling efforts, that will be a key message that we can continue to drive. I think Kevin mentioned the reliance that genetics experts have on GeneDx. We do know through our market research that the non-experts do rely on the lab that genetic experts are relying on as well. So we think that reputation and our ability to really continue to build trust sets us apart.
and I would say just based on the 80% market share that we've had, as we have new clinician types starting to use genetic testing, they don't want to be left in a vulnerable position of a test that may be less accurate than what GeneDx offers, so the importance of accuracy in addition to speed and in addition to reimbursement, we know is gonna mean a lot to them, we've heard from general pediatricians, some of the reasons why they might wanna refer out to a geneticist, but the reality is there's a wait list of 12-24 months to get in to see a geneticist, so being able to really reassure them that this is the most accurate test out there is going to be one of the reasons that they're gonna start using testing. And so it's on us to make sure that we continue to educate the clinicians of that.
Sounds good. See, you talk about the NICU opportunity where you are in terms of placement interest in there. And what makes the NICU sale unique?
So the NICU, just to share some perspective on the underutilization of genetics in the NICU, fewer than five% of babies in a NICU get a genetic test. Yet we have published data with Seattle Children's that shows that 60% of babies in a level four NICU will benefit from a genetic test. So there has been just a wholesale underutilization of genomics in this setting. We have published data from the Seek First collaboration that establishes that it's delivering better clinical care. We also have data that shows that it will provide better health outcomes as well. So it, on average, can be $150,000 per patient annually that we're able to save.
There has just been a similar underutilization of testing to other markets as well, in part because they would refer babies that were in the most dire situations to see that same geneticist that all the outpatient patients were relying on as well. We can't have the geneticist being the gatekeeper of utilizing genetic testing. We need to drive it into the more mainstream practice of medicine. Some of the factors that influence this, one, you need to have rapid turnaround times. Last year, we reduced our turnaround times from 14 days to 5 days earlier this year. We actually introduced two days so we can provide an answer in as quickly as 48 hours.
There were some gaps in our genome that we were able to close, and then additional sample types, buccal swab, which is a cheek swab, is something that we've been able to introduce as well, making it easier to order. So Epic Aura has been an important focus for us, and we're now up to nine clinics, or nine activations of Epic Aura and health systems, so we're continuing to turn the crank. I would say Epic Aura is a new area of strength for us. It's a new commercial and product muscle that we've been able to develop, which is only gonna benefit us both in the NICU setting and in the outpatient setting, but the number of stakeholders that you need to convince i s different from in the outpatient setting. You need to convince the geneticists, which they're already using our services eight, eight out of 10 times.
You need to convince the neonatologist who is convinced based on the clinical data, improve clinical outcomes for these babies, but you also need to convince the hospital administrators that this is going to be something that's good for the business that they're running as well, and so we've developed a proprietary calculator that we're able to go into the administrators and convince them of why this is gonna be good for their business as well, so it's a multi-stakeholder sell, which of course means you have to line up schedules, you have to line up all of those conversations, you have to line it up to the budget cycle. I would say we've learned a lot this year about what it takes to win in that setting. We're pleased to see some of the progress that we've made this year and excited to build on that momentum as we think about 2026 and beyond.
Gotcha. Can you talk about the general pediatric market? How big is this and how are you going after it? And, you know, one of the questions we get from investors is, is this really an incremental opportunity or is this just a patient that would eventually see a specialist?
Yeah, I think, as we look at the general pediatrician setting, today there's about 600,000 children who are diagnosed with DDID. There's 60,000 general pediatricians and 25,000 of those are actually diagnosing kids with developmental delay. So it is a very large market opportunity for us. And the reality is, because of the underutilization of testing throughout all of these clinics, because the genetic testing was historically reserved for the geneticists, these patients are actually, many of them have gone undiagnosed into adulthood. So we're diagnosing adults today with epilepsy that was actually childhood onset epilepsy. So there's no shortage of patients that today are walking around. One out of 10 Americans has a rare disease. Half of them are children.
So we have a massive cleanup job to do over the next decade of diagnosing people who should have been diagnosed, frankly, at birth. So, as we think about the argument that perhaps we're cannibalizing the market, I look forward to the day when that will be a reality. But the reality is these patients are continuing to progress through life with an undiagnosed disease. Ultimately, we wanna get to a place where we're diagnosing every baby as early as possible, which is the importance of newborn screening. And we've been leading the way in that respect. There's a long way to go to develop that market. But in the meantime, the NICU and the general pediatricians, those are the two areas where we have to fundamentally insert a new technology that has not been historically utilized.
So we've gotta get humans to start doing things that they haven't historically been doing. And we need to really start making that the standard of care. That takes time. We've said that the general pediatrician opportunity will start to take off at about the 18-24 month period, after guidelines have been published. It takes a lot of education. It takes improving the workflow. So, as we think about the fact that a general pediatrician has 10-15 minutes total with each family, we need to be able to have one minute ordering. So it's really easy and does not overburden that clinician. So we've gotta build that. We've begun building our salesforce. So we now have several of our regional sales directors and have started hiring the actual reps, who will be training in early 2026. So it is, it's a massive opportunity for us that we couldn't be more excited about, that will require marketing, medical education, a better customer experience as well as sales reps on the ground.
Gotcha. I'm a big fan of the idea that every newborn is gonna get sequenced. I personally believe that this is not that far away. However, it's one of those things where investors don't necessarily have something right at the tip of our tongues that say it's gonna happen. So how do you think this kind of plays out? Is this kind of a state-by-state basis? Do you think it's maybe on a national basis in small numbers? Do you think maybe this is another country who shows, you know, good data and, you know, we realize we have to do it? I mean, how do we get comfortable that that is gonna be a reality?
Yes to all of those things. You know, we see the U.K. being more forward-leaning in terms of utilization of genomic sequencing at birth. I think that is, I think that speaks to what can be done with leadership at the federal level. We are, of course, talking to policymakers at the federal level about the importance of this. There is a newborn screening reauthorization act that has been circulating for some time. We have full court press in terms of education on the Hill as to why they should be bringing this forth and making this a reality for more patients. The Guardian study that we have been supporting, which is here in New York State, is a landmark study.
It was published just about two years ago in JAMA, showing that 3.2% of babies who otherwise would've considered to be healthy at birth actually had a clinically actionable genetic disease. We went back into our historic database to say, on average, what was the age of diagnosis for the diseases that we're now catching at birth, and it was seven to 11 years. So we're able to eradicate seven to 11 years of the diagnostic odyssey, of unnecessary disease progression with newborn screening. And we've proven that through the Guardian study. That inspired legislation that is now in place in Florida. So I think your point, Dave, about like, could it happen faster? We weren't expecting to see that a state would have legislation approved, and the Sunshine Genetics Act today is proving that the first state is taking action.
We're eager to get the message out that Florida has the most progressive health genomics policy for children, and bringing that to other states and to policymakers. I'd love to see some competition state to state, to see if we can get others to really, I think, adopt a version of what is happening in Florida, which is a version of what we've been doing here in New York. The NIH awarded a grant to Dr. Robert Green. GeneDx is a proud collaborator of the Beacon study. That will be a multi-state program. And so we are at the forefront of each one of these. I don't intend to be subsidizing state by state newborn screening. That's not a model that is gonna work.
What we need to do is deliver the health economic data that shows, I think, what we were able to show to Florida, which is not only is this better in terms of clinical outcomes, but for states that wanna run their healthcare budgets better, newborn screening is a great way to do that. I think that's part of what every healthcare company, every pharma company, every diagnostics company has to do when presenting their case. It has to be about better clinical outcomes, but it also has to be about running a better healthcare business. And that's exactly what earlier diagnosis does using exome and genome sequencing as early as possible. So we are talking to state policymakers, federal policymakers.
Thanks to our acquisition of Fabric Genomics, we have the ability to bring our data asset and do interpretation for countries around the world, where they can buy their own sequencers and let us handle the interpretation. So the answer is all of the above. We're gonna continue to push it on all fronts because it should be a reality for everyone way sooner than what I think people anticipated.
Got it. I don't know if I have actually to go. I only have a couple minutes left, whether we should get some financial questions or dive in further than that. I wanna dive in further than that because you have Fab, Fabric Genomics. It is an, you know, an opportunity to, to dive into international markets. So how does that play into your international strategy? And are there any concern about losing testing revenue as hospitals and countries continue to contemplate next generation sequencing? Sorry to not involve you enough, Kevin.
No, that's okay. This was, this was great to listen to. No, look, I think the Fabric acquisition in large part, I, I think take a read on that as our way to export our most differentiated capability, and that's that Infinity data set. Allow others to sequence locally. We've always envisioned a world where there may be regulatory requirements, there may be the desire to create the, the jobs locally in terms of the manufacturing component of sequencing on soil. Invariably, what other countries are gonna lack is the ability to scale population-based programs. And Fabric and the GeneDx's data set allows us to enable them to do just that. And so sequence locally and pipe that information to us to do what we do best, which is analyze and interpret the whole of the genome at scale, at speed better than anyone else on the planet.
And Fabric gives us that built-in capability to do interpretation as a service. Continue to believe that outside of the United States, something like an interpretation decentralized model, likely to be predominant for our business. But within the United States, at least for the next decade plus, continue to believe what today is the reality of a more centralized lab approach, sending to a lab like GeneDx, rather than hospital one, hospitals one by one insourcing, that the centralized lab model will be predominant in the United States. Will there be some more forward-leaning hospital systems, academic labs that wanna buy sequencers and do the end-to-end production cycle themselves? Yes. And we're there to support them with interpretation as a service should they need that capability.
But by and large, at least for the foreseeable future, hospitals one by one are gonna struggle with the economy of scale and delivering locally sequencing and interpretation. They're also gonna struggle to find the expertise in terms of the genetics manpower to feed analysis and interpretation, whether that's done manually or training and feeding algorithms over time. We've got one of the largest benches of genetic experts and genetic counselors in-house at GeneDx, and continue to believe that there will be a place for both a decentralized and centralized testing model with the decentralized approach primarily being outside the United States, at least for many more years to come.
Gotcha. Thank you very much.
Thanks so much.