Good day, and thank you for standing by. Welcome to the Adaptive Biotechnologies 2nd quarter 2022 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Karina Calzadilla, Head of Investor Relations. Please go ahead. Thank you, Daniel, and good afternoon, everyone. I would like to welcome you to Adaptive Biotechnologies' 2nd quarter 2022 earnings conference call. Earlier today, we issued a press release reporting Adaptive's financial results for the 2nd quarter of 2022. The press release is available at www.adaptivebiotech.com. We are conducting a live webcast of this call and will be referring to a slide presentation that has been posted to the investor section of our corporate website. During the call, management will make projections and other forward-looking statements within the meaning of federal securities laws regarding future events and the future financial performance of the company. These statements reflect management's current perspective of the business as of today. Actual results may differ materially from today's forward-looking statements depending on a number of factors which are set forth in our public filings with the SEC and listed in this presentation. Joining the call today are Chad Robins, our CEO and co-founder, and Tycho Peterson, our Chief Financial Officer. In addition, Harlan Robins, Adaptive's Chief Scientific Officer and co-founder, Nitin Sood, Head of the Immune Medicine MRD business, and Sharon Benzeno, Head of Immune Medicine Business, will be available for Q&A. With that, I'll turn the call to Chad Robins. Chad? Thanks, Karina. Good afternoon, everybody, and thank you for joining us on our 2nd quarter 2022 earnings call. First, a big thank you to all our Adaptive employees for their continuous dedication and hard work in delivering another strong quarter. We're halfway through the year. We're on track to achieve our 2022 goals in both our MRD and immune medicine businesses. As outlined on slide three, this quarter, we executed towards important milestones and delivered key results. Revenue for the 2nd quarter was $43.7 million, representing strong growth of 13% versus prior year. Our MRD business, comprised of clonoSEQ clinical testing and our pharma partnerships, delivered strong performance. Clinical volumes grew 53% versus prior year. We secured a positive coverage decision from Medicare in diffuse large B-cell lymphoma, the most common type of non-Hodgkin's lymphoma. clonoSEQ is the first and only test to receive Medicare coverage for MRD and DLBCL. Our MRD pharma partnerships continue to grow. This quarter, we entered into yet another pan-portfolio agreement with a major pharma company. Our immune medicine business, comprised of pharma services, drug discovery, and clinical testing opportunities, continues to grow as we diversify into multiple applications of our immune receptor data. We experienced significant growth of 123% from pharma research partners. Our Genentech partnership is on track with both our shared and private cell therapy programs. We have made a business decision with respect to the commercialization of T-Detect. Rather than launch diagnostic tests disease by disease, we are deferring commercialization until we have multiple signals with strong enough data to change physician behavior with a clear path to reimbursement. The science is working in multiple diseases, and we are confident in our long-term vision for T-Detect as a single blood test for multiple indications. However, as we look ahead, we are now focused on pharma partnering and drug discovery while we generate strong clinical utility data around our T-Detect multi-test panels. Related to our corporate activities, we continue to manage expenses prudently while exploring non-dilutive financing opportunities that could extend our cash runway. Moving on to the MRD business on slide four. As shown in the graph, our clonoSEQ clinical testing growth is strong and accelerating quarter-over-quarter. This quarter, tests delivered grew 17% sequentially to nearly 9,000 tests, with double-digit growth observed in all three marketed indications: ALL, multiple myeloma, and CLL. All metrics are pointing in the right direction. Ordering HCPs or healthcare providers and ordering accounts experienced significant growth of 53% and 44% versus prior year respectively. Unique patients tested grew 56%. Slide five shows our strategy to solidify our leadership in MRD testing for patients with lymphoid malignancies. First, the team is focused on further penetrating existing institutional accounts and increasing the activation of new community accounts with our expanded field force, which is now fully trained and deployed. 72% of the volume growth this quarter came from established institutional accounts, underscoring the potential to expand usage within existing accounts. We also grew the number of newly activated community accounts by 20%, which is a positive indicator of our sales team expansion. Another key driver of growth is blood-based testing, which has the potential to both increase penetration of clonoSEQ among clinicians and increase the number of tests run per patient. About 30% of all clonoSEQ MRD tests are performed using blood, and importantly, multiple myeloma in blood increased 33% versus prior quarter. We plan to expand into DLBCL following our positive Medicare coverage decision. The policy is effective immediately and extends to all DLBCL patients, 75% of which are Medicare-aged, regardless of line of therapy, treatment regimen, or testing time point. We continue to build our DLBCL evidence base to support guideline inclusion. Based on these efforts, we expect DLBCL to contribute to clonoSEQ growth in 2023 and beyond. Data continues to emerge, strengthening clinical utility and the value of MRD testing for patients. Slide 6 highlights data presented at ASCO from the phase III DETERMINATION trial for newly diagnosed multiple myeloma patients. This study was designed to assess the benefit of adding transplant to front-line triple therapy followed by maintenance therapy until progression. An important result from the study showed that patients who achieve MRD negativity by clonoSEQ prior to maintenance had similar outcomes independent of transplant. The authors state that the elimination of MRD is of increasing importance in tailoring treatment, in informing clinical care, and as a treatment goal, given its prognostic value for better outcomes. Let's shift to our MRD pharma portfolio on slide seven. Our clonoSEQ assay is being used in 168 active trials, representing about 21% penetration among active heme pharma trials. In multiple myeloma, we are the gold standard, almost 50% penetration. Our goal is to replicate our multiple myeloma success in NHL and CLL. This quarter, we signed a new pan-portfolio agreement with a major pharma partner, increasing our eligible milestones to over $355 million from ongoing and future studies. Now, turning to our immune medicine business on slide eight. We have proven our ability to map T-cell receptors to antigens at scale and can leverage this data for multiple diagnostic and therapeutic opportunities. To drive growth for our immune medicine business in the near to mid-term, we will focus on pharma partnerships and drug discovery collaborations. Clinical testing with T-Detect is expected to be a meaningful contributor to revenue in the long term once we establish T-cell signatures in multiple indications that can be offered as a reimbursed, differentiated diagnostic panel to patients with shared symptomatology. On slide nine, we provide an overview of our growing immune medicine business opportunities in pharma and drug discovery. From a base level, T-cell and B-cell receptor sequencing to inform research and development continues to expand in immunoSEQ as the gold standard. Layering on our ability to map disease-specific TCRs to antigens unlocks a valuable product offering called T-MAP that is used to support our pharma partners in measuring the T-cell response to various drugs, including vaccines. We are partnering on COVID and RSV vaccine programs and expect to drive additional revenue in infectious disease, autoimmunity, and oncology. Moving up the R&D value chain, immune response data can be also used as a regulated clinical endpoint with diagnostic applications. In drug discovery, we further characterize antigen-specific TCRs for target and/or drug discovery. This is the basis of our partnership with Genentech. We are increasing our focus on additional high-value drug discovery opportunities. Turning to our T-Detect clinical testing strategy on slide 10. We proved and validated our T-Detect clinical testing capability in infectious diseases. Specifically, T-Detect COVID achieved EUA and was key to educate the FDA about a new class of T-cell-based testing. We also made T-Detect Lyme available in our CLIA lab, which enabled us to implement end-to-end and CLIA workflows and to continuously improve the algorithm. As mentioned previously, our experience showed us that the cost to commercialize and improve signals through self-pay customers disease by disease is high. Therefore, we have decided not to launch T-Detect tests before there is a clear path to reimbursement. We believe we can improve the signals to drive clinical evidence for coverage and commercial uptake by focusing on internal R&D and pharma partnering. This will allow us to drive near-term revenue and generate more signals that support the vision of T-Detect. We are confident that this disciplined approach will enable us to achieve commercial success with T-Detect as a differentiated high-value clinical test. We are excited about the multiple business opportunities that we discussed today and look forward to providing additional updates on our progress. I'll now pass it over to Tycho for a financial update. Thank you. Turning to our financial results, starting with revenue on slide 11. Total revenue in the 2nd quarter was $43.7 million, representing a 13% increase from $38.5 million in the same period last year, with 51% from immune medicine and 49% from MRD. MRD revenue, which is comprised of clonoSEQ clinical testing, plus revenues from our MRD pharma and research partnerships, was $21.3 million, an increase of 38% from a year ago. clonoSEQ clinical testing and MRD partnerships drove approximately 65% and 35% of the growth respectively. Within our MRD pharma business, we recognized a $1 million regulatory milestone. While we continue to see milestones from our MRD partnerships materializing and accelerating over time, these can vary quarter to quarter. clonoSEQ test volumes, which include tech transfer, increased by 53% to 8,998 tests delivered from 5,897 in the same period last year. We expect similar or higher volume growth trends to continue for the remainder of the year. Immune medicine revenue was $22.4 million, down 3% from a year ago. The change was driven by a $3.7 million increase from pharma and academic customers using immunoSEQ and T-MAP products, as well as a $1 million decrease in revenue from T-Detect COVID and a $3.4 million decrease from Genentech amortization, which, as we have noted in the past, varies from quarter to quarter. Shifting to our operating costs on slide twelve. Total operating expenses were $96.2 million or a 9% increase from $88.3 million last year, and a 6% decrease from $102 million last quarter. Cost of revenue was $13.2 million compared to $10.8 million last year, representing a 23% increase driven mainly by a mix to higher cost assays. R&D expenses were $37 million compared to $37.8 million a year ago, representing a 2% decrease, which is partially attributable to reduced collaboration and medical advisory costs. Sales and marketing expenses were $24.3 million compared to $23.2 million a year ago, representing an increase of 5% due largely to higher T&E and increased personnel costs from the sales force expansion, partially offset by a decrease in marketing expenses. G&A expenses were $21.2 million compared to $16.1 million a year ago, representing an increase of 32%. This was primarily driven by the expansion of our facility footprint with the opening of our new headquarters in the back half of 2021, as well as higher depreciation expenses and increased personnel costs. Net loss for the 2nd quarter of 2022 was $52.1 million compared to $49.3 million last year. Now turning to full year guidance, we are reiterating our full year revenue range of $185 million-$195 million. Both our MRD and immune medicine businesses have great momentum, and we expect them to still contribute to our full year revenues approximately 50/50 at the midpoint of the range. For operating expenses, we now expect full year or full year target to be between $410 million-$415 million, as compared to our previous expectation of $425 million-$435 million. This reflects our continuous efforts in managing investments and improving operating efficiencies beyond the restructuring activities that we announced at the beginning of the year. Some of the operating efficiencies we are exploring include real estate consolidation, sequencing and workflow cost reductions, and software optimization. Importantly, we are being thoughtful about our cash, and we expect to deploy capital off our balance sheet to support operations, and we expect our quarterly burn rate to be approximately $55 million in the back half of the year. Our capital position is strong. We ended the quarter with about $450 million in cash and equivalents, which provides us around two years of runway. As Chad mentioned, given current market conditions, we are exploring non-dilutive financing alternatives to extend our cash runway while also working extensively on our long-range plan. I look forward to providing you with further details on our path to profitability in the back half of the year. With that, I'll hand it back over to Chad. Thanks, Tycho. As outlined today, we are sharpening our focus and remain disciplined with our investments as we fine-tune our path to profitability. Both our immune medicine and our MRD businesses have great momentum and are on track to achieve their respective catalysts listed on slide 13. We're looking to a great second half of the year. I'd like to turn it back over to the operator and open it up for questions. As a reminder, to ask a question, you will need to press star one one on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Brian Weinstein with William Blair. Please proceed with your question. Hey, thanks for taking the question. At least I don't have to fight with Tycho to see who is gonna get the first question anymore here. That's a positive. Just a question for you on the sharpening of the focus here with immune medicine. I understand prioritizing pharma partnering and sort of discovery opportunities. Can you just talk about what led to doing this now? What really changed? Was it a cost thing? Was it time that it was taking for R&D? Was it recognizing the commercial path was gonna be a little bit more challenging? Can you just talk about why now? Can you also help us further understand the growth profile of immune medicine absent the T-Detect portion? Is sort of our first question. Thanks. Yeah, thanks for the question, Brian. I just wanna kind of put out there that, you know, we remain committed to the vision of T-Detect as a single blood test with multiple answers. However, you know, we realize that our near term path of commercializing disease by disease is it's challenging and costly. At the same time, we have this incredibly rich immune receptor data that will drive growth in our immune medicine business, as we kind of continue to strengthen the signals. As a matter of fact, we're able to, in many of these pharma deals, leverage that data to essentially get paid and increase our signals, you know, at the same time. If you look at kinda the capital efficiency of being able to do that, it just as we're developing our long range plan, it really came to light and to sharpen our focus to say, you know, this is a much better path, as we look towards profitability. If you take a look at it, I mean, big picture pharma is actually the fastest growing segment of our immune medicine business. It's grown over 100% so far this year, and we expect it to continue to grow at very healthy rates. You know, while we're deferring the commercialization of T-Detect, we're gonna continue to monetize what I'll call our higher margin profile opportunities from our pharma partners using kind of this really rich and unique immune receptor data set. I think it's a much more efficient way to generate strong signals. Essentially what we're doing is kind of replacing the revenue with a higher margin profile in the near term. Got it. You guys talked about, you know, having a number of high value drug discovery opportunities that you were looking at. I mean, is there a way to kind of give us an idea about when we may hear about some of these newer opportunities? Are these things that you would be press releasing? Are these smaller types of deals that are kind of going on behind the scenes? Just what does that kind of pipeline of opportunities to kind of leverage this look like outside of what you've already disclosed? Yeah, Brian, I think it'll be a combination of, you know, as it's warranted, we'll press release deals, and quarter to quarter, again, as appropriate, we'll be kind of filling in where our pharma partners allow for us for disclosure. We'll be talking more and more about the kind of multiple opportunities that really, if you look at that pipeline slide, it's really across the spectrum, you know, from everything from, you know, on the early research side all the way up through kind of the target discovery, drug discovery, you know, on the higher end side. Okay. The last one for me, Tycho, I wanna confirm what I thought you said was we'll get some idea about profitability time frames and maybe even some thoughts on some of these non-dilutive options that you guys have teased over the last couple quarters. What we should expect to hear something from you on that here in the back half of the year? Nothing to comment on, other than that at this point. Yeah. On profitability, you know, it's incredibly important. We're in the midst of our kind of three to five- year long range planning, kind of updating that. You know, we'll communicate more around the path to profitability in the back half of the year, likely on the 3rd quarter call, as how we're thinking about that. On the financing front, yeah, we've publicly said and Chad reiterated today, we're looking at non-dilutive financing opportunities to extend our cash runway. You know, starting from a position of strength, we've got over $450 million to begin with, so two years of cash on hand, but we're looking to shore that up and we'll have more to talk about it when we can communicate. Hopefully sooner rather than later, but I'm not gonna put a timeline on that. Got it. Okay, thanks. Thanks, Brian. Thank you. One moment for our next question. Our next question comes from Julia Qin with JP Morgan. Your line is now open. Hi, good afternoon. Thanks for taking the question. To start off on the clonoSEQ business, obviously it's great to see you get expanded coverage for DLBCL. Obviously we know it's a big market like you talked about. How quickly do you think you can drive that penetration? Do you think the uptake will mirror your historical experiences with the other clonoSEQ indications? Or do you think we could potentially see faster uptake, you know, maybe benefiting from the expanded sales force? Just, you know, help us think through the near term revenue ramp and how that might change your MRD revenue trajectory in the near term. Sure. Julia. Nitin, do you wanna take a crack at that? Yes. Thanks Julia for that question. Yeah, look, we're really excited about the DLBCL coverage. You know, it's the most common subtype of non-Hodgkin's lymphoma. As you heard Chad say, you know, we're the first and only MRD test for DLBCL to receive Medicare coverage. You know, I view that as a clear validation that, you know, we continue to extend our leadership position in MRD testing for lymphoid cancers. In terms of DLBCL contributing to growth, we expect this to happen in the second half of 2023. You know, we'll have to do the standard things that we do with all you know, other disease types. We have to go out there, educate the physicians. We have to change physician behavior. We have to get into guidelines and I'm very bullish that we'll be able to do that, you know, as the therapy landscape for DLBCL has significantly advanced in recent years, and there's a pretty large unmet need for monitoring disease progression and guiding, you know, patient care similar to what we've seen, you know, happen in multiple myeloma recently. We have good data. For example, you know, recently we published that MRD assessment using clonoSEQ in DLBCL post-CAR-T treatment can be more informative than PET/CT in identifying patients who are at high risk of relapse. Overall, you know, I expect the MRD business to continue to grow at or above the annual growth rate we're gonna see this year, but off of a higher base. In the outer years, we're gonna continue this growth trajectory but off a higher base. In some ways, we're adding, you know, more incremental tests every year, going forward. Great. That's helpful. One for Tycho on the non-dilutive financing. Understand you're planning to save more details for when you're ready to talk about it. On a very high level, was wondering if you can give an update on, you know, the kind of deal types or deal structures you're currently exploring. What kind of conversations are you having right now? And are they gonna be closely tied to your increased focus on the T-MAP business with Biopharma? Yeah, no, it's a fair question. You know, non-dilutive, you know, meaning equity is kinda off the table here. I'd say from a kinda high level, we're generally reluctant to you know, issue debt just given the nature of kind of balloon payments. You know, we are exploring a potential royalty type deal. You know, I don't wanna give much more detail than that, but, you know, this is a well-established model in the therapeutic world, with companies that do these type of royalty transactions. Those are the discussions we're having now, you know, still in process. Again, no firm updates and, you know, not specifically tied to, you know, the T-MAP program. I mean, these types of things would generally be done on kind of a basket of revenues, total revenues overall. Gotcha. That's helpful. A follow-up on the long range plan. I know you're currently working on it. Without getting into the specific details, can you maybe talk about whether there are any new components to the plan or new approaches you're thinking about? I know visibility of Biopharma milestones is something you're working on, so maybe give us some color on how you would approach it. Yeah. Look, I mean, we're, you know, the initial cut is kind of build the revenue map, and then kind of, you know, think about kind of the OpEx that's gonna be required to kinda to get us there. You know, I don't envision it involves any kind of significant change in trajectory overall. I mean, I think it's a lot of kind of continuation of stuff that's in progress, obviously continuing to build out the pharma portfolio, you know, for Nitin's world, continuing to kind of penetrate the MRD market further. I don't know, Sharon, is there anything you wanna add from kind of the pharma immune side that you would highlight in the long range view? Yeah, you highlight exactly the components and of course we take into account prior booked deals and studies and obviously continue our business development efforts, as Chad Robins indicated, in the different research uses or regulated uses in the future target discovery and therapeutics that add up to the revenue component as we project three to five years out. Great. That's helpful. Thank you. Thank you. Our next question comes from Derik De Bruin with Bank of America. Your line is now open. Hey, good afternoon. Thanks for taking my question. Appreciate the fact that you know, the T-Detect landscape was a little bit more complex, but can you give us some sense of timing on when you sort of think the first products could start having some commercial benefit? I mean, we had modeled some Lyme and, you know, some GI and some stuff into our models. Not a lot, but I mean, you know, just need to know how much that comes out. Then also, how should we think about T-Detect COVID? Is that also gonna disappear next year? Yeah, why don't I, h ey, Derik De Bruin. Why don't I take the first one first, which is T-Detect COVID. We are gonna keep T-Detect COVID up. We think it's, you know, it's important, you know, as a, you know, this is the first and only T-cell test authorized by the EUA and for cellular immunity. You know, we continue to work, you know, closely with pharma partners on a correlative protection study, which we think, you know, has the potential to really impact the kinda paradigm here. But, you know, there wasn't a, you know, significant amount of kind of revenue in the model. We've talked about it, you know, as being a, you know, very small contributor from a financial standpoint. That being said, that data is along with other data support sources, is supporting, you know, our T-MAP COVID product, which we're partnering on pharma, which is a larger contributor to the revenue source. T-Detect COVID will be left up. We have made the decision to take down the Lyme offering, and we made it available. We accomplished what we set out to do. You know, we made it available in our CLIA lab, which enabled us to put in kind of all the building blocks and infrastructure software, how we validate in a CLIA lab and have a kind of a self-improving diagnostic with the algorithm, which kind of we checked all those boxes for future launches. Again, I think there should have been kind of, as we guided you know, very little kind of revenue associated with that. That being said, Derik, we are continuing the work on our PTLDS, which is the post-treatment Lyme disease syndrome or chronic Lyme, because as part of a panel of shared symptomatology, you know, chronic Lyme could be confused with, you know, many other neurological disorders, including MS, even kinda long haul COVID. That work is ongoing from an R&D perspective. If the data is positive, the other thing we can do, which really goes for every single one of these signals that we're generating, is we're gonna leverage that data kinda with pharma with our pharma partners. There's different programs going on kinda across the spectrum from kinda GI to Lyme, et cetera, where we can leverage that immune receptor data to potentially bring in near term revenue. Just circling back though, but then when would be a good time to start thinking about when T-Detect would start to contribute to the top line, right? The sort of the revamp and the reset here. Yeah, we're probably a couple years out, Derik, and we'll get back more on when we kinda roll out the three to five-year long-range plan in the November earnings. But we'll have kind of a more detailed view, but we are gonna let the science do the talking here and kinda leverage that data near term. It's a revamp, but it's really a replacement strategy. I mean, in some assets we're kind of replacing those revenues at a kinda higher margin profile with kinda near-term pharma. It's just a different strategy for kinda the R&D development. Okay. That's where I was going to, right? I think, do you sort of see, and you know, are they enough to offset what you sort of have planned in the models for like the, these higher revenue ones or something that could drive? You could actually be potentially higher in the near term? Yeah. I'm gonna let Tycho and Karina work with you on the models, Derik. You know, I think we're certainly encouraged by what we're seeing in terms of replacing those revenues with a higher margin profile, quality of revenue. That's essentially what I'll consider at least, you know, paid for R&D or somewhat gonna burn offset R&D from our partnerships with pharma to develop those products and get to a panel approach that has multiple indications for earlier detection at the same time. Great. Thank you. Sure. Thank you. Our next question comes from David Westenberg with Piper Sandler. Your line is now open. Hey. Hey, guys. Thanks for taking the question and congrats on some of the great clonoSEQ stuff. I'll stick with that because I think that was the biggest sequential increase in that we've seen. Can you give a little bit more color on what exactly might have happened that you finally had this inflection run quarter inflection? I have a couple more on clonoSEQ, and I'll stop there, how you answer that. Sure. Nitin, do you wanna take that? Yeah, I'll take that. I think there's multiple factors. First, you know, our sales- Take that? Yeah, I'll take that. I think there's multiple factors. First, you know, our sales team is fully trained and deployed out there. I think as we've talked about, you know, we're our strategy there was to increase penetration in our existing accounts and then also sign up new accounts in the community setting, as well as drive penetration in blood. You know, we're seeing all of those factors contribute in our existing institutional accounts. They are still driving growth. We saw sort of 72% growth come from institutional accounts, but we're also increasing our, you know, the contribution from community accounts. The new accounts we're signing up are, many of them or most of them are in the community setting. That's driving growth. We continue to see increasing amounts of evidence come out. We talked about the DETERMINATION trial. I think one of the big decision points for a physician treating multiple myeloma is to you know whether to do stem cell transplant or not. The DETERMINATION trial you know really helped highlight the fact that that's an important decision, and MRD can be used to make that decision. I think there's general awareness in the physician community that the goal of lymphoid cancer treatment should be MRD negativity. We see that also contributing to growth. I wouldn't say there's one thing that's contributing growth. There's a lot of things coming into play, that's contributing growth, and we expect this robust growth to continue in the subsequent years as well. Got it. Well, I'll ask, I guess, a little more offline 'cause it does seem like, you know, we went 8%, 8%, 12%, 17%. It just seems like there was a big inflection here. Anyway, we'll look into that. Just a couple of questions on NHL. Can you remind us why NHL is a little bit more piecemeal, you know, in that you do DLBCL rather than the, you know, the whole non-Hodgkin's lymphoma? I'm sorry, I'm not an oncologist, not a scientist. Yeah. I just kinda remind me on that. Then also, can you know, you're talking about this as a 2023 contributor. Like, these are the same oncologists that are ordering blood cancer tests. You know, we've done plenty of our checks with oncologists, finding the ones that are ordering, you know, even like T-cell lymphomas and you know, you're not indicated for that. Why? Mm-hmm. Why is this a 2023 inflection point? Yeah. I'll stop there. Yeah. First of all, you know, answering your first question, you know, DLBCL. You know, within non-Hodgkin's lymphoma, there are multiple subtypes, which each subtype has a slightly different treatment paradigm and as a result, a different evidence set that's required. You know, there's follicular lymphoma, there's mantle cell lymphoma. DLBCL is about 35% of non-Hodgkin's lymphoma. We went after DLBCL first, but we will, you know, continue to tackle the rest of non-Hodgkin's lymphoma subtypes. You know, we feeling confident that we'll be able to get Medicare reimbursement for those. We wanna do it step at a time because the evidence set required for each subtype is different. Talking about the you know, DLBCL contributing to growth, first of all, you know, our current DLBCL test accepts plasma. For it to be widely used, we needed to accept whole blood in Streck tubes. We've previously talked about that, we're doing that work. We'll launch the Streck tube assay for DLBCL later in this year. You know, we have to go through the whole education process of convincing physicians, getting into guidelines. As a result, you know, it's gonna really kick in in the second half of 2023. Even though it's the same physician set, you know, we still need to do the education process. The use of a blood test and MRD in non-Hodgkin's lymphoma isn't established. You know, we'll do all the work. We have the evidence, we have the studies, we have the expanded sales team and the capability now to do that. But, you know, it's gonna take time, and that's why we think the real growth is gonna kick in in the second half of 2023. Perfect. Thank you for the color. Welcome back, and congrats on the new post, Dave. Thank you. Our next question comes from Dan Brennan with Cowen and Company. Your line is now open. Thanks. Thanks for taking the questions. Tycho, congrats on first call here. Maybe Tycho, maybe I'll start with you. On the balance sheet, I guess the burn guide that you're targeting in the back half of the year, $55 million, that's basically in line with the prior guide, I believe, but you have lower OpEx. Maybe just kinda help me think through that a little bit. If we were to plug in the forecast that you guys are giving, where should we be landing at year-end for cash? Is it, you know, I think around $200 million? Is that the right zip code? Yeah. We are guiding to $55 million, you know, burn and quarterly burn in the back half of the year. You know, as I mentioned, we took OpEx down to $410 million-$415 million, so that kinda reflects the restructuring and some of the other, you know, efforts that I kinda highlighted around workflow and things like that. From a cash position, yeah, I don't think that's too far off in terms of, you know, where we'll be at year-end. What was the other part of it? Oh, no, I just I guess maybe some of the OpEx cuts are non-cash because I know that I think the prior burn guidance was $50-$60 in the back half. Since OpEx is coming down, I'm just wondering if the burn, you know, if the burn reduction could come down more, that's all. Look, we're trying to get more efficient every day, right? We've got other efforts, you know, underway, to bring down the OpEx. That's an ongoing, you know, effort, and part of our long-range planning too, right? As we think about the three to five-year plan, we're generally trying to, you know, hold OpEx, if not, you know, bring it down annually. Got it. Maybe on clonoSEQ, just I know there's a few questions asked already, but can you just speak to what the access looks like today? Has that changed much? You know, I know different diagnostic companies have discussed access really being stuck, but obviously you're in a more acute space with cancer, so maybe that's kinda continuing to improve. Where is the access? I know it was touched upon earlier, maybe to Dave's question, but just are we at, like where are we at in terms of productivity of the expanded sales force? Are we halfway there? Fully there? Is there a lot more to go, as they you know, kind of are in the field more? Yeah. Before we do that, Dan, just on the cash question earlier, $350 at the end of the year. I think you had said $250, but no, it's $350. Got it. All right. Go ahead. Yeah. I think unfortunately, the access hasn't changed much in the last few months. You know, I think it seems to be a new normal. But on the other hand, you know, we are able to, you know, get a hold of physicians through other channels. You know, so we expect that to not change much in the upcoming years and in the second half of the year as well. You know. Sorry, what was your second question? Oh, it was just on the, you know, the expanded commercial team. Just trying to get a sense of, you know, kind of the rate of productivity enhancements. How far along are we with that team in place now? Yeah. I think there's a long way to go in terms of increasing the productivity. I think you know this is you know the 1st quarter where the sales team was trained and deployed. You know it still takes six to eight months for you know individuals in new territories to develop their territories to really understand what's going on in each of their territories. I expect for sales productivity to increase continuously going forward. We're quite a way away from I would say at least 12-18 months away from increasing productivity. I don't expect us to increase our sales footprint going forward. I think we can drive a lot of increase in business with the current footprint by increasing productivity. Got it. Maybe just one more on T-Detect. You know, for ileal Crohn's and colitis, I know you run a fair number of samples at different presentations. Is the idea that you need to have a broader signal across more indications than just something like that? Which I think those were maybe targeted to be the first out of the chute. You know, was the idea that the commercial impact of just having those isn't gonna be enough, so you need to have a broader spectrum of kind of signals, or were the signals not strong enough in those areas? Maybe just speak a little bit to the first indication you were initially targeting and kinda how those first indications would evolve into a bigger panel. Oh, sure. Sharon, you wanna take that? Yeah, absolutely. Thanks for the question to help clarify. IBD is still a top priority. In fact, we initiated our clinical study in IBD that covers both Crohn's and ulcerative colitis. We are aiming, as Chad mentioned, in terms of this shift and focus in a panel which includes not just IBD, Crohn's, ulcerative colitis, but also other GI disorders, including enhancing our signal, for example, potentially in celiac disease. Really having a panel of, for example, GI symptomatology that T-Detect could help differentially diagnose and diagnose early. That's one example of a panel. We are still pursuing MS and neuro as a panel where, as Chad indicated, our signal and the strengthening of the signal in mind can also come into play to differentially diagnose. Those are the activities. Again, we are continuing and are encouraged by the signals that we've generated to date and that will continue to scale in multiple indications. Got it. Maybe a final one just on kind of the outlook, could you help us think through in the context of the guidance for revenue? I know you said 50/50 between MRD and immune medicine, but when we think about some of the buckets within that, would you be willing to provide some color, you know, across clonoSEQ clinical and clonoSEQ pharma, MRD development? You know, the different buckets as you report, how we should think about kinda the trajectory of those businesses implicit in your guidance? I don't know, Dan, if we would specifically break it down. I mean, I think you can frankly probably back into it. If you have the ASP and the tests delivered numbers, you can probably get close to that. I think the first cut, as you know, this year going to kinda immune medicine and MRD, those broad-based bucket. You know, over time, we may provide kind of, you know, further resolution into that. But I think you can get, you know, somewhat of a proxy. You know, obviously the milestones are kinda sitting out there and are probably harder to quantify. But you know, we'll work with you on the model. Awesome. Okay, great, Chad. Thank you. Yeah, you bet, Dan. Good talking to you. Thank you. Our next question comes from Salveen Richter with Goldman Sachs. Your line is now open. Hey, guys. Thanks for taking our question. This is Elizabeth on Salveen. This is on the drug discovery vertical, and just hoping you can help kind of frame the opportunity in target discovery and how much that contributes to the long-term growth. Thank you. Sure. Sharon, you wanna take that? Yeah, absolutely. On the heels of the signals that we are generating, we mentioned autoimmune disorders like IBD and MS. There's a lot of opportunity that we and potential partners see there in terms of really validating and discovering novel targets to then pursue as therapeutics in these diseases where there's a high unmet need. That's what we're exploring. That is the heart and soul of the TCR antigen mapping effort with our Microsoft colleagues. We're very excited to continue to pursue that and scale that and really get to these novel targets that we could structure deals around discovery and licensing that could also enable some drug discovery opportunities for us in terms of TCRs against those targets or even antibodies. Thank you. Our next question comes from Tejas Savant with Morgan Stanley. Your line is now open. Hi, this is Yuko on the call for Tejas. Thank you for taking our questions. Would the DLBCL expected to make a more meaningful contribution in the back half of 2023? Could you elaborate on the potential opportunities on the clinical research side and whether you see that opportunity to be more near term? Sure. Nitin, you wanna take it? Good question. Absolutely. I think, you know, we are already, you know, working towards increasing our penetration in DLBCL with pharma companies. As I mentioned, therapy landscape for DLBCL is very rich. There's a lot of activity going on there. There's a large number of clinical trials going on, and our penetration in those clinical trials as an endpoint is very low. We are working with all the major players in that space, and we expect that to be, you know, a near-term revenue contributor. We've already heard from a handful of pharma companies that they view the Medicare coverage very positively. The fact this test is going to be broadly available for patient management is viewed positively by them, and we're already having some conversations about using, you know, clonoSEQ as an endpoint in DLBCL trials. Great. Thank you for that color. Then just as an unrelated follow-up, some of your peers in the industry noted they're seeing staffing shortages in hospitals and physician offices. Is that something you also run into? And if so, has it been a headwind for clonoSEQ? Yes. I think we are seeing something similar, and we do actually see that we get some order spikes on a couple of days within a week, largely because I think they're trying to accumulate orders on, you know, two days out of a week and send us those orders. We see sort of that day-to-day variability. You know, despite that, you know, we saw some very strong performance this quarter, and we hope to continue that in Q3 and Q4 as well. Great. Thank you so much. Thank you. Our next question comes from Mark Massaro with BTIG. Your line is now open. Hey, thanks for the questions. I guess, congrats on the reimbursement for non-Hodgkin's lymphoma. I guess, can you comment about whether or not you've received pricing on the test and how we should think about that? You know, I think in the past you've received sort of a bundle for four tests. Should we think about that as flat to what you already have? Is it fair to think that NHL can be ordered somewhere around two to four times per patient in the blood? Yeah. Thanks for that question, Mark. Yes. The pricing is identical to the historic pricing we received for clonoSEQ, the bundle pricing. In terms of usage, I think that's gonna grow over time. I think our approach is to tackle the relapsed refractory setting of DLBCL first, which is where we think there's greatest utility in the near term. As we build evidence and as we build a familiarity with physicians on using clonoSEQ and DLBCL, we'll also move upstream into frontline treatment. I think as more and more treatments come online and as people live longer and longer with these diseases, you know, we expect the usage to increase over time. Okay. I know you were asked this question earlier, but maybe just can you confirm that pricing, I think, is already effective immediately. I guess why won't this have more of an impact in the second half of 2022? I understand that, you know, it could be small numbers in the early days, but, you know, given the size of your sales force and the fact that everyone knows what clonoSEQ is, you know, are you just being conservative that the bigger uptake is in 2023? Or maybe just walk us through why you have low expectations for the initial uptake in the first six months. Yes. I think there's a very specific reason. The current test, I think we talked about this in prior earnings, the current test is based on plasma. And as you know, in the community setting where DLBCL is most frequently treated, the physician's capability to take whole blood, spin that down into plasma, and send plasma to us is limited. At the end of this year, we're launching a change to the product where we will be able to accept whole blood in Streck tubes, which is very similar to, you know, other sort of liquid biopsy tests out there. That's happening at the end of the year, and I think that's gonna be the limiting factor for driving growth in the second half. You know, that's the real discrete reason why we think growth and adoption for DLBCL will be limited. Again, I just wanna emphasize that the Medicare coverage is for all without limitations. It covers DLBCL throughout the treatment paradigm for DLBCL. Given that Streck tube limitation which we're addressing, you know, we think the growth will come really in 2023. Okay. Understood. Mark, I- Yeah, go ahead. Mark, I'll add one comment to that 'cause it's been said a couple times, but just to clarify, where our largest penetration so far is in kind of the academic medical center, where there is a lot more specialization between the leukemias, multiple myeloma, and then kind of lymphoma is a different category. Mm-hmm. Granted in the community, there is still some specialization in the community, but in the community, where they do kinda treat all comers, it's, you know, we're much lower penetration rates right now. So there's a notion that, you know, our sales force. Obviously, that's where we're trying to get to, is that one doc who treats all patients understands our test well, but that, you know, that's a growing, but smaller, off a smaller base right now. Okay, excellent. One last question on MRD. You know, your press release on NHL sort of referred to, you know, the indication as being based on circulating tumor DNA. I think- Mm-hmm. You've talked about how, NHL or DLBCL is almost a borderline heme disorder. Recognizing- Mm-hmm. That you guys certainly are the dominant market leaders in heme. Mm-hmm. You know, obviously solid tumors are also a big opportunity. I guess, have you learned anything through the development of NHL or DLBCL that leads you to believe that this may be sort of a potential precursor into solid tumor development? Yeah. I'll address that. I think, you know, the ctDNA test that we have developed for DLBCL essentially uses the same underlying technology that we have for DNA that originates from whole cells. So, you know, in that sense, it's very similar and it leverages the you know, the years and years of development effort that we put into that assay, all the IP protection we have, all the controls we have in manufacturing and all the operational excellence we have around that test. But at the same time, it also demonstrates that, hey, you know, we can leverage our technology and look at different analytes. And in terms of, you know, looking at solid tumors, that's, you know, something, you know, we can, you know. Let me talk about it. Yeah. Yeah. Yeah. I'll take that one. Mark, it's a good question. It's a natural question, especially as kinda the new technology we're developing potentially lends itself to being able to evaluate MRD in solid tumors. From a corporate development perspective, you know, we continuously kinda evaluate our opportunities, and that's, you know, obviously something naturally we will evaluate amongst kinda many other opportunities to expand our franchise. Awesome. Thanks very much for the color. You bet. Thank you, Mark. Thank you. Thank you for participating. You may now disconnect. The conference will begin shortly. To raise your hand during Q&A, you can dial star one one.