Good day, thank you for standing by, welcome to the fourth quarter and full year 2022 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. 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. Della, you may go ahead. Thank you, Justin. Good afternoon, everyone. I would like to welcome you to Adaptive Biotechnologies fourth quarter and full year 2022 earnings conference call. Earlier today, we issued a press release reporting Adaptive financial results for the fourth quarter and full year of 22. The press release is available at www.adaptivebiotech.com. We are conducting a live webcast of this call and will be referencing to a slide presentation that has been posted to the investor section on our corporate website. During the call, management will make projections and other forward-looking statements within the meanings of federal security laws regarding future events and the future financial performance of the company. These statements reflect management 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. In addition, non-GAAP financial measures will be discussed during this call, and a reconciliation from non-GAAP to GAAP metrics can be found in our earnings release. 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 MRD Business, and Sharon Benzeno, Head of the Immune Medicine Business, will be available for Q&A. With that, I'll turn the call over to Chad Robins. Chad? Thanks, Karina. Good afternoon, everybody. Thank you for joining us on our 2022 fourth quarter and full year earnings call. As always, I wanna thank all of our Adaptive employees for their dedication and strong execution throughout the year. As you can see on slide 3, 2022 was a year of key decisions and achievements for Adaptive. We started with the reorganization of the company around 2 business areas, MRD and Immune Medicine. We established clear strategic goals for each of these 2 business areas, executed against these goals by hitting key deliverables throughout the year. Following the restructuring, we shared our long-range financial plan to achieve sustainable revenue growth while reaching adjusted EBITDA profitability in 2025. We also strengthened our cash position with a non-dilutive royalty financing agreement. Importantly, given our 2022 ending cash position of $498 million, we do not anticipate the need to raise additional capital to achieve our profitability targets. Both of our business areas achieved significant progress and finished the year strong. In MRD, clonoSEQ clinical volumes grew 51% versus fiscal year 2021, supported by our fully trained sales team, which we nearly doubled during the year. In addition, we launched clonoSEQ in DLBCL and signed an agreement with Epic for EMR integration. Both are key milestones that are fundamental to the growth of our MRD business. In immune medicine, we made the strategic decision to focus our commercial and development efforts around pharma services and drug discovery. Pharma services had substantial growth of 67% versus 2021. In drug discovery, our partnership with Genentech had significant progress in both of our cell therapy programs. We are optimistic about the potential of Genentech advancing the first candidate into the clinic. In addition to Genentech, we are focused on leveraging our capabilities to develop our internal programs in autoimmune disorders. We finished the year with a strong fourth quarter of $55.2 million in total revenue, representing a significant growth of 46% versus prior year. Our fiscal year 2022 revenue of $185.3 million reflects a 20% growth versus 2021. We're off to a great start in 2023. Momentum is building. We are growing revenue, advancing our pipeline, and we're managing our operating expenses. Importantly, we have the capital to fuel sustainable growth and execute on our long-range plan. I'm gonna start with MRD on slide four. clonoSEQ is the gold standard for MRD in blood cancers. Over the last decade, we have built strong moats around clonoSEQ that provide significant competitive advantages, including best-in-class sensitivity, broad coverage, clinical evidence, guideline inclusion, and pharma use as a surrogate endpoint in clinical trials. Now, having nearly doubled our sales force, expanded into DLBCL, and with the forthcoming Epic integration, it is about execution and driving penetration. As shown on the graph, clonoSEQ test volumes are growing consistently. Fourth quarter volume grew 9% from third quarter to 10,526 tests delivered. Ordering healthcare providers and ordering accounts experienced significant growth of 56% and 47% respectively versus prior year, and unique patients tested grew 63%. ASP is nearly $1,100 per test, and we expect it to continue to grow annually in the mid-single digits as we finalize pricing agreements with non-contracted payers and improve collection performance. Our revenue from MRD pharma partnerships, which is a key component of our MRD business, is also growing. Quarterly revenue, excluding regulatory milestones from these partnerships, grew 52% versus prior year and 41% versus prior quarter. This quarter, we recognized a $2 million milestone from the approval of another multiple myeloma therapy, which used our clonoSEQ assay as a secondary endpoint. We are off to a great start this year with clinical clonoSEQ orders at a record high for us in the past month. To further increase clonoSEQ penetration, we are focused on a three-pronged strategy shown on slide 5. First, increase blood-based testing. Blood-based testing will be a catalyst to drive penetration in the community and increase frequency of testing for patients. clonoSEQ is validated and reimbursed in blood in ALL, multiple myeloma, CLL, and diffuse large B-cell lymphoma. Overall usage of blood in the fourth quarter currently accounts for approximately one-third of all ClonoSEQ MRD tests. In addition, as we increase penetration in CLL and DLBCL, which are primarily blood-based, the overall usage in blood will continue to increase and will catalyze penetration in the community, which now represents 15% of volume versus 12% just last quarter. Second, drive growth in DLBCL. We launched ClonoSEQ in DLBCL during the ASH conference in December. DLBCL represents 30% of patients with non-Hodgkin's lymphoma and is an aggressive disease with a high relapse rate. We anticipate DLBCL to be a meaningful contributor in the second half of 2023. Expanding access to ClonoSEQ allows physicians to detect relapse sooner and create a more precise treatment plan for each patient. We expect to generate additional data in DLBCL and file with the FDA to support clinical adoption and increase pharma usage. Third, expand clinical use cases by further demonstrating clinical utility at multiple points along the patient care continuum. You can see on slide six a snapshot of the relevance of MRD testing in patients with blood cancers recently featured at ASH. More than 30 clonoSEQ-related abstracts and multiple presentations reinforced clonoSEQ's ability to provide valuable insights for treatment surveillance, clinical decision-making, and continued demonstration of the value that clonoSEQ offers to drug developers. A rich set of evidence has driven specific use cases that clinicians are incorporating into clinical practice today. Particularly, the MASTER trial demonstrates that 90% of standard risk multiple myeloma patients who have two consecutive MRD-negative results with clonoSEQ can stop treatment and remain cancer-free after two years. This is an outstanding outcome for patients who can find relief from treatment side effects and also enable substantial savings for the healthcare system. As more studies read out, there will be greater adoption of MRD in the clinic, resulting in more patients benefiting from clonoSEQ at multiple time points along their treatment journey. The setup for our MRD business is strong, and we are confident that we will achieve significant growth this year. Turning to immune medicine business on slide seven. Our immune medicine business leverages our platform's proprietary ability to sequence, map, and characterize T-cell and B-cell receptors at scale to drive opportunities in major indications. Growth in immune medicine is driven by two main areas: pharma services and drug discovery. Through pharma services, we deliver rich and valuable immune receptor data to our biopharma customers that informs biomarkers of response and accelerates their drug development programs. In drug discovery, we are focused on cancer and autoimmune disorders, with the goal to advance therapeutics either on our own or with potential partners. As shown on slide eight, our strategy in drug discovery is to use our proprietary and differentiated capabilities to discover new drug targets and then develop T-cell receptor or antibody therapeutic candidates against those targets. We are already doing this in oncology with our partner Genentech in cell therapy. As shown on slide nine, we're making good progress with Genentech on two cell therapy programs. For both cell therapy products in development under this collaboration, Adaptive validates specific cancer neoantigen targets and then identifies and characterizes potent therapeutic grade TCRs to those targets. For the first shared TCR candidate selected by Genentech, we are focused on speed to the clinic. In addition, we delivered two additional shared TCR data packages for Genentech's consideration. On the fully personalized program, having established our prototype with more than 60 patients, we successfully identified and characterized T-cell receptors to patient-specific tumor mutations. We also completed end-to-end process runs to start to define early product development. This year, we are focused on standardizing and optimizing our process towards future clinical readiness. In addition to our partnered programs with Genentech in cancer, slide 10 highlights our internal efforts in autoimmune disorders. In this therapeutic area, disease-specific antigens are not well known. We are leveraging our unique capabilities to identify druggable targets in multiple sclerosis and IBD, among others. Next steps are to generate data that validate those targets, so we can make progress towards developing therapeutic assets using our TCR and antibody discovery capabilities. We believe drug discovery is another major value driver at Adaptive, and we are excited by the strides we're making with Genentech and our internal programs. I'll now pass it over to Tycho for our financial update. Thanks, Chad. Starting on slide 11 with revenue for the fourth quarter and full year. Total revenue in the fourth quarter was $55.2 million, with 51% from MRD and 49% from Immune Medicine, representing a 46% increase from the same period last year. MRD revenue of $28.1 million grew 70% from a year ago, with clinical testing and MRD pharma partnerships each driving approximately 41% of the growth, along with a $2 million increase in MRD regulatory milestones. clonoSEQ test volume, including international, increased by 54% to 10,526 tests delivered from 6,850 tests in the same period last year. Immune Medicine revenue was $27.1 million, up 27% from a year ago. This change was driven by a $5.2 million increase from pharma and academic customers, as well as a $2.1 million increase in Genentech amortization, partially offset by a $1.6 million decrease from T-Detect COVID. Total 2022 full year revenue was $185.3 million, representing a 20% year-over-year increase. Looking closer at the full year, MRD revenue was $87.1 million, up 32% from a year ago, driven by a $15.8 million increase in clonoSEQ clinical testing and $10 million increase in MRD pharma, partially offset by a $4 million decrease in MRD regulatory milestones. Immune Medicine revenue grew to $98.2 million, up 11% versus the prior year, driven by a $13.6 million increase from pharma services, partially offset by a $4.4 million decrease from T-Detect COVID. Moving on to operating expenses on slide 12, we continue to place a strong emphasis on leveraging our OpEx. Total operating expenses for the fourth quarter were $94.4 million, representing a 5% decrease from $99.5 million in the same period last year. Cost of revenue was $16.6 million compared to $14.4 million last year, representing a 16% increase. R&D expenses were $31.2 million compared to $34.7 million last year, representing a 10% decrease. Sales and marketing expenses were $23.7 million compared to $26.7 million last year, representing an 11% decrease, largely due to reduced clonoSEQ and T-Detect marketing activities. General and administrative expenses for the quarter were $22.4 million compared to $23.3 million a year ago, representing a 4% decrease. Lastly, interest expense from a royalty financing agreement with OrbiMed was $3.6 million. Net loss for the quarter was $42.2 million compared to $61.4 million last year. For the full year, total operating expenses were $385.5 million compared to $363.3 million in 2021, with the 6% increase primarily driven by higher G&A and cost of revenue. Importantly, the 6% increase represents a significant reduction in our OpEx growth of 45% from the prior year, while still achieving meaningful revenue growth from our core revenue segments. Full year 2022 net loss was $200.4 million, compared to $207.3 million in 2021. Adjusted EBITDA was a loss of $121.6 million, compared to a loss of $151.7 million in 2021. We ended the year with approximately $498 million in cash equivalents and marketable securities, giving us over three years of cushion on the balance sheet. As Chad noted before, we expect this will carry us through to profitability without having to raise additional capital. Turning to our outlook for 2023 on slide 13. We expect full year revenue to be in the range of $205 million-$215 million. At the midpoint, we anticipate the contribution from our businesses to be approximately 55% from MRD and 45% from Immune Medicine, with the lower contribution from Immune Medicine mainly driven by significantly lower amortization from the Genentech upfront versus prior years. Our MRD business estimates include over 50% growth in clonoSEQ test volumes and a continued ASP increase in the mid-single digit range. In addition, we anticipate MRD milestones in the $mid to high single digit millions. With respect to trends over the year, we expect revenue to be back-half weighted and Q1 to be the lowest of the year. This is due to several factors, including normal seasonality reflected in the low first quarter and high fourth quarter, uptake in MRD from the clonoSEQ DLBCL launch and Epic integration which are expected in the back half of the year. Milestones in both immune medicine and MRD, which are expected by year-end. Regarding operating expenses, we expect 2023 OpEx, including cost of revenue, to be slightly below our 2022 OpEx of $385.5 million. This reflects our ongoing efforts to drive operating efficiencies while investing behind the projects to support our growth profile with higher returns. We're continuing to be thoughtful about our cash deployment and expect our burn to be an average of $40 million per quarter. We had solid performance in 2022. We are growing revenues, managing our operating expenses, and we have a strong capital position to fuel growth and execute on our goals. With that, I'll hand it back over to Chad. Hey, thanks, Tycho. As highlighted during the call and shown on slide 14, we have several key milestones for 2023. We're off to a running start, and I'm confident in our ability to accelerate clonoSEQ penetration in our MRD business and to demonstrate our drug discovery capabilities in Immune Medicine. With that, I'd like to turn the call back over to the operator and then open up for questions. Thank you. To ask a question during the session, you'll need to press star one one on your telephone. You will hear an automated message advising your hand is raised. To withdraw your question, please press star one one. Please stand by while we compile the Q&A roster. One moment for our first question. Our first question comes from Derik De Bruin from Bank of America. Your line is now open. Hi, good afternoon. Hey, Derik. Hey. Can you talk a little bit about revenue pacing? Obviously you've got the DLBCL coming in the back half. How should we sort of think about ramp up? I realize Q1 is going to be your lowest, there's a reduced seasonality, other things, but just some quarter-to-quarter progression if you've got on revenues and volumes, this would be helpful. Yeah. Yeah. I mean, as you noted, the first quarter will be the low. The DLBCL launch and the Epic integration are you know back half drivers, for sure. Then you know if you kind of look at the range we laid out, there are some variables in there, which you know maybe I'll spend a minute on. You know on the MRD side you know we got it conservatively on milestones, so that could be a swing factor as we go through the year. You know could drive things to the high or low end of the range depending on the magnitude of the milestones. We've you know got roughly $370 million future milestones, as we've talked about in the past, line of sight to about half those. We you know risk adjust those in our guidance, with about a 30%-50% probability of success. That's one of the swing factors. The IND acceptance from Immune Medicine, obviously a big swing factor, toward the end of the year. You know that's the biggest swing factor in the fourth quarter. You know as a reminder on Genentech, we recognize, $7 million of the $10 million upfront on the acceptance of that milestone. You know that gives you we're not going to give quarterly guidance, but you know that gives you some flavor as to the drivers in the back half of the year, that are gonna lead to accelerated growth as we progress through the year. Great. That's helpful. On the greater than 50% volume growth in ClonoSEQ, it's a little bit below what we were looking for. Just sort of like, some commentary on trends and basically or any residuals or like headwinds in the market, patient access you know patient access, doc access, just any sort of like commentary on trends, volume trends. No, actually, Derek, as I mentioned, we're seeing, kind of record volumes you know to start the year. You know we'll be conservative in putting that out. Greater than 50% leaves a lot of room on the upside too. You know. Yeah. we're putting that out there. It's a watermark to hit. We feel very confident that we're gonna be able to achieve that number, and believe that another swing factor that there could be some upside there. Okay, great. Thank you very much. Yep. Thank you. One moment for our next question. Our next question comes from David Westenberg from Piper Sandler. Your line is now open. Hi. Thank you for taking the question. I'm actually the other side of Derek here, 'cause one of the battlegrounds we get is in that 50% volume here. Can you maybe talk about same kind of concept. Can you talk about you're now on a mid-fifties comp here in terms of growth rate. You, you do have a tough comp on the volume growth coming in 2023. I think Epic and DLBCL are kind of happening in the back half. Can you give us maybe a little bit more conceptualization of beating that tough comp? Really, I mean, what does Epic and DLBCL kinda contribute from an incremental standpoint? 'Cause I do think it means that they do help you overcome that comp. Sure. Hey, David. I'm gonna turn this over to Nitin Sood, who runs our MRD business and calling in from San Francisco. Yeah. I mean, I think first of all, I just wanna remind everyone that you know our current penetration is about 5%, so there's a lot of room for us to grow. You know as Chad mentioned, 2023 is off to a very strong start, and I'm very confident that we grow volumes at greater than 50% off a larger base business this year. That combined with ASP increase, which we are seeing steadily, we'll see revenue increase by 60%. You know a few things I wanna point out. As you know our focus and growth strategy has been in the U.S. to twofold you know to drive deeper penetration and to increase business in the community. You know over the last few quarters, we've seen you know our orders per account in institutional accounts increase by 30%. Our community business has grown from 8% of our total business to 15%. I expect that to be 20% of our 2023 business. You know all leading indicators are looking favorable. New HCPs, accounts grew by 50%. Unique patients tested grew by 60%. Multiple myeloma, which is a key growth driver for us, continues to deliver. You know and we've had some very significant data readouts this year, MASTER, DETERMINATION. Finally, the increased reach and effectiveness of our sales team is coming into play and will sort of fully deliver in 2023. Over and above DLBCL and Epic, there's a lot of growth catalysts, and I expect you know our growth you know very confidently that we'll grow above 50% in this year and even beyond. Got it. now, thank you for the color. I noticed you have 10 analysts here, so I'm just gonna ask one more since you probably have a lot more questions here. you know you did keep burn rate or expenses, I think you said, were flat. you know I respect that you're probably gonna go revenue, which basically means, you know you are gonna have to have you know sales co-compensation for sales people that are hitting their numbers, bonuses you know just the natural cost of goods sold that associated with higher revenue here. Can you give us a little sense on where you have, where you have cuts remaining in 2023, given the fact that I think that you will you know grow on the year and yet you're holding OpEx steady? Sure. A couple things. Yeah, the cash burn guidance is $40 million on average you know for the year. Q1 will be higher you know due to bonus payouts. We had a you know pretty low quarter in the fourth quarter. There was favorable working capital, low CapEx spending and high investment income. We're coming off a low, low burn on the fourth quarter, but one Q will be a pretty significant step up. You know if we look at kind of total OpEx overall, we spent you know just over $385 million, including cost of revenue last year. Some of the areas you know we've talked about in prior calls, workflow enhancement, leveraging lower sequencing costs, DNA extraction costs, cloud compute, real estate, these are all ongoing initiatives. We've done a lot of work around R&D as well. We've mapped you know projects to revenue or margin enhancement opportunities, and there's some leverage there that we've seen, similarly with CLL. Then, you know we're doing a lot of work on gross margins now. We'll have more to say on that you know at some point in the future, but this is an area where we do see significant potential, as we scale. You know the important thing about OpEx is it's not coming from a single area, it's all parts of the company. There's been a real cultural shift underway here at Adaptive, and really, there are no sacred cows. You know we'll continue to look for opportunities to get more efficient and better as a company, going forward, but it's across all parts of the business. Thank you for the color and, congrats on a good print. Thank you. One moment for our next question. Our next question comes from Daniel Brennan from Cowen. Your line is now open. Great. Thanks. Thanks for the questions. maybe just the first one would just be, as we think about the 2023 guide, immunoSEQ, say, academic and pharma, and then as well on what's implied for MRD pharma. Just give us a sense of, obviously, these are you know fast-growing businesses, but hard for us to see underneath the hood. Obviously, there's a lot happening. Just what's kind of implied in 2023, and kind of what's the visibility on that outlook? Yeah, Tycho, you wanna take that? Yeah. I mean, we're not gonna give specific guidance around immunoSEQ or Academic or some of the sub-segments. you know I mean, Sharon, is there anything specifically you want to say on immune for your part of the business? Maybe we'll put it over to Nitin as well, but we're not gonna guide specifically on sub-segments. Yeah, happy to expand. again, it's about execution. As we said, our strategy is to increase penetration with our portfolio pharma companies and biotechs in later and larger stage clinical trials in really four major indications. We're heads down focused on doing that to generate revenue you kno guidance. Just so you... You know again, at midpoint of the range here, immune medicine is about you know 45%, so that implies kind of $995 million. The Genentech amortization is a big headwind for that business, right? It's $30 million-$35 million this year versus north of $60 million last year. That, you know that's something that has to be factored in. Then pharma services you know we've publicly talked about that business you know growing at a 20%+ CAGR in the long run. That gives you kind of some sense of how we're thinking about it. Then there's the milestone we talked about earlier with Genentech toward the end of the year. MRD 55% is you know the range at the midpoint. You know, that implies about $115 million. We you know talked earlier about volume growth of 50% for clonoSEQ and mid-single digit ASP growth. Milestones there you know I mentioned earlier, are gonna be in the kind of the mid to high millions. Then you know you've got the MRD pharma sequences business around $45 million, growth of about 10% at the midpoint. Nitin, anything you'd add to that? No, I think I'll just only point out that, you know, this is for the first time, you know, our clinical diagnostic business is a key growth driver and is gonna be larger than our pharma business in MRD. It's a pretty exciting year for us in 2023. Maybe one quick follow-up. Just in terms of the clinical trials and the adoption in blood, are there any important milestones, not milestones in terms of dollar milestones, but in terms of events in these trials such that it would lead to maybe a more meaningful proven impact, such that you could see, you know, a greater ability to market it to doctors? You know, I know that, you know, we spoke to a few doctors and, you know, they're looking for continued data to mature over time. Will any of that be happening in 23 or just kind of an ongoing basis? Go ahead, Nitin. Yep. I think first I just want to remind everyone that, you know, we are selling in blood today. 30% of all MRD tests are in blood. DLBCL and CLL are blood tests primarily. 26% of all ALL tests are in blood. Multiple myeloma used to be primarily a bone marrow test. However, you know, now 12% of all tests in multiple myeloma are in blood, and this is increasing. The use case for blood is simple in the case of multiple myeloma. You know, when the test is positive in blood, your cancer is there, treat the patient, make it negative in blood, and then verify annually in bone marrow. You know, on top of this, we're conducting additional studies in blood to strengthen our evidence and to demonstrate that we're better than other biomarkers in blood. We expect to have data for multiple myeloma readout at the International Myeloma Society in September and ASH in December. We have data also for CLL and DLBCL reading out. DLBCL, we have a major conference coming up in June. You know, we're executing commercially and we'll have, you know, additional data. I expect blood volumes to go up. Excellent. Thank you very much. Thank you. One moment for our next question. Our next question comes from Julia Cheng from Cowen. Your line is now open. Hi, good afternoon, it's Julia from JP Morgan. Looks like in this four Q, your clonoSEQ ASP of $1,100 ramps up faster than what we were modeling. Could you maybe give us an update on your private payer conversation so far? Why, you know, is it not possible for us to see, you know, ASP accretion, above that mid-single-digit growth that you're guiding to? Go ahead, Nitin. I mean, I think we've seen sort of a steady ASP growth for clonoSEQ over the past couple of years. We anticipate that growth to continue in the mid-single digit range over the next 2 to 3 years and trend towards $1,700 per test, which we have sort of as the contract array with private payers. You know, we continue to invest in, you know, getting, you know, additional pricing agreements with non-contracted payers. You know, we're including, you know, large Medicaid plans, where we've seen a lot of usage of clonoSEQ recently. We're improving our collection performance, we're gonna invest in that area this year. You know, you know, we are also going after sort of the expanded coverage for, you know, new indications like DLBCL. You know, DLBCL, we have Medicare coverage only. This year we expect to expand that into private payer coverage. We have minor indications like MCL and CTCL that we need coverage on. A lot of things are happening. You know, we expect ASP to grow steadily towards $1,700 in the next few years. Great. Then on the immune medicine side, for Genentech, you mentioned that your focus for this year on the first candidate is fit-to-clinic. Can you elaborate on, you know, what can Adaptive do to kind of speed up that process and what kind of timeline we should be thinking about? Then for those two additional TCR data packages, what's the timeline for Genentech making a decision on those? Sure. For Genentech, they control the timing of the filing, and obviously interactions directly with FDA when they do file. That's ongoing. We're very optimistic and are working closely to support along the way. As it relates to the two additional TCR data packages that we completed and delivered at the end of last year, those are being reviewed together jointly by the working teams. Obviously we will update in terms of any progress to advance those as potential therapeutic product candidates. Okay. Thank you. Thank you. One moment for our next question. Our next question comes from Mark Massaro from BTIG. Your line is now open. Hey. Questions. Hey, how's it going? I wanted to, you know, maybe ask a follow-up question. I know it's sort of been asked, as we think about, you know, anniversarying a, you know, relatively challenging comp and a 50% growth is really, you know, pretty elite in diagnostics. It seems to me that the key variable in the back half of the year is the DLBCL launch, just to give people confidence that you can exceed 50% again this year. The one thing that I don't think I've heard is like, how should we think about the incremental contribution from DLBCL and any way for us to think about it in terms of market penetration or early access interest or anything of that variety? Yeah. Mark, I'm gonna take this 'cause yet while DLBCL is one component, it's really not only the multi-pronged strategy that we laid out. There are just major levers, you know, across the board, including increasing, you know, penetration in the community setting. Our team's done a lot of work in defining pathways, and we've really had success as of late in penetrating some of the larger community practice accounts that have taken a long time to crack. We also mentioned kinda Epic integration in the back half of the year. I think that really being able to go right into your EHR and order directly from there, should, especially on accounts that are already ordering ClonoSEQ, we think that should accelerate usage. You know, in terms of increasing clinical utility, the previous question on Blood-based usage in multiple myeloma and the readouts that we have coming, I think that will continue. The additional use cases for the discontinuation of maintenance therapy as you get kind of more and more data from the MASTER trial and the MRD2STOP trial and other, and others that are kind of reading out. I'll make an overall comment that, you know, I think I'm seeing, and I don't know you can, we can agree on this, but MRD in general is becoming a much more accepted, kind of, by healthcare providers. You know, it took a long time to get here, and I actually think even a lot of the noise around MRD and solid tumors and just kind of the nomenclature and understanding, kind of what the assay is. You know, no one wants to be first, but no one also wants to be last. We're kinda hitting that, starting to, I would say, starting to hit that point where it's become kind of more, more common practice, and that's obviously what we're trying to get to, where it's, it's, you know, something you do on every patient that has one of these hematological malignancies that our test applies to. I think it's a variety of factors that gives us confidence that we're gonna be able to hit that 50% number in 2023. Okay, great. And then- And then- Go ahead. Yeah, go ahead. Add to that a little bit. You know, in multiple myeloma, which is our, you know, biggest growth driver, we're less than 10% penetrated, so there's a lot of room for us to grow. In CLL, we're less than 5% penetrated. You know, even in the existing diseases, we have a lot of room to grow. Lastly, I think we expect sales team to be 2x more productive this year than last year. You know, last year we increased the size of the sales team, we deployed them in various territories. In community, our penetration is extremely little. That's, there's a lot of growth drivers other than DLBCL. Yes, you know, the 50% comp is above what other diagnostic companies do, but I think we have, you know, the best product in heme MRD and we have a great team in place. Okay, excellent. I also wanted to ask about, just to kind of confirm, the T-Detect initiative. Should we assume that that's effectively paused? 'Cause I guess, I'm also trying to arrive at how the OpEx can be lower, while the top line is growing. Maybe, Tycho, if you could walk us through any of the buckets, you know, presumably G&A, may be up a little bit, sales marketing may be up a little bit. Should we assume R&D is likely down? Yeah. I mean, look, as I said earlier, we're working on getting leverage across the company and yeah, I mean, G&A for sure, we've got some leverage. You know, sales and marketing a little bit, but to Nitin's point a minute ago, you know, we did double the sales force last year, so you've gotta keep that in mind. Yeah, there is R&D leverage. You know, I mentioned earlier, we went through a very thorough process over the summer of kind of mapping out every R&D project. You know, with that in mind, there was some stuff that dropped out that wasn't necessarily mapping to revenue or margin opportunities. We do have R&D leverage as well. Just in terms of your question directly on T-Detect, Mark, as you know, kind of we made the decision in 2022 to delay commercialization efforts of T-Detect as a diagnostic test until we have strong enough signal data that can change physician behavior with a clear path to reimbursement. That said, we kinda have this really nice opportunity to leverage the data and continuing to develop that antigen mapping data for both pharma services and in our internal efforts in drug discovery. One of the you know, if you look at kind of probability of success of therapies that are tied to an effective biomarker that can stratify patient populations, this is exactly the strategy that we're hoping to deploy with our antigen mapping efforts in developing those signals. Excellent. That's it for me. Thanks, guys. Thank you. One moment for our next question. Our next question comes from Salveen Richter from Goldman Sachs. Your line is now open. Hey, guys. Thanks for taking the question. This is Elizabeth on for Salveen. When should we consider proof of concept being achieved for the drug discovery efforts? Do you think that would be this year upon IND acceptance for the first share product? Just curious how you're thinking of proof of concept generation there. Could you remind us of the timelines around the personalized T-cell therapy and I guess, what the next milestones are for that? Thank you. Yeah, sure. Hi, Elizabeth. I'll start and then I'll pass it over to Sharon. I think really there's two different sets of kind of proof points in the drug discovery business. You know, the first is with our partnership with Genentech in oncology and cell therapy. What you'll see first is an IND filing on a shared product, then we're making really strong efforts. We haven't yet disclosed a timeline, but I can tell you that we're moving rapidly towards proof of concept on the private product. We have another set of kind of proof points and validation points that we're working hard towards with our internal programs, which I'll pass over to Sharon to, you know, better describe. Yeah. For our internal programs, the goal and the focus, first and foremost in autoimmunity, is to get to at least one target that's disease specific. We've highlighted our efforts and our focus and investments in multiple sclerosis and IBD. Once we have a target That's validated and that we're confident, we're in a therapeutic program, that's where we'll deploy our TCR or antibody capabilities to develop an actual therapeutic asset and advance those with a goal to advance those, ourselves into the clinic. Got it. That's helpful. Thank you. Thank you. One moment for our next question. Our next question comes from Andrew Brackmann from William Blair. Your line is now open. Hi, guys. Good afternoon. Thanks for taking the question. Maybe I just wanna follow up on some of the clonoSEQ commentary for the community setting. Chad, I think you just referenced a win on a large account sort of basis. Maybe just qualitatively, can you talk about the tipping point that was there for that win and maybe some of the other accounts that you're talking to? How's the funnel progressing there? Thanks. Sure. Nitin, I'll have you. Do you wanna highlight, without necessarily being specific on the accounts, you wanna highlight kind of what the tipping point was for one, if you can pick one of them, one of our large community practice accounts that has recently signed on? Yeah, I mean, I think, you know, first I'll just sort of broadly speak, you know. You know, what we did this year was, you know, hire additional individuals with focus on community accounts. We took a multi-pronged approach here. You know, we not only have individuals who sort of do, you know, physician education, but we have a sort of a strategic account management team that works with large community practices at the C-level. You know, multiple things came into place and in one particular account, you know, after engaging with them over several months, they have sort of standardized their clinical workflows on clonoSEQ upon, you know, the arrival of every patient that's diagnosed, for example, with CLL. We expect more of these to happen in 2023 and be a key contributor to growth. As I said, you know, our community business, you know, is trending upwards. We went from sort of 8% at the beginning of 2022 to 15%, and I expect that to become 20% of our business in 2023, while our penetration in academic and institutional accounts also increases. Okay. Thanks for that. Just a quick one on the macro frontier. I think about a month ago you referenced the Inflation Reduction Act as a potential headwind there. Can you just give us current thoughts on how you're thinking about that and maybe some of the conversations you're having with pharma related to that? Thanks. Sure. Sure. Sharon, you can go first and maybe Sharon can comment from the. Yeah. pharma services business as well. Yeah, I mean, I think we've had many conversations with pharma companies, we're hearing from many of them that due to IRA, there's increased scrutiny over their budgets. I think the second thing we're seeing play out is particularly in multiple myeloma, there's a lot of competition. Lots of drug programs are going on out there. The efficacy of the drugs that have recently come out are very high. Pharma companies are, you know, looking at which programs to continue with and which programs to sunset. That's the MRD pharma side. I'll pass it to Sharon for immune medicine. Yeah. I think it's mostly a watch and wait, but obviously that's top of mind. We too will monitor, but no immediate impact as of yet for us. Thank you. Thank you. One moment for our next question. Our next question comes from Sung Ji Nam from Scotiabank. Your line is now open. Hi. Thanks for taking the questions. Just a couple of housekeeping questions for Tycho. Sorry if I missed it, but are you guys including the potential milestone payment from Genentech IND filing in your guidance? We are. You know, that's at the end of the year. You know, as I mentioned earlier, we recognize... The milestone is on acceptance. You know, that can lag filing by minimum of 30 days, but it can take longer. We recognize $7 million of that upfront and then amortize the remaining $3 million. There's. Okay. Got it. no other Genentech milestones, so we're only recognizing the one in guidance. Okay. Gotcha. For, would you be able to break out what your assumption is for the interest expense for the year? Yeah. The good thing is, you know, interest income actually offsets interest expense. We have about I think it's over $30 million now in interest income in the model. That actually pays for the OrbiMed deal itself. Great. Thank you. Thank you. One moment for our next question. Our next question comes from Dan Leonard from Credit Suisse. Your line is now open. Hey. Thank you. Just a couple of questions on the 23 guide. Tycho, I'm trying to map to that $95 million revenue figure for immune medicine in 23. I think you said Genentech amortization is $35 million, that would mean the balance $60 million is pharma services. Is that? It looks like that's nearly a double year-over-year from the 22 number. Is that math even correct? What's driving that? Is there any kind of bookings or book to bill or anything you could offer? Dan, I talked earlier about kind of the long-term CAGR for pharma services being in the 20% range. You know, there is other drug discovery, right? We have various, you know, ongoing discussions with potential drug discovery partners that would be the remainder of that. It's not all at pharma services. The milestones. the milestones, yeah. Yeah. A question on revenue phasing. I think this was asked a couple different ways, you highlight a very strong start to the year in MRD. You're flagging though Q1 as a low point. Is there anything to reconcile that's timing related besides just the milestones in the second half of the year when thinking about phasing? Yeah. I talked about the Genentech headwind. You know, that's the biggest headwind on the year. You know, in the first quarter alone, it's about a $4.2 million headwind. You know, we did recognize a $3 million MRD pharma milestone last year. There's a comp from that as well. There's no T-Detect revenue, those are, you know, some of the factors that would impact the first quarter relative to the remainder of the year. Helpful. Thank you. Thank you. I'm showing no further questions. This concludes today's conference call. Thank you for participating, and you may now disconnect.