Hi, that's very helpful. Good afternoon, everybody. I'm Luke Sergott. I cover life science tools and diagnostics here at Barclays. With me, it's my pleasure to have Robin Cowie, CFO of Biodesix. Thanks again for making it, and sorry for being a little bit late here. We have a little bit of break, so we can run over. But I guess, like, let's start off, relatively unfamiliar with the business outside of meeting you guys a couple times and scaling up. For those that aren't familiar with what you guys do, kind of walk us through just the one-on-one of where the technology, what the platform is and how you're building it and, like, kind of where you guys are going. Yeah, sure. Absolutely. Biodesix is a diagnostic company. We're dedicated to developing tests to help improve patient lives and outcomes, focusing on specific clinical questions. Commercially, we're primarily focused in the area of lung. On the research and development and on the services side, we actually are pan-cancer and pan-disease, so providing research services across the board. We have five tests on market in lung, all with Medicare coverage. Two are tests to help identify which patients are likely malignant and likely have lung cancer and need to move on to a biopsy or a surgery, and those that can safely go on to CT surveillance. We have three tests that help identify the appropriate treatment for patients once they've been diagnosed with lung cancer. We leverage genomics, proteomics and radiomics AI. To help accomplish that on our commercial front and then also on the services side, where we'll provide discovery of tests for pharma companies or diagnostic companies, development, regulatory reimbursement support, all the way up through commercialization. If I get the workflow right, so somebody comes in with. When is the test used in the workflow? Like, when does the patient come in? Where do you guys fit within that? Obviously you have from the diagnosis risk, you know, risk stratification, and then you go to the therapy selection. Like, but where, kind of where's your sales point? Is it on the physician? Is it on the, you know, the oncologist? Like, just give us a sense of where that fits. Yeah. We actually call on pulmonologists and just this past year began leveraging those relationships to begin calling on their primary care referral network. There's about 15,000 pulmonologists out there treating patients, and about 15,000 primary care physicians that actually deal with the vast majority of lung nodules that are diagnosed each year. It's estimated in the U.S. there's about 6 million patients annually with a lung nodule. Some of those are found through screening programs. I was just gonna ask, how do you find out you have a lung nodule? Yeah. It's not like, oh, my lungs are hurting me today. Yeah. Most of the time it's incidental. Somebody goes in, they hurt their shoulder, or they go in for. Yeah. A heart test, or they have something else, and they see a spot on the lung, and it gets identified and referred either to pulmonology or to primary care for follow-up. The lung cancer screening adoption is very, very poor in the United States. Yeah. It's really, it's incidental. You not only then have to deal with whatever brought you to the hospital in the first place, but then also following up on the lung nodule to make sure that it's not cancer. Yeah. That's where our test gets ordered, is after the lung nodule's found, and we can help them determine if it's high risk and they need a biopsy or surgery or if it can be safely followed through CT surveillance. All of our tests are blood tests. Very easy and convenient for both the patient and the physician. We'll get into test development and how this shapes into an overall platform going forward. You know, from a technology perspective, you say genomics, proteomics and radiomics. Like, how did you guys come up and bring this all together? If you can give us. Is there a difference between your Nodify Lung, right? That's like the risk characterization, and then you have your IQLung, which is your therapy selection, right? Are there any differences there in the technologies? Yes, absolutely. For Nodify, those are proteomic tests. We use ELISA and LC-MS to measure proteins and autoantibodies in the blood. In the treatment guidance side, we use ddPCR for our very targeted panel of gene mutation testing. We use the Thermo NGS platform for our NGS test. Then finally, another proteomic test, VeriStrat, which measures the patient's immune system. We can actually measure when the body has triggered an acute chronic inflammatory response, which is where the immune system is actually helping the tumor instead of fighting it. That's a MALDI-TOF mass spectrometry. Okay. That's really interesting. Talk about the reimbursement and the, you know, the path here. I just feel like the reason I thought all that was very interesting because, like, when you think about blood tests, you're always thinking about, like, NGS, right? You've been in the market for a while, and the reason I ask about reimbursement is it takes a while to get that. Yes. Are you planning to incorporate more multi-omics in the next versions of your tests? Yes, we do. We think, you know, there's no single technology that can answer every clinical question. For us, it's really important to use the technology that can best answer the clinical need. The incorporation of radiomics into our pipeline, we're an expert in clinical proteomics. It's one thing to be able to measure proteins, it's another thing to be able to do it routinely, and at margins that are scalable. Last year, our gross margins were 81% for the year. We've excelled at optimizing this testing platform. From a reimbursement standpoint, you're right, reimbursement is long and hard. Yeah. It's really important to continue to publish, get great clinical data and clinical utility to show how you impact care. In lung, about 60% of the patients are Medicare. It's a predominantly older disease. We've got that down for our tests, and we've started to gain good momentum in the commercial payers for Nodify, as we saw really strong increases in ASP over the last four quarters. How much coverage do you need more from the commercial side? I'd like all of it. Yeah, I know. We're in great shape now. We're at 81% gross margins now. Okay. Clear. Yeah. Clear. Yeah. Clear. Yeah. Now everything on top of it is just beneficial and flows through to the rest of the business. Yeah. It was more of a question, like from a mixed perspective, how much is not being reimbursed versus on your volume side? Oh, it's a relatively small and shrinking percentage. Okay. Fair enough. And then on the IQLung side, as therapy selection, we talked about kind of this flywheel, and you talked about this flywheel of like pharma accessing the data and working with you, and you're gonna get more companion diagnostics informing better treatment decisions. Talk about that funnel and how that pipeline's building for you guys. Is this something that's scalable just on the IQLung, or do you need to have like another test outside of that? Yeah. The majority of our testing on the biopharma services side is on IQLung. We do a variety of other services, so we'll discover new tests for a company, we'll bring on new tests if they have early data on a different test and take it to a scalable, commercializable testing platform. We've announced last fall a partnership with Bio-Rad, where we developed an ESR1 test for breast cancer for them for the ddPCR platform had that from contract to LDT in about four months. Very rapid, very scalable. The demand for our services is increasing, so our backlog is higher than we've ever seen it before, and the interest in what we're doing is continuing to grow. Okay. How does that play in from, you know, as you're thinking about spend and investing in the business for growth versus investing for the next 10 years? Like, how do you weigh that and, like, give us your near term and longer term priorities? Our near term priorities are growing the commercial organization and growing top-line revenues to get to cash flow positivity. We did reach Adjusted EBITDA positivity in the fourth quarter last year, so we're very happy to hit that milestone. Now it's continuing to move towards sustainable Adjusted EBITDA and cash flow positivity. That's our primary goal. The great part about the services side of the business is we use all the same equipment that we use for our commercial, so we're leveraging all of the equipment and the personnel, so it's really great operating leverage. The larger that business grows, the more it pays for itself. Yeah. We do have several tests in our pipeline. An MRD combination MRD and proteomic test that we're developing with Memorial Sloan Kettering Cancer Center, as well as VeriStrat in other tumor types. Okay. We've actually studied VeriStrat in nine different tumor types, and we presented new data last year in prostate and some other tumor types, too, working to expand that and then working on digital diagnostics, using imaging as the input instead of wet lab as the algorithmic input. Yeah. It was ultimately probably marrying those two together. Exactly. Yeah. It's perfect. Lung's the perfect place for digital diagnostics because you always have an image. Yes. There's over 50 different diseases treated by a pulmonologist. We think there's really great opportunity to marry the multi-omics, right? The digital diagnostics along with the blood-based insights. On the new test on the digital side, are they going to be, you know, panel size? Like, how many genes are you guys looking at? It's on the digital side, it's actually not genes. It's looking at radiological features off of the CT scan. No, I meant the digital PCR, ddPCR. Oh, the ddPCR. Yeah. Yeah. The current on market is four Tests. It's targeted for the earlier stage cancers where you're really looking for a handful. Yeah. Of mutations that have approvals. In our services side, we'll look at one mutation, up to a couple dozen mutations. Okay. That is obviously, you'll just be able to scale that with other tests as they come on. Okay. Absolutely. That's really helpful. 80% gross margins, I mean, part of that obviously is just due to the test technology from MassSpec, et c., in the PCR, but as the market moves to whole exome, whole genome, you know, why do you feel that where you guys are from a technology perspective, that this is the right way to do it versus just jumping in and saying, "All right, let's just start sequencing everything? Yeah. I think it's definitely one approach is to get all the data and then be able to mine it. We think that a more targeted approach works well for general population and general use. There's, you know, organizations like MSK who sequence absolutely everything and have the capabilities to do so on every patient, whereas the other clinics maybe farther out in the communities don't necessarily have those capabilities. We think it's really trying to provide the right test for the right patient at the right time. Okay. As you continue on your growth, I mean, from a guide perspective, but also just as a infrastructure building in your own stuff. Like, you guys are doing EMR integrations, right? Talk about how, you know, kind of the lift that you need to do to get that and then what that ultimately kind of what you feel like that translates to on a, you know, reorder basis or, you know, increasing your market share basis. Yeah. The EMR integrations is a really important project for us from a logistics standpoint, helping to identify the right patient for testing, helping to transmit the appropriate information from the office to us, to cut out paper. Fax machines, which is still the most commonly used ordering technique in medicine. It's kind of amazing that we're here and we can do so many things with technology, and yet fax is Right. Still by far the majority. It's a big focus for us and for a lot of hospital systems to try and get away from using paper and better streamline the medical records. We think it's a really important part of our strategy going forward, not just from reorder rates and in physician engagement, but from the operational standpoint and operating leverage. This is on Epic, or is it? Uh, there's. Across all of them? All across all of them. Oh, great. There's many EMR systems. Yeah. That should help. I kind of touched on it before, but obviously this helps just the ease of ordering and also. It helps if a patient comes in and, like, just a sign comes up like, Hey, you probably give them this test. Yeah. Outside of that, when you're thinking about the penetration of the market, you know, you have your core pulmonologists that you're selling to now. Talk about the overall wallet share gains that you've had, the reorder rates and how those have picked up. Then couple that with just, like, new wins, right? So landing new hospitals or landing new pulmonologists, and are you seeing that time for them to accelerate or, like, bring on more of those patients start to shrink? Yeah, it's a great question. The great part about this market segment is everyone knows there's a problem. Yeah. We know there are so many, many patients, and managing all of them, finding the right patient and getting them to the right treatment path is complex, and we don't get it right all the time. In fact, about 20% of patients who go on to CT surveillance actually have cancer, so should have gone on for an intervention. Oh. About 65% of patients who get a biopsy didn't need it. Yeah. 35% of patients who got a surgery and had a portion of their lung removed didn't need it. This is really where we focus. Getting to a clinical yes is really pretty straightforward. Physicians want more information to be able to help them make better informed decisions. It's the logistics that's the hard part. Yeah. That's, you know, getting integrated with the offices, that takes time. Getting to the yes is fairly straightforward. The pull-through with the office is really where a lot of our integration team's time, where they focus. Okay. On that, I guess it's like just creating efficiency within the overall diagnostic workflow. You know, talk about your ASP. What's your reimbursed rate right now? As you think about kind of where that adds costs and ultimately you're taking costs out, where you're talking about, like, does this patient need a biopsy? Where everybody, you know, 65% don't. Then on the other side, like the worst case is you don't have cancer and then, like, you got it. Yeah. I've worked in reimbursement for about 20 years, and most of the time when you're having a conversation with a payer, you're introducing a problem they may not be completely aware of and then telling them you have the solution to that problem they didn't necessarily know they had. Consulting 101. Exactly. This is a different space. Payers know, hospital systems know, physicians know they've got a problem. Yeah. From a payer standpoint, their second most expensive vertical is advanced cancer. They wanna catch those cancers earlier. They don't want those patients with cancer going on to CT surveillance. They also absolutely hate unnecessary care. Yeah. Paying for things that didn't need it is not something they love. From a health system and physician standpoint, they want the right patient in the right group. Yes, there are cost savings by avoiding ineffective care and ineffective treatment decisions. From a physician standpoint, they have a set number of patients that they can do biopsies on in a day. We're not changing necessarily how many patients are getting them, we're just trying to capture the right patients into those groups. Yeah, get them the right care at the right time. Exactly. Yeah, that's all they wanna do anyway. Yeah. We spoke with one hospital system, they're in five states. They went through, they found in the last six months they had 100,000 patients in their hospital system that had lung nodules and no follow-up. That's horrible. It's awful. 'Cause time matters. Yeah. You wait a couple of months, and that cancer can advance. How much of that is due to the patient compliance of just not wanting to go in and do the workup? There's definitely some of that, particularly for those that are discovered incidentally. Yeah. You go in for a stroke or a heart issue, you're focusing on something a little bit more urgent. It's also just being able to identify those nodules, get them into the systems, and manage them quickly. Okay. Then I'm just looking at the time here. I think like I said, we'll definitely go over 'cause I started a little bit late. As you're thinking about like, so the digital ordering, you've talked about this, we have the EMR. Your overall like commercial organization, talk about, you know, what's the investments that you guys have made and ongoing investments here to continue to penetrate? I think, I don't know if you told me the penetration number you have for the pulmonologist versus the PCP right now. Yeah. It's, we're mid-single digits with the pulmonologist. We just really started calling on primary care. Our first group of primary care sales reps hit the field in the third quarter. Okay. We're pretty early on. Volumes from primary care in the fourth quarter were about 12%. Saw almost 70% year-over-year growth from that group, which was great. About 28% growth in pulmonology on a much bigger base. We're very pleased with how that's growing. We added about 35 sales reps last year. Went from about 65 to almost 100. We'll add another 25 this year 'cause we've only have about 100 folks calling on about 30,000 physicians. Our primary investment base is getting feet on the street to help educate and build the market. Yeah. Hand-to-hand combat. Yeah. What kind of productivity are you guys looking for out of those reps? From the reps that you've had, let's say for the last two years versus the ones obviously just onboarding, like what's the scale and productivity levels? Yeah. In the fourth quarter, average revenue per rep was about $1 million. Which is great, especially because a very large portion of that sales organization was brand new. Yeah. With most of them hired in the second half of the year. Our reps who have been in the field a little bit longer, we see really exciting productivity numbers, and we're seeing the new reps on the ramp towards those numbers. We think $1 million is sort of a baseline for us and we haven't really seen in territories, we haven't seen them max out. Yeah. And so we're. It's so new, right? I mean. It's so new. It's integrated. Yeah. We're really the first on market, we're building the market, and so it's a heavy education sell at this point. Yeah. We're learning and adapting every day. As you think about the overall lung workflow, right? I mean, do you have any ambition to get into screening or replace the 'Cause it's just imaging-based right now, right? It's just imaging-based right now, but there are several MCEDs, the Multi-Cancer Early Detection, or the SCEDs, Single-Cancer Early Detection tests that are out there that are coming. It's not in our pipeline right now, but we think that those tests will really supplement the market. There's a huge population that's eligible for screening that's just not going in. Yeah. These tests can help find them and put them into the funnel. Any ideas like just from a commercialization, you can partner with them or like kinda link up with them as they educate the market and unlock a big piece of that? I feel like it would just be like an easy cross sell to you. We. A hand off to you, if I would. We completely agree. We've had great conversations with many of those companies. Okay. As they're working towards getting to market in lung. This is great. I mean, this is a great ramp and a great story. Thanks very much. We're very excited about it. I really appreciate the time. Thank you. Thank you. Thanks. Great.