Okay, great. All right, welcome, everyone. So my pleasure to be hosting CEO Steve Chapman and Chief Business Officer John Fesko from Natera. I'm glad that you guys can join us at the conference. Thank you. Yeah, thanks for having us. Okay, absolutely. So maybe I'll kick off with you, Steve. You know, first quarter performance, really an impressive one. You know, you were expecting some, you know, sort of contribution from some of the accounts that you had acquired. These were, you know, some of the Invitae accounts, but still the beat was sizable. Maybe just walk us through all of the things that, you know, were a positive surprise, and maybe just touch on the sort of catch up or true ups as well, and then sort of what should be the expectation on, on sort of true ups going forward? Yeah. So, yeah, first, you know, thanks, thanks for having us. We saw very strong revenue growth in Q1, and that was driven by, you know, volume outpacing our expectations in both Signatera, where we saw record growth, or women's health, where we saw, you know, one of the best growth quarters we've ever had as a company. And then organ health, where we also saw very strong growth. We combined that volume growth with improvements and continued strength in average selling prices, and that resulted in the upside that we saw in revenue. Yeah, I think there was also another kind of major readout in the quarter, which was that we got to cash flow breakeven- Mm-hmm. - and that's been a goal for, you know, a long period of time. Yeah, so it's good to see that along with the, you know, very strong gross margin that we saw. But one of the things I think that's most exciting, though, is that we've gotten a cash flow breakeven while we're continuing to invest in the company. Mm-hmm. You know, for example, you saw that we increased our guidance for operating expenses as we're putting our foot on the gas and adding additional commercial strength, particularly in the Signatera space. We're continuing to invest in research and development, and then we still have several of the large catalysts remaining in the future that, you know, I think could provide upside to the business. For example, the readout of the ALTAIR study in Signatera, or the 22q guidelines in the prenatal business. Mm-hmm. I want to touch on the women's health volumes you talked about. I mean, significant increase there. I think 85,000 year-over-year increase in first quarter. Consensus seems to be assuming first quarter is by far the best quarter of the year, and that's usually not the case with Natera, just in terms of the way the next few quarters work should work out. But so maybe just talk to us, what's driving that conservatism versus was it just sort of one-timer things that came in that give you more confidence about first quarter and then the rest of them still moderate from there? Yeah. So we saw really robust volume growth, and revenue growth- Mm-hmm ... in the women's health business. And you know, some of that growth was driven by the acquisition of the Invitae business. But actually the vast majority of the growth was organic from our existing accounts and from our direct sales team- Mm-hmm ... which I think is a good, you know, good sign overall for the health of that business. Mm-hmm. Generally, in women's health, and maybe this is, you know, because we don't really break out the volume necessarily for women's health separately- Mm-hmm ... but usually what we see is Q1 is, you know, the strongest or near the strongest for the year, and then we see a dip down in Q2 because of seasonality. Mm-hmm. There's just fewer people reaching that screening window during the quarter, and this has been the case for 10 years. And then we see in Q3, things start to tick back up, and then kind of Q4, we're back up again, and then Q1 is, is always really high. So, you know, it's not surprising to... With maybe some conservatism that Q1 would be modeled as, as sort of the highest quarter for the year. Mm-hmm. But you know, I think with the stuff that we have in the pipeline right now and the new RhD testing launch, Mm-hmm ... you know, I think that could be conservative. What was there anything fundamental behind the just organic growth that you saw in women's health? Was there any other unique driver to it, or is it just, you know, certain additional sales reps on the commercial side, or is there anything else that you attribute to? Yeah, I think what we're seeing is that, existing customers- Mm-hmm ... are using the products more, and that we're, we're growing new customers and retaining business. Mm-hmm. And we've improved on each of those metrics. So, you know, of course, as we've been in the business for a long time, we generated a lot of data. Mm-hmm. I think that strength of the data and significant amount of peer-reviewed evidence, the unique differentiations of the both on NIPT and on carrier screening, where just clinically, we, we have, you know, highly differentiated products driving a lot of the decision making from physicians. Okay. Switching gears to Signatera, obviously a, you know, major topic of interest for investors. You know, another strong Signatera quarter in the first quarter, I think 115,000 volume, 60% year-over-year. I mean, appreciate that the, you know, the guidance is assuming sort of, you know, maybe high single digit thousands in sequential volume growth per quarter. But what's, maybe just help us understand... given the momentum you have, the number of indications that are in place, the number of, I mean, you have good reimbursement as well. Clinically, the product is getting more understood out there. Penetration is low. So, you know, just help us understand sort of what should be the growth trajectory here or, you know, either the sequential basis or, you know, year-over-year? Yeah. So, Q1, we had a really strong quarter. I mean, I think of the oncology business overall, we grew sequentially versus Q4 in 2023 by 17,000 units, which is a record, and we're, we're seeing a lot of continued interest in, in Signatera. Mm-hmm. You know, particularly, I think coming out of the ASCO GI conference, which is a time for, you know, physicians in the colorectal setting to kind of reset and take a look at, you know, additional data and technologies that are out there. We saw a nice increase in new physicians using the product and also increasing depth within the existing customer base. So today, you know, about 35% of all physicians, oncology physicians are using Signatera. We think as, you know, ALTAIR reads out, as we continue to educate doctors through our medical liaison team and medical health team, we'll see increases in utilization in new accounts. Mm-hmm. We're also in a position where, you know, we have a lot of data beyond colorectal. We're seeing additional submissions go into MolDX. So there's a lot of upside opportunity, and we're excited about the trends that we're seeing now. John, maybe I'll ask you on the reimbursement side, engagement with the commercial payers. What, what are the next steps for Signatera? Sure. So most of the power behind the ASP today- Mm-hmm. is from Medicare and commercially administered Medicare Advantage plans. Mm-hmm. The Medicare Advantage plans, it takes some time to dial them in for any new product or technology, and so we're seeing a ramp, which is probably the biggest driver of commercially administered Medicare Advantage, and there's good runway there still- Mm-hmm. -to help drive ASP. Separate from that, on the commercial side, we've had some plans that have adopted, coverage policies, largely regional blues. Mm-hmm. Blue Shield of California was the first to do that based on the health economics behind CRC and Signatera. Mm-hmm. -and cost savings associated with chemotherapy avoidance. But we also have this trend of state mandates coming through, where I think 15 or 16 states have now voted to require commercial plans to match what Medicare is doing or what's recommended by guidelines. It's very early days in terms of how that's getting implemented, but we have seen policies tick on with, you know, Blue Louisiana, Blue Georgia, HCSC in Texas, Illinois, as a result of those state mandates. And, you know, we're just starting to pull payment through with some of those regional plans, which will have a positive effect on ASP as well. Another nice thing about the way Signatera is structured is with the commercial plans, we're pricing based on our ADLT rate per time point. Mm-hmm. So the pricing with the commercial plans is, you know, better than Medicare on a per test basis. Got it. And, in terms of the ASP pickup, how much of that would you say is still sort of indication dependent or, the mix of patients, the commercial versus Medicare mix, and that's shifting more towards Medicare? So there's a bit of an ebb and flow there before you get to more commercial, correct? I think you see- Yeah ... you know, slight differences in mix. It's not that meaningful. Mm-hmm. For example, bladder has a much higher older population than breast- Mm-hmm -which is many younger patients, but largely the mix is similar. Pretty consistent. Yeah. Yeah, I think, I, I think the mix of kind of commercial- Mm-hmm -versus Medicare Advantage versus Medicare has been pretty consistent over time. Mm-hmm. You know, one of the things that we're seeing is that each indication is kind of growing proportionally. Mm-hmm. Because physicians, when they start using the product, they like the product. And so, you know, as breast grows and colorectal also grows, and muscle-invasive bladder also grows- Mm-hmm ... and immunotherapy grows. So, you know, the difference in sort of proportion of the mix across the business is similar as the volume grows. Got it. And I have to ask this question because, I mean, you obviously a number of companies point to, well, Natera has done a phenomenal job with MRD, but then they talk about their own product that is launching in the marketplace. And there are multiple companies attempting to enter the market. Obviously, you have some litigation ongoing, and there are other ones that are looking at maybe whole genome and other approaches and whatnot, and are entering this market. You know, how do you think about sort of overall the competitive landscape? You have a strong clinical evidence track record already. Maybe just help us understand what are the things that you are watching out for in the competitive landscape and actions you're taking to stay ahead? Yeah. So I think, first, you know, we've been in an environment where, you know, we've been in very competitive fields before, and we've always done really well. Mm-hmm. I think you have to focus on clinical data development, innovation within the portfolio, having a strong commercial and medical affairs team, and then having a very good user experience. So we combine those four things together, and that's sort of the Natera algorithm for how we're successful. But you know, I think here we've got a unique advantage in that we've generated so much data, 50+ peer-reviewed papers at this point, multiple indications that are covered. But we're not done there. We have many randomized trials that are gonna be reading out. And so I think when competitors come in, and they have an analytical validation or maybe a kind of a just a standard clinical validation, and we have randomized outcomes data, you know, interventional randomized outcomes data, I think it's gonna be challenging, you know, for them to compete with that. In addition, I think we've built out the commercial infrastructure and just the logistics and operational infrastructure in a very significant way. You know, we have 250+ commercial employees- Mm. You know, in the field. We have full teams set up to procure tissue and mobile phlebotomy samples. We're in EMR systems. We're in network with all the insurance companies. You know, so there's a long way to go from having analytical validation to actually getting a product reimbursed. Mm. and getting a product on the market. Mm. You know, in addition, we have multiple different submissions that are in MolDX to continue to expand our indications, and then we've got a robust research and development pipeline as well. Mm. You know, I think we're at peak levels of R&D spending now. You know, despite getting to cash flow breakeven, we're still spending a lot on research and development, and that's going to scaling, reducing costs, but mostly to clinical trials and innovation in the core business. MRD- Mm-hmm. Women's health and organ health. Mm. You know, not sort of side projects- Mm. But really making sure that we're ultimately the winners in these individual spaces. Got it. If you look at just a quick sort of question that I get from just so, you know, based on the first quarter growth for Signatera, can you maybe just describe the demand you're getting from the existing oncologists versus new oncologists and sort of sort of same-store sales versus new accounts? Yeah. Yeah. So, these are metrics that we, you know, we track obviously. We look at, you know, within the existing accounts, when they start using us, you know, are they continuing to use us? Mm-hmm. You know, what's the scale of their utilization? Mm. You know, what pace are we able to bring on new oncologists? Mm. I think what we see is when doctors start using the test, you know, generally they continue using. What happens is they get comfortable with one indication- Mm. or maybe one use case within a particular indication, and then they expand that utilization. Mm. And so, you know, I think that's a trend of continuing to, you know, for physicians to offer the testing to more and more patients within their practice. There's also a trend of starting off in, say, colorectal and then expanding, you know, community practices where they're seeing multiple different tumor types expanding to maybe breast or lung, for example. Yeah, and then, I think when it comes to closing new business, you know, certainly there's opportunities where there's doctors that are maybe waiting for more data- Mm-hmm. or they haven't started the testing yet. Mm-hmm. Generally, the reason why, you know, we're seeing 35 or maybe now 40% of doctors using Signatera is because they're waiting for the randomized outcomes data. Mm-hmm. The good news is that we have randomized data coming and, prospective randomized outcomes data. You know, and, and actually, ALTAIR is gonna be read out in about 90 days. And, and so it's coming very soon. But we're also, you know, doing many other randomized studies. In colorectal, I think we have four randomized trials underway. In, breast cancer, we have multiple randomized studies, and in muscle invasive bladder, we have, Mm ... two randomized trials that are underway. One that's actually gonna read out in 2025. So, you know, again, just going back to how do we move the market forward and how do we expand utilization- Mm-hmm. I think the data reading out serves to not only be a competitive differentiator, but also to help us further penetrate the market and improve reimbursement. Just staying on ALTAIR, maybe just to help us understand what... Again, remind us the trial, how is it different versus the GALAXY data? What-- how to think about sort of, some sort of benchmarking and, you know, when this data does come out. So overall- Mm ... it does look, appears to be meaningful, but maybe just walk us through- Yeah How the setup is for Altair. Yeah. So, the ALTAIR study is part of the, uh, CIRCULATE-Japan study, where we, you know, enrolled more than 5,000 samples, or 5,000 patients, total. We're monitoring the patients, for several years, and we're looking at clinical outcomes, you know, at, at up to, up to two years. And so initially, we read out the results of, the Galaxy arm, which is the observational study, where we look at the patient with MRD positive, were they more likely to recur? If they're MRD negative, were they less likely to recur? Mm. And then for the patients that are MRD positive, if they got adjuvant chemotherapy, we were able to show that the Signatera was predictive of who would benefit from adjuvant chemotherapy. For the patients that were MRD negative, we were able to show that there's no benefit of getting adjuvant chemotherapy in that cohort. Now, that was an observational study, prospective, but observational. The thing about Altair is it's now the randomized arm, and it's looking at, particularly at MRD positive patients and escalating them to get additional treatment versus a placebo, where they wouldn't get any additional treatment. And so the fact that it's randomized outcomes data done in a prospective manner makes it unique versus any data set that's been presented before. You know, I think, in fact, this might be the first readout of data of this quality in the MRD setting. So there's a lot of excitement about it, and I think it does have the capability to, you know, if the readout is positive, to make a significant impact in the sector. Yeah. I know, look forward to that data set. What does it mean for NCCN guideline inclusion? Obviously, NCCN, you know, historically, I've seen that they look for totality of the data, so to speak. But obviously, with an evidence like this, what's your expectation for NCCN? Yeah. So we were really pleased with the NCCN guidance that came out earlier this year that was supportive of Signatera. I think obviously, when you have a randomized data reading out of this scale, you know, that's gonna be considered by the committee. You know, look, we're getting close to the readout of the data, so I think we have to see how it... what it looks like. Mm-hmm. And, you know, assuming that it, that it's positive, I would imagine that that's something that would be taken under advisement by the committee. You know, but we have a lot of data that's being generated now, a lot of randomized studies in CRC. And I think certainly that's all pointing in the right direction- Mm-hmm. —for, getting deeper and deeper into the guidelines over time. Okay. Another catalyst that gets talked about is American College of Obstetricians and in ACOG. So, in the 22q microdeletion there, any updated thoughts on when we can potentially see that? And, again, remind us on the, you know, potential for upside there. Yeah. So, 22q is a very important disorder. The incidence in the general population, about 1 in 1,500 pregnancies. We invested into a seven year clinical trial, which was called the SMART Study, and we were able to show that we can detect 22q with a very high sensitivity and a good specificity and a high positive predictive value. We believe the American College of Obstetricians and Gynecologists is reviewing the data and will determine whether they think the evidence, you know, meets the requirements to put out a society guideline. You know, certainly, kind of on the surface, it would appear- Mm-hmm -it does meet the criteria, but, you know, we have to see where the committee comes out. But, if there is a positive guideline, I think Signatera would benefit from that. You know, our test is highly differentiated. There's sort of two types of tests. There's the SNP-based microdeletion test- Mm-hmm ... which has a very high sensitivity, high detection rate, and a very good positive predictive value, particularly in areas where there's ultrasound findings. We've seen in some studies 100% positive predictive value. Then on the other end of the spectrum, you have the low detection rate, 22q tests, which are, you know, from some of the other competitors that are out there. And I think, you know, I think the, the physicians, you know, do understand the differences of, you know, low detection rate, 22q assays versus what we're doing with the SNP testing. Yeah. I think ultimately that's gonna be a competitive differentiation as well. Got it. Just wanna touch briefly on ASP again, and maybe John can chime in on this as well. You know, when we look at the ASP increases here, we saw in carrier screening, but we're not necessarily going back to the levels, or maybe we can, but you know, to the when things were reimbursed for enhanced carrier screening. But you know, the ASP has come down meaningfully since then, but now is recovering. Maybe just tell us, you know, what's your expectation for ASP recovery on the Horizon side and Panorama? Yeah, on the Horizon side, I think you have to remember that ACOG, in our view, has a positive guideline already. Mm-hmm. Mm-hmm. And for many years, the Blue Shield Association has a positive recommendation on expanded carrier screening. We've seen more state Medicaids begin to cover expanded carrier screening. Independent of any kind of recent guideline change, we've seen plans tick on by instituting positive medical policy. So there's been a steady kind of climb from that. You know, there's a few holdouts in the national plans that you know are claiming to want an even stronger guideline, even though there are guidelines in place from ACMG, from NSGC, from ACOG, and we've heard that one of those may be in the works. But independent of that, we've just seen a drumbeat of plans putting on positive policy. I think we've also benefited from some operational improvements in terms of our procedures for collecting medical records and other information necessary to get claims paid. So, you know, those are, those are the real drivers behind the lift in carrier ASP. Okay. And, I know there was some lift in prenatal from the California program coming out of that, so that helped. But overall, how should we think about, you know, just the ASP improvement in the prenatal business, leaving ACOG aside? Yeah, I think there's been stable improvements. Now, it's kind of the trend that we've seen, and we think there's some, you know, continuation there. As Mike indicated on the earnings call, you know, the guidance that we put out assumes sort of, kind of roughly flat, stable ASPs. Mm-hmm. Prenatal. And I think there's some opportunity to improve on that. You know, of course, you know, we're doing a lot of things to both, you know, work with payers, improve the operations, and also, you know, expand coverage on areas that, you know, today, maybe we're not getting paid. And so I think there is upside. Okay. I wanna touch this up on the point of, you know, CRC screening was in topic last week. There was a, you know, AdCom meeting and discussions around that. Investors had a lot of questions. This is a market that does get a lot of attention due to just the sheer size of the market. Maybe update us where you are in your thinking and, and, you know, how you wanna position in this market, any sort of early data sets, and when can we potentially see those data sets? Yeah. So, what we said previously is, you know, we think soon now, probably this quarter or maybe early Q3, we will be in a position to release some case control results. And I would say we'll be building on that with an additional readout in the fall, which will include, you know, probably like around 1,000 prospectively collected samples with matched colonoscopy results. And, you know, the collection of those is already, you know, well underway. And what we've done actually is we've designed this trial in a way so that it can just roll into an FDA-enabling trial. Mm-hmm. And so, you know, should the readouts from case control and this follow on more definitive readout, should they be positive, we can sort of flip the switch and move into the FDA-enabling trial. Mm-hmm. You know, I think the question is gonna be: You know, what does the performance look like, and is it worth us to, you know, continue on? I think we're just gonna have to let the data read out and then, you know, decide where we are from there. Mm-hmm. But, you know, certainly, given our cash trajectory now, even if we were, you know, to invest in the FDA-enabling trial, it would have no impact on our ability to be cash flow breakeven and to continue that generating free cash flow at the scale that we're, you know, we're looking at as we move forward. But with that said, we're being cautious because we want to continue to invest heavily in MRD and to keep our focus on MRD, which we think is a main driver of growth for the business. Mm-hmm. Unless we see clear opportunity, we're gonna keep our investment limited. Okay. And another topic, Renasight, I think there were some guidelines there, KDIGO guidelines came out. Maybe just talk about that. What is... what, how relevant is that? What, what does that mean for overall clinical adoption and the growth you expect for that business? Yeah. So, Renasight is a germline test for patients that have been diagnosed with chronic kidney disease. And, in 2019, we kicked off a large-scale prospective clinical trial that looked at using Renasight prospectively in practice and then managed outcomes and looked at what interventions doctors were taking. Mm-hmm. Not only the results of the Renasight test, but what interventions did doctors take as a result of getting the Renasight test back? And what we saw is that about 25% of chronic kidney disease patients have a genetic etiology, and that when the doctor receives a result back that's positive, about 75% of the time, there's some change in care, and about 33% of the time, they actually physically change the treatment that the patient was on. So those results were received very well. KDIGO, which is one of the largest governing bodies, is similar to ACOG, I guess I would say- Mm-hmm. - but more global in nature. They put out a guideline that suggested that genetic testing can be used to determine the cause of chronic kidney disease, and they listed out a bunch of different indications about when it might make sense to use the test. So we went through those indications, and when you add them all up, it actually comes out to probably 60%-75% of all chronic kidney disease patients- Mm-hmm. - are eligible for, you know, getting a test out of the guideline. And you know, as a reminder, there's 40 million Americans that are diagnosed with chronic kidney disease, and there's about 1 million patients per year that are newly diagnosed with chronic kidney disease. And so our goal is to help people keep their organs. When you look at our donor-derived cell-free DNA business, we're helping people try to keep their transplanted organ, but then with our germline test, Renasight, we wanna prevent them from losing their Mm-hmm ... kidney in the first place. And I think, we're really moving the science forward, and there's some opportunities to expand the market there. Mm-hmm. Especially as now as the NKF guidelines might follow suit with KDIGO. We'll, we'll see. Okay. Just wrapping up the last question around, and maybe I should have asked this before, but in terms of, when you think about product launches, you've talked briefly about it, but can you just outline, you know, are we- are you thinking more on the oncology side, the MRD side, and, or is it more on the women's health side? Maybe just help us contextualize. Yeah. I think we're looking across all the different business units- Mm-hmm. at opportunities to support the core portfolio. And what we're not doing is going and doing a bunch of things, you know, that are separate, that are outside of the core business- Mm-hmm ... with the exceptions of the investment that we're making in ECD and some of the investment we're making in other areas. But, you know, largely MRD, core women's health and core organ health are the areas, Mm-hmm ... that we're investing. Okay. Awesome. Well, this was great. Thanks for being here, and thanks for taking the time. Yeah. This is wonderful. Thank you. I appreciate it. Okay. All right. Thanks. Okay. Thanks.