Thank you. Welcome. Day one of the TD Cowen Healthcare Conference. Dan Brennan, Head of Tools and DX. Pleased to be joined with me on stage here, Mike Brophy, CFO of Natera. So Mike, welcome. Hey, thanks for having me. Good to see you guys. You got it. So Mike, obviously you guys reported last week really strong into the year with nearly 60% revenue growth. Guidance was strong as well, you know, 5% above consensus on the top line as well on gross margins. So maybe just to kick it off, Mike, when we think about key initiatives for Natera this year in MRD and women's health, you know, just how would you outline those? Yeah, no, thanks for the time. And it's great to be here with you, Dan. So in terms of the 2024, obviously it's a transformative year for Natera. I think we went from, you know, $1.1 billion in revenue to something like $1.7 billion in revenue. We grew gross margins like 1,000 basis points thereabouts. We initially were hoping to burn less than $100 million in cash. We actually generated something like $80 million in cash. Had a very strong Q4 in particular, where we ended the year kind of 59% gross margins, kind of ex the true ups 63% with the true ups. Really generated about $65 million kind of operating cash flows just in the quarter. And so that performance in 2024, coupled with our experience in 2023, in which we held OpEx flat and grew revenues 31% in that year, those are the kind of the case studies that we were seeing that showed us that we're really getting leverage on this business model and that we need to, you know, it's time to kind of put our foot on the gas in terms of investments in order to support the top line growth for the 2027 through 2029 kind of timeframe. I feel like for the guide for this year, I mean, we're really kind of set in terms of the initiatives we have in place to achieve the top line we've guided to for 2025. I mean, you know, that's already in place and that's already rolling. And the investment's really focused on the future. So in terms of the key initiatives for this year, it's really going to be more of the same. I mean, we had an excellent year in the women's health business, really rapid volume growth. But even more importantly, I think to me, as your humble bean counter here, is that the ASPs continue to really improve. That goes back to a decision that we made in 2022 to really double down on the execution and the kind of the investment and engineering that we make in that business to make sure that we get covered for covered services. And we really saw that initiative play out well in our favor in 2024. Expect more of that here in 2025. Got some interesting product launches happening in women's health. We launched our Fetal RhD test last year, which was incredibly well received, served, solved a really kind of critical problem that the healthcare system was experiencing with the shortage for RhoGAM at the time. We've got, you know, some interesting product launches scheduled for this year, which we'll talk about as we kind of get closer to the launch. Organ health, similarly, I mean, we kind of called out on the Q4 call. Organ health actually grew circa 50% last year. Volumes and ASPs were quite strong. That's always been a high margin business for us. Meets a critical unmet need for a patient population. A lot of strong data both for Renasight and Prospera. On the Q4 call, we previewed a couple of trials that we're going to have reading out this year that we're very excited about in organ health. Finally, you know, Signatera, you know, just really continues to ramp. I mean, we had one of the best quarters we've ever had in terms of just sequential quarterly clinical growth units. In Q4, we grew more than 14,000 clinical units above the Q3 number. The guide for this year, I mean, as many of you will recall, we've kind of guided to kind of 8,000-10,000 sequential growth units as being kind of our baseline. We're now kind of the guide acknowledges we're kind of modestly above that now as this kind of flywheel continues to accelerate for Signatera. So the volumes look quite strong there. That is supported by a continued drumbeat of excellent clinical trial results. So just to pick two in particular, last fall, we were very excited to unveil for the first time kind of three-year prospective outcomes data in colorectal cancer via the CIRCULATE trial at ESMO. And then more recently at ASCO GI here in January post-JPM conference. We had a number of very important readouts. In particular, we had an amazing readout with our CALGB 80702 study where we showed something like a 40% treatment benefit among patients, just by Signatera-positive patients, just by adding an NSAID, just by adding Celebrex to their regimen on top of the standard of care. And that was a randomized prospective clinical trial that had been run previously and had failed on all comers. And then you come back and you segment the population just for Signatera-positive patients. The Signatera positive patients have a 40% treatment benefit for a drug that is very inexpensive and the safety profile for which is very well understood. We have an excellent kind of set of data sets driving momentum into 2025 in addition to the kind of the commercial momentum we've already demonstrated in the clinical volumes. This is year 10 for Natera as a public company and something that really fun is going to happen in July will be the kind of the 10th anniversary of our IPO. We're actually, we're going to go to New York and we're going to, I think we're going to like ring the bell or we're going to do something like that. It's really meaningful to us because if you look around, you know, our management team, I mean, almost all of us were there, almost all of us were there 10 years ago. We've gone through this kind of journey together. I think it's fair to say that we've never been in a better place in terms of where the business is and where we're headed. I'll pause there. Excellent. So maybe when we zoom out on MRD and you think about the volume growth that's coming forth, obviously you've got surveillance as more of the CRC patients mature into the surveillance. And when you think about new adds, how much of that new add, if you think over the next couple of years, is it CRC carrying the bulk of it? How much spreads into breast, bladder, lung? Just trying to think through how much those other indications could begin to see the penetration rise. Yeah, I mean, look, the mix of our volumes across tumor types has actually remained relatively stable over the last year or so, where we had a little bit more than half of the volume is colorectal cancer volume. Then, you know, circa 25% of the volume is breast cancer volume. Then you've got several tumor types that comprise, you know, 10%-15% of the volume. One of them is kind of a pan-tumor immunotherapy response monitoring indication, which is primarily adjuvant treatment for lung. Then you've got muscle invasive bladder cancer, melanoma, other GI cancers, also kind of in that high single digit range. And then you kind of round out to kind of like a longer tail. That's been relatively consistent over the last year to 18 months. And what we presume is that that will kind of remain so for the immediate term. It's interesting over the slightly longer term, you know, what the mix can be. In the United States, it probably starts to evolve more and more toward breast cancer, just given the incidence of breast cancer in the U.S. and the huge amount of need that particularly women in the, you know, who are in remission, there's something like 4 million women in remission for their breast cancer just in the United States. For our mix of our business though, it may kind of remain kind of in this kind of balance zone because in addition to U.S. colorectal cancer patients, we're starting to get closer to the time when we can hopefully get approval for colorectal cancer, you know, Signatera monitoring in Japan, okay, which would effectively double the, you know, the patient opportunity, the volume opportunity by more than double the revenue opportunity for that tumor type. It's, you know, as you look forward, you have these couple of drivers that, you know, can grow several of these tumor types quite rapidly. What's like the visibility or events that we have to watch to play out for that Japan kind of progress? Yeah, you know, so we're working through the process to get Japanese FDA approval. And then once that's attained, then you've got to go and, you know, apply for, you know, coverage from the National Health Service. And those things happen in serial instead of happening in parallel. So what I'd like to have happen this year is we have, you know, a few updates, either press releases or we'll give you some updates on earnings calls where we kind of walk you through kind of, hey, what steps have we completed and what kind of, there's some, you know, some measurable kind of progress points that we'll be able to point to through the year in terms of which modules have we submitted and what's our updated thinking on timing. There's no LDT in Japan that you can launch prior to approval? Yeah, it's really the way that you end up commercializing in Japan is via like a Japanese FDA approval and a National Health Service pricing decision. Got it. So maybe just on some of the newer products, which you mentioned, you got tumor agnostic and whole genome. So how do you plan to roll those products out like throughout the year and what kind of potential like mix do you think we could see by year end between existing Signatera and those other two applications? Yeah, we're really excited to announce the launch of these additional offerings for the Signatera franchise. And this is really consistent with the strategy that we've always undertaken at Natera, which is to kind of offer a menu approach for our customers. So while, you know, we fully expect the vast majority of our patients will continue to use kind of the workhorse Signatera assay that has all of the clinical trial data behind it. You know, you will have, you know, on the margin, you'll have, you know, an older lung cancer patient who is just not going to withstand a, you know, a fine needle aspirate to the chest to remove tissue and then build a Signatera test. But you might like to offer that patient something. And for that patient, we think it's great to be able to, you know, offer them a tumor naive panel. On the tumor naive side, I mean, I was very encouraged by the, you know, initial data set that we were able to kind of preview with investors at J.P. Morgan. I mean, as many of you know, one of the real problems that we've seen with these tumor naive panels is they just throw off way too many false positives, you know, and so we were able to show in this kind of early data that for pretty good sensitivity, I mean, relative to Signatera, it performed reasonably well, not quite as good as Signatera. It had very high concordance on the negative calls, so hopefully that can give physicians some comfort that, you know, you're not going to be, your practice is not going to be inundated with a bunch of false positives that you have to deal with. It's a valuable kind of additive step to our franchise. Of course, we have to deliver more data there and we will. Similar answer on the genome side. I mean, on the other end of the spectrum, you'll have a subset of physicians that have an opinion about the technology and want to go ahead and push forward into an assay with a genome backbone. You have a similar set of drawbacks, right? I mean, you will generate more false positives with that product most likely. Some physicians are like, have a preference there. They're happy to manage those false positives. They're in the extreme minority, but they exist. For them, you know, to be able to offer them this broader panel can be useful. I expect there to be some incremental uptake of these new products that I think on balance are going to be additive to the Signatera, the kind of this core Signatera product because offering this menu kind of enhances kind of the overall Signatera offering for a physician who's trying to decide whether or not to adopt MRD into their practice or not. Maybe just on Signatera then, talking about the sequential volume gains and you've kind of upped the guide range from 8 -1 0 to something above that. I think you talked on the call that three-year GALAXY data as being a driver of that. Just kind of what else are you seeing that kind of got you into that zip code throughout 2024 and what gives you the confidence to think you'll sustain something, I don't know, it sounds like 12,000, 13,000 maybe. I don't know if that's the number in 2025. Yeah, I mean, what we said on the call is that we just acknowledge that the guide contemplates that we're just modestly above that kind of 8-10,000 range. So I sort of think about it as like 10-12 is a decent kind of starting point for that. I think we'll almost certainly have quarters that are kind of similar to the one we just put up where we did like 14,500. I will caution you as I do every time that like the sequential volumes are going to fluctuate quarter to quarter, largely driven by the number of receiving days that happen to arrive in that quarter. I mean, we're now operating at a scale where every receiving day in our lab is worth a couple of thousand units. So if you have, like, you know, holidays or you have some kind of disruption, you could have that be a little bit lower. If you have, you know, an extra three receiving days, that's 6,000 units. I mean, you know, in the context, you know, that can look like a big deal when really if that happens, we'll be downplaying that, you know, on the call. The broader kind of spirit of the comment is that we are seeing the underlying kind of baseline volume growth here continue to accelerate on really pretty steady rep counts, you know. So that's been very exciting for us. Right. Because I think last year was like a 13,000 average. I think that's what it was last year in 2024. In terms of maybe 80702 and ALTAIR, maybe start on, you know, the 702 data. What's been the feedback from customers and doctors in the last month or two? Do you see the regimen being implemented in the clinical practice? I know Steve talked about it a little bit on the call. Yeah, I mean, it's been incredibly positive. I mean, even just walking around ASCO GI, you know, there were actually two data sets that were somewhat similar that were read out of ASCO GI. One was our 80702 data. There was another data set that was, I think, stage one through three patients that evaluated adding an NSAID to PIK3CA mutated patients, okay? And that data also looked amazing. The only difference is that like the PIK3CA mutated patients are like a subset of the Signatera positive patients. So the Signatera positive patients is a much bigger patient population. And that, like our feedback of that is that that's a pretty satisfying result for the field because there's long been the strong supposition that a lot of these stage three patients are having this polyp development in their colon being driven by some kind of inflammatory response. So it makes sense mechanistically that you should be able to help these patients by giving them an NSAID and kind of knock down that inflammatory response. And yet when the studies run on all comers, it failed. So like so many things in cancer, it turns out like life is more complicated than that. And there's, you know, the drivers of stage three disease are kind of multifactorial. So what this data was able to do is it was kind of an aha moment. Like, hey, we can subset, we can segment this population into a group of people that actually probably are having polyp development driven by an inflammatory response. And we can help them a huge amount with an NSAID where you wouldn't probably, you know, even though Celebrex is a very safe drug, you know, the base case has not been to give it to everyone because you're going to create, you're going to cause bleeds, you know. If it doesn't work on all comers, it's tough to kind of give it chronically to people for years and years. But if you can have a 40% treatment benefit for a very cheap and otherwise very safe drug, you're going to do that, right? So we had that kind of initial feedback at ASCO GI that several of kind of the top KOLs in the space are just saying like, hey, look, I thought that this should have worked on all comers and I was disappointed that it didn't. But now that I understand, I can segment my population. I'm going to start doing that right away. And of course, you know, I don't mean to oversell. I mean, the response is going to fall on a continuum. There's always going to be physicians who have a thoughtful desire to see more data. And we will certainly deliver that. So you are running kind of a, you know, randomized trial? I'd say there's going to be more because both of these data sets are read out at the same time. I mean, there's clearly going to be more data from us and just from the field kind of evaluating this effect further. I got it. Maybe in terms of, you know, randomized readouts, you know, VEGA comes to mind, you have CIRCULATE-U.S., Kind of what's in the current pipeline of clinical data that you're anticipating this year? Yeah, I mean, I think for this year, I mean, what I have in mind primarily is IMvigor011, a very important study that we expect to read out this year. Just for people's background, that's IMvigor011, the second phase three muscle-invasive bladder cancer trial that we're running with Roche and Genentech. We ran IMvigor010, which evaluated patients in muscle-invasive bladder cancer for atezolizumab efficacy. And before unblinding that data, after running, you know, a seven-year $100 million clinical trial for atezo, actually, you know, pre-specified an endpoint to see what it's going to be the treatment response just among the Signatera positive patients. Very similar to what this example I just gave you for Celebrex in stage three colorectal cancer, unfortunately, the drug did not meet its endpoint in all comers, but had a, you know, again, about a 40% or so treatment benefit among Signatera positive patients. That was amazing. Unlike Celebrex, this is not a drug that was on the market. Roche immediately turned around and launched a second phase three trial in which entrance criteria is predicated on being Signatera positive. They were going to randomize you to atezo. That's expected to read out sometime this year. I'd love to have that read out sometime like mid-year, although we obviously don't control that timing. That could be a very exciting result, obviously, for these very sick patients, but I think for the field. I mean, I think when we read out the IMvigor010 data, that's in muscle invasive bladder cancer, but what we saw was a massive network effect kind of across the volumes of the business because physicians have understood the use case and felt that, you know, this can help their patients in these other indications. And I think that's proven to be true as more data has come to light. In addition to IMvigor010, I mean, I also just call out, I mean, we will have a continued drumbeat of additional data sets kind of across all these tumor types, including, I would expect more CIRCULATE data, may have more pharma data in breast cancer. And as we get closer to those readouts, we'll preview those to you, you know, on the earnings calls when we know that, hey, there's going to be a presentation at a certain upcoming conference. Guardant recently got surveillance coverage in CRC. Like, have you factored in any impact of kind of shared degradation from that launch or other players like some of these ultra-sensitive players looking to come to market this year? Yeah, I mean, I think, look, competition is great, very healthy for the space. We've had a number of, you know, of competitors over time in the space and haven't really gotten any meaningful traction just yet. On balance, I mean, I think it's very constructive for the healthcare system to have several sales teams out there helping to kind of move the consensus toward, you know, of course, you should get an MRD. Like, I mean, of course, you get a CT scan, you know, just moving that to just be, you know, more kind of a, you know, consensus standard of care is on balance. I think that's good for patients, and generally, what's good for patients is being a pretty good thing for Natera, so we welcome that. In terms of kind of shared degradation, it's hard to model. I mean, these are all very good companies that are launching these products, and we know these people, you know, for a long time, we know how talented they are, so I'm sure they will be able to gain some share, but I would just remind everyone, like, what a huge unmet need this is, and, you know, there's plenty of volumes for us to go capture to kind of meet all of our goals. On screening, you know, you showcased 18% AA data on the fourth quarter call, which is based on 76 AAs from, I guess, 3,000 asymptomatic colonoscopy screen patients. Maybe could you just give maybe just some more background on that study, kind of where you go from here? I think you said you're going to have another data set later this year. Ultimately, you sounded pretty confident, but just again, walk through how you think this, you know, kind of assay development plays out. Yeah, I mean, we were very encouraged by the results we had. We previewed the stage one through four results at J.P. Morgan, and then on our earnings call last week, we were actually able to supplement that with some performance and advanced adenomas that I think was very promising. You know, that was really on the first kind of cut of, you know, initial kind of subset of the processed patients, and we'd like to have, you know, a larger set of patients to read out likely by year-end that gives you, you know, a more fulsome look on our AA performance, you know, on a bigger patient population. You know, and we've done, I think all of us that have been kind of around the early cancer detection space for a while have learned the thing that I think is yet to be learned in the MRD space, which is that initial clinical trial results, initial validation studies, unfortunately, don't always live up to the scrutiny that comes from larger prospective data sets. That's one thing that we've been very proud of with Signatera. If you look back to our, you know, 2017 data or our 2019 paper in colorectal cancer with Reinert and then compare that to the three-year prospective outcomes data, arguably the three-year data is better. You know, I mean, the assays continue to improve and things like that. But also, we tried to be very rigorous when we first announced data to the world. We've tried, we take that very seriously to try and live up to that data, you know, as we read out bigger data sets. It's really the same process that we've deployed in early cancer detection for CRC. We've tried to take as many precautions as we can take in terms of making sure that these are kind of randomized, you know, asymptomatic patients to kind of hopefully give you as a real-world a sense of what our performance can be. We're constantly optimistic that we can do better than the 18%. Of course, that, you know, all you can do is just produce the data and we'll have more for the end of the year. Maybe just a few other comments, you know, on that opportunity. I mean, this looks like actually an excellent opportunity for us and for the space. I mean, as we know, it's a massive unmet need. Would it be that everyone just got a colonoscopy? But that's not realistic. There's an excellent stool-based test that, again, the form factor will just limit, you know, you won't get 100% of the people screened that need to get screened because of the form factor. And so there's a huge unmet need for a very easy plasma test that can capture a big chunk of the population that would otherwise be unscreened. It looks like the, you know, the health economics for that are compelling enough to support, you know, reimbursement that actually supports a business. And we have an excellent channel for that business. I mean, our OB-GYN channel is one of the best primary care sales channels that's ever been built in the space. And so that's one potential port of call for that assay in addition to, you know, potential partnering opportunities, which we also think are interesting. So more to come on that. So maybe jumping over to Women's Health, great year in 2024, Invitae bankruptcy helped. But beyond that, certainly was a solid year. You know, you kind of walk us through the pricing, the underlying pricing in NIPT and carrier screening, you know, the expanded carrier screening opportunities ahead. But just walk us through what to expect in 2025 and what's going on underneath that's allowing you to get some better pricing right now. Yeah, I mean, like the actual, the rates haven't changed that much, right? So the market is more mature in terms of the reimbursement, like the contracted rates that you'll get from payers. What's really changed is the fraction of time that we get actually reimbursed for a test that subjectively should be covered, you know, basically every single time. You ought to be able to get covered for an NIPT if you're pregnant in the United States. And sadly, historically, that just hasn't been the case. There's been all kinds of administrative issues and reasons why a payer may deny a claim. And we've just really doubled down on our investment to just clarify that and to make sure, you know, not argue with the payers about the merits of different administrative barriers, but just meet whatever hurdles, you know, that they have, just meet them where they're at. We've been able to do that at a much, much higher clip, much better clip over the last year. That's been very important just for the health of the underlying business. So in terms of that price increase, what's kind of baked in for 2025 on underlying for Women's Health? Yes, I mean, the Women's Health, I mean, those of you who have followed the company for a long time and listen to me guide to Women's Health ASPs know that the standard, like the SOP is to guide to erosion in Women's Health pricing just because we can't have nice things in diagnostics, as you guys all know. But this year, I mean, you should take it as much more of a bullish sign that we actually are kind of guiding to kind of stable ASPs, which means that, you know, as we improved ASPs through the course of the year, we kind of exited Q4 at a much stronger level that we entered the year. And now we're getting to kind of annualize that for a full year in the guide. That's part of what's driving, you referenced at the top of our chat, what a strong gross margin guide we had this year. That's a component of it. It's just that level of success that we had towards the end of the year, kind of just amortizing that across a full year. Having said that, I am, like, I'm cautiously optimistic that there's more to come there, that there's more execution that we can do that can improve our ability to get paid on covered services more frequently than we have even in 2024. So, two quick last ones. So, tumor types of Signatera, should we expect, while it's not in the guide, that you'll have other MolDX approvals this year? Yeah, I mean, I think, you know, when you look at our volume mix, which we touched on earlier in the chat, I mean, the major tumor types we have MolDX coverage for. So it shouldn't surprise you that we have additional this year. I would consider them as kind of incremental. There's not some hidden MolDX approval that we need in order to hit our guide for sure. I mean, the guide kind of presumes that this is our set of covered tumor types. And then, last one. So you talked about in the beginning, now is the time to invest on the OpEx side in 2025. Why is OpEx going up? Like, what are the drivers of that OpEx increase in 2025? Yeah, more intensity on customer service. We feel very strongly that we've got to have the best offering in the world in terms of what is objectively a complex service that we make feel very simple for the physician in terms of tissue acquisition, in terms of blood draws, in terms of patient portals, in terms of availability of nurse coordinators to help facilitate all of the logistics required to deliver a personalized test. R&D, I think the increase in R&D just underlines our commitment to innovation here. We're going to continue to deliver best-in-class clinical trial results, and best-in-class measured by size of studies, duration, quality of the outcomes. That's going to be our goal. And we're going to continue to, you know, launch and support new products like we have this year. Great. Well, Mike, thanks for being with us and thanks to everyone in the audience. Thanks, guys.