All right. Finally, we're good to go. All right. So good afternoon, everybody. I'm Doug Schenkel. I cover tools and diagnostics here at Wolfe. It's my pleasure to host Veracyte. From the company, we have both Marc Stapley, the company's CEO, as well as Rebecca Chambers, the CFO. Marc and Rebecca are old friends from the old Illumina glory days. Veracyte's a company I used to cover before Marc and Rebecca got there. So now that I'm back covering the space and Marc and Rebecca are at Veracyte, it was kind of only a matter of time. So we actually launched on the company last week. We think it's a great time to be involved with the stock. It's been a great year, and we think there's more to come. So we're going to get into that momentarily. And now it's your job to start pitching. All right. That's British. That doesn't work. Thank you. You're welcome. All right. Well, thank you both for being here. So in terms of just agenda and objectives, first, we're just going to talk about the momentum you've built over the course of the year and just how to think about sustainability into Q4 and hopefully beyond. I do want to dig in a bit on the current menu and the pipeline, and then get into a discussion of longer-term growth outlook, the longer-term growth outlook, and essentially where growth and margins can go. But before we do that, I thought we would talk a little bit about state of the state, state of the company, and thoughts on the industry. Marc, you joined Veracyte in 2021. Revenue is on track to have doubled during your tenure. Product gross margin is on track to improve almost 500 basis points. It looks like you can generate certainly over $90 million in Adjusted EBITDA this year. When I covered Veracyte years ago, it was like a lot of diagnostic companies, a collection of some good products that occasionally grew a lot. And I don't mean any disrespect to those that came before you, but there wasn't a balance of growth and margin and cash flow. You guys are doing both. How have you got here? What discipline have you applied to this point? And as you think about not just Q4, but moving forward, what's the risk to the trajectory, if any? Yeah, thanks, Doug, and thanks very much for having us. It's great to be here at this conference. Before I get into any of the details, I do have to mention our safe harbor statement, so to the extent we make any forward-looking statements, they're anticipated to be covered by that statement, which can be found in full on our website at www.veracyte.com. Now I'd love to answer your question and get into what's been driving our business and how we think about it. When I came to the company, which is now close to three and a half years ago, we had an incredibly strong foundation. We had some great products in the portfolio, some things that we were doing that we looked at with a slightly different lens and determined the ROI wasn't there. We had a philosophy around creating financial performance for the company that was industry leading in an industry that I think, and we can get into this more, that I think was incentivized differently, rewarded differently, and we kind of saw, if you really want to run a profitable business, diagnostics business that can fund its own development and launch exciting new products, there's a way to do that, and so that's the philosophy we applied, and we've been on that journey for the last three years, and I think we've made some good decisions along the way. We've done a lot of great things as far as the portfolio is concerned. We've got five really important things that we're investing in. I'm sure we'll talk about them, but the Decipher and Afirma growth that is near-term, medium- and, in the case of Decipher, long-term, our MRD strategy, our IVD strategy for outside the U.S., and our nasal swab strategy for our pulmonology franchise, and so with five really exciting things to focus on, and everyone in the company focused primarily on those five things, we're now starting to see the performance of the business, and as you mentioned, I mean, this year we're going to deliver over 20% Adjusted EBITDA. We had a quarter just now where we hit 24%. I couldn't be prouder of what our Veracyte team and all of our employees have done to create that kind of a financial profile, but most importantly, behind that is all of the patients that we're helping, which is really why we come to work every day. I couldn't be happier with the way things are going. You talk about what's the risk to that. With the way that we've been focused on the business and the under-penetration we have in our core markets, the risk is somewhat mitigated by the opportunity. The opportunity is far greater. Some of the risks that seem to be a little bit more tactical than strategic in nature, things like supply chain challenges, which have always impacted our business. But even there, we've been able to mitigate that in our core very, very successfully. I'm never going to say there's never any risk, but I think we've shown over the last three years that we've been able to hit issues that come our way and deal with them and knock them down and deliver the kind of performance you mentioned. Lots of focus within our coverage universe, especially on the tools side, about what's going to come with the new administration. I think there's a little less focus on the diagnostic side, and in fact, diagnostics arguably could be viewed as more of a defensive area. What do you think? Your stock's been remarkably resilient since the election. Are you affected by China trade wars, sourcing of materials because of tariffs, changes in HHS, FDA regulatory reimbursement? I know that's a lot, but any thoughts five days in? Yeah. Yeah, great question. Diagnostics is resilient because it is driven by the incidence of patients dealing with cancer. And sadly, that isn't going down. It doesn't stop because of a change of administration. And our patients need insights, and our physicians that are treating them need insights. For us, I think the effects, if anything, are going to be second or third order or even further down the chain from the things you mentioned. We're not directly in China sourcing from China. I'm sure somewhere in the supply chain many steps back, that could potentially be an issue. But those things get resolved, as we saw during the last few years and during COVID. We all dealt with the challenges that we faced. FDA regulation, we're a regulated industry. We meet very stringent clear New York State requirements in particular. We are ready and willing to meet any regulatory requirements that might be thrown our way. As a high-quality lab, we actually have the opportunity to do that probably a little bit easier than many of the other smaller operations who aren't ready. And then reimbursement, I always say that we've done a really great job at Veracyte of de-risking for investors the reimbursement challenges because we don't launch our tests until we see a clear path to reimbursement. We continue to generate evidence to support the reimbursement. Perfect example, Decipher has 85 studies that support that utility of that test. And so that's very durable. Afirma has helped 60% of all patients avoid unnecessary surgery. That real-world evidence is second to none. So if you think about it like that, I think we've done a lot to mitigate the reimbursement risks that we might face. So I don't think of any of the administration changes as being significantly impactful. OK. Super helpful. And just to push on one thing, separate from the election, one of the topics that has come up recently, I would say over the last several weeks, because elsewhere in the coverage universe, there was a high-profile change in the reimbursement of a pharmacogenomic category, which is obviously different from what Veracyte does. But I think you may have just answered the question as to why you feel better prepared outside of anything that's going on in Washington. When you think about commercial payers and risk to coverage decisions, it's what you just said, right? It's the data. It is. It's the evidence. In terms of what mitigates, sorry. I finished my sentence. I messed up there. But in terms of what mitigates the reimbursement risk. It is. To put a finer point on it, I'd say it's more the evidence that supports and addresses the reimbursement risk. And the example you're talking about, the quote, I don't have any insight into the specific indication area or the evidence behind it. But the example you talked about, they cited lack of evidence. And that's a debatable point that I'm sure others will get into. About a year or so ago, we had one of the major MACs also impact a lot of tests, citing again, lack of evidence for those tests. So the absolute best thing that we can do as an industry and a company to avoid this and make our reimbursement durable is continue to invest in evidence, have the evidence available. Like I said, Decipher, not only 85 publications, but over 100 studies that are driven by the Decipher GRID that all help to ensure that we can always support our reimbursement. We're actually seeing the opposite dynamic. We are having a lot of success with commercial payers now in contracting further. We announced a very large one, 30 million lives earlier this year. And it's just that these conversations are very fruitful when you bring so much strong evidence, including NCCN level one guidelines. Yep. Yep. Makes sense. Let's talk a little bit about recent financial and performance updates. So we touched on a little bit of this, but again, correct me if I'm messing up the numbers, but in the Q3 revenue grew, I think it was 29%. You've talked about 23%, I think, is mathematically what you get to for the year based on your guidance. Whatever it is, we're not updating guidance today, but a lot of this has been driven by, I mean, it's actually been remarkably balanced between Afirma and Decipher, and I say that because I think of Afirma as just being a more mature franchise. As you think about momentum heading into Q4 and beyond, should we be cognizant of, on one hand, Afirma doing well, but penetrations getting up there? Decipher, on the other hand, still a long way to go. Yeah. And Rebecca, jump in as well here if you want to add some details. But I think at the highest level, the way I think about both of our markets, our core markets for endocrinology and prostate, is those markets should be able to get to 80% penetration. To your point, the endocrinology market is further along, more mature, but still, at the beginning of this year, coming in, only about 60% penetrated. On the other hand, looking the other way, the prostate market coming into this year was about 35% penetrated. And our view is, every patient with thyroid cancer that's indeterminate, and even now in the case of Bethesda V suspicious, and every prostate cancer patient, including metastatic, should be getting a molecular diagnostic test. And of course, we think it should be Veracyte's test. And so when you look at that opportunity for further market penetration, this is why we feel so strongly about both Afirma and Decipher Q4 2025 and beyond. If you want to. Yeah, absolutely. And I think getting more into the specifics, as you look into Q4, we've obviously guided. Afirma does have a harder comp in the Q4. And part of the reason we wanted to give the 2025 guide was to ensure folks didn't, on Afirma specifically, overlook the fact that it was a really hard comp and propelled that to understated the revenue for Afirma in the future on that line specifically. So we did lean into 2025 there a little bit. Q4 has two less selling days than the Q3. And the way the holidays fall is a little less than ideal, perhaps. So I think there's a ton of momentum in this business with those factors taking into account. Into 2025, we're obviously quite excited about the continued momentum of both Afirma and Decipher. We do think that we can get to a pretty attractive growth profile even despite the success of 2024. A couple of factors in our business that we have that are a little bit more challenged as we look forward, but are only 5% of revenue, are the product business and the biopharma business. We do expect those to decline next year. But I think when it comes down to 2025, we're quite excited about the ability to deliver outsized revenue growth in totality. And just to put a finer point on that, the guidance for next year specific to Afirma is for high single-digit growth. And the other things we should be contemplating, kind of bad guys are what you talked about, small parts of the business, but parts of the business that are expected to decline. In one case, you know it will decline because you're discontinuing the product. Managing demand. Managing demand. You were talking about the Envisia. You were talking about Envisia. So yeah, so there are a couple of different factors. Envisia is $6 million of revenue that will go away next year, absolutely. On product, we are managing demand. And then on biopharma, it is not a strategic asset. So effectively, it will tail out over time. Then the positive offset will be whatever you think is going to happen with Decipher. Yeah. Absolutely. And so when you sum all of that up, I think consensus is currently at 10%. Around 10%. We would be very disappointed if we aren't able to beat that. OK. Great. Not guidance, but you would be disappointed. Very disappointed. OK. Thank you. And ASPs, we saw a pretty significant uplift in the Q3. I do think some of that was prior period collections. So, how much of that? How of that? How should we think about the sustainability of that moving forward? Yeah. I think if you look at the last couple of years, we've grown ASP at a 5% CAGR for Afirma and Decipher primarily. And that's primarily given our successes with our managed care team, really going out and contracting and getting new coverage for both products. Afirma now is around 275 million covered lives, and Decipher is around 200 or slightly more than. And so I think from here on out, we see gradual ASP improvement over a multi-year period. Probably best to strip out the prior period collection in that statement because it's a very large comp for next year. But if you think over a five-year period, absolutely, we expect to continue to see ASP expansion. And we will have in the Q1 of next year a positive comp because that large payer market cited came in halfway through the Q1. So you'll have that tailwind continue through that period, but then again, take into account prior period collection. So overall, good growth, multi-year period, some puts and takes. Just got to be cognizant of the quarters and what's going on there. OK. So you talked about achieving 24% adjusted margin in the Q3. How do you balance when you're, at least in my view, you're tracking at least a little bit ahead of plan? Do you think about potentially picking up investment in certain areas in a period of strength? No. I'd say first and foremost, we don't really manage the business on a quarterly basis, especially in terms of projects, investments, budgets, and so on. And we don't react to that. Q3 was a very strong quarter, but the timing of spend can vary quarter by quarter by a lot, which is why we guided to over 20% this year. So our planning process is very robust, and we've always been following the same formula. We look at all the projects ahead of us. We decide which ones make sense for us to invest in now. And it's not always driven by financial metrics, as I know you understand, Doug. It's driven by management time, resource time, people, focus in our company. You try and do too many things. You might do all of them OK, or you do, like we say, five really important things, and you do them extremely well and knock it out of the park. We're very focused, so certain projects make the cut. Others don't. We may save a little bit for a rainy day if we need to, if there are some things we want to do. Certainly, I don't feel we're underinvesting. I'm very happy with where we are. More than half of our $60 million run rate of R&D is spent on those three long-term growth drivers I talk about. That's a very healthy state of affairs to be in. As time goes on, other projects will come in, and those will tail off. We'll keep that going. Yeah, it's a very robust approach. I think the other thing to add there is effectively the way we go about designing our tests, meaning more information, is pretty critical to being able to have said efficiencies that Marc highlighted. Because we're doing a whole transcriptome in the case of Afirma and Decipher, and we will be doing a whole genome in the case of MRD, which I know we'll get to, we effectively are able to generate very interesting data that fuels the clinical evidence pipeline for not huge R&D dollars. So if you think about how much is spent on Afirma and Decipher evidence generation, it actually would be less than 10% of total R&D spend. And so if you think about the efficiency of those dollars, what that really allows you to do is invest in new products, like Marc highlighted, as well as have an incredibly leverageable sales team because they aren't necessarily out having to knock on every single door because of the high attendance at each of the scientific conferences. So that is a very purposeful decision on our part. Definitely higher COGS out of the gate, but way makes up for it in terms of both the leverage and the growth. Recognizing you're not managing quarter to quarter and better margin in a single quarter and listening to what both you and Rebecca described in terms of where you can get more information, where you can invest according to plan over the long term, it sounds like you never say never, but you got enough to do with existing products and the pipeline products that we're going to talk about and also the amount of data that you're getting out of all of these initiatives to keep you busy driving growth, driving discovery, but doing it in a disciplined way where you're not layering on something else that would affect the margin trajectory. No. Absolutely. I mean, doing it in a very disciplined way with a profile that we've laid out there that we think is absolutely achievable and sustainable for our business. Having said that, there are some things we're always working on that we don't talk about. We have probably low single-digit millions of dollars focused on discovery efforts at any one point in time. And as we've talked about in our MRD discussion, at some point, we will broaden our platform to other indications. And so you can imagine there's some initial work going on around that broader than just muscle-invasive bladder cancer. But those things are just part of the normal run rate of the business. And we decide where to point that investment and what are the right things to be working on. Why don't we just build off of that and talk about MRD before going back and talking a little more about Decipher and Afirma? So MRD, as you talked about, you're going to start in muscle-invasive bladder cancer. I believe the launch is scheduled for the first half of 2026. So can you again, that's not years and years away. It's a little ways away, but it's coming up. So it doesn't necessarily affect next year, except for, I think, investing in the foundation for the launch. So can you talk about what you need to build to get in place for that? And how should we think about the reimbursement pathway and how you expect to drive market adoption there? Yeah. So just to remind everybody, our MRD approach is a different approach that really goes back to what Rebecca just talked about in terms of the more data drives more insights. It's a whole genome every step of the way, including the initial sequencing, followed by the surveillance sequencing, which we think is extremely differentiated in many respects. And we can get into that. But the first part of that platform is to launch in muscle-invasive bladder cancer. Not a huge market, but a very important one, a terrible disease with a real clinical applicability and utilization or utility for MRD. It's also a market where two things are very important. One, we have a channel. So that's our prostate test channel, of course, working with urologists. The second is a clear path to reimbursement. So we are doing a tech assessment. We're doing the necessary work in our lab to be able to stand that test up. And then we'll make sure we have reimbursement before we launch in the first half of 2026. And that's just the beginning of our overall MRD journey. When's the earliest you could potentially generate non-clinical? And by that, I mean, is there an opportunity to generate some pharmaceutical partnership revenue with this? There is. We don't put a line in the spreadsheet for that right now because the way we see it is we're getting a lot of inbound interest. What Pharma particularly likes is the whole genome all the way approach. That will generate an incredible rich amount of data that they would be potentially extremely interested in. And so we're filling those opportunities. We're first and foremost focused on our diagnostic path. But it could be a potential biopharma uplift in the future. OK, so we've heard different things from different companies. When you talk about first half launch in 2026, that's truly clinical. Oh, yeah. Yeah. That's patients dealing with muscle-invasive bladder cancer who have been treated, and then you're looking for MRD. Also submitting reimbursement at that point. At that point. And then in terms of data catalysts, what should we be looking for over the next year? Over the next year in terms of data catalysts? You mean specific to MRD? Yes. Really? Invasive? Yeah. I think really the muscle invasive bladder cancer data was published by C2i prior to our acquisition, which demonstrated a significant lead time advantage in terms of identifying MRD prior to the standard of care imaging, and that is, we believe, plus the additional clinical validation work we need to do in our lab, or IVD work primarily, is sufficient to get to our reimbursement pathway. Now, we'll never be done, obviously, as we've said before, generating evidence that supports further expansion and adoption of our tests. In terms of what you might see during 2025, the milestones along the way to launching this test is getting the tech assessment accepted, making sure the reimbursement is there, and having it stood up in our lab, in our CLIA lab ready to go. OK. And it does sound like in terms of new indications, you probably don't want to talk about what those might be, but we should potentially expect more data next year in other indications. I wouldn't necessarily say so. I mean, so a couple of things. Firstly, we've kind of given a sense of what those indications would be. Typically, we would launch in MRD in indications where we have a presence. So a couple of obvious examples in our business would be breast and lung, which makes sense for our business. And they also make sense for MRD testing in terms of the utility there. Some of that data has already been published. We actually have some lung data published by C2i that also shows a meaningful lead time to detection. And so, in terms of, I'm not going to suggest we're going to have more data in those indications next year. We'll be working in the background, making sure that our MRD test is, we're able to launch it over the coming years in other indications. In some cases, we may have to go out and establish reimbursement. In other cases, we may not. OK. I'm going to stop self-indulgently talking about MRD and go back to Decipher. The advancement into the metastatic setting, how important is this for the franchise as we think about 2025? It's critically important for our patients, first and foremost, patients dealing with metastatic disease. And now us being able to provide more insights to those physicians in terms of not just prognostic, but also predictive capabilities. I think those of you that paid attention to what we talked about at ESMO this year in Barcelona was, for example, the STAMPEDE trial. And the STAMPEDE trial demonstrated very clearly that Decipher could be used to distinguish those patients who would benefit from docetaxel chemotherapy and those who would not. And that's really important because, obviously, as we all know, for those who do not benefit, having chemotherapy is a very quality of life-altering situation. And so we're super excited to be able to address that part of the market. The LCD is there. It's 30,000 patients, which are a high percentage, close to 70%, likely Medicare or Medicare Advantage. And so now with the LCD, that becomes accessible to us. We're getting ready to launch the test. We're doing the tech assessment. We're doing everything we need to. Consider this to be more of a driver as it starts to ramp in the second half of next year. OK. And again, recognizing there is competition here, when we look at the data that you have out there, you feel pretty again, this is what differentiates you. Yeah. The data differentiates Decipher across the board in terms of publications, level one guidelines. But in metastatic specifically, we believe this is the only test that is able to address that indication at this point. You can do this building a commercial. You can do this with the, I think, you have about 50 reps. Yeah, we do. We have about 50 sales reps. We add maybe a handful or slightly more than a handful of reps in the urology franchise on an annual basis. I don't see that necessarily changing to support the things we've talked about here. And yes, it would be the same reps talking to their same customers about metastatic for the most part. OK. Afirma, we've talked a bit about that and the expectations for next year. Rebecca, how much of that's volume versus ASPs? Yeah. So I would think of it as being primarily volume and volume really driven by penetration, unfortunate incidence growth, and then market dynamics, AKA share, being the three things really that are driving that volume. If you were to move into, I think it's Bethesda VI, or is it V? Oh, so five is what we have. You had right. If you moved. We moved to. Yeah, because we've heard about some off-label use. Is there any chance you could get reimbursement for that next year? So yeah. So if you think about 5 and 6 together today, for some commercial payers, we are reimbursed, very small percentage of total population. For Bethesda V, we now can access the Medicare portion, which is around 10,000 patients of the 30,000 Bethesda V patients in general. If we were to be able to access the Medicare portion of Bethesda VI, it would be about the same amount. I don't think that's in the next few years, but it is something within, call it a five-year time horizon. We can definitely generate incremental clinical evidence to try and go after. OK. Pipeline, IVD development, we should think of that as what being key to more international expansion? Exactly. That is the OUS strategy for us, is to launch as many of our tests that we can that make sense as IVDs to address the patient needs outside the U.S. OK, and timelines? Yeah. I mean, we've talked about this. We've got three projects ongoing at once. We're developing Decipher as a PCR-based test, kitted PCR-based test. We're developing Prosigna as an NGS-based test. And we're also developing nasal swab as an NGS-based test. Decipher and Prosigna are first, and nasal swab to follow. And we've got those projects ongoing right now. We're hoping to launch those in the next year plus. And then what's an important milestone here is to make sure we have our IVDR approval in oncology. And we recently, very recently, I think we talked about this a quarter ago, submitted our request to the notified body for the Prosigna test on nCounter. Once we get regulatory approval, then that paves the way for the rest of our oncology tests to be launched. Now, I do want to just temper expectations here around timing. Getting the IVDR approval and launching the test is only step one of the journey. The next step of the journey is to go country by country and get on, put on the reimbursement list and negotiate a price, and then be able to launch in that country. So that's a little bit more of a step-by-step blocking and tackling approach. OK. All right. We are out of time. Probably could cover 20 more minutes of things. There's lots of good things to talk about. Any closing comments before we wrap up? No. I just think maybe just to say that, like you said at the beginning, Veracyte's come a long way. I think we're leading the industry in terms of financial performance, and we've got an exciting array of tests, not just now that are driving the near-term markets and bridging to the very important long-term growth drivers that we've talked about and beyond. There's so much opportunity to grow these markets and to make sure that every patient has access to our tests, so just continue to follow that story, and we'll continue to execute. Excellent. All right. Thanks, Marc. Thanks, Rebecca. Thank you. Appreciate it. Thanks, Doug.