Welcome, everyone. I'm Puneet Souda. I cover Life Science Tools and Diagnostics here at Leerink, and it's my pleasure to be hosting Rebecca Chambers, CFO from Veracyte. Rebecca, great to have you here with us. Thanks for having us today, Puneet. Okay. Maybe to kick off, you know, there were a number—you obviously had a, you know, you had a good quarter. Decipher volumes grew 45%, Afirma 8%. You released a strong guidance for $74,080,000. There was some confusion in terms of the exit you had for the unprofitable, you know, French business. Maybe just if you could take a minute and talk about the France SAS exit. You're obviously not investing into that business anymore. You did mention in the quarter that, you know, that the asset could go bankrupt if you don't find a buyer. Maybe just take us through the mechanics of that and what's needed and what's the risk either to, you know, sort of obviously to Veracyte in that process itself. Maybe just take us through the puts and takes. Yeah, happy to. Good morning, everybody. Before I get started, I'd like to refer to our Safe Harbor Statement on our website, www.veracyte.com. All commentary made today will be covered by that. With that, to Veracyte SAS. As you know, Afirma and Decipher covered 95% of our revenue. The question Puneet asked was regarding the other 5%. The other 5% is primarily made out of our Marseille, France location. Back in 2021, we acquired a company called HalioDx to vertically integrate our IVD strategy with the development and the manufacturing of those IVDs. With that acquisition came a Biopharma CRO business that effectively at that point in time was relatively profitable and had a pretty good revenue cadence with a repeat book of business. Unfortunately, that repeat book of business was relatively concentrated, and over the course of the last couple of years, with the macroeconomic environment and shifting technologies, that revenue, the portion of the business that contributed to, has declined over 60%. In France, as we all know, the cost structure doesn't move the same way revenue can move. We have done everything in our power to effectively manage those costs. As we entered into 2025, there still remained a material amount of headwind, as we've described in our public commentary. Over the course of the last period of time, we have assessed our options in Veracyte SAS, and what we announced on our earnings call was that we are considering no longer funding Veracyte SAS. The French process is very particular, and therefore what we can say and what we can't say, when we can say it, is definitely very strict. I think the word considering is relatively or incredibly important because no decision has yet been made as to whether or not we will, you know, decide to no longer fund. What that means is today we are actively engaging with our Works Council. That is the body of employees that represents the entirety of the employee base. That will go on for a period of months, at which point in time, you know, potentially we'll make a decision one way or the other. In parallel with that, we've proactively engaged in selling, putting the business up for sale. That may go in bits or pieces and/or the entirety of it, right? When you think about what makes up the revenue over there, the manufacturing of Prosigna is, you know, pretty important and probably the one piece that—or is the piece that, you know, we obviously want to maintain continuity of supply to Prosigna for Prosigna. You know, hopefully we'll find a buyer for that manufacturing portion. Hopefully we'll find a buyer for the rest of it as well, which, you know, has some interesting assets. If there is not a buyer for a bit or all of it, it will go into bankruptcy. That is part of the process. The goal with the French process is absolutely that they maintain as many jobs as possible. What that effectively means may or may not be continuity of supply for Prosigna. That's our—obviously our goal is to make sure we have continuity of supply for our customers and for patients. Obviously, that's critically important. It's very important that Veracyte Inc is not—it's a nuance, but we are not actually making any decisions. This is absolutely the entity that's making the decision. The only decision we may make in the future is not to fund. You know, I think what this does provide is a very strong Veracyte at the end of the year when this process is over. We have a couple of quarters of uncertainty around $4 million of revenue to come out with a very—you know, an incrementally stronger financial position where we can invest, you know, the burn from that entity in a way that has a higher ROI and is also, you know, I'm sure we'll drop some of it down as well. I think it's unfortunate that it's caused such confusion for 5% of the revenue. I think our IVD strategy is not changing. We're still incredibly committed to it. It's just effectively, we'll be investing in bringing some of that over here to the States. It might push out the timelines a little bit, but there wasn't anything really material in our internal models for the next couple of years anyways. If there's a slight delay, that doesn't really change anything from our perspective. Net-net, we're super—you know, we're trying our best to be as compassionate to our employee base at this point in time. It's a tricky situation. SAS has ever—you know, we've set them up so that they have everything in their power to be successful in a sale, either a bit or all. If they make the determination to go into bankruptcy, that's what we have risk around is that $4 million of revenue a quarter. To gain $13 million of adjusted EBITDA or $13 million of investment power, you know, I think we'll end up much in a stronger place than we are today. Got it. Yeah. Thanks for covering that. That's helpful. I wanted to talk about the philosophy behind what is now, as you said, 95% of the mix which is two assays. Decipher, obviously leading the charge there. And you have Afirma growing as well, somewhat of a mature product. But when we think about the portfolio, you had, you know, Envisia and prior to that, even the Percepta, not the nasal swab one, but the Percepta GSC. And both of those assays were de-emphasized and now focus is again, you know, very much on Decipher and Afirma. Maybe just talk to us about the philosophy of, you know, driving with two assays versus, you know, usually we see in diagnostics that the menu and the portfolio is expanding. Maybe just talk to us about that. Yeah, absolutely. That is absolutely our intent in time, right? Sometimes to take two steps forward, you have to take one step back. I think over the three years that we have been here at Veracyte, this management team, we have looked incredibly stringently at the portfolio and assessed the ROI of investments. If you think about something like Percepta GSC, it was a great product, no question. It was just a really small market and needed a lot of clinical utility evidence, which takes tens of millions of dollars. That ROI was deemed not to be there. We have a best-in-class financial profile at this point in time, right? We just guided to 21.6% adjusted EBITDA for 2025. That comes through really stringently looking at your portfolio. That is absolutely what we've done over the last three and a half years and absolutely what we plan to continue to do going forward. That being said, we don't believe that will come at the expense in time of a very diversified portfolio. We're lucky in that—not lucky, that's the wrong word. We're fortunate in that, you know, Afirma and Decipher are strong growers and we believe will continue to drive our differentiated growth profile through the contribution of our long-term growth drivers. Excuse me, we have, you know, we have that strong, solid footing with, you know, incredible profitability being driven by those two such that we can invest in these longer-term growth drivers, of which some will be added to those bags, right? When you think about Decipher, pretty soon you're going to have Decipher Metastatic, which will be added to the bag in the fall. I'm sure we'll get there. Also, our MRD product out of the gate, that's a platform, but effectively the first one will be in muscle invasive bladder cancer. That will also be added to the Decipher sales force. In the urology channel in particular, you will have four products in the Decipher bag: the prostate test, the bladder test, the MIBC MRD test, and then the metastatic test. We're absolutely moving towards that direction. I think the question just is on the Afirma side, it's a little harder to put more into that bag. That's part of the philosophy. We're always scouring the landscape to that end. You know, I think it is less obvious what that next test can be on the endo side. I think the good news is between MRD, nasal swab, and our IVD strategy, we have three great long-term growth drivers to augment our Afirma and Decipher products that are already contributing great growth. We are really excited about what that type of portfolio could look like in three to five years. Got it. Maybe continuing with Decipher, you know, you expect to grow in the low 20s volumes revenues this year. I think that's what you have outlined. You know, maybe talk to us about the sustainability of that. Part of it is, you know, you received level one evidence last year. There was a growth from that. How much of a comp is, you know, sort of how much of a challenge is that this year in terms of the comp? Maybe if I—I want to touch on the advanced tools tables too, which is actually helping you. How much of the upside from advanced tools table can actually offset some of that? It's incredibly challenged to tag in order where did this come from, from an advanced tools perspective or, you know, penetration or share or all those things. While I would love to give quantitative metrics to each of those, I think that what we're really focused on is just further penetrating and further taking share, right? That is what effectively makes up the implied revenue growth guide of 19%-22% in 2025. You're absolutely right. We have an incredibly hard comp. If you just think about what we delivered in 2024 from a volume growth basis, and effectively the delta between the 34%-35% volume growth and the, you know, low 20s, 19%-20%, 22% guide for 2025. I'm like, what year is it? Really. It's 2025. Really is a couple of things. One is the law of large numbers. If you assume the slope of the curve stays the same, just the law of large numbers takes you down. The delta between 2024 revenue growth and volume growth was prior period collections. Obviously on a revenue basis, that is a headwind as well. You know, I think when it comes down to it, the slope of the curve implied in the guide is absolutely, you know, incredibly steep, remains incredibly steep. We are quite excited to further penetrate Decipher. To your earlier question, obviously we think this can go on for quite some time. I am sure we will get into the multiple variables driving that growth. You know, I think where it stands today, we are in good stead. How should we think about the metastatic contribution this year? Yeah. Maybe just on the indication side, prostate complex disease, lots of indication. Decipher has done well. Is there anything else that we ought to be thinking out after metastatic? Maybe let's start with metastatic. Yeah. On the metastatic side, that's an incremental 10% of the incidence population. Think of the incidence, the total incidence of prostate cancer being around 310,000 to 315,000 patients, unfortunately every year. Metastatic, that 10% we have now reimbursement for. We are in the late stages of effectively finalizing the test internally as well as training the sales team, et cetera. That will launch in the first half of this year with the contribution really happening in the back half. That contribution is, you know, it's slow out of the gate. We are not assuming that, you know, the steepness of the curve that we're seeing on the localized side. I think there's a couple of different things. Just one, you have to educate the sales team. Then you have to educate the physicians. There was a great paper and poster in STAMPEDE that we then need to publish to drive, you know, hopefully that plus more information will help us with guidelines. You really, you know, it's just kind of that early drumbeat of evidence that will help drive that penetration over a multi-year period. You know, two quarters is really early to get, you know, too much contribution into 2025. It is a critical point, part of our growth trajectory over the multi-year period and why we have confidence in Decipher's ability to continue to drive growth. Got it. Another point on Decipher's revenue, the ASP, obviously this is a well-covered test, you know, significant evidence behind it. How should we think about the ASP contribution here? I do not think that is something that you have, that is not something that you have provided much into, but I would love to hear if there is, you know, ASP expansion as a result of metastatic or any other contribution. Yeah. Not necessarily as a result of metastatic. Outside of the fact that two-thirds of metastatic patients are Medicare and we'll have reimbursement for the other third, you'll have to go have those commercial conversations. Right now we have around 200 million covered lives for Decipher. Over a five-year period, we absolutely believe that this will be, there will be ASP tailwinds. In 2025 in particular, if you recall, we have a relatively large prior period collection headwind, which was around two-thirds Decipher in 2024. You know, we didn't call out ASP as a driver this year just primarily because that's a material headwind. You know, I think the good news is as we've done with Afirma for the last couple of years, the more covered and contracted lives we get, the more ASP as a tailwind. We're now into the portion of the payer curve, if you will, that is, you know, much smaller winds. If you, so, you know, effectively the large chunky payer winds that we've had in the past will now just kind of even out a bit and just be smaller ones as we move from 200 million up in terms of the covered lives. So ASP will absolutely be a tailwind over a five-year period, 2025 as a headwind. Got it. Okay. Potentially. On the competition front, if I may ask, you know, in the advanced tool table, there was another competitor, sort of an AI-based competitor, just trying to understand, you know, how are you thinking about the overall competition in the market? One of those competitors has had a collaboration with another diagnostic company, oncology testing company to broaden their distribution. Just trying to understand sort of like how, you know, again, Decipher, longstanding product as competitors emerge in the marketplace. What's the, maybe the feedback from the oncologists? What is the, you know, what are you hearing from the field and what sort of, how do you think about the competition overall in the current state? Yeah, happy to go into that. Right now there's four players in this market. Three genetic analysis tests are, we have the leading share, and then effectively a digital pathology test. In the guidelines, effectively the digital pathology test has level one evidence. We have level one evidence. The other two players on the genetic analysis side are no longer recommended in guidelines. I think over the course of 2024, we believe we took from the genetic analysis test around 500 basis points of share. We do not see that dynamic changing. If anything, the guidelines have reinforced that. One important thing to note on the guidelines, we have effectively for our public commentary or documents, we have NCCN approval for comments that have been made. I know there's been some debate, if you will, about who's in guidelines, who's not on the genetic analysis side, but we ensured that we had approval from NCCN for the points we made. I think that's important because we would never want to misrepresent that. I think, you know, I think when it comes down to it with the 85 publications of Decipher vis-à-vis the genetic analysis test, we have incredible evidence, we have credible coverage, we have an incredible sales team, and Decipher is doing incredibly well from a share perspective. The new entrant on the digital pathology side is super interesting, right? Digital pathology is a, you know, is a relatively new field. However, we view that to be more complimentary than competitive because effectively you're looking at, you know, you're looking at an H&E slide and that has absolutely different characteristics than the genetic components of the disease, right? That's pretty obvious. See, I almost felt I told you I would. That absolutely has different components and is complimentary. You know, one of the other genetic analysis tests just signed a partnership with another company in the digital path. I think from a digital path perspective, we're in an incredibly good position. We just had three posters at ASCO GU. You know, I think if we heard from our KOLs and if we heard from our physicians that they thought that information would be helpful, we'd be able to, we'd be able to pivot and do something quite quickly in an interesting way. That being said, today they aren't really asking us for it, right? But, you know, I think always be prepared. We have 50,000 slides. We've scanned 30,000, over 30,000 patients. We scanned all of those. We have 30,000 outcomes. That effectively is what has gone into those posters at ASCO GU. You know, I think on one side, the digital pathology company signed up a partnership for channel. The genetic analysis company signed up a partnership for content. We both. You know, I think we're in an incredibly good position. You know, I think to the extent that digital pathology becomes interesting, we plan to lead the charge just like we always would. Okay. Got it. Switching gears to Afirma, I mean, you know, you've estimated that the thyroid market is around 65% or so penetrated and, you know, can get to that 80% penetration. Obviously, you know, appears to be a market that is well into its sort of late innings. Maybe help us understand, you know, what are some of the drivers with which you think further penetration will happen? What sort of growth rate that we ought to be expecting for Afirma? You know, in terms of competition, if you're seeing anything, any new entrants there? Yeah. The competition one, I'll take that first. No, that's been pretty steady over the last couple of years. There are two other competitors. One has more material share than the other, but we have the leading share of all three. You know, I think from a competitive positioning, we're in good stead. GRID has definitely helped us from a competitive positioning as we partner more with academics to drive, to drive, you know, collaboration and knowledge of the basis of disease. I think on that front, we're doing quite well. For Afirma, we've guided high single-digit growth this year. We have not given a long-term guide on Afirma, but the components of effectively how we will continue to grow are obviously share. Unfortunately, incidence growth is happening here. It's in the low single digits. Further penetrating to get to that 80%. That is a lot of blocking and tackling by our excellent sales team. I think when it comes down to it, you know, I think Afirma is our steady yeti. There are absolutely things that, you know, we will continue to do in terms of product dynamic. We are going to introduce a new version of GRID in the back half of this year that will continue to drive that penetration and interest. I think at the same time, you know, we have also cogs opportunities with Afirma that we hope to be able to talk more about in the coming years. You know, I think overall the Afirma franchise is quite healthy. You know, with the investment provided to it, it is seeing really nice rejuvenated growth. Has a hard comp between prior period collections and the amazing growth that we saw last year. High single digits I'll take for a product that's been on the market for 13 years. Yeah. You have talked about Bethesda V. How much of that, this growth is a result of Bethesda V? You mentioned GRID 2 as that version is introduced, sort of, I guess trying to understand how much is baseline growth for this assay versus some of these new drivers, Bethesda V and GRID? Yeah, I would say the vast majority will be baseline. GRID, I would put in the baseline to be clear. We don't get paid for GRID. It's an RUO test. I'm sorry, it's an RUO set of information that is provided with the test. It's hard, it would be incredibly challenging to differentiate. For Bethesda V, that is a 30,000 patient population annually. Medicare is a smaller percentage of that population, around a third. Think of that as with the LCD, we are now able to go after those 10,000 patients, some of which are already in the denominator, right? In terms of Bethesda V in general, around low single digits of our volume. That would primarily be on the commercial side prior. Today, you know, as we sit here, we have the ability to really go after those Medicare patients of that 10,000. We did say revenue grew 80% in the fourth quarter with Bethesda V. It is a good news story. It is just not, you know, the largest market in the world to go after. Therefore you do not hear us calling it out as a primary driver. It is absolutely, you know, a nice tailwind. It is just not going to shift the needle more than a little bit. Got it. Is ASP contribution, I mean, do you expect ASP to remain stable here? Without prior period collections, absolutely. I think it's just how those flow in in any given quarter or not, right? We had the other third of the $11 million in 2024 was Afirma. You know, I think there's a headwind there as well. Over a five-year period, absolutely, ASP will be a tailwind. It probably won't be as material of a tailwind as it will be for Decipher given Afirma has 275 million covered lives. ASP in general, you know, is a good news story. I wanted to just touch briefly on pipeline before I move to MRD. What's the latest thinking on the pipeline in terms of the, you know, IVD market opportunity given that you're exiting the France position? How should we think about that? You know, how are you, how do you plan to approach IVD? Yeah. I would say our go-to-market approach at this point in time has not changed. And we're incredibly committed to our IVD strategy. You know, we do have country managers in the region that are serving tier one in what we call, you know, very critical customers with large enough volume. You know, I think when it comes down to it, those folks are still managing and marketing Prosigna and going after it. We will most likely be, we will be reinvesting in the IVD development team here in the U.S. Right now, about a third of our activity is happening in the U.S. for IVD development. The other two-thirds are in France. We have a foundation to grow from there. If you think about the numbers that we gave on the earnings call, we said the burn was $20 million and the gain on EBITDA would be $13 million. That delta is the reinvestment into the IVD business here in the States. You know, I think we're confident and committed to this strategy. I think when it comes down to it, Prosigna and Decipher are absolute. Prosigna and NGS and Decipher, qPCR are the first two tests that will come to market. Instead of vertically integrating on the manufacturing side, we'll do it through a CMO. Those are tests that CMOs manufacture day in, day out. It's not something that we're particularly concerned about. Got it. Okay. I wanted to touch on the MRD side. Obviously, you have, you know, you acquired an asset. You're building that assay into the MIBC indication. I believe first half 2026 is when you were expected to roll that out. You look at this market and obviously you have a leading competitor in that space. There are some tumor naive assays that also have emerged, but there are a number of other competitors. Some of them are well capitalized. They're still, I mean, they're pursuing that market. How should we think about your positioning in this market? How do you plan to serve this, you know, this product into the market? And the evidence needed to, it just all of these things take time, right? By the time we're rolling into 2026, first half 2026, this could be, I mean, today 5% of the penetration in the market could be, you know, 10% by that time, you know, who knows? How do you think about competition and positioning of this assay? Yeah, I mean, I think when it comes to MRD, this isn't a, there's so many players because it is a huge market, right? And so, you know, I think obviously we would obviously always aim to win, but, you know, for it to be meaningful to Veracyte, we do not need to be the market leader. Similar to Decipher, we think you can come from behind. Decipher was the third of those three genetic analysis tests that came to market. And through actually the whole transcriptome approach, we have driven more data, more utility, more evidence, more coverage, right? And so we'll be taking the same approach here. And, you know, I think when it comes down to it, we have, you know, we're kind of calling MIBC our pilot for the platform, but there's no reason why we can't go into many other indications across the MRD market. You know, I think we will be launching in the first half of next year. We plan to have reimbursement coverage with that launch. You know, we will not be having zeros in the economics. We will drive our engine that effectively shows that whole genome sequencing at every point of time in the MRD journey does provide kind of that flywheel of evidence generation and utility. I think the other thing the whole genome approach that we have acquired through C2i provides us is not only that additional data, but it will provide biological insights that we have, that we will gain from. Doing whole genome will provide us a rich data set if we choose to go into tumor naive. You know, I really think about this as yes, we might not be first to market, but the market is huge. In the end, you know, the science will win. You know, we even heard on your panel yesterday that whole genome is, you know, they're looking for incremental, they're looking for incremental information through the whole genome sequence. That is where the KOLs think this is going. We are excited that our strategy plays directly into that. Yeah. Getting that sensitivity higher is the key. Maybe just in the minute we have here, I would love to understand your approach to then addition of the products. As you talked about initially trimming of the portfolio to get what you are. And then should we think about, you know, capital deployment in terms of M&A, in terms of is it the technology, is it a focus, is it addition of things that enhance your existing position, Decipher, Afirma, Thyroid, Prostate, or [Oral and Urology, or how should we think about as you think about expansion into the market and more products? Yeah. Obviously, we are very well positioned in a consolidating industry to be consolidators. We've built a foundation through bringing these companies together, Decipher and Veracyte, yeah, Veracyte. I don't know why I said Veracyt there. Veracyte that effectively allows us to really add more things, right? We started there a little bit in terms of adding things to the bag. That being said, the bar's incredibly high. You saw us do the C2i acquisition and not materially change our financial profile. You know, we actually enhanced it quite materially that year. The goal would be to find other things like Decipher or other things like C2i that allowed us to not only have strong growth for the future, but also maintain a relatively differentiated financial profile. We look at many different M&A opportunities every single day. You can imagine over the course of close to four years how many we've looked at and we've executed on one. You know, I don't, I wouldn't say no to M&A in the future for the sake of saying no. Absolutely. This is going to be an important lever for growth, but it's one with a high bar that we look forward to executing upon at the right point in time. Got it. The right valuation, obviously. Okay. All right. Excellent. That's all the time we have. Thank you again, Rebecca. Thank you guys.