Biodesix, Inc.

Good day and thank you for standing by and welcome to the Biodesics first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chris Binsey of Biodesics Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Thank you for joining us today for a discussion of Biodesics' first quarter 2023 business highlights and financial results. Leading the call today will be Scott Hutton, Chief Executive Officer. He will be joined by Robin Harper-Cowie, Chief Financial Officer. After the prepared remarks, we will open the call for Q&A. An audio recording and webcast replay for today's conference call will also be available online as detailed in the press release announcement for this call. Today, we issued a press release announcing our business highlights and financial results for the first quarter 2023. A copy of the release can be found on the investor relations page of the company website. Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand, and the competitive nature of biodiesel industry. Such forward-looking statements and their implications involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to differ materially from those projected. The forward-looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the risk factors section and elsewhere in the company's annual report on Form 10-K for the year ending December 31st, 2022, filed with the Securities and Exchange Commission on March 6th, 2023, as well as on Form 10-Q filed today for the first quarter 2023 as applicable. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company's press release issued today and in the company's filings with the SEC. I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott?

Thank you, Chris. Biodethics is a patient-centric, mission-driven lung disease diagnostic company with a mission to unite physicians, patients, and biopharma to transform the standard of care and improve outcomes with personalized diagnostics. At BioDesics, we've built a comprehensive portfolio of precision diagnostic tests to support clinical decision-making across the lung cancer continuum of care. Our core lung diagnostic testing portfolio ranges from initial risk assessment of lung nodules with the Notify Lung Testing Strategy to post-cancer diagnosis treatment guidance, and monitoring with the IQ Lung Testing Strategy. Notify Lung consists of two blood-based proteomic tests, Notify CDT and Notify XL2, which are used by physicians to assess the risk of malignancy of a lung nodule. IQ Lung consists of three blood-based tests, the Genistrat NGS Genomic Test, the Genistrat DDPCR Targeted Genomic Test, and the Veristrat Proteomic Test. Offered as options within the IQ lung testing strategy, these three tests are used to inform treatment decisions and monitor for the rise of resistance mutations while patients are on therapy. All five of our core lung diagnostic tests are covered by Medicare, and we believe we're the only diagnostic company with five on-market tests for lung cancer, all with Medicare coverage. Throughout the quarter, we've continued to make excellent progress and I'm pleased with the start to the year. Looking at our financial performance, we reported total revenue of $9.1 million for the first quarter 2023, which represents growth of 38% compared to the same period a year ago. The quarter was again highlighted by the impressive growth of our core lung diagnostic testing business, which generated revenue of $8.6 million, reflecting approximately 86% year-over-year growth. We're exceptionally pleased with not only the growth in core lung diagnostic testing volumes, but in the accelerating ramp of that growth. Core lung diagnostics quarterly test volumes increased by 78% compared to the first quarter of 2022, the highest quarterly year-over-year growth in nearly two years, primarily driven by our Notify lung testing volumes. Following the seasonality seen in the beginning of the first quarter, our sales team has benefited from being in front of physicians and care teams on a day-to-day basis, as well as an increasing number of peer-to-peer physician educational events. Importantly, the momentum seen through the end of the first quarter has continued, and we're pleased with the start to the second quarter. In addition to the growth in volumes driven by our sales team, broadening reimbursement coverage remains an important part of our growth strategy. Building on the recent announcements of the first four private payer coverage policies for the Notify XL2 test, we're making excellent progress and expect to have additional updates for you in the coming months and quarters, including the anticipated first private coverage for our Notify CDT test, expected later this year. To further support our clinical adoption and reimbursement, we also anticipate several updates on clinical studies we're conducting, that will build upon and support the clinical utility of our Notify Lung and IQ Lung testing strategies. Specifically, we anticipate sharing additional data and updates from the Oracle study, evaluating the performance of Notify testing, and updated data from our Insight study, assessing the clinical effectiveness of Veristrat, our proprietary blood-based proteomic immune profiling test. Moving to our biopharmaceutical partnerships and service business, In the first quarter, we reported revenue of $411,000 for the quarter, which continues to be impacted by timelines for existing and new agreements resulting from delayed enrollment in clinical trials. On a positive note, we continue to have a strong backlog, and we ended the quarter with $9.1 million under contract but not yet recognized. While we're encouraged by the continued strength in the backlog, we assume the challenges our pharma partners are experiencing will remain for the next few quarters as projects flow and in some cases are delayed beyond our originally expected timelines. Longer term, we believe our ongoing efforts and advancements in explainability and transparent AI provide what we believe are unique insights and clarity to healthcare professionals and biopharmaceutical and academic research teams by providing the ability to identify key biological mechanisms driving specific outcomes for patient subgroups that may require a different approach or different treatment. I've said it before and cannot reiterate it enough. Lung cancer kills more people in the United States annually than the next three deadliest cancers combined, breast, prostate, and colon cancer. Time matters when treating these patients. We pride ourselves on Biodesic's ability to discover, develop, and commercialize a broad range of tests that can quickly provide critical results and insights back to healthcare professionals and care teams with best-in-class turnaround times for all tests to help improve patient outcomes. With our strengthened financial position, along with the products and team in place, we're confident in our ability to drive continued strong test volume and revenue growth in 2023 and beyond. Now let me turn it over to Robin to review the first quarter 2023 financial performance. Robin?