Biodesix, Inc.

Good day, and thank you for standing by. Welcome to the BioDesk's Q4 2024 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To answer your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to turn the conference over to Chris Breasley, Biodesics Investor Relations. Please go ahead.

Thank you, Operator, and good afternoon, everyone. Today, Biodesics released results from the fourth quarter and full year of 2024. Leading the call today will be Scott Hutton, Chief Executive Officer. He is joined by Robin Harper-Cowie, Chief Financial Officer. In audio recording, of today's call and the press release announcement with the quarterly results can be found in the investor relations section of the company's website at biodesics.com. As today's call includes forward-looking statements, we encourage you to review the statements contained in today's press release and the risks and uncertainties described in our SEC filings, which identify certain factors that may cause the company's actual events, performance, and results to differ materially from those contained in the forward-looking statements made on today's webcast. In addition, we will discuss non-GAAP financial measures on this call. Descriptions of these non-GAAP financial measures and reconciliations of GAAP to non-GAAP financial measures are included in today's press release. I would now like to turn the call over to Scott Hutton, Chief Executive Officer.

Scott? Thanks, Chris. 2024 was an excellent year for the biodeistics team. as we delivered on our annual objectives across the board. We delivered $71.3 million in total revenue, exceeding the midpoint of our improved revenue guidance and delivered 45% year-over-year growth. We increased our already strong gross margins to 78% for the year and improved our adjusted EBITDA loss by 32% on our path to profitability. At Biodesics, our mission is to transform patient care and improve outcomes through personalized diagnostics that are timely, accessible, and address immediate clinical needs. We leverage a multimodal approach that includes genomics, proteomics, and radiomics combined with AI to discover, develop, and commercialize innovative diagnostic tests for physicians, biopharmaceutical, life sciences, and diagnostic companies to help improve patient care. Clinically, we focus on lung disease because there's a massive unmet medical need. Pulmonologists diagnose, treat, and manage over 50 different lung diseases, including lung cancer. In the US, one in 16 people will be diagnosed with lung cancer in their lifetime, and it is responsible for one in five deaths from cancer annually. Our commercial team currently sells five Medicare-covered tests addressing lung nodule management and treatment guidance following the diagnosis of lung cancer, supporting clinical decisions to expedite personalized care and improve outcomes for patients with lung disease. In 2024, we continued to invest in the expansion and professional development of our lung-focused sales and commercial teams, extending our reach in clinics specializing in the management of lung nodules, the diagnosis of lung disease, and their referral networks. We grew 2024 lung diagnostic testing revenues by 43% over 2023, driven by 40% test volume growth and the expansion of reimbursement coverage of our nodule tests throughout the year. As the leader in lung nodule management testing, our initial sales approach focused on interventional pulmonologists who are specialists in diagnosing lung cancer. After gaining clinical experience with the test, and observing the utility for their patients, leading interventionalists worked with the biodesics team to educate and enable their referring pulmonologist to order the notified test. As a result, the proportion of high-risk patients seen by interventionalists increases. Conversely, the general pulmonologist keeps the patients at low risk in their practice and monitors them with CT surveillance. In 2024, we began seeing some interventionalists and general pulmonologists identify opportunities to educate and enable high volume primary care providers to implement the same testing and referral practices. Claims data shows that approximately 49% of all patients with lung nodules have their first imaging workup conducted by primary care providers. the majority of which are managed by approximately 10 to 15,000 primary care physicians. We conducted a pilot program in the second half of 2024 to assess how best to leverage the referral networks and access more of the existing addressable market. The pilot tested the viability of having a sales teammate support the lead sales professional in territory and follow the referral pattern from primary care into pulmonology. That pilot was a success, demonstrating that adding additional sales professionals supporting a senior pulmonology sales representative facilitates us accessing more of the addressable market across pulmonology and primary care in a given territory. So what does that mean? We will continue to grow and expand the sales force in 2025 by adding approximately six sales teammates per quarter, ending the year at approximately 95 teammates supporting 50 territories, up from 71 teammates supporting 48 territories in the fourth quarter of 2024, with the majority of these new additions going to support this approach. To support the ongoing adoption of our tests by healthcare providers and payers, we published and presented new clinical data and health economics and outcomes research data at various key physician society meetings throughout 2024. We also announced the launch of our new clinical study, CLARIFY, in the fourth quarter. In this study, we are collecting patient outcomes and other clinical information on 4,000 patients who've received notified testing in clinical practice with at least one year of available follow-up. The CLARIFY study uses a cost-effective study design that is faster to execute compared to a standard prospective design. In the three months that the study was open in 2024, we accrued over 300 patients, with that increasing to over 600 to date. While the primary goal of the CLARIFY study is to confirm performance of the Notify CDT and Notify XL2 test in a broad population of patients, the study will also allow us to answer several specific questions that are of particular importance to healthcare professionals, such as the relative performance and utility of Notify testing compared to PET scans. We know PET scans are used extensively in the initial assessment of nodules, despite having a very high false positivity rate, which limits their utility. We have observed in several physician practices that the incorporation of notified testing in a system-wide structured nodule management program can have a positive impact on the early diagnosis of lung cancer, leading to more cancers being caught in the early stages of the disease. This is something we will also look to document within Clarify study sites and are excited to see this effect demonstrated in a broader population. We expect to start releasing data from the Clarify study in 2025 and a number of presentations and publications to be generated over the course of the next two years. Enrollment and patient follow-up in our prospective randomized clinical study, Altitude, is progressing well under the supervision of the Data Safety Management Board. The DSMB is scheduled to meet again in the second quarter and will provide timing expectations for the study mid-year. If the DSMB recommends closing the study due to the endpoints being met at that time, we could be in a position to start releasing data before the end of the year. Now let's shift to our diagnostic development services. We've talked over the past year about the increasing demand for our services, resulting in 70% growth in diagnostic development services revenue year over year, with dollars under contract but not yet recognized as revenue improving to $12.2 million at the end of 2024, up 54% versus the end of 2023. This is a differentiated service offering that leverages our multimodal approach and R&D expertise to help deliver insights that our partners use to personalize patient care and help improve disease detection and treatment evaluation across various disease types. New data from one such partnership demonstrating the performance of the Veristrat test in advanced prostate cancer was presented at the AACR liquid biopsy meeting in San Diego in the fourth quarter. The early findings showed that the immune classifier Veristrat may accurately stratify metastatic prostate patients initiating standard of care hormonal therapy into good and poor prognosis groups. A second study showed that Veristrat may also be valuable in predicting response to Keytruda in a wide spectrum of metastatic solid tumors. Further validation studies are ongoing. We will see new data in continuing research and development efforts on our existing tests and new tests throughout 2025. including a new presentation at the Precision Medicine Tricon on March 11th entitled, Accelerating Drug Development in Prostate Cancer Using MRD as an Endpoint. We look forward to sharing more in our upcoming calls. Moving on to establishing expectations for company performance. In 2025, we expect to one, deliver 92 to $95 million in total revenue, driven by growth in our lung diagnostic testing and our diagnostic development services. Two, maintain our already strong gross margins in the mid to upper 70s. And three, achieve adjusted EBITDA profitability in the second half of the year based upon our cost-disciplined approach and revenue growth. With that, let me turn it over to Robin to review the financial performance. Robin?