SOPHiA GENETICS SA

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Sophia Genetics second quarter 2021 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 this session, you'll need to press star 1 on your telephone. Please be advised that today's conference may be recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Carrie Mendeville, Investor Relations. Please go ahead.

Thank you. Earlier today, Sophia Genetics released financial results for the quarter ended June 30, 2021. If you haven't received this news release, or if you'd like to be added to the company's distribution list, please send an email to ir at sophiagenetics.com. Joining me today from Sophia Genetics are Georgie Camblon, co-founder and CEO, and Ross Newkin, TFO. Before we begin, I'd like to remind you that management will make statements during this call that are forward-looking within the meanings of U.S. federal securities laws. These statements involve material risks and uncertainties, that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Cautionary Statement Regarding Forward-Looking Statements in Exhibit 99.2 of the report on Form 6K on file with the SEC. Except as required by law, Sophia Genetics disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements. whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of its broadcast, September 9th, 2021. With that, I'd like to turn the call over to Yerky.

Thank you, Carrie, and good morning, everyone. I'm excited to be here today and welcome you to our first earnings call as a public company. On today's call, I will start with a brief overview of our company for those who are not familiar with our story. Next, I will take you through the progress we have made during the second quarter and since our IPO at the end of July. Finally, I will discuss our goals and objectives as we look ahead to the second half of 2021 and beyond. I will then turn the call over to Ross for a more detailed look at our second quarter financial results and our outlook for the rest of 2021. As many of you know, we completed our initial public offering in July, raising approximately $217 million in net proceeds. Before I get started, I would like to take a moment to express my sincere thanks to the Sofia team for their continued hard work and execution. Without them, none of this would be possible. Additionally, I would like to extend my gratitude to our investors, old and new, for their ongoing support and enthusiasm for the work we are doing here at Sophia. We look forward to continuing to engage with all of you as we pursue our long-term goals. Before we get into the specifics of our progress, I want to give you a sense of the vision that is driving us at Sophia. Over the last decade, there has been an explosion in the amount of digital data generated by the healthcare industry. The ability to draw insights from this data has led to an acceleration in the understanding of biology and disease. However, this data has been generated primarily using non-standardized methods by clinicians and researchers across many health care institutions. And as a result, this data has largely remained siloed, preventing it from being fully leveraged for the benefit of patients. At SOFIA, we have set out to change this. We have created our SOFIA platform, which sits in the cloud and uses AI and machine learning to analyze data sets to enable precision medicine in any hospital, laboratory, or bio-pharma institution around the world. We operate in a decentralized model in which we supported our customers with their data analytics needs while ensuring that they keep custody of their samples and data but benefit from shared insights across our network. We refer to the practice of growing insights from complex data sets to improve diagnosis, treatment, and drug development as data-driven medicine. Using data-driven medicine, healthcare professionals supplement their own experience and intuition with data insights and shared knowledge from their peers to advise the best course of action for their patients or research. For our platform, we are unlocking data silos, leveraging AI to generate actionable insights from digital health data, and helping healthcare professionals work together as a community and deploy their collective expertise for the benefit of patients around the world. We believe the SOFIA platform will help drive the decentralization of healthcare industry over time. We're uniquely positioned to leverage this decentralization and serve hospitals that are transitioning their equipment to next-generation sequencing machines, as well as other diagnostic modalities into which we may expand in order to deliver precision medicine applications. Today, we're enabling the use of data-driven medicine for more than 780 client institutions across 72 countries. As these institutions produce data locally, our platform ingests their data into the cloud, where it is computed using our proprietary AI and machine learning algorithms. We then leverage the output against previously collected data analysis to provide insights to the customer. Our platform sits at the heart of a virtuous cycle of data generation, where data output is fed back into our database to generate even better insights. This approach uniquely aligns our interest with those of our customers and patients. Our platform is equipped to analyze data and generate insights from complex multimodal data sets and different diagnostic modalities. Today, most of the data we work with is genomic data. We analyze more than 20,000 genomic profiles per month, and we have computed over 770,000 genomic profiles on the SOFIA platform since 2014. To further expand and leverage the power of our platform, we are focused on five key objectives. First, expanding customer adoption with new clinical customers, especially in the United States. Second, increasing utilization within our existing clinical customer base. Third, further advancing our platform to continue the innovation to increase its capabilities and broader its applications. Fourth, developing partnerships and collaborations across the healthcare ecosystem. And fifth, leveraging our platform and database to continue to drive adoption with biopharmaceutical companies. We are making important progress across each of these dimensions of our business. Starting with new customer adoption, during the second quarter, we grew our total customer base to 780 customers up from 750 customers in the first quarter of this year. We are especially focused on growing the adoption of our platform in the U.S. market, which we view as our largest addressable market opportunity. To that end, we have recently began collaborating with Well Cornell Medicine, one of the nation's top-ranked medical and graduate schools, to help support comprehensive genomic research across their lab network. Our SOFIA platform will collaborate with the Wellcornell Medicine's next-generation sequencing laboratories to provide a management solution that we hope will streamline the vast amounts of related cloud data. Wellcornell Medicine researchers hope to leverage our intuitive SOFIA platform to assess fully comprehensive datasets. We believe our platform will help researchers quickly filter through genomic profiles for variants of interest to dissect and discover details that can potentially lead to new medical research discoveries. By advancing new technologies and data-driven approaches in medicine, we are very proud to support Weill Cornell's medicine continued research success and journey toward better care for all. I am excited by our growing partnerships with top tier institutions in the US and across the globe and I'm encouraged by our growing pipeline of potential customers with broad interest across our menu of applications. We're continuing to raise awareness of benefits of data-driven editing and expand use of our platform through our direct sales force, our distributors, and our collaborator network. As of the end of the second quarter, our direct sales team consisted of more than 80 field-based commercial representatives, including sales and business development managers, key account managers, and biopharma alliance managers. We also employ subject matter experts, clinical genomic experts, and biopharma operation specialists who provide customer-facing, technical, and scientific support. We are continuing to invest heavily in our direct sales force in North America to further scale the size of our network, both in terms of the number and types of new customers. Now, moving on to our second objective regarding the utilization of our platform, we employ a land and expand commercial model that is focused on winning new customers like Old Cornell Medicine and then driving greater utilization of our solution by those customers. Once we have secured the customer, we use our direct sales force to build further engagement and help that customer profitably increase testing operations. We also target additional clinician users and departments within each institution. During the second quarter, total recurring platform customers grew from 348 customers in the first quarter of this year to 367 customers. Total number of analyses grew 16% quarter over quarter, from 54,000 analyses in Q1 to 63,000 analyses in Q2. This sequential growth is underpinned by growing demand from new customers as well as existing customers broadening their usage to a growing number of applications. Now turning to our third objective related to menu expansion. We are continuing to invest in scientific innovation to land new customers and bring new high-impact content to our customers through regular updates to our platforms. This menu expansion includes new features, new applications, new data modalities, and new services. Furthermore, we intend to augment our offering across a multi-modality framework, generating novel insights, enabling by our expanding data sets, including genomic data, radiomic data, clinical data, and future additional data modalities. In early July, We announced the addition of new comprehensive genomic profiling workflow to our SOFIA platform. This new data-to-report workflow is designed to maximize the utility of the Illumina TSO500 assay by optimizing its data output for secondary analysis. The SOFIA platform facilitates highly accurate detection of single nucleotide variants, indels, gene fusions, and tumor mutational burden with expanded coverage of copinium variation in 495 genes and qualitative assessments of micro-satellite instability benchmarked to the PCR standard. The SOFIA platform for TSO500 offers an accelerated assessment of genomic data thanks to mutation pre-classification that is supported by advanced algorithms, customizable filters, and hotspot screening. We're also excited to share the progress we made on our novel NGS-based homologous recombination deficiency, or HRD solution. HRD is a complex biomarker, notably important for PARP inhibitors, that helps identify whether cancer patients may respond better to specific treatments, and its use could ultimately lead to personalized therapies that benefit the individual patient. Our proprietary smart and deep learning algorithms provide a unique approach for testing both HRD-causing mutations and HRD-induced genomic instability in a single NGS workflow. Powered by our cloud-based SOFIA platform, the whole genome profile is analyzed by our proprietary deep learning model, which produces a genomic integrity index score. Development data generated from hundreds of samples have demonstrated high analytical performance compared to a reference method. We intend to initiate an early access program next month and are on track to launch the REU version of our HRD solution in early 2022 to support clinical research activities. In oncology, we are moving beyond genomics to multimodal data. We're on track to launch our first SOFIA-sponsored clinical study, named Deep Lung 4, in Q3 this year. Deep Lung 4 is an international, multicentric, observational, retrospective, and prospective clinical study that will recruit 4,000 patients diagnosed with metastatic stage 4 non-small sanguine cancer in the first line of treatment settings. The overall objective of this study is to be able to predict individual patient response to therapy and prognosis with baseline data by combining genomics, radiomics, clinical and biological data using advanced machine learning models. Ahead of the study launch, we have recently completed an important regulatory step related to data privacy and security, having obtained the approval from one of the world's leading regulatory bodies. We look forward to sharing further details related to this study later this year. Moving on to our fourth objective of partnerships, we are committed to developing partnerships and collaborations across the healthcare ecosystem with companies who provide products and services to our customers. We believe that each new collaboration we develop helps facilitate further adoption of our platform. The evolution of the solution we provide to customers and the growth of our network and product capabilities. A large network enables us to continue to collaborate with customers to develop new solutions and to commercialize these solutions, benefiting all users across the Elsker ecosystem. To that end, we have recently announced the expansion of our partnership with DASA to include a first decentralized HRD solution in Latin America. DASA is the largest integrated healthcare network in Brazil, serving more than 20 million patients per year. This expanded partnership will allow DASA to offer local testing in accordance with regional laws and regulations while retaining control of samples and data for rapid results turned around to cancer patients across Latin America. Our work with DASA began five years ago when they chose Sophia Genetics to build the original workflow for their genomics lab. This partnership grew in 2020 when DASA implemented our SOFIA platform for radiomics and trial match solutions to create the first multimodal approach in the region. With the recently announced expansion of the SOFIA-DASA partnership, DASA will be able to offer the first decentralized HRD analytic solution in Latin America. In Q2, we have also embarked on a co-marketing agreement with Agilent to automate next-generation sequencing or NGS library preparation and analytics processes for cancer research. By combining Agilent's automated MAGNES NGS prep system and true select assets with the SOFIA platform's AI-powered analytical performance, this partnership broadens access to flexible oncology workflows and support a diverse array of applications. And finally, moving on to our biopharma opportunity. In this market, we currently serve pharmaceutical and biotechnology companies and clinical research organizations, or CRS. We continue to promote our current products and services, which we believe will strengthen existing collaborations with biopharmaceutical companies, as well as lead to new relationships. Additionally, we plan to develop new offerings for BioPharma as we expand the number and type of new applications and data modalities on our platform. For example, earlier in this call, I mentioned our recently launched NGS-based HRD solution. We're already seeing strong interest in this solution across our BioPharma customers. We have initially focused on developing our solution using our brain and breast cancer tissue types, but we believe other cancer types including prostate, pancreatic, bladder, and retro biliary tract and head and neck cancers will require HRD testing. Those are being investigated using PARP inhibitors across the continuum of care in over 150 actively recruiting clinical trials as reported on clinicaltrails.gov. Conceptually, Our approach could also be relevant for other targets that are part of the HRD pathway, and if mutated, could lead to genomic instability. I am pleased with our progress across the biopharma landscape, and we are now investing heavily to expand this team over the next 12 months to meet the growing demand for our services in this market segment, including our HRD offerings. As we look ahead in 2021, we're focused on continuing to grow across these five pillars, particularly in the U.S. Overall, I am very proud of the progress our team has made to date, and I am confident we're well positioned to execute our strategy going forward. I would now like to hand the call over to Ross to discuss our financial results. Ross?