Invitae Corporation

Good afternoon and thank you for attending today's NVTA 2022 second quarter results call. My name is Jason and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call and opportunities for questions and answers at the end. If you would like to ask a question, please press star one on your cell phone keypad. I would now like to pass the conference over to our host, Poki Luck, head of investor relations. You may begin.

Thank you, operator, and good afternoon, everyone. Thank you for joining us for our 2022 second quarter results call. Joining us today are President and CEO Ken Knight and our CFO, Roxy Nguyen. Before we begin, I'd like to remind you the various remarks that we make on this call that are not historical, including those about our vision and business model, the company's strategic business realignment, future financial and operating results, expectations of future growth and reduction in burn rate, future products, services, our product pipeline and their timing, and investments in our infrastructure and operations constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Rules Act. It is difficult to accurately predict demand for our services, and therefore, our actual results could differ materially from our state outlook. Statements on future company performance assume, among other things, that we don't conclude any additional business acquisitions, investments, restructurings, or legal settlements. We refer you to our most recent 10Q, in particular to the section titled Risk Factors, for additional information on factors that could cause actual results to differ materially from our current expectations. These forelooking statements speak only as of the date hereof. As you listen to today's conference call, we encourage you to have our press release available, which includes financial results as well as key growth metrics and commentary on the quarter. To supplement our consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, we monitor and consider several non-GAAP measures. We encourage you to review our gap to non-gap reconciliations, which are available in the press release and in the appendix of the Earnings Guide Act, both of which you can access by visiting the Investors section of the company's website at ir.indc.com. We have already pre-announced key financials along with our corporate announcements in July. Today, we'll discuss our strategies post the realignment plan, provide some recent developments and continue on to our published second quarter financial, followed by our key metrics and outlook. We will then proceed to Q&A. With that, I'll turn the call over to Ken.

Thank you, Hopi, and thank you all for joining us today. After the first quarter result, we communicated our company's intent to extend our cash runway to the end of 2024, and our July realignment was the translation of that into a thoughtful operating plan. With the realignment plan in place, we are now ready to further accelerate the work that had actually begun months ago. We're pleased to see that our second quarter non-GAAP gross margin, operating expenses, and cash management were all demonstrating necessary improvements. More importantly, the trailing 12-month trend in those metrics has consistently delivered in a positive direction, confirming our ability to execute on our overall plan Our team remains committed to achieving the financial goals that we have laid out, which are expected to strengthen our balance sheet. Having said that, one of management's top priorities includes finding the right option for our debt obligations due in 2024, and we continue to be in discussion with various parties looking for the most optimal solution. Despite the recent challenges, These events have also provided an opportunity for our team to take a close examination of our focus and priority. And throughout this process, we found that Invitae continues to have many valuable assets that would position us to win in the future. And we believe that those assets, along with our mission and the execution of our plan, will increasingly provide a compelling proposition for investors who share our vision and believe in our potential. Now, I would like to move on to our strategic focus going forward. We will continue to solidify our leading position in the testing space while utilizing digital tools and support to provide value for our patients and our providers. These combined capabilities will be leveraged to deliver our vision of transforming healthcare and unlocking the true potential of genetics. Under this premise, patients, payers, pharma partners, physicians, providers, and more will be able to use our information, insights, and systems for more pieces of the puzzle, leading to more complete results and deep data, data that will be the basis for further research, treatment, and better health. That is where we are headed, and we continue to see that as a defensible and differentiated strategy that sets us apart from others. Next, we'd like to touch on a few positive developments in these areas, beginning with the recently updated NCCN guidelines, which now endorses universal germline genetic testing for all patients with colorectal cancer. Notably, NVTA has advocated for this guideline change, thanks to the efforts of our clinical specialists and research team. The updated guidelines have also cited two of our published collaborative studies, Based on this development, we estimate that in the U.S. alone, the colorectal cancer germline testing patient population will more than double. We are glad that we have contributed to this change, and additional efforts are well underway to do the same for breast, prostate, and lung cancer that have larger patient populations. We will also be making efforts to further promote clinical adoption and implementation of these guidelines. along with continuing to raise provider and patient awareness. In oncology, Invitae is a leading genetic testing provider, offering both germline and somatic assays, which is exciting and supports the growing value in genetic testing. An increasing number of studies presented each year at ASCO and other major clinical meetings are delivering more and more evidence that indicate the combination of germline and somatic information yields earlier diagnoses, more actionable results, ongoing monitoring, and potentially better outcomes. The great thing about our portfolio is that we will leverage our technology to utilize the same tissue sample to perform tumor profiling, which is vital for therapy selection and prognosis, as well as to generate a patient-specific panel for CT DNA detection and monitoring in the blood. via our MRD assay, which we call personalized cancer monitoring or PCM. For example, a patient with advanced cancer frequently needs tumor profiling for biomarker detection and treatment planning. And that same patient can also benefit from measuring treatment response. So our platform and bioinformatics approach allows one sample input for two important clinical results. This is particularly beneficial in patients with limited tissue availability. And we are adding personalized insights via our pharmacogenomics offering that have the potential to reduce adverse reactions to prescription medication. We continue to believe that Invitae has a unique proposition based on our combined offerings, our relentless focus on ease of use, our commitment to provide the best customer service, and our distribution channel. Speaking of our channel, we have a strong sales team led by highly experienced commercial leaders. We also have a presence in most large NCI and community cancer centers. Many of the talented genetic counselors we work with have direct relationships with oncologists who oftentimes serve the same patient. We are in the early stages of penetrating the somatic market. and we expect these strong relationships to offer us a competitive edge. Touching on our efforts in digitizing providers' workflow and patients' journey, an example is the adoption of our GS Chatbot, which provides clinicians with patient-driven information such as health and family history. With this risk assessment in the patient's record, our algorithm then offers concrete actions for the physician to further guide the patient such as lifestyle choices, health monitoring, or genetic testing. We're seeing continued uptake for our GS chat tool for risk assessment, as our interactions in the second quarter increased 75% from the same quarter in 2021. We have also formed a number of partnerships with different institutions, including Worldwide Clinical Trials Incorporated, a contract research organization. Through this partnership, Worldwide has access to data insights based on prevalence, incidence, demographics, and epidemiology for rare disease patients. This aggregated data enables Worldwide to recruit patients faster and pinpoint optimal study locations to help its sponsors uncover new and potentially lifesaving treatments. Longer term, I would like to emphasize the importance and value of the network effect that we are trying to create. This network effect continues to benefit patients we serve well after their initial testing experience with Invitae. Rather than providing a test to a patient as a discrete, one-time interaction, we view the first interaction, whether it be a test or risk assessment through GIA, as the starting point of forming a relationship with the patient through the rest of their journey. Currently, almost 2 million of our patients have made their data available for sharing, solidifying their belief in our long-term relationship as well. In reality, many patients, particularly in rare diseases, do not have the information they need at a critical time when outcomes can change for the better. In addition to providing the test to these patients, we intend to provide a more holistic solution, addressing other important needs in their journey. such as by offering the connection to patient advocacy and other support groups, finding optimal treatment and alternative therapy options, or searching for clinical trial opportunities with the ultimate goal being to stand by these patients along every step of their way. And while it will take time for us to get there, the patient stories that we hear internally continue to accumulate and give us confidence that our strategy is working. I'll now hand the call over to Roxy to walk us through the details of our second quarter results.