Biodesix(BDSX) - 2023 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q2 2023 was $11.9 million, representing a 48% increase year-over-year when excluding non-core COVID revenue [9][17] - Core lung diagnostic revenue reached $11.4 million, reflecting a 58% year-over-year growth [17] - Gross margin improved to 73%, up from 64% in Q2 2022 and 65% in Q1 2023 [9][19] - Net loss for Q2 2023 was $13.4 million, a decrease from $15.8 million in Q2 2022 and $18.7 million in Q1 2023 [21] Business Line Data and Key Metrics Changes - Lung diagnostic test volumes increased by 75% year-over-year, totaling approximately 9,800 tests delivered [18] - The growth in test volumes was primarily driven by Nodify lung testing [10][18] - Biopharmaceutical services revenue was $423,000, a decrease of 43% compared to Q2 2022, but a slight increase over Q1 2023 [15][18] Market Data and Key Metrics Changes - The company reported a strong backlog in biopharmaceutical services, ending the quarter with $9.3 million under contract but not yet recognized [15][19] - The Nodify CDT test received Advanced Diagnostic Laboratory Test (ADLT) status, enhancing its reimbursement coverage [14] Company Strategy and Development Direction - The company aims to grow revenue by increasing the number of physicians treating more patients and making progress towards profitability [23][24] - A new state-of-the-art facility is set to enhance capacity for lung diagnostic testing and biopharmaceutical services [23][26] - The focus remains on maintaining a disciplined approach to reduce expenses and cash burn while driving revenue growth [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in sustaining momentum and growth in test volumes and revenue throughout the second half of the year [17][24] - The company anticipates continued strong year-over-year growth in core lung diagnostic testing and modest growth in biopharmaceutical services [24] Other Important Information - A private placement raised $27.5 million in equity funding, entirely from insiders, indicating strong confidence in the company's future [8] - The company has published critical clinical data supporting the utility of its tests, which is expected to enhance physician and payer adoption [25] Q&A Session Summary Question: Can you talk about the pacing for the third and fourth quarter within your guidance? - Management expects a similar pacing to last year, with a step up in the third quarter and further in the fourth, particularly emphasizing lung diagnostics [28] Question: How much of the growth in test volume is driven by existing account utilization versus new accounts? - Management noted strong adoption across all pulmonology groups, with no specific specialty showing greater or lesser adoption [30] Question: Can you comment on the competitive dynamics in the GeneStrat treatment guidance market? - Management highlighted the unique value of their genomic offerings and the importance of turnaround time for treatment decisions [34] Question: How will the tempered biopharma revenue impact gross margins going forward? - Management indicated that they expect to maintain gross margins in the low 70% range, inclusive of biopharmaceutical agreements [38] Question: What are the CapEx implications of moving into the new facility? - Management confirmed there will be some CapEx in the third and fourth quarters, but no significant step up in overall CapEx [40]