GeneDx (Ticker: GDX (NYSE:GDX)), a prominent player in the genetic diagnostics market, has reported a significant year-over-year revenue increase of 51% in the first quarter of 2024, reaching $61.5 million. The company's notable growth is attributed to the delivery of over 16,500 whole exome and genome tests, contributing $44 million to the revenue.
With an adjusted gross margin that has almost doubled to 61%, GeneDx has raised its revenue guidance for the year to between $235 million and $245 million. The company is optimistic about achieving profitability by 2025 and is on a path to become the industry leader in diagnosing hereditary diseases.
Key Takeaways
- GeneDx's Q1 revenue reached $61.5 million, a 51% increase from the previous year.
- The company delivered over 16,500 exome and genome tests, with this portfolio generating $44 million.
- Adjusted gross margin improved to 61%, up from 34% the previous year.
- Annual revenue guidance raised to $235-$245 million.
- GeneDx aims to achieve profitability by 2025 and become a leader in hereditary disease diagnostics.
Company Outlook
- GeneDx expects full-year adjusted gross margin to be 60% or higher.
- Net cash burn for 2024 is anticipated to be between $70 million and $80 million.
- The company is confident in complying with the FDA's new LDT guidance, backed by a robust regulatory and quality system.
Bearish Highlights
- Approximately 50% of exome claims are currently denied, impacting revenue potential.
- The company is focusing on reducing denial rates and improving contracting rates to address this issue.
Bullish Highlights
- GeneDx is transitioning customers from panels to more comprehensive exome and genome testing.
- The focus on pediatric neurology and developmental specialists has led to a successful shift in CMA volume.
- The company's strategy to target the NICU segment is expected to drive volume and revenue growth in 2025.
Misses
- Despite the growth, GeneDx is still working through challenges with reimbursement rates and claim denials.
Q&A Highlights
- The company is customizing workflows and processes to address the high rate of exome claim denials.
- GeneDx's salesforce realignment and focus on profitable accounts are key components of their commercial strategy.
- There is a small but dedicated enterprise sales team working on expanding the NICU market presence.
In the first quarter of 2024, GeneDx has demonstrated a strong performance, marked by a significant increase in revenue and an almost doubled adjusted gross margin. The company's strategic focus on comprehensive testing and targeting specific medical specialties has contributed to this growth.
GeneDx is also actively addressing the challenges of claim denials to ensure continued revenue growth. With plans to expand services to a broader population and a confident outlook on profitability by 2025, GeneDx is positioning itself as a leader in the field of genetic diagnostics for hereditary diseases.
The company's leadership has shown optimism in their commercial execution and plans to share further progress at upcoming investor conferences.
InvestingPro Insights
GeneDx's stellar performance in Q1 2024 is a clear indicator of its growth trajectory. However, it's important to consider the broader financial context that companies like GeneDx operate within. Here are some insights from InvestingPro that could provide additional color to the company's financial health and stock performance.
InvestingPro Data shows a market cap of $286.59 million, reflecting the company's size in the competitive genetic diagnostics market. Despite a challenging environment, the company's revenue for the last twelve months as of Q4 2023 stands at $202.57 million. However, this represents a revenue decline of 13.69% over the same period. This could be a point of concern for investors looking at the company's ability to sustain growth.
Looking at profitability, the P/E ratio is currently negative at -1.54, with an adjusted P/E ratio for the last twelve months at -1.71, indicating that the company is not currently profitable. This aligns with the InvestingPro Tip that analysts do not anticipate the company will be profitable this year, which is consistent with GeneDx's own projections for profitability by 2025.
A silver lining can be seen in the stock's recent performance. Despite a 1-week price total return of -8.33%, the 1-month, 3-month, and 6-month returns have been impressive at 20.48%, 185.71%, and 491.4%, respectively. This suggests that investor sentiment may be shifting positively in the short term, possibly due to the company's strategic initiatives and market positioning.
InvestingPro Tips highlight that while the stock has been volatile and has taken a hit over the last week, it has shown strong returns over the last month and three months. Additionally, the company operates with a moderate level of debt and its liquid assets exceed short-term obligations, which may provide some financial stability.
For readers interested in a deeper dive into GeneDx's financials and stock performance, InvestingPro offers additional insights. There are currently 10 more InvestingPro Tips available for GeneDx, which can be found at https://www.investing.com/pro/GDX. For those considering an InvestingPro subscription, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Full transcript - CM Life Sciences (WGS) Q1 2024:
Operator: Ladies and gentlemen, thank you for standing by, and welcome to the GeneDx First Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today’s conference is being recorded. It is now my pleasure to introduce, Commercial Chief of Staff, Sabrina Dunbar.
Sabrina Dunbar: Thank you, operator, and thank you to everyone for joining us today. On the call, we have Katherine Stueland, President and Chief Executive Officer; and Kevin Feeley, Chief Financial Officer. Earlier today, GeneDx released financial results for the first quarter ended March 31, 2024. Before we begin, please take note of our cautionary statements. We may make forward-looking statements on today’s call, including about our business plans, guidance, and outlook. Forward-looking statements inherently involve risks and uncertainties and only reflect our view as of today, April 29, and we are under no obligation to update. When discussing our results, we refer to non-GAAP measures, which exclude certain items from the reported results. Please refer to our first quarter 2024 earnings release and slides available at ir.genedx.com for definitions and reconciliations of non-GAAP measures and additional information regarding our results, including a discussion of factors that could cause actual results to materially differ from forward-looking statements. And with that, I’ll turn the call over to Katherine.
Katherine Stueland: Thanks, Sabrina, and thank you all for joining us. We’re excited to share the strong results from the first quarter. With the continued execution from our team, we’re raising our guidance for the year, bolstered by our view that we can sustainably deliver profitable growth in service of a critically important unmet need for diagnosing rare disease to an ever-growing group of patients and their families. We have transformed GeneDx over the past few years, but it’s also fair to say that our entire industry has changed tremendously in that time. The companies that are thriving are those that are focused on their distinct strengths, and in our case, it’s our industry-leading exome and genome. Our team is working with exceptional focus, purpose and care, to put an end to the diagnostic odyssey by delivering the most comprehensive answers to clinicians and their patients. We’re proud to say that we’ve hit yet another milestone. We’ve interpreted more than 600,000 clinical exomes since 2012. To give you a sense of how we’ve accelerated the growth, we interpreted half of those in the past 3 years, and 100,000 since the fall. These exomes contribute to our proprietary data assets, which enables more definitive diagnoses for more patients. That data asset is key to our competitive advantage, and it’s only getting stronger with our growth. We organized our entire team around three goals in the middle of last year: one, driving exome utilization; two, improving our average reimbursement rates; and three, producing cash burn. This focus is paying off. In the first quarter, we delivered more than $61 million in revenues, 61% in gross margins, and an 8th consecutive quarter of cash burn reduction. As a result, we’re raising our annual revenue guidance to $235 million to $245 million. We’ll continue to expand our gross margins off of Q1, and we’re reducing our cash burn guidance, which Kevin will walk through. There’s a lot that went well in Q1. Our commercial and medical affairs teams are driving exome and genome as the standard of care in the pediatric setting. This increased utilization positively impacted our product mix, which came in at about 30% exome and genome, with this representing over 70% of our total revenue. Over time, we expect to drive substantially all of our volumes and revenues to exome and genome, so our product mix this quarter is a sign of early success on this path to a two-test future. We continue to drive market leadership with 80% of all clinical exomes being run at GeneDx. The providers that we’re targeting fall into two categories, geneticists and pediatric specialists, including pediatric neurologists and pediatric developmental specialists. We’re focusing on deeper penetration in existing accounts, as well as new customers. Improving reimbursement was also a bright spot for the team in the first quarter. We saw faster-than-planned improvements in our average reimbursement rates, which also positively contributed to the strengths of the quarter. We still believe there’s room to improve that over time. We’re operating with a strong bias for its cash management efficiency and scalability, and we’ve seen market improvements as we integrate new tools and technologies, streamline processes, introduce machine learning features, and drive down COGS in our lab. Our team also retired more than 400 tests to simplify our menu in line with our strategy. We continue to say that our flagship exome and genome products have the rare attributes of being both what is best for patient care and best for our business. Today, 1 in 10 Americans have a rare disease, with 50% of them being children. We know that the expanded utilization of testing reveals that far more people are impacted by genetic diseases, and we are committed to serving this growing patient population in the future. Our sites are set on diagnosing all hereditary diseases and as many families as possible. So, over time, we’ll introduce GeneDx to broader pace of populations to inform health decisions through every stage of life, but for now, our team is focused on helping end the diagnostic odyssey for as many children and families as quickly as we can, and that purpose motivates our team each and every day. And with that, I’ll hand the call over to Kevin.
Kevin Feeley: Thanks, Katherine. First quarter 2024 revenues from continuing operations grew to $61.5 million compared to $40.7 million in the first quarter of 2023, and $58.1 million in the fourth quarter of 2023. That is an increase of 51% year-over-year and 6% sequentially. Our team resulted over 16,500 whole exome and genome tests in the first quarter, which generated revenues of $44 million in the first quarter from the exome and genome portfolio. That’s an increase of 96% year-over-year and 12% sequentially, both volume and collection performance contributed to the growth. Adjusted gross margin from continuing operations was 61% in the first quarter of 2024, up from 34% a year ago and up from 56% in the fourth quarter of 2023. The margin expansion during the quarter is driven by all three of continued favorable mix shift towards exome, improved exome average reimbursement rates, and continued cost for test leverage. On mix, exome and genome surpassed a key milestone representing 30% of all tests resulted this quarter. That’s up from 17% a year ago and up from 27% in the fourth quarter of 2023. We continue to believe that over time nearly all hereditable disease diagnosis will be run on an exome or genome backbone, and that our total gross margin will continue to benefit as these high value prop tests pick up greater share of our overall test volume and replace lower margin products. On average reimbursement rate, we’ve amplified resources in line with the three focus areas Katherine outlined. One such imperative was improving exome reimbursement rate through denial reduction. In the first quarter of 2024, our average reimbursement for the exome and genome portfolio after all denials was approximately $2,600, which compares to approximately $2,500 in the fourth quarter of 2023. We are encouraged with the uptick here, but the reality is that nearly half of all exome claims are still being denied. A large portion of all denials are administrative in nature for claims not meeting a variety of non-medical requirements designed by payers. And we’re working hard to ensure upfront order, document collection, and claim submission processes evolve to enable insurance-specific workflows to improve our probability of success. Another large portion of our denials might abate over time as Medicaid policy continues its momentum towards broad coverage for exome and genome. And already in 2024, two states have expanded coverage for rapid whole genome in the NICU, and in the outpatient setting, New York State added exome coverage to their medical plan effective April 1, 2024, that brings us to 28 states covering exome in the outpatient setting and 11 covering rapid whole genome inpatient. We applaud those states for taking this important step, but there is still a long way to go towards ensuring nationwide equitable access for all patients who need it. On cost per test, the team has done a great job. Lower input costs and wet lab process improvements are the headliners this quarter, but we continue to believe that automation across clinical interpretation and analysis offers mostly untapped long-term potential to drive scalability and cost efficiency. And moving down to operating expense. Total adjusted operating expense was $45.4 million for the first quarter of 2024. That is a reduction of 26% year-over-year and 6% sequentially. Having again delivered reduced costs, we are approaching what I consider to be a normalized OpEx base for the business. Our team has built the muscle memory for efficiency, and we will not stop looking for ways to improve operating leverage throughout the business. On the bottom line, total company adjusted net loss for the first quarter of 2024 narrowed to $8.5 million. That’s an improvement of 83% year-over-year and 52% sequentially. Our first quarter cash burn was $17.2 million, which improved 71% year-over-year and 48% sequentially. I call out that net cash burn this quarter included approximately $6 million to fund the company’s annual 401K employer match, approximately $2.9 million in what can be considered one-time payments related to previously reserved Legacy Sema4 refund requests, and $800,000 in severance payments related to our previously announced cost reduction initiative. We’ve now delivered eight consecutive quarters of cash burn reduction and expect to drive sequential declines in cash burn each quarter of 2024. Cash, cash equivalents, marketable securities and restricted cash was $113.9 million as of March 31, 2024. And as a reminder, in October 2023, we announced that we entered into a 5-year senior secured credit facility with Perceptive Advisors. The agreement provided for up to $75 million in capacity consisting of an initial tranche of $50 million which was drawn in October 2023, and an optional second tranche of $25 million which is available through December 2024. Now turning to guidance. As Katherine said, we’re raising previously issued revenue guidance and now expect to deliver revenues between $235 million and $245 million for full year 2024. We’re raising previously issued adjusted gross margin guidance. And now expect to land the full year adjusted gross margin at 60% or higher. We are improving the low end of our net cash burn guide and now anticipate using $70 million to $80 million of net cash for the full year of 2024. And finally, we once again reiterate our expectation to turn profitable in 2025. With that, I’ll now turn it back to Katherine for any closing remarks.
Katherine Stueland: Wonderful. Thanks, Kevin. The shift from single-gene testing to multigene testing began more than a decade ago. And now, we’re successfully shifting the rare disease market from multigene panels to exome and genome. This takes time and the dedication of a team that wants to win for the growing number of patients and families who rely on us. And it’s all made possible by the shareholders who support our growth. I’d like to thank our team and our investors for the opportunity to prove that we can set a new standard of clinical care, while running a really good business. We know that the path to profitability is one that not many companies in our space have achieved and we are fully committed to making that happen to ensure we can help more and more families and return value to our shareholders along the way. We’ll now open the call up for questions.
Operator: Thank you. [Operator Instructions] One moment, please, for our first question. And our first question comes from the line of Dan Brennan with TD Cowen.
Daniel Brennan: Great. Thank you. Thanks for the question. And, obviously, congrats on another good quarter. Maybe before a few questions on the quarter and the guide, obviously, we had the FDA issue the LDT guidance today, and I’m just wondering, any comments from management about what you thought of it, what stood out, how it might impact the company?
Katherine Stueland: Certainly. We were happy to see the 500 plus page document come out earlier today after a lot of speculation. Net-net, we think that this is a good opportunity. We have been planning for this new era of FDA regulation. In fact, we’ve hired a Head of Regulatory, who’s joining the team. So, I think, we are well prepared to ensure that we can comply with FDA and having been operating the lab for 20-plus-years and having complied with CLIA, CAP, New York State. We have a really, really strong system and very good, I would say, regulatory and quality systems already in place. So, we’re looking forward to moving into this new era.
Daniel Brennan: And then maybe – sorry guys, maybe there’s one quick follow-up to that, and then maybe it’s one quick one on the business. But from like a competitive standpoint, the fact that existing LDTs get grandfathered in, so A, have you guys earmarked some costs associated with maybe running PMAs or anything of that sort that maybe now you might not have to do? And then B, would you expect it could raise the hurdle because you’re on the market and for other players that want to come in, does it all make it harder for future players to compete?
Katherine Stueland: Yeah, we think that this is an important opportunity for us. As we said today, we’ve run more clinical exomes than anyone. We’ve got such a robust. What we believe is the largest rare disease data asset, running exome and genome. So, we think that it’s a really important opportunity for us to be able to set the standard as we move into its compliance with FDA. And we think that there should be a high bar as it pertains to others being able to enter the market, but we’re still calling through the 500 plus pages and working with our consultants and our regulatory and clinical teams to best determine exactly how we’re going to move forward, but we’ve baked in costs associated with it. So, we’re feeling good about the opportunity ahead.
Daniel Brennan: Got it. And then I’m able to test one on the business, obviously, there will be many I’m sure to follow, but you reiterated guide for profitability by 2025, although you did raise the gross margin guide pretty much early this year, you lowered the burden this year. So, is the profitability guide the fact that it stays like something must have changed in that profitability guide? Is it for a quarter in 2025? Is it full year? Is there any more color about the impact in 2025 versus the benefit you’re seeing come in better than expected in 2024?
Kevin Feeley: Yeah, Dan, look, we’re super pleased with Q1’s performance. I think that’s representative in the improved outlook that we provided for the remainder of the year. We’ve said all along that the full year 2025, we expect to be profitable and there will be a quarter in there in which we make that turn. We hadn’t specifically called out the timing there. Overall, I think we’re standing behind our overall commitment that the full year on balance will be profitable and that there will be a quarter within that year where we make that sustainable turn.
Daniel Brennan: Great. All right. I’ll get back in the queue. Thanks, guys. Congrats.
Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Mark Massaro with BTIG.
Mark Massaro: Hey, guys, congratulations on another good quarter. This looks like it’s the 4th consecutive quarter of sequential revenue growth. I know you didn’t provide guidance for Q2, but with this rising mix shift to exome and genome and your salesforce aligned to sell those which come in at a higher price, is it reasonable for us to extrapolate that you could have sequential revenue growth perhaps throughout this year?
Kevin Feeley: Yeah, I think that’s fair, Mark. I continue to call out that the fourth quarter is typically our seasonally strongest quarter, and I see no reason for that to change this year. So in line with that, I do want to call out that we expect and have delivered consistent robust revenue growth and exome would expect that to continue. But at the same time, the non-exome portion of our portfolio, we don’t want to surprise anybody if we see volumes and revenues decline in those testing lines, that would be in line with our strategy to overall replace those testing lines with exome and genome.
Mark Massaro: Okay. And maybe just a clarification question, I think I heard you talk about a $2,600 exome/genome panel ASP up from $2,500 in the last quarter, did you provide a metric on the patient on the denial rate? I assume you probably had some improvement in denials or collections in the quarter, and then, can you speak to any lift from new payers like whether it’s Medicaid or some commercial payer coming on?
Kevin Feeley: Yeah, all of the improvements in that average reimbursement rate would come vis-à-vis reduction in denials, there’s been no changes to underlying contracted pricing. And so, reduction in denials with the denial rate just north of 50% in the first quarter.
Mark Massaro: Okay. Got it. And then related to that, I mean, what do you think a long-term run rate could be for exome/genome ASPs? I know, if you’re at around the $2,600 level today, I think you’re getting paid more than 2 times that from other health plans. So, I guess, where do you see perhaps a normalized run rate, even if it’s 2 to 3 years from now?
Kevin Feeley: Yeah, look, I think over time you might expect a reduction in the denial rate, potentially some reduced contracting rates such that the $2,600 we experienced in the first quarter I consider to be a new floor for us to work off of over the next several quarters in a couple of years.
Mark Massaro: Okay. Got it. And maybe last one for me, you guys exceeded my revenue projections by well over $11 million. So I must not be a good modeler or you guys are just executing well, I guess can you speak to if you had any success converting accounts from Invitae (OTC:NVTAQ) in the quarter? And then related to that, I know that Labcorp put in a bid and won the assets to acquire Invitae. Can you just speak to what your expectations are from any potential of perhaps converting some of those Invitae accounts later this year?
Katherine Stueland: Perfect. Yeah, so the rare disease business at Invitae is in part centered on one of our core targets in terms of providers that we’re focused on, and that’s the pediatric neurology market. So we have been targeting them and as we’ve talked about as we pulled back from general pediatricians to really double down in that space, that’s where we’re seeing really good success both with new customers who haven’t been ordering genetic testing where we convert them rapidly to utilizing our exome out of the gate. And then we have seen success in pediatric neurologists who have been ordering panels including panels from Invitae and getting them to start ordering our exome. So we have seen success there and expect that we’ll continue to convert that entire market and that segment from panels to exomes. I think Labcorp has, obviously, made an important acquisition and that hereditary cancer business that Invitae built is certainly kind of the shining star there. The rare disease panel business, we think over time will become obsolete and we’ll be converting all of that to exome and genome. But that’s a core part of our strategy as we think about expanding utilization of that the most comprehensive test that’s providing rapid turnaround times as quickly as panels and most patients not having an out-of-pocket, so we’ll continue to turn the crank on that from a commercial medical affairs perspective.
Mark Massaro: Okay. Sounds good. Congrats on the quarter, and I’ll hop back in the queue.
Katherine Stueland: Awesome. Thanks, Mark.
Operator: Thank you. One moment, please, for our next question. And our next question comes from the line of Matt Sykes with Goldman Sachs (NYSE:GS).
Matthew Sykes: Hey, good afternoon, Katherine and Kevin. Thanks for taking my question and congrats on the quarter. Maybe, Katherine, just kind of a high-level question, but you had mentioned the press release, the data, and I know you had released earlier that you presented at the American College of Medical Genetics comparing exome versus CMA. I know converting people from CMA to exome is part of the challenge here education awareness. That data set in particular, how much do you think that will help in that education awareness, and do you need to continue to provide data similar to that to convince people to start with exome first, and how much more education awareness do you feel like you need to do?
Katherine Stueland: Yeah, it’s really important data for us, when we think about kind of refocusing in the future on the general pediatric segment. So what we started to see last year when we did enter the general ped segment was their tendency to utilize CMA and, therefore, the data that we’ve been able to generate is super helpful in terms of being able to not only go to payers, but ensure that we can continue to educate clinicians who are ordering CMA. We have seen since we have refocused our commercial strategy away from the general pediatricians and to the ped neuros, as you would expect, our CMA volume has shifted. We think this is really important for the longer-term strategy of being able to educate that broader pediatrician segment. But over the next several years, we’re really going to be doubling down on pediatric neurologists, pediatric developmental specialists, and in those settings, there’s less utilization of CMA. So we think the data that we’ve generated is really, really good for the longer-term strategy.
Matthew Sykes: Got it. Very helpful. Thank you. And then just on the exome/genome test mix, it looks like you guys have kind of averaged around 300 basis points per quarter in terms of improving that mix towards exome/genomes. Is that a number that we could kind of extrapolate for the balance of this year with maybe a higher step up in Q4 because of seasonality? I’m just given the importance to margins, just trying to figure out the cadence of this test, test mix, how regular it is, how predictable it is, and how you look at driving that makeshift higher in terms of increases on a quarterly basis?
Kevin Feeley: Yeah, I think certainly sequential increases is absolutely fair. So anywhere in that range of 1% to 3%. I think we’ve said all along that all else equal a test mix of roughly 40% would get us profitable at sort of consistent gross margin profiles in our OpEx profile. And if you think about it turn to profitability in 2025 sort of a steady march up towards that that point is what we’d expect.
Matthew Sykes: Got it. And then just for my final question, just on reimbursement, if you just remind me, and apologies if you’ve said this before, but just sort of the percentage of patients that you face that are Medicaid eligible, just given the traction you’ve had in some of the states that have passed that just want to get a sense for the context of the Medicaid population. And then, secondarily, Kevin, you mentioned the half of exome claims are still being denied, and I know you addressed some of the denials on the earlier question. I was just wondering that in terms of like moving that denial rate down, is that like a body problem in terms of just hiring more people to do that, largely administrative work? Or do you feel like you can move the needle on denials with the current staff and OpEx spend that you have today?
Kevin Feeley: Yeah. And the first, roughly 15% to 20% of the business volume-wise is institutional. And so, the remainder then of the exome and genome business is split between commercial insurance and Medicaid. And there’s roughly a 50-50 split in that insurance channel between commercial and Medicaid with, as we’ve called out, 28 states covering outpatient and 11 on the rapid whole genome product inpatient. And so, a disproportionately higher denial rate today in the Medicaid populations for wherever volume is sourced from those states without coverage. And then on addressing front-end processes, no, not necessarily a body problem or something that we can solve just by throwing more bodies at it, more so ensuring that upfront workflows from the ordering system through the time of claim submission are specific and unique to individual patient insurance products rather than a one-size-fits-all process, what we see is vast disparity in the medical necessity requirements as well as administrative requirements to ensure that exome and genome claims ultimately get paid, and so some work to do to make sure that processes are custom to those unique workflows is what has to happen. That’s more technology-based and process-based than just adding people, if that makes sense.
Matthew Sykes: Got it. Thanks. Very helpful.
Operator: Thank you. One moment, please, for our next question. Our next question comes from the line of Matt Stanton with Jefferies.
Matthew Stanton: Hey, thanks. A lot has been covered in terms of the guidance increase both on the revenue and margin side and reiterating the targets for 2025, but Kevin, we just look to get your kind of high level thoughts just visibility you have in the business today and just maybe how much that’s improved over the last few quarters here?
Kevin Feeley: Yeah. Look, we’ve invested a lot into the team and in 2023 learned a lot of lessons with respect to commercial execution, I think the team is well poised to now understand what call points work for us. And we have the right size and skill set across the commercial organization. So I think it provides some of the confidence that allowed us to raise our guide this earlier in the year, and we think it’s a substantial raise in guidance and look forward to using some of those lessons learned over the past year or two as we’ve developed this strategy to start to expand the utilization of exome and genome The team has what it needs to execute on our plan. And so, looking forward to seeing the results of the year progresses.
Matthew Stanton: Thanks. And then maybe one quick one just an update on the salesforce realignment You did last quarter to target more profitable accounts and then any color around the enterprise sales team I know it’s a bit longer cycle, but just any update around some of those changes you’ve made more recently? Thanks.
Katherine Stueland: Sure. Yeah, you’ve got the salesforce, so absolutely right. We’ve got 54 sales reps and about 9 medical facilities on to our focus on the outpatient opportunity, which is predominantly with our exome and we put that into place in the fourth quarter in anticipation of 2024, we’re really happy with the performance of the team. We feel like we’ve got the right incentive comp program in place and I think this based on what we’re seeing year-to-date by way of volume in the door, percentage of mix, we’re feeling really good that the team’s executing, that they’re focused on the right accounts, that they are importantly motivated by their incentive comp plan. So I feel great about the team and continuing to drive forward with 2024. So good momentum with the salesforce and you’re absolutely right on the enterprise side of things. We have a small team that is going in and doing enterprise-wide sales for that NICU opportunity. NICU is I think an important market for us, but it’s a different type of sales approach. We think that it’s a really good way to be able to try a different sort of consultative sale with the C-suite and really be able to get some of the health economics data in front of these hospital systems. There are a fixed number of beds in the NICU setting. So, we think it’s a way to be able to introduce genomics at more of a system-wide level, and to your point about it’s a longer selling cycle, that’s exactly why, but we would hope to see in 2025 a greater percentage of volume and revenue coming in from that NICU segment, but this year we’re anticipating it’ll just be a rinse and repeat from last year.
Matthew Stanton: Super. Thank you.
Operator: Thank you. I’ll now turn the call back over to CEO, Katherine Stueland, for any further remarks.
Katherine Stueland: Thank you so much. We appreciate all of the great questions and engagements. We’ll continue to provide updates on our progress, and we look forward to seeing you at upcoming investor conferences. So, thanks so much. Have a good night.
Operator: Ladies and gentlemen, thank you for participating. This does conclude today’s program, and you may now disconnect.
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