Biodesix Inc Q1 FY2022 Earnings Call

Hello. Thank you for waiting, and welcome to Biodesix's First Quarter 2022 Earnings Conference Call. I would now like to turn the conference over to Chris Brinzey. Please proceed.

Thank you, operator, and good morning, everyone. Thank you for joining us today for a discussion of Biodesix first quarter 2022 business highlights and financial results. Leading the call today will be Scott Hutton, Chief Executive Officer. He will be joined by Robin Cowie, Chief Financial Officer. After the prepared remarks, we will open the call for Q&A. An audio recording and webcast replay for today's conference call will also be available online as detailed in the press release announcement for this call. Today, we issued a press release announcing our business highlights and financial results for the first quarter of 2022. A copy of the release can be found on the Investor Relations page of the company website. Actual events or results may differ materially from those projected as a result of changing market trends, reduced demand and the competitive nature of Biodesix industry. Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. The forward-looking statements discussed on this call are subject to other risks and uncertainties, including those discussed in the Risk Factors section and elsewhere in the company's annual report on Form 10-K for the year ending December 31, 2021, filed with the Securities and Exchange Commission on March 14, 2022, as well as in subsequent quarterly reports on Form 10-Q filed during 2022, if applicable. Additional information concerning factors that could cause results to differ materially from our forward-looking statements are described in greater detail in the company's press release issued today and in the company's filings with the SEC. I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott?

Thank you, Chris. As a reminder, Biodesix is a patient-centric lung disease diagnostic company with a mission to unite biopharma, physicians and patients to transform the standard of care and improve outcomes with personalized diagnostics. In the short time since our last earnings call, we've had a very productive end of the quarter and are looking forward to the rest of 2022. Beginning with our financial performance, we reported total revenue of $6.5 million and core lung diagnostic testing revenue of $4.6 million, which reflects 17% year-over-year growth. Like many of our peers, performance in the first half of the quarter was affected by the COVID-19 Omicron variant, which significantly impacted the month of January and February with practitioners, patients and many of our Biodesix team members getting COVID and staying home to recover, which resulted in an overall revenue decrease versus fourth quarter 2021. While we do not plan to talk about individual monthly results in the future, we do want to share more color about sales performance in the first quarter to highlight the rapid and strong recovery we experienced following the Omicron wave. We're pleased to report that the month of March produced the highest volumes for our core lung diagnostic test in the history of the company. We saw sales access and activities rebound to pre-pandemic levels and April continued this trend with a higher number of core lung diagnostic tests per business day than March, giving us continued confidence in our current 2022 revenue guidance of $37.5 million to $39.5 million. Stepping back for a moment, we began the year with what we believe is one of the most comprehensive suites of diagnostic test targeting the large lung disease market with an estimated combined total addressable market of $29 billion. We have five blood-based tests on the market that support clinical decision-making across the lung cancer continuum from initial risk assessment of lung nodules with the Nodify lung testing strategy to post diagnosis treatment guidance and monitoring with the IQlung testing strategy. The Nodify lung testing strategy consists of two blood-based proteomic tests, Nodify CDT and Nodify XL2, which are used by physicians to assess the risk of malignancy of a lung nodule. This helps prioritize high-risk lung nodules for invasive diagnostic procedures while also helping avoid unnecessary procedures on very low-risk lung modules. Since launch in early 2020, we've successfully driven adoption of Nodify lung despite the challenges presented by the COVID-19 global pandemic. Ongoing positive feedback and advocacy from our customers as they gain more experience with Nodify lung further validates that we are only beginning to realize the full potential for these tests to change the standard of care in lung nodule risk assessment. Moving to IQlung, we started the year with a full commercial launch of the GeneStrat NGS test, increasing our therapeutic guidance portfolio to three blood-based tests, including the GeneStrat-targeted ddPCR genomic test and the VeriStrat proteomic test. Offered as options within IQlung testing, these tests are used to inform treatment decisions and monitor for the rise of resistance mutations while patients are on therapy. The GeneStrat NGS test launched in January with Medicare payment already secured. Adding the NGS test means we can now offer the option of broad sequencing of circulating tumor DNA and RNA with a turnaround time of 72 hours, the fastest of any test available in this space. This complements the more targeted GeneStrat ddPCR test, introducing flexibility in addressing individual patient and physician needs. Feedback from our physicians has been incredibly positive since launch, reinforcing the importance and competitive differentiation of the rapid turnaround time and coverage of both DNA and RNA genetic alterations by this test. In summary, we're pleased with adoption over the last four months. Continued support and investment in data generation to demonstrate and reinforce the clinical utility of our test is another critical factor for future growth. We expect the upcoming full data readout and publication of our ORACLE study on Nodify XL2 will further support our sales and reimbursement efforts for the test. Additionally, we look forward to providing further updates on our ongoing INSIGHT study for the IQlung testing strategy, the ALTITUDE study of our Nodify test and the BEACON study for primary immune response, our immunotherapy guidance test, and our further development efforts for our pipeline risk of recurrence test. We've said it before and cannot reiterate enough. Lung cancer kills more people in the U.S. annually than the next three cancers combined and time matters when treating these patients. We pride ourselves on Biodesix's ability to quickly provide critical results and insights back to health care providers with best-in-class testing turnaround times for all of our tests to improve patient care. We believe we've just begun to scratch the surface of this $29 billion market, and we have both the team and the products to drive growth in 2022 and beyond. Speaking of our team, and as previously discussed, we doubled the size of our sales team in 2021 as we grew from 24 to 48 team members. We believe our commercial team is critical to continued growth and as such, in line with plans, we've added another five sales team members in the first quarter of 2022 to increase our coverage in promoting and selling the complete portfolio of core lung diagnostic tests. With a large greenfield opportunity in our existing territories, we will further expand this team in 2022 and beyond as long as we continue to see the levels of productivity experienced thus far, with sales team members paying for themselves on average in four to six months. Moving to our biopharmaceutical partnerships and services business, we reported revenue of $0.9 million for the quarter, reflecting the COVID-19 Omicron variant wave in the first half of the quarter impacting prospective study enrollment and shipping of samples. Overall, we continue to receive positive feedback and interest in the Biodesix's Diagnostic Cortex proprietary AI and machine learning platform and our broad multimodal and multi-omic service offerings. Our ongoing efforts and advancements and explainability in transparent AI will provide unique insights and clarity to health care professionals by providing the ability and potential to identify key biologic mechanisms driving specific outcomes for patient subgroups that may require different approach or different treatment. Overall, we remain confident that we'll see growth in revenue from increasing demand for our service offerings. Lastly, we've made considerable progress strengthening the company's financial position to ensure that we have the funds and resources to execute upon our growth objectives. In addition to the $50 million committed equity facility that we announced in March, we're also pleased to announce a new term loan for $15 million, a private placement of $11.7 million and a revision to our integrated diagnostic asset purchase agreement milestone payments to extend the time to pay and provide near-term financial flexibility.

Thank you, Scott. First quarter total revenue of $6.5 million was in line with our expectations and compared to $28.9 million for the first quarter of 2021, represented an increase in revenue from our five core lung diagnostic tests and offset by an expected decrease driven entirely by the year-over-year change in COVID testing. As a reminder, the first quarter of 2021 reflected significant COVID-19 diagnostic testing revenue, which we did not expect to be repeated in this last quarter. Our first quarter core long diagnostic testing revenue was $4.6 million from total volumes of 4,300 tests versus $4.0 million from total volumes of 3,100 tests for the first quarter 2021. The growth in test volume was primarily driven by our Nodify CDT and Nodify XL2 tests. As Scott referenced, growth in the quarter was impacted by the latest wave of the COVID Omicron variant. Fortunately, the impact from Omicron decreased as quickly as it came, and we saw a rapid recovery and a record month in March. Biopharmaceutical services revenue was $0.9 million compared to $1.7 million in the first quarter of 2021, a decrease of 45%. As we have said, this business can fluctuate due to several factors, including contract timing and project execution, but in this instance, reflects the continued impact the pandemic has had on overall prospective clinical trial enrollment and shipping of samples needed to complete the projects and recognize revenue. We ended the quarter with up to $7.5 million contracted but not yet recognized, $2.5 million of which is currently on the balance sheet as deferred revenue as we have already collected the cash. COVID testing revenue was $1.0 million in the first quarter versus $23.2 million in the year-ago quarter. The first quarter 2022 was slightly higher than anticipated due to the Omicron spike in January and February. We have consistently projected that COVID testing as a percentage of our revenue would drop off as compared to the prior year as testing shifted to rapid at-home antigen testing. We expect this dynamic will continue throughout 2022. Gross margin as a percentage in the first quarter 2022 was 51% versus 37% in the first quarter of 2021. The improvement in gross margin over the year-ago quarter was primarily a result from the shift in mix in sales to our higher-margin products of our core lung diagnostic testing and the sequential decline in COVID-19 testing revenue. Gross margin decreased sequentially over the fourth quarter 2021 due to higher-than-expected COVID revenues, which have lower gross margins and due to the full launch of our GeneStrat NGS test, which creates a drag on margins in the initial stages of launch as we get to scale. The gross margins for each of the other tests remains consistent. We expect that the overall gross margin as a percentage to steadily increase over the course of the year. Operating expenses, excluding direct cost and expenses were $17.8 million in the first quarter of 2022 compared to $16.2 million for the same period of 2021. The year-over-year increase seen in the quarter was primarily driven by increases in sales and marketing expense from the doubling of the sales force in 2021. Operating expense includes $1.3 million in noncash stock-based compensation. The net loss for the first quarter 2022 was $15.6 million compared to a net loss of $7.0 million for the first quarter of 2021. The increase in loss is attributable to the decrease in total revenue from COVID-19 testing in 2021 and the growth of the commercial organization in 2021. We ended the quarter with $16.4 million in cash and cash equivalents, a decrease from the prior quarter due to a net loss in the quarter and a scheduled payment to Integrated Diagnostics of $4.6 million. As we announced this morning, we've renegotiated the Integrated Diagnostic payment schedule, reducing required payments by approximately $7.5 million and $7.2 million in 2022 and 2023, respectively. The complete details can be found in the documents filed with the SEC. The cash balance as of March 31, 2022 excludes $11.7 million raised in our April private placement and the new $15 million debt deal announced today. Turning to our outlook for 2022. We are reaffirming our previous guidance and anticipate 2022 total revenue to be between $37.5 million and $39.5 million. Over the course of the last six months, we have taken a variety of steps to add access to additional funding and reduce our cash burn, all while focusing on continuing to grow revenue in 2022 and 2023. We will continue to focus on liquidity enhancements that will enable us to maintain focus on revenue growth and accelerate our time to profitability. In 2022, we will invest in projects and hires that result in near-term revenue growth while implementing additional cost savings measures that will impact the second half of 2022 and 2023.

Thank you, Robin. So as you've just heard, it's been a busy and productive quarter on all fronts. I'm extremely proud of the Biodesix team and excited for us to continue to grow as we progress through 2022. The Biodesix team remains steadfast in our commitment to: one, improve the lives of patients impacted by lung disease; two, integrate Biodesix testing into physician practices, providing all the testing needs for a lung patient through the continuum of care. One patient, one trusted company, multiple test personalized results; three, discover and develop new diagnostic tests like a risk of recurrence and primary immune response test; four, lead the way with AI explainability and transparency; five, conduct numerous clinical studies to demonstrate and reinforce the real-world performance of our test; and six, grow and expand our biopharmaceutical partnerships to aid in their research, drug development, clinical trials and development of companion diagnostics. In closing, I would like to thank all Biodesix teammates for their dedication to the Biodesix mission, vision and culture, which revolves around our collective commitment and daily contributions to positively impact patients' lives. With that, I will turn the call over to the operator for questions.

Our first question comes from Brian Weinstein with William Blair.

Just a couple for me. First, you said April trends were better than a record March. So obviously, April is a record as well. But is there anything that you can provide us in terms of kind of what that trajectory sort of looked like so that we can get a better idea about how quickly things are recovering here?

Yes. Brian, thanks for the question. As we've stated, we really don't want to get down to projecting monthly numbers going forward. We feel as if there's a pretty significant interest and continued ramp. We'll give greater clarity on the next earnings call. But most importantly, we're excited to get back to what we deemed as kind of pre-COVID access, physicians focusing on early detection and diagnosis of cancers, which we know is critically important. And as we continue to grow the sales team, obviously, more feet on the street with increased access gives us great prospects of continued growth, and we feel really good about where we're at.

Got it. Speaking about the team, can you just remind us how the team is being deployed here with multiple tests that they're selling? What is kind of in the sales comp plan here? Is all growth equal? Are you focused on volume? Are you focused on docs? Just give us some idea about how you're incenting the sales force and where you want them spending their time?

Yes. Great question, Brian. We haven't given specifics of the individual comp plan on any given year, but it really is focused on growth, and that's volume, where that matters most is getting into accounts. And so we reward and compensate both for expansion, right, going out and getting new accounts to begin ordering. And then once we get an account kind of that land-and-expand type approach, there we can get more ordering physicians with an account, but we compensate equally. It really is about volume growth across the portfolio. We want our sales professionals to sell the entire portfolio of lung diagnostic products. Again, being the only company with five on-market products focused on lung, we think that gives us a significant advantage that once we land in an account, it gives us the ability to deploy additional tests, providing value. And that's ultimately our goal is as the patient progresses through that continuum of lung cancer care, we want to be that trusted provider to provide insights at each and every touch point or a clinical visit.

And what kind of guidance do you give them on pulmonology versus oncology in the two different call points?

We typically begin with pulmonology, as we recognize that Nodify represents the largest market opportunity for us. Importantly, we know that the earlier we assist physicians in detecting and diagnosing cancer, the greater the chances of a favorable outcome. Therefore, we prioritize this area. As patients move through the integrated practice, there are many transitions involved. Our sales team is encouraged to foster these relationships. In the past, we have emphasized the differences and specific characteristics between the two call points, noting our collaboration with our medical science liaison team or the medical affairs team. We have also continued to grow by adding oncology specialists. We don't expect a single sales professional to address every clinical question or be familiar with every clinical trial, so we ensure specialists are available to support them. Is that helpful, Brian?

Yes, it is. Robin, I appreciate the efforts your team has made to strengthen the balance sheet, which is in a much better position now compared to a few months ago. That's encouraging to see. How should we approach the cash burn for the year? I don’t believe you provided any guidance on that. You mentioned cost-saving measures that would affect the second half of '22 and '23. Could you elaborate on what those measures are? Overall, how should we understand cash burn this year?

We are concentrating our operating expenses on projects that will generate revenue in the near term. As Scott mentioned, we plan to continue expanding our sales and commercial teams opportunistically throughout the year, which will likely lead to an increase in our sales and marketing expenses, alongside the departments that facilitate these increased volumes. As our revenues grow, we anticipate a decrease in our cash burn as we move through 2022 and into 2023. Our primary goal is to achieve profitability as swiftly as possible.

Thank you for sharing the core lung test volume and providing a helpful year-over-year comparison. I’m curious if you plan to continue sharing that information in the future, as this appears to be the first quarter you've included this metric. Additionally, it seems that the volume increased at a faster rate than revenue. Could you discuss the year-over-year average selling price trends? It appears to have declined, and I wonder if this is mainly a result of the NGS test.

Yes. So it's due in part to the NGS test just launching. And so starting off with Medicare, but really working on the others, but also heavily due to CDT. So as you know, we do not yet have Medicare coverage for our Nodify CDT test. And as the overall test volume growth was driven primarily by growth in Nodify XL2 and Nodify CDT that Nodify CDT pending revenue status really does drag down the overall ASP. But we are very pleased that by product, our ASPs have been very consistent. So once we have that Medicare milestone, you'll see a jump there.

That was helpful. Regarding gross margin, you mentioned some insightful points about your expectations going forward and the reasons for the decline this quarter. It seems there are two main factors: first, the startup costs associated with NGS impacting margins, and second, the unexpected performance related to COVID. I’d like to clarify the startup costs further. Is it just those costs, or are there other issues like dial rates or cash flow that relate to reimbursement, which could be more systemic than just startup costs? I understand COVID also affected margins. Can we expect to see a return to Q4 levels in the second quarter and thereafter?

Great questions. The costs associated with the NGS are primarily due to start-up expenses. There are significant fixed costs related to NGS technologies, especially when processing a specific number of samples per plate. If the plates aren't full, the cost per sample increases. The main challenge for us has been the start-up phase of the new test. Looking ahead to the second quarter and gross margin, I would expect us to approach that level, but as we continue to increase our NGS capabilities, it will take some time to reach that figure. We are making substantial progress with our NGS tests and their growth. I anticipate that the gross margin in the second quarter might be slightly lower than in the fourth quarter, but still quite comparable.

All right. Perfect. And just a few more for me. And maybe, Scott, you could chime in as well. So on GeneStrat NGS, one of the main questions around the test heading into the launch was just the competitive positioning, given the multiple similar products in the marketplace. And in the past, you called out turnaround time and its focused role in the testing continuum as kind of key differentiating factors. I just wanted to revisit that given it's been on the market for like a third of a year basically at this point. What's the feedback been like from a competitive perspective? And do you stand by your original commentary around like differentiation of the test in the marketplace?

Yes. Thanks, Kyle. Great question. Definitely, feedback has been positive. It's been consistent with our assumptions. We're receiving a lot of positive commentary on turnaround time. We've always said that current turnaround times or previous turnaround times prior to our launch weren't acceptable. And we're actually getting that. We're finding a number of physicians that are verifying that, right, kind of the trust the verify approach. And their commentary is, wow, why can't others do that? What are you guys doing different? And we are seeing traction in those accounts. Right now, we've talked about this test having the ability to be utilized across multiple cancer types. We still see the majority of physicians that are utilizing the test today focus on lung cancer. But we are starting to receive additional inquiries. And so we feel really good about it. We stand behind the product and adding it to our portfolio of products has done exactly what we said, which has made it a little more robust. When you're a Biodesix sales professional and you knock on a door today, not only can you come in with the broadest portfolio of products, but you can make a commitment that you're the only sales professional that's going to be able to provide those critical clinical insights at multiple time points. So much more to follow there, Kyle. I think you highlighted how recent that product launch is. But right now, we're very excited about what we're hearing, what we're seeing and we still think that this will add to our growth trajectory in the future.

Perfect. I appreciate that. If I could just ask a final question. It's great to you reaffirm the guidance. If I'm doing the math right, it looks like the guide continues to assume well over 50% year-over-year growth in the core business, obviously impressive. Your Q1 performance was obviously tempered by Omicron. I just wanted to ask if in order to meet that growth objective that I stated, and maybe kind of similarly robust growth targets in future years, like how much do you have to increase your sales force over the next 12, 18, et cetera months? And if you could call out any plans like specific that would be great as well.

Yes. Thanks, Kyle. It's a great question. We stated or at least I stated earlier, we're going to be very mindful about that. We're not blindly going to continue to state or strive to double the size of the sales force. We're really focused now that we've got traction and some experience over the last 12 months expanding the sales force, it really is about their contribution and how quickly they can get to sales rep productivity numbers that we feel strongly about. What we have experienced and seen is no surprise to anyone as we expand into new territories where we haven't had prior coverage, that ramp time and onboarding time can take a little bit longer, where we have a good foothold, and we're dividing or cutting territories and adding reps, as you can imagine, they scale much more quickly. So for us, you may have noticed we stated we added five. This really was the first quarter, over the last four to five quarters, where we didn't add six. And so we're tempering that to make certain that we can get that return. So we'll continue to update you as we progress through the year. We know right now that when you add a sales professional, like we said, it can take four to six months. So if we expand in the second half of this year, we want to be mindful of that expense, knowing that the return will really happen next year. So it is about growth. And again, the most important thing is that we bring in the best highest quality talent, which we're really excited about the talent level of the Biodesix sales team. And we know that competitively, they're out knocking on doors and gaining access that we didn't have prepandemic.

Our next question comes from Max Masucci with Cowen.

So I know it's largely out of your hands at this point, but it would be great to hear if you have a sense for when we could see the final ORACLE publication hit. And if you've had any recent interactions with NCCN guideline members or other guideline consultants, advocacy groups. It would be great to hear whether you see the potential to sneak into the next NCCN update later this summer or it's more prudent for us to really set our sights on potential NCCN guideline inclusion in more of the 2023 time frame.

Yes, Max, welcome to the call. Thanks for the question. Yes, ORACLE goal is to have that published this year. Like you said, much of that is out of our hands and out of our control and review times. But we feel good about where we stand with that to date. And as we receive feedback from the potential publisher, obviously, we're going to respond in a timely fashion to ensure we do everything we can to get that out as soon as possible. So more to come on that. Hopefully, by the next earnings call, we'll be able to give greater clarity and guidance on where that's at and when we expect it to be published. When it really comes to guidelines, I think we all know in this space, you've really got three different groups that provide guidelines with NCCN, as you referenced. You have ACCP, which are the CHEST guidelines. And then you have the Fleischner Society. One of the things we've watched is the cadence of updates. So we're mindful that ACCP or the CHEST guidelines have really not updated much throughout the pandemic. And if they did, they really focused more on the pulmonary components related to COVID. So we're excited and eager to see ACCP initiate some updates and guidance. We think we've done a good job of putting ourselves in a position to be that company that can help represent blood-based diagnostics gaining inclusion into those guidelines. NCCN, they update more frequently. And similarly, we feel like we've put ourselves in a good position there. The Cleveland Clinic Foundation just had a meeting about two weeks ago, a lot of great dialogue. As you can imagine, the attendees at that meeting are really luminaries in the space, multiple presentations and ongoing discussions. We were able to update many physicians that we believe are involved in making some of those decisions answering their questions and giving additional input. The reason that's critical is as we come out of this pandemic, we've got to be mindful that we haven't had face-to-face interactions in nearly two years. Just to remember, and as a reminder, ACCP is tied into CHEST. There has not been an in-person CHEST meeting since 2019. So in essence, all that we've done with Nodify has occurred without having in-person meetings. So it's a great question, Max and where we're focused on is getting that face-to-face interaction, updating physicians not hoping that they can read something or catch up, and we're off to a great start. We've had a lot of interest and inquiries. And again, we think we've done everything we can to put ourselves in a good position. Is that helpful, Max?

I appreciate that summary, Scott. I'm curious about which specific offerings or capabilities of Biodesix you expect will lead to biopharma collaboration wins this year. Additionally, what resources are you dedicating towards new biopharma contract wins? Are there particular customer types or biopharma service applications where you see your current offerings fitting in most effectively?

Thank you, Max, for the question. We're currently evaluating how biopharma has adjusted its focus areas post-pandemic. We're interested in the clinical trials they're reigniting and the new ones they're initiating, as well as where they're allocating their resources. While it’s still early, we're pleased with the ongoing discussions. One key differentiator for us is the comprehensive nature of our portfolio, particularly our multi-omic multimodal approach, which allows us to avoid reliance on a single platform technology. As biopharma emerges from the pandemic, they're shifting their inquiries beyond just ddPCR and NGS to encompass the patient’s immune system and proteomics. There has been an influx of proteomic companies in the last year and a half, and as one of the few companies with three commercialized proteomic LDTs, we're receiving numerous inquiries about our methods and scalability. This area is generating significant interest and our conversations are growing. Furthermore, Biodesix has a long history with AI and machine learning, dating back to the mid-2000s, which sets us apart. Our proprietary Diagnostic Cortex is pivotal for discovering new assays and tests, and we’re seeing considerable interest from biopharma in this regard. Additionally, we are focusing on AI explainability, particularly within proteomics, and we’re excited to share new findings regarding specific proteins identified by our VeriStrat test, which distinguishes us from our competitors. These insights provide valuable targets for biopharma, expanding our discussions. Although we are somewhat disappointed with our current standing, the number of conversations, contracts, and agreements in negotiation gives us optimism for significant growth in biopharma in the near future. I hope that answers your question, Max.

Our next question comes from Tejas Savant with Morgan Stanley.

This is Neil on for Tejas. Could you remind us on your expectations on the timing for Nodify CDT reimbursement this year? And then a quick follow-up on that.

Yes. We continue to have great conversations with Medicare and remain confident that we'll start to see some payments for Nodify CDT here in the second half. I would anticipate later in the second half, but we will update you as we have more from our MAC.

And Robin, I know you touched on gross margin improvement through the second quarter earlier in this call, but any additional color on the cadence through the back half of the year and how the potential reimbursement and increasing GeneStrat volumes might play in your expectations towards the fourth quarter?

Sure, absolutely. I expect us to see some pretty good improvement, steady improvement from first quarter into second quarter and into third quarter. Adding in coverage for Nodify CDT and NGS test volumes, I would expect us to get close to that 70% mark, which is still under where we were prior to launch of the new tests in 2019, but getting back up towards that stronger sort of 70% range.

That's very helpful. And so beyond the sample shipment delays that you're seeing on the biopharma side, any other ongoing supply chain or pricing pressures carrying through the business?

Supply chain has been okay. I've talked about it a few times before. At the beginning of COVID, we formed a team, and they have diligently worked to ensure that we have not had any supply chain disruptions and no business disruptions, and I'm very happy to say that, that has continued. We, like everyone else, are seeing the impact of inflation and rising costs and rising shipping costs. So just increases in supplies, travel, shipping just what everybody else is dealing with. So we do see that reflected in overall cost of travel and goods, and you see that in OpEx, but from a supply chain, nothing at this point disrupting supply chain.

And one last for me. Apologies, I'm not sure if I missed this during the prepared remarks, but should we anticipate any major updates at ASCO?

Yes, that's a great question, Neil. We don't have a significant update to share. As you may remember, in our INSIGHT study, we aimed to provide an interim analysis at ASCO. Enrollment for that study slowed down due to the pandemic, similar to many other clinical trials. Currently, we have around 4,500 patients enrolled, with a target of 5,000. We are hoping to close out the study and report on the full enrollment by next ASCO or even earlier. We will also have a strong presence at ASCO this year because we launched the NGS test. Historically, our presence at ASCO in the biopharma sector has been substantial, and this year we will have a significant presence both in biopharma and commercial sales. We are excited to initiate conversations there. Additionally, ASCO will be the first in-person meeting where we can showcase our complete portfolio of tests for pulmonologists and medical oncologists, which is a fantastic opportunity. The last time we had an in-person meeting like this was in 2019, so the meeting at the end of May is very important for us. I mentioned our progress regarding AI explainability, and we look forward to discussing our work with VeriStrat and how we plan to apply those insights to our pipeline products, including risk of recurrence and primary immune response. We expect ASCO to be a significant meeting, and we believe our presence there will continue to grow. Great questions.

And I'm not showing any further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.