Veracyte, Inc. (VCYT) Earnings Call Transcript & Summary

Great. Welcome. This is Dan Brennan. I cover life sciences here at UBS, day 2 of our Global Healthcare Conference. Hopefully, day 1 was enjoyable and productive for all of you participating virtually. I'm really pleased to be joined here on the 10:00 virtual stage with the senior management team of Veracyte. As a treat, we have not only the existing management team, so Bonnie Anderson, Chairman and CEO, but we also have the new incoming CEO, Marc Stapley, who I've known for, I don't know, 5 or 10 years, dating back to his time at Illumina and then through Helix. So really pleased to be joined with both of them on the stage here.

And I thought certainly the first question, which is appropriate to kick it off, would be just an open-ended introductory question for both Bonnie and Marc, for Bonnie to discuss -- introduce Veracyte a bit and then obviously to discuss the important change that's taking place with her, not leaving the company, but staying with the company, but handing the official CEO reins over to Marc. So with that, welcome Bonnie and Marc. And Bonnie, the floor is yours.

Thanks, Dan. It's great to be here. Thanks so much for the invitation. Marc and I are really pleased to have our debut fireside chat together. We're really excited about the timing and the opportunity we have here, the change of the CEO, with me staying on as Executive Chairman. Veracyte has been so focused on building and executing on a really powerful global strategy. We have not only expanded our menu to be included in 7 of the top 10 oncology indications, we've acquired the rights to our own platform, which really is the vehicle to allow us to take these tests on its own platform to global markets and serve patients everywhere. So we're -- we feel the table is set for a very exciting future. After 14 years of founding and leading the company through our IPO and through all these strategic leadership positions, it's fantastic to be able to stay on as Executive Chair and welcome Marc to take over the helm, which is going to happen next week, actually. Marc?

Thanks, Bonnie. Yes, and Dan, thank you, and appreciate you having us here. And everything Bonnie just went through is really why I'm here at Veracyte, powerful global strategy and a portfolio that covers 7 of the 10 top cancers. I really appreciate the own platform point that Bonnie made and that strategy that is playing out really nicely. And then the exciting new products that the company is launching and has launched, for example, the nasal swab that I'm sure we'll talk about that was recently launched. The company is rooted in clinical expertise, strong execution, and that's why I'm here to continue to drive that.

Terrific. And obviously, there's a series of commercial products, a really deep pipeline, which it gives us a nice menu for which to kind of walk through the discussion point. The TAM for Veracyte has really evolved over the last 5 years pretty materially. And consensus' revenues growing nearly 70% this year, obviously coming off an easy comp base, but then growing, call it, 20% plus the next couple of years. As we think about -- and you've done a great job at laying out the market opportunity and penetration and whatnot. But as the story has evolved and has gotten bigger, maybe help us think through what are the key revenue drivers as you see them? And where is the most opportunity and where that could be the biggest inflection point in the business?

Yes. What I think is so exciting about the way that we have set up the menu and the pipeline is that we have got products serving really important unmet needs and really sizable markets but at various stages of penetration into that market. So while our Afirma franchise is well advanced into a mature market where it's really about just continuing to execute to go deeper and deeper into that space, we're through the technical hurdles. We're through the reimbursement hurdles, and that's really great. That's our leading revenue product, about 35%, 40% penetrated into its patient testing population. Right behind that, we have our Decipher Prostate cancer test. And that's a recent acquisition we made, specifically to allow us to accelerate top line growth near term. That near-term word is really important because we have a whole pipeline of tests that will come into their S-curve of growth in the next 1, 2, 3 years. And the prostate test is at the peak part of its S-curve growth. So those 2 products are going to lead the way. Our pulm products are continuing to rebound from COVID. The procedures that are done for those tests are still about 50% what they were pre-COVID, but we're seeing good signs of recovery there. And then we have the pipeline of truly innovative and exciting things going on, starting with our Envisia test, which is very proven now in the U.S., lots of great data. We're moving through the coverage and reimbursement hurdles there. That test will be made available as our second test menu on the nCounter platform at the end of this year for international markets. So that begins the execution on the strategy, building out menu and taking these products globally. And then as Marc mentioned, we've got the advancement of a whole portfolio of lung cancer tests. We're going all in on lung cancer. We're in that market today, but our nasal swab is going to really have the potential to dramatically change care and identify patients earlier, save lives. And then on the back end of that, our Percepta Atlas, both those tests are going to launch later this year. And as they move through the coverage hurdles, they will be in their peak growth in 2 to 3 years. So we can look out over the next decade and see a pathway to continued, sustained growth at the rates that we want to see. So it's a very exciting time and a very neatly aligned short- and long-term growth portfolio.

Great. So maybe just starting with Afirma, given that's what the company was built upon or kind of came public on years ago and still has arguably a lot of upside left, just as you've got 1/3 of the market penetrated, as you said, Bonnie and/or Marc, you've got some coverage expansion. I believe you have the new Atlas product. I'm not sure exactly when the Atlas product came out. But just walk us through like what's the right way to think about where we go from here on Afirma. Is the -- has the trajectory slowed? Or do you really feel like you've got still a pretty linear path to maintain what you were doing pre-COVID?

Yes. I would say growth rates have slowed, of course. We've actually had a cadence with that product, excluding COVID, where we have added about 5,000 new tests per year. And we hire and invest in that product to achieve about that. So that's a great target.

Got it. Interesting. No, that's helpful to know. Okay. So maybe going to Envisia. What are the key factors you think for this test to penetrate its addressable market? And maybe just starting with reimbursement first, and then we can go on some of the recent data that you have.

Yes. Envisia and Percepta GSC for lung cancer are both at the stage of being fully covered by Medicare. We had hired coming into 2020 because 2020 was set up to be the year of real growth for both of those products. We are in the back of a Medicare coverage decision. That's a moment where you invest and you begin to see that growth, and we were doing just that until March. And then, of course, we know what happened there. And because the pulm products are actually used by pulmonologists who got distracted with caring for COVID patients and the fact that these tests are collected at the time of a bronchoscopy procedure to aid in the diagnosis, they have been the slowest to rebound from COVID. And we actually predicted that. And where we are standing right now coming out of March and looking at April, May, we're really encouraged that we're going to see these products emerge. They're answering really important product questions for patients, and it's really critical, especially on the backdrop of COVID, quite frankly, to get an accurate diagnosis made on whether the patient has interstitial lung disease, IPF or some other lung problem potentially caused by COVID itself. So we're excited about where the product is. We've had a lot of good data come out this year, and this test will be available internationally starting at the beginning of next year on the nCounter. So this will be our first 4 way to that global menu expansion.

And how about -- and I do want to come back to Marc to just get some high-level views. Maybe we'll do that a little later in the conversation. But just in terms of Envisia in terms of its data set, I know there's some recent data or, I guess, in ATS. So just kind of walk us through the commercial kind of pathway forward. What is it that's going to kind of drive the penetration that you envision? How much of the data is in hand? How much more needs to come out? Just walk us through the...

Yes. We've got -- excellent question. I mean we've got lots of great data on the test. We have had new data come out at ATS, which just continues to build the user experience, the clinical utility of the test, a lot of great data showing significantly improved confidence in diagnosis of patients with IPF from other interstitial lung diseases. And that's really, really critical as you're choosing which patients to put on the rather expensive fibrotic therapies, et cetera. So we'll continue to build out that menu of evidence. We've begun -- earlier this year, we've begun the market-shaping activities for the introduction in Europe. One of the reasons we chose Envisia for the first menu expansion on nCounter is the fact that the market in Europe is about the same size as it is in the U.S., so it's a very strong market. Drug pipelines coming through approvals there, and we have a very strong relationship with several of the thought leaders in Europe already. When this clinical trial was started back in 2010, '11, we had multiple sites in Europe. So we're connected to great KOLs that will help that. We've got a portfolio of data that can be used to begin the dossier technical assessment work with coverage in Europe, and all of that has begun. So we're excited to where Envisia is and where it can go over the next couple of years.

Maybe we can actually -- I mean if you don't mind, I can -- I mean, we have a lot more to go through on the product side. But maybe just, if you don't mind, going back to Marc just for a moment. Marc, so obviously, you had a very sizzled career, prior to Illumina, at Illumina then at Helix. So maybe give us some color. It's obviously Veracyte to the point really so far has a really attractive pipeline and growth opportunity. But just as you made the decision to join the company, just maybe give us some of your thinking about why you decided to come here? I'm sure there's a lot of opportunities out there in diagnostics given what's going on today.

Yes. Thanks, Dan. I appreciate that. There are a lot of exciting things that I like about Veracyte, in particular the opportunities to grow in multiple different dimensions, okay? So Bonnie has talked about the opportunity to grow globally, the opportunities we have in Europe given the nCounter platform, the opportunities to expand the menu and introduce new tests, expand clinical indications, the portfolio and the pipeline. So when I look at the ways that the company can expand both its market and its access to those markets, I see so much opportunity in the future, as Bonnie said, for many years, right? So this is a really long-term prospect for me and for the company, and I'm excited to do it. So that's one of the reasons for me. I'd say the second reason is really largely to do with the arrangement that we have here. I have an opportunity to join a company that has -- that is addressing these markets, where the leader, Bonnie, who is willing to stay on as long as needed to help achieve the vision that she's set. And then on that vision, we're aligned on that. That's the really important point for me. I'm not coming in here with the view to changing the strategy and the goals for the company. I'm so bought into the existing strategy and the vision that Bonnie's laid out and that the Board has signed off on, but now I get the opportunity to execute that. And I know how to do that from my own career standpoint. That checks a lot of the boxes that I'm looking for and plays into all of the experience that I have in global markets, tools and reagents, diagnostics, more recently with Helix growing one of the largest COVID labs in the United States. So I think it was one of those great opportunities where the fit is perfect. It's the right time for Bonnie, it's the right time for Veracyte and the right time for me. So it was an easy decision at the end of the day.

Great. Okay. Awesome. So maybe switching back over to the product pipeline. You talked already about the lung opportunity. But when you talk about Percepta, Bonnie, what's -- how do we think about the ramp there? I mean like what have you guided for in terms of the Percepta outlook? And just kind of update us there as well with where things stand with reimbursement and what's to come.

Yes. So Percepta, again, was on the back of Medicare coverage and data perspective, really set up nice for 2020. And we got a -- had a little bit of a step back due to COVID. But what is really exciting about the Percepta GSC is that we're going to be bringing these 2 new lung cancer products to market that really surround the Percepta GSC. It's the first of its kind portfolio. It is going to go upstream and helping these doctors identify through a noninvasive nasal swab which patients to work up, which one's not. Those that end up in the critical/intermediate risk group are likely to -- most likely to continue to have the bronchoscopy biopsies. The Percepta GSC will be there as roughly half of those biopsies end up nondiagnostic, and that test will be able to guide next steps. As cancers are diagnosed through either of those processes, we're going to be able to have a Percepta Atlas with the full transcriptome and DNA variant panels that are both known and targeted through current guidelines and targeted therapies but keeping in mind that whole transcriptome assay has a lot of novel variants that could be found in the future to be important. So we'll be collecting that data at the time of diagnostic -- diagnosis on a tiny biopsy and completing the end-to-end clinical care continuum for lung cancer patients. And this will be the first portfolio of its kind to thread together all of those clinical questions and unmet need by a single portfolio.

And in terms of commercial reimbursement, so obviously, Medicare is in place. But just remind us of like the split between the Medicare population there in commercial and kind of what the outlook is on working through the commercial payers.

Yes. Medicare is key here because both for Envisia and our Percepta GSC, over 50% of the patients are Medicare-eligible patients. We are working to take the data and try to expand that coverage in the commercial coverage. We're certain we'll get there. It's a matter of time. There's been a lot of distraction by them over the last year as well. So getting those conversations and being able to present the data, I think that will open back up to us this year. And we're very comfortable and confident that both of those products are in a great place to start to gain commercial coverage.

And if you just -- from a high level, like your ability to prosecute commercial coverage, I mean, this is what I thought you guys were always excellent at, just the process by which you identified KOLs. You had a real plan in place. You kind of went at it methodically. Have -- I mean have those -- have your history of kind of prosecuting commercial coverage, has that allowed you to get to that end point faster with some of these current products? So like where -- should investors be thinking you're going to get to 80% commercial coverage within 2 years, 3 years? Just any thoughts on the time at which you get to that tipping point on commercial coverage and how that may have changed for the past.

Yes. I mean the recipe hasn't changed, right? I mean we -- it really starts with answering a clinical question that is really considered an unmet need, one that both doctors and patients want answered and then answer it with very high-quality science, high-quality validation studies that show the performance of the test can be trusted and safe, from moving the patient to a new clinical care decision and then collecting the clinical utility to show that in the real world, when that test is used, the patient does benefit and that there is some cost benefit by reducing procedures or finding out that the patient actually has a diagnosed cancer earlier. That's a backdrop for reimbursement, and none of that has changed. We are in contract as a lab with virtually all the major payers now. We achieved that with Afirma, but it wasn't in-network for Afirma, it was in-network for a lab. So as we emerge now from the COVID distractions and continue to drive deeper into these markets, have more adopters and more test volume, we will have the KOL networks to be able to convince the payers to come on with a positive coverage decision. We know how to do that, and I do think the journey will be slower. If you remember years ago, we had a slide that I used to speak to at these conferences, and I'd say it was my favorite slide and my least favorite slide. And what was cool about the slide that it showed us climbing that mountain of coverage really well, one of the best in the industry, as you pointed out. But what I didn't like about the slide was the fact that it took 5, 6, 7 years to get there. We definitely believe that is going to be truncated because of our in-network contracts that we have right now with the payers. So it will be an exciting couple of years. I mean it's hard to predict timing because at the end of the day, these decisions are out of your control. Some of these companies work on time lines of when they review and make these decisions, but we're in there. We've got great data, more data emerging really every year. And we're in a great position to make that happen.

Great. That's super helpful on that front. Obviously, the -- well, not obviously, but the nasal swab classifier opens up a whole new kind of opportunity as well. I know you just had some clinical validation data that was released ahead of ASCO. So maybe just -- I don't know how you want to introduce it. I mean I think the investors who are listening, obviously, are aware of the product. But do you want to give a little backdrop about what the opportunity is with this product and then walk through the importance of the data that recently came out?

Absolutely. We're super excited about the data. I think when you unveil that blinded set of validation data and get the kind of results you are sitting back wishing for, it's a great feeling. Fortunately, we've been able to do that a number of times. But going back to the unmet need, I mean, we understand deeply that physicians' challenges in lung cancer is taking the patients that are found to have a suspicious nodule by CT, which is a really sensitive technology for detecting these suspicious nodules. And whether the patient is found to have a nodule incidentally, I mean, that sometimes happens when they're undergoing chest CT before surgery, for example. And then depending on the patient's history, whether they were a heavy smoker or not, or whether the patient came through lung cancer screening, keeping in mind that -- but thankfully, the preventative task force has actually expanded the eligibility into low-dose CT screening for lung cancer. There's now 15 million eligible people to get CT to see if they have a suspicious nodule. But the challenge for the doctors isn't that screening piece because if the patient has cancer, the nodule will be detected. The question becomes what to do once that nodule is detected because there will be many nodules detected that aren't cancer, and they are caused by many different conditions. So our positioning in the nasal swab is to answer that question on the front end of any decision of workup to do. And our classifications for risk for the patients tightly line up with the way guidelines already exists today and guide physicians as to what the next step should be based on that risk. We're not dependent on some other method of nonobjective assessment of risk. We take a nasal swab following the detection of the CT. Someday, we may combine those. You collect all that data together. And then the really cool thing about the nasal swab is we had very high sensitivity when we put a patient into the low risk for cancer bucket. That can't be emphasized enough because when a patient is found to have a nodule, they all think they might have cancer. And you don't want to ignore any of those nodules because if they do have cancer, you want to move quickly to diagnose it and get that patient on treatment. But to be able to tell a patient with data,that you have a lung nodule that can confidently go to surveillance because we have a very high degree of confidence that's not cancer is really a great answer to give to the patient. And our data showed that we could identify over 40% of the truly benign patients with a nasal swab and move them to a low risk for cancer call with less than 3% likelihood of cancer. I mean that is just phenomenal data. Our KOLs are just really excited about that. And then where we cannot confidently tell the patient, "You don't need to worry. You don't have cancer," we are able to risk stratify them so that they fall into either the intermediate risk group where they are most likely recommended for a biopsy, less invasive to make that diagnosis; or if they are at high risk for cancer, which is defined by guidelines as greater than 65% likelihood of cancer, and our test showed a greater than 67% likelihood of cancer in that high-risk group, then the next step, depending on the patient characteristics, if this was a small nodule -- let's say this is 1-centimeter nodule. Today, many of the risk assessments would not identify that patient as high risk for cancer because it's a relatively small-sized nodule. These are the challenging cases. If we can call that patient high risk, they could go into a procedure with the potential of having that small nodule, not only diagnosed as cancer, but ablated in one procedure or surgically removed for a cure. And that's what's going to really move the needle in saving lives in lung cancer. We're really excited. We're at the early stages. We'll be launching the test in a few months, back half of the year, along with Percepta Atlas, As we bring the test to market, we are already taking names from thought leaders that want to be early adopters for the test. That's important because we want to see the test into accounts that will collect it on every patient sample, guide next decisions and then collect and publish the utility data of how this test will work and getting our validation data published, and the rest of the analytical work will give us a portfolio of technical assessment publications we need to get for Medicare. So it can take, as you know, 12 to 24 months to get through that, depending on the timing of their process. But we're in the process, going to launch soon, and we'll be really excited to get this product to market.

So maybe one follow-up there or 2 follow-ups. So what was kind of the bar? Like what were you expecting? And what did the experts hope that the test or what did you think the test could achieve above which you thought the test to be successful? So obviously, the data you talked about 96% sensitivity. I think the negative predictive value, you said, was like a little less than 3%. So what were the metrics that you were hoping to achieve versus what you actually achieved? And any of the -- you mentioned the experts were really satisfied where they're -- or excited. Just any more color about what some of the feedback has been.

Yes. I mean the -- our goals were twofold. We wanted to be able to classify as many truly benign patients as low risk with a very high negative predictive value and sensitivity and doing it with a very high sensitivity in NPV was the most important metric there. Now the other part of it, the specificity part of the low-risk classification is how many of the true benigns can you classify. Interestingly, the more than 40% of the patients that we're classifying as low risk is higher than what we did initially with the first-generation Afirma test, moving those patients to benign. We created a whole new standard of care with that product. And what our doctors told us over and over is you can't miss cancers in lung cancer. So we knew going in that when we were going to classify patients down to low risk where they would literally be moved to surveillance, we had to have a very high negative predictive value, which we achieved. We were thrilled with it. It was higher than what we needed to have to have a great test. On the upper end, we want to be -- wanted to be able to align with guidelines because the way that it -- I mean telling someone with a 95% likelihood that they have cancer is great. But if someone tells you and you have a history of smoking and you know you're already at risk for lung cancer and someone says to you, you have almost a 70% likelihood of having cancer, you don't mind going in for that biopsy. That's a very high risk, right? So the guidelines don't require you to have 95% specificity and positive predictive value in order to get worked up. It's actually 65%, and the reason for that is you don't want to miss anybody. And that is the right level of risk to take the chance on doing the biopsy or surgical procedure to diagnose. So we feel -- we spend a lot of time in each of our test development really understanding the pathway of clinical decision-making that is made and where the hurdle is where a big decision is being made, but it's not really being guided by data. And what we've learned over the years with all of our tests is if we can guide a better decision with really great data, the test will be adopted. And that's exactly what we've achieved with our data on the validation, pivotal validation data for nasal swab.

And maybe one final one on nasal swabs. So when you think about the market opportunity here, just kind of frame -- and I know in your decks, you obviously have a lot of information on sizing markets and whatnot so investors could find that. But just given the data that what's come out, just how does a nasal swab opportunity compare to some of the other opportunities in your portfolio? Because it sounds like just given the -- it certainly sounds like it just could be one of the biggest, if not the biggest, but I'm just hoping to get some color.

It is, Dan. I mean there's about 1 million patients we estimate will be eligible, and that could grow because that's based today on a number of patients actually getting screened. Now that we have a noninvasive way of better managing those that are screened, that are found to have nodules, we think that is going to accelerate uptake of our test and accelerate getting patients into screening, which is all good for patients, by the way. So about 1 million patients today, and that's in the U.S. alone. We are -- we will work to add those tests to the nCounter platform, tap the global market. This is where our lung portfolio gets to address roughly $8 billion market between the 2 tests in the global markets. And then the big upside, the $40 billion, $50 billion market opportunity, $40 billion of that being tied to this early detection in lung cancer also includes the opportunity we're working on with our collaboration with J&J, where we believe this field of injury can be used to identify patients precancer. And we're working with them in our interceptive therapeutic group to try to find patients before they develop cancer, so they can be halted from developing that cancer. And that's a really big idea. That's future. That's beyond this test that we're bringing to market today. So by itself, $4 billion market opportunity, definitely the biggest of any that we have. And as these tests are made available on the nCounter platform, they will help solidify the pull-through of the entire menu on the platform. So I think that global strategy has more leverage across the menu and pull-through of the business because of a cancer center or medical center, invest in doing any of these tests on site, they now have access to run all of the menu on site. And that's a powerful driver of growth, long term, as we get these into the global markets.

Great. So I wanted to jump over to Decipher, but I mean the question I didn't have on here, which is more just like a high-level way of kind of asking about the -- and maybe this gets to some of the characteristics of Veracyte. But your ability to have this machine classifier and to prosecute new diagnostic tests in a methodical way, I mean, that's -- I mean, a lot of companies in diagnostics are -- the field is kind of exploded with the understanding of genomics and molecular implications on reimbursement. Nonetheless, Veracyte seems to be at the forefront of being able to develop these highly efficacious tests. Is it possible to give some color about what differentiates Veracyte in that perspective about your ability to have this methodical training approach with machine learning and whatnot to kind of really develop these highly efficacious tests?

You know, Marc, it -- or Dan, I'm sorry. I'm used to talking to Marc on the line. I think that it goes back to starting with the clinical question that is relevant because the starting point becomes what is the question you're answering, building your cohort of clinical samples and data, a large cohort when you want us to do the training, I think Giulia mentioned, we trained our classifier in 1,100 samples. And these were nasal swab samples that came through multiple mechanisms, patients that were found incidentally, patients that were at high risk and going to undergo a bronc and patients that came through screening cohorts. So you want these multiple ways that patients get into the testing paradigm to begin with,so that you are training your classifier to recognize the benign patients or the cancer patients within this cohort, choosing very, very good truth labels. So you have to start by knowing really clearly the question you're answering because you're training a classifier to recognize that. Then you have to build the clinical cohorts with a lot of breadth and diversity within those sample sets. So that they're not -- these samples came from -- through some of the clinical studies, 26 or more sites. So you've got lots of diversity, stages in cancers, with cancer, not with cancer, those not with cancer with COPD, there's with cancer with -- like all these variants so that you're really challenging your classifier with everything it will see once on the market. And when you unveil that blinded validation data and get the kind of performance that we got, you can be confident because of the backdrop of that training set that you're going to be able to do as well on the market. And I think the secret sauce we have is the understanding of the clinical question to answer, the clinical expertise to build the clinical cohorts and collect the truth labels in a very, very robust way. And we've been building our machine learning team for over a decade, so they've got lots and lots of experience building models and being able to build models and perfect those to predict a truth. And obviously, they're very sophisticated scientists. They do a really good job.

What -- I want to jump over to Decipher and then discuss nCounter a bit and then maybe the income statement. But maybe just before doing that, just as an adjunct to that last question, what -- you've got a really large and exciting pipeline ahead of you and kind of commercializing these opportunities. Is the team very busy prosecuting new opportunities like that we'll hear about as Marc takes over, over the next 5 years? Just you've got this process-driven approach that's been very successful. So how do we think about even what's beyond what the investor base knows today? I mean should we expect Veracyte to really focus on what's here and now? And -- or will there be a steady cadence of new pipeline opportunities that get unearthed as we look out?

That's a really good question, and I'm going to answer it, and I'm going to also suggest that Marc answer it because this is something we talk a lot about. I mean where we sit today, we feel, strategically, we are in a phenomenal position to execute and drive phenomenal growth for the company and value for shareholders with just where we sit today. We've done a lot of acquisitions that have kind of set the table for where we're trying to go. And with the portfolio of menu, including adding to our IPF test, which is not cancer, although I would say it's devastating cancer. We're in 7 of the top 10 cancers. That breadth is important, more so with the nCounter strategy globally because you want to offer the clients who are going to perform these tests close to the patient's broad menu. The prostate cancer test market is a really large market, and we acquired that, I would say, at the perfect time on the back of some very key coverage decisions that puts them at a point of really nice growth over the next few years. And then as we put this menu, what -- you can imagine what we're doing right now is prioritizing and trying to figure out how we execute more quickly on getting these key menu of tests on the nCounter, so we can go global. And the global reach will continue to require investment in operations and infrastructure because we acquired the small global team as part of our NanoString acquisition and haven't invested a lot in that until we start to see the menu grow. And so I'd love to give Marc a chance to answer that as well because he's coming in at a time ready to kind of take the helm and execute on that. I'm not sure we're out spinning our wheels on what's the next thing we can -- new test we need. But if that came along, we'd probably be ready for that as well. Marc?

Yes. Thanks, Bonnie. And I totally agree. I think there are so many unmet needs out there, Dan, so many key questions that need to be answered. And as Bonnie said, we're really good at identifying what those questions are and then executing on that. But the level of penetration at this point is so low across all the opportunities that there's plenty more to go after. Our role right now is execute on the great products and the great strategy we've got in place. We've got a lot of amazing products coming out of the back end of the pipeline. But one of my really key focuses over the next 5 years is how -- continue to fill the front end of that pipeline. Veracyte has done a wonderful job of that by answering real questions that have real needs, and we have to continue to do that. If you don't do that, then you can -- no matter how well you execute on what's coming out, obviously, the growth rate starts to slow at that point, and that's not going to happen because we're going to be very good at filling the pipeline in the front end as well. So lots of opportunity, lots of ways to do it. As Bonnie said, we've set the table now. So as we put more stuff into the pipe, we continue to just execute and roll it out.

So it sounds like it will be a -- it sounds like, well, the next 3, 5, 10 years, you've got this really large markets to penetrate. Sounds like you're not really going to potentially slow down on looking for opportunities vis-a-vis M&A, where, organically, you need to have other stuff to kind of come into your channel so that you can leverage your -- I guess your large commercial team. Is that fair then?

My -- I'll let Bonnie answer as well, but my view is this is a long-term prospect. We're here to build the growth of this business for the next 10 years and more, and so we have to take both a long-term view and what's needed in the next 1, 3, 5 years as well. So it's both.

Yes.

Okay. So maybe in the interest of time, we have just have a few minutes left. Maybe just Decipher, just the prostate field, there's a number of different companies competing in that market. Obviously, there's a lot of different parts of the continuum where different companies come in. So what's -- I guess 2 questions for Decipher. Just what attracted you to Decipher? And what do you think that you could do with Decipher maybe the company wasn't able to do on its own?

Well, what attracted us is we believe the Decipher Prostate test is the best test on the market. This test has an enormous amount of clinical evidence behind it. As you know, that's really important to us. And it also is one of the only tests that has been, I think recently, there may be a couple of ads, but this test was recognized in NCCN guidelines before all others at being able to be used to guide next steps on high-risk prostate cancer patients. Localized prostate cancer is not challenging to diagnose, but what is challenging is to determine who is at low risk and should not be worked up using the aggressive treatments that have really profound impacts on men and which patients actually have a high likelihood of metastasis that you do want to take those aggressive steps with. And that's exactly where Decipher set its end point in being able to predict the likelihood of metastatic cancer. And that's been the hallmark of the test and one that we believe has awarded them tremendous KOL reputation over 200 publications supporting the test. And now we see that this test is being used in 7 or more clinical trials to enroll patients in these trials. And it's very attractive to drug companies because when they use the Decipher test for that enrollment, looking at those that are high risk for metastatic disease as an enrollment criteria into the test, they get access to all the underlying transcriptome data. It's a similar scientific philosophy to Veracyte, and you run the test and collect all of that data. And that's attractive because if you were to use the other test in that mode, you would get the data on some small number of genes. But with the Decipher test, you not only get the risk score to help with enrollment decisions, you get the underlying entire transcriptome of data. And that can help therapeutic companies mine the data and get even more insights into these individualized cancers. So it's a really powerful strategy. They were on the back of just an expansion of 4 indications covered using the NCCN classification by Medicare on the back of those decisions late last year, so our timing and get a deal done was really perfectly aligned around them getting those expanded indications and be at a point of accelerated top line growth. And they're having a terrific year, as you can see from our March numbers that got included in our Q1. What was in it for Decipher, I think Dr. Tina Nova is an amazing veteran CEO herself. She agreed to stay on and continue to run that business for some time with us, which is a great privilege for us to have her doing that. But they saw Veracyte as a vehicle to take their test into attractive global markets far earlier than they would ever be able to do on their own. And to be part of a company that is building out the infrastructure and capability across multiple cancers was more important to them to be part of that than to try to be a company on a single indication. And Dan, we see a lot of companies trying to build companies on single products and through consolidation and stuff. It's hard to do that. We know it can be done. But I think when you can join hands and consolidate and become a powerhouse that also has vehicle to tap global markets, it's a win-win. And we're really excited to have the Decipher team as part of the Veracyte family.

Well, that's awesome. So we got the most of the questions, not all, but that was a great discussion. So Bonnie, thanks, obviously, for being here. Marc, as well, great to see you virtually. Hopefully, everyone benefited from the conversation and I hope you guys have a great rest of the conference, and we look forward to, I guess, the next update on -- when we get to Q2.

Okay. Sounds great. Thanks, Dan, for having us.

Thank you, Dan.

Take care.

Bye-bye.

Bye-bye.

Bye-bye.