Natera, Inc. (NTRA) Q4 2021 Earnings Report, Transcript and Summary

00:03 Welcome to Natera's 2021 Fourth Quarter and Full-Year Financial Results Conference Call. At this time all participants is on a listen-only mode. Following management's prepared remarks, we will hold a Q&A session. [Operator Instructions]. As a reminder, this conference call is being recorded today, February 24, 2022. 00:36 I would now like to turn the conference call over to Michael Brophy, Chief Financial Officer. Please go ahead.

00:53 Thanks, operator. Good afternoon. Thank you for joining our conference call to discuss the results of our fourth quarter of 2021. On the line is Steve Chapman, our CEO; and Solomon Moshkevich, General Manager of Oncology. Today's conference call is being broadcast live via webcast. We will be referring to a slide presentation that has been posted to investor.natera.com. A replay of the call will also be available at investor.natera.com. 01:18 During the course of this conference call, we will make forward-looking statements regarding future events and our anticipated future performance, such as our operational and financial outlook and projections, our assumptions for that outlook, market size, partnerships, clinical studies, opportunities and strategies, and expectations for various current and future products including product capabilities, expected release dates, reimbursement coverage, and related effects on our financial and operating results. We caution you that such statements reflect our best judgment based on factors currently known to us and that actual events or results could differ materially. Please refer to the documents we file from time to time with the SEC, including our most recent Form 10-K or 10-Q and the Form 8-K filed with today's press release. Those documents identify important risks and other factors that may cause our actual results to differ materially from those contained in or suggested by the forward-looking statements. Forward-looking statements made during the call are being made as of today. If this call is replayed or reviewed after today, the information presented during the call may not contain current or accurate information. Natera disclaims any obligation to update or revise any forward-looking statements. We will provide guidance on today's call, but will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. We will quote a number of numeric or growth changes as we discuss our financial performance and unless otherwise noted, each such reference represents a year-on-year comparison. 02:39 And now, I'd like to turn the call over to Steve. Steve?

02:42 Great. Thanks, Mike. Good afternoon, everyone, and thank you for joining us. We've got a packed session full of announcements, so let's get into the recent highlights. 2021 was a breakout year for Natera, volumes were up 53% year-on-year, which is higher than we pre-announced in January by more than 5,000 units. Despite all the disruption in the world from the Omicron variant, volumes were still very strong. We posted another record with 439,000 test process. In addition, this was also one of the largest sequential growth quarters we've ever seen on a net unit basis. 03:21 Revenues were $625.5 million for the full year, above the top end of our November guidance, and more than $100 million higher than the midpoint of our regional revenue guide given in February of 2021. Looking at the quarter, once again, Q4 was a very strong revenue quarter as we came in at roughly $173 million. Mike and I will spend more time on the drivers behind these numbers and the remaining financial results shortly. 03:51 In addition to the excellent volume and revenue performance we recently set a new standard for clinical data in the field of cell-free DNA with presentations and publications that can have a very meaningful impact on patient care. First is the recent presentation at the ASCO GI conference from the prospective multisite CIRCULATE trial, which showed that Signatera is predictive of treatment benefit in colorectal cancer. We also showed that Signatera has exceptional sensitivity at the post-surgical time point. This was the largest prospective dataset ever presented using MRD testing in CRC and the first to show MRD testing is predictive of treatment benefit in CRC. 04:36 Second is the publication of the prospective multisite SMART trial in The Gray Journal, which is a leading Journal in Obstetrics and Gynecology. With the SMART trial getting into publication in a top journal, and with over 18,000 patients in the study, this now allows 22q screening to be formally considered for ACOG guidelines inclusion. There is a generally accepted set of criteria required for a disorder to be included in the prenatal testing guidelines and we believe the study results achieved all of the performance metrics required to meet this objective. 05:10 Finally, in Oregon Health, we were able to release very strong large scale prospective data in each heart, lung and kidney transplantation that we think can have a very positive impact when published, for example in kidney, the Trifecta study represents the largest prospective fully biopsy match study conducted to date, with nearly 3 times the number of biopsy match rejections as in DART study, which is one of the larger historical data sets in the space. We are very pleased that Prospera's performance in the study was exceptional, and we'll spend more time in all of these results later in the call. 05:46 Finally, we are pleased to be guiding full-year 2022 total revenues at $770 million to $790 million, which implies roughly 31% proforma revenue growth over 2021 at the midpoint. The guide reflects our usual cautious approach, but there is upside opportunity as we see ourselves entering 2022 strongly positioned for continued growth across our portfolio. 06:13 Okay, let's get into some of the business trends. The next slide is just an annual view of our volume growth over time. We have a long track record of execution which you can see that something different happened in 2021 where we are benefiting from 2 fundamental trends in health care. First, the use of cell-free DNA in Oregon Health and Oncology just getting started and we are a leader in both fields. The volume from cancer products and Oregon Health products are starting to make a significant impact on our growth. 06:41 Second is the increased pace of NIPT adoption in the US, post ACOG guidelines, which drives not only NIPT volumes, but also allows us to offer physicians other tests like carrier screening and 22q. I think our 2021 performance shows we are well-positioned to leverage these trends and we think these are multi-year drivers that we can continue to benefit from in the future. 07:03 Diving into a quarterly view on the next slide shows that the business trends remained very strong in Q4 with total revenue growth outpacing volume growth. In addition, quarterly sequential volume growth was strong at roughly 8%. This was one of the best sequential growth quarters we've ever had in spite of the fact that third quarter in 2021 was unusually strong for us because a large NIPT player exited the space in June and Q4 has fewer [seasoning] (ph) days due to the holidays. 07:35 The underlying ASP performance was strong, although we also had roughly $7 million in cash receipts from prior period true-ups and reserve benefits in Q3, which mutes the reported sequential pricing trends in Q4. $173 million in revenue was also well above expectations and all the growth trends continue to look quite strong so far in Q1. 08:00 On the next slide I'm excited to share a new snapshot of the volume trajectory in our newer products, which as you can see, have been growing rapidly. This is what I mean when I say cell-free DNA is just getting started in oncology transplantation. The left chart is our volume progression in Signatera and Altera in Oncology and the right chart is Prospera and Renasight in Oregon Health. 08:23 In Oncology, the vast majority of these volumes are Signatera units ordered by physicians for clinical use, but this also includes very strong pharma performance. Based on our current run rate and publicly available data, we believe that we're very close to being the overall market leader by volume in the field of liquid biopsy even when including both therapy selection and MRD testing categories. We think this performance is superior to any other MRD test on the market today. In addition, this rapid growth shows how big the MRD opportunity can be. 08:57 We've been able to drive this level of early adoption focusing primarily on colorectal cancer, which we think is still an under-penetrated market. Despite our historical focus on CRC, which represents less than 10% of the overall MRD opportunity, we are starting to see more volume come in from immunotherapy response monitoring in addition to MRD testing in other solid tumors beyond CRC. Some doctors start using Signatera in colorectal cancer and then expand to use it as a multi-cancer tool. This is an advantage of our patient-specific tumor informed assay. The same product can be applied to a broad range of cancer types without designing a new fixed panel for each tumor type. This growth is also impressive, because 2021 was a building year for us with regards to our commercial and operational teams. We've now built a full commercial team that still has a lot of leverage left for growth. 09:51 Paired with that our robust live operations now allow us to scale, as we built out the infrastructure to optimize turnaround times and manage recurrent orders, both of which take time to master. We're in a great position to grow the market, but I think what's most impressive is our data leadership. We've got paradigm-shifting predictive data now in both colorectal and bladder cancers. We have over 100 additional studies underway and it's possible we can publish more than 20 peer-reviewed papers in 2022 alone. In addition, in 2022 we will be receiving repeat testing volume from patients that started on Signatera in 2021, which is when the vast majority of our current patients initiated testing, driving continued growth for us. Overall, we believe we're in a very strong position to expand our leadership here and in the liquid biopsy field. 10:45 In Oregon Health, the majority of our volume in the slide is coming from Prospera orders, but it does also include a meaningful contribution from Renasight. In 2022, we expect added momentum from the publication of the Trifecta study in kidney and we expect meaningful volumes from the contribution of our recent launches in heart and lung resulting from the publication of leading studies in those organs. 11:10 It's worth noting that the commercial and operational infrastructure needed to support years of growth is largely built now, so we have an opportunity to get significant leverage out of our current team as centers adopt donor-derived cell-free DNA testing. You can see from this volume trajectory why we think we are positioned to be a top player in this space for years to come. For now, we will plan on providing the snapshot once annually on the Q4 call in order to preserve competitive positioning. But, I think the 2021 volume show that these are not going to be niche products and we are on the path to achieving scale in these new areas. 11:47 Now, let's move to the second major trend on the next slide. After gaining a full ACOG endorsement in 2020 for NIPT, adoption grew significantly in 2021, even as the overall market for NIPT grew based on our estimates, Panorama actually increased market share. As you can see on the right side of the chart, there is still a long way to go to get anywhere near full adoption. We've estimated that the NIPT market can reach 80% to 90% adoption in the coming years. In addition to growing adoption in the community setting we are seeing growth from large group practices and health systems. For example, we recently just closed a system of over 10 hospitals that's now rolling out NIPT to its patients for the first time. We think that our competitive edge in winning these deals is our significant body of peer-reviewed clinical evidence, our highly differentiated product and our strong suite of user experience tools. For example, we are now fully integrated into leading EMR systems, making it easier for systems to adopt Panorama broadly. 12:53 Additionally, although it's the only state-sponsored prenatal screening program we are aware of in the United States, we think the State of California is likely to expand their existing prenatal screening program from high-risk only in which Natera is already actively participating to now include average risk NIPT. We've been selected to participate in this program, and are currently in discussions with the State. If we do choose to move forward, we'd likely offer a lower-priced offering that screen for a narrower set of conditions, but we think that volume would increase as access is opened up by this program. We've already submitted for a unique PLA code for the more limited offering. In addition, we expect to offer other test in our portfolio like curious screening alongside the program as we enter new OB-GYN offices. 13:45 There are also a lot of key points in the program that are still under discussion, but, we've gone ahead and built this into our forecast, taken a conservative approach to the impact of the change. Across all channels OB-GYN, MSM, Hospital Systems, et cetera, we think Natera remains very well-positioned to extend its leadership position. The other opportunity that we see potentially compounding the value of increasing NIPT adoption is our ability to service the physician for additional tests that are routinely offered early in pregnancy. We think there are substantial growth opportunities here, as our commercial team meets with more and more physicians to also expand our client base for other tests, like genetic carrier screening that ACOG recommends to be offered to all pregnant women regardless of ethnicity or age. Historically, Natera's Carrier screening orders has scaled up together with our NIPT volume and we think that trend will continue. 14:38 Furthermore, we believe screening for the 22q may soon be recommended as part of routine practice, which may further expand the value we can offer to our patients and ordering physicians. More on that topic on the next slide. 14:52 As many of you saw in our press release, the Landmark SMART 22q microdeletions study was recently published in The Gray Journal, which is a premier journal among OB-GYNs in the United States. SMART is by far the largest prospective study to confirm genetic outcomes on all pregnancies in the study. The results were excellent. The incidence of 22q in the study was 1 in 1,524, which confirms 22q is one of the most common prenatal genetic disorders in the general population and unlike trisomy 21 the incidents of the disorder is not impacted by maternal age. 15:30 By comparison, cystic fibrosis, which is screened routinely has an incidence of approximately 1 in 3,500 in the general population, and trisomy’s 18 and 13 have an incidence of 1 in 3,000 and 1 in 5,000, respectively. Panorama test results were accurate, greater than 99.9% of the time, meaning that 99.9% of the time the Panorama result, whether high risk or low risk was confirmed to be correct. For high-risk results only, we had a positive predictive value or PPV of 53%, meaning that more than 1 in 2 pregnancies screening high risk with Panorama were confirmed to be effective using a confirmatory diagnostic test. This is really strong, especially compared to traditional prenatal test like the Quad screen offered routinely to all pregnant women in United States for the past 40 years that have a PPV of only 3.5% or 1 in 29. 16:31 So, the question remaining is, will this be recommended by ACOG for routine screening? Well, we don't control the outcome, but screen tests that offer the most clinical utility need a few criteria. They screen for a serious disorder with high accuracy and high PVV, they catch many cases that are not otherwise captured by the existing standard of care, and early detection provides an opportunity to intervene and improve outcomes. In the case of 22q that means treatment with calcium at birth in order to mitigate potential seizures that can result in cognitive impairment. We think our 22q microdeletions screen, clearly meets all of these criteria. It's common, it's severe, it can be screened for with high accuracy and there is an appropriate intervention. This sets up very nicely for a guideline change, but we will have to see where things end up. 17:21 Okay. Now, let's spend a bit more time on the Organ Health opportunity. You saw the excellent traction we've been getting in Prospera on the earlier slide, and we see a lot of room for future growth. When we presented this slide in 2020, we estimated fewer than 5% of transplant recipients were getting cell-free DNA testing. While that is clearly grown we think this chart shows Prospera can fill a significant unmet need in the coming years. And what we believe is yet another large market opportunity. 17:51 One driver we think can help increase adoption of cell-free DNA in this area is additional large prospective clinical trials that that confirm the excellent performance of Prospera. While we're pleased with the data we generated thus far we know that publishing big prospective trials can really move the needle. Although our volume has been growing nicely, this is probably the biggest objection we faced in the field. So, just as we did in Oncology and Women's Health we've been investing heavily in data generation. Finally, after a ton of work by our team and our outside collaborators, in 2022 we expect a wave of prospective, strong and meaningful data across kidney, heart and lung transplantation and we think this can make a significant impact for us. 18:33 So, first a minute on the Trifecta study in kidney transplantation. This study was led by Dr. Phil Halloran, who is one of the premier researchers in the field. Trifecta had more than 3 times the number of biopsy match rejections than the DART study. Trifecta also enrolled patients from more than 20 US and international sites. You can see that Prospera results from the initial readout were exceptional. The results were so strong that we believe it could eliminate the need for multi-modality testing to rescue test performance. 19:05 Multi-modality testing using RNA and cell-free DNA is very expensive. We think it could cost roughly $6,000 per blood draw compared to Prospera, which is less than half of that price. So we look forward to publishing the Trifecta study this spring and we think it will be a really significant step forward for Prospera adoption. 19:26 We also have 2 studies soon to be published in each of heart and lung transplantation. First-in-one, we were pleased last fall to pre-release data from the largest prospective lung donor-derived cell-free DNA trial to date using our commercially available assay. The data was very strong and accepted for an oral presentation at ISHLT. We look forward to the publication of this paper in the near term. 19:51 Finally in heart, we previously announced the readout of our multi-site study that includes a prospective and retrospective arm. We showed an excellent overall AUC of 0.84 with greater than 250 prospective samples included in the study and greater than 100 retrospective samples for total of greater than 350 overall. In fact the AUC in the prospective arm were slightly higher than retrospective arm. Again, this performance is very strong, it could eliminate the need to perform expensive multimodality test that in the context of heart transplantation require cumbersome specimen processing, for example, spinning down the sample and shipping it on dry ice. 20:33 Okay. Now, let me hand the call over to Solomon to provide an update on oncology. Solomon?

20:39 Thanks, Steve. We're now working across all 3 of these areas on the slide here, for an estimated total addressable market North of $50 billion. Given we just provided an update on the early cancer detection program earlier this year, the key focus of this business update will be on the MRD space and the Signatera opportunity. As many of you know, we've had several major wins recently, so I'm excited to elaborate. 21:06 Let's start with the commercial and operational teams that we have built over the last 18 months or so. Steve touched on the competitive advantage, we think this team is already delivering. And I think the Signatera volumes in 2021 prove that out. The commercial team is now similarly-sized as the big teams from other liquid biopsy players. They've been in place with consistent sales territories for only a couple of quarters. So, we think there is ample room for our team to get more efficient with initiating new clinics and supporting growth within existing accounts. We estimate the commercial team is only at roughly 10% capacity in terms of the number of ordering patients and accounts that they can manage. 21:45 Over the same time, we've also dramatically scaled our operations and launched flexible and intuitive user experience tools for seamless ordering of the test. No other company in this space has ever reached this level of scale with a personalized serial monitoring test. So we've solved a lot of new challenges to get to this point. On lab operations in Q4, we saw a median turnaround time of 19 days for a patient's initial test results, and less than a week for subsequent tests. This means we're delivering test results within a clinically meaningful timeframe to inform adjuvant treatment decisions. Especially since Signatera can be initiated at any time pre or post-surgery, unlike other assays that are indicated only starting at 30 days post-surgery. 22:32 Other laboratories that have ambitions to launch a tumor-informed MRD test will have to solve many of these same operational challenges, but with the added pressure of Signatera already being commercially available. Our suite of user experience tools are also making an impact, which, of course, levers everything we've learned from operating in competitive environment for the last 10 years. The core of this offering are the online portals, EMR integrations, and a customer support infrastructure that is designed to facilitate serial monitoring and can be adjusted to fit the unique evolving needs of every patient. 23:07 As Steve mentioned, we think the strongest components of our offering are the clinical performance of the test itself and the extensive validation data we've already produced and continue to produce across a broad range of cancer types. We expect our lead in data generation to only increase this year. We've now got more than 100 clinical studies on our pipeline, including projects with pharma partners and academic partners that we expect a strong year of peer-reviewed publications as Steve described. 23:35 On the subject of clinical data, we were glad to host many of you for a special call about the data that was presented in January at ASCO GI. The interim readout from CIRCULATE Japan included analysis from over 1,000 patients with 12 months of follow up stratified by MRD status and for the first time also stratified by treatment status, which enabled the predictive claims that we can now make about Signatera in colorectal cancer. I want to just briefly review our results there, and the next steps. 24:05 So the central question for us in CRC has always been, will MRD positive patients benefit from adjuvant treatment? Or are they just destined to recur regardless of treatment? This data clearly shows that Signatera positive patients do benefit from adjuvant chemotherapy. The green lines in these charts represent Signatera MRD positive patients that received chemotherapy and the blue lines are the MRD positive patients that did not receive chemotherapy. You can see a clear separation of the lines, and the p-values were significant in all stages of disease, even when adjusting for other confounding factors, such as age and lymph node status. 24:45 The hazard ratios here are striking, for example, in the middle chart we see Stage III Signatera positive patients are over 8 times more likely to recur if they are observed instead of getting treated with adjuvant therapy. We know that a significant group of patients that are indicative for chemotherapy today do not actually get treated for a variety of reasons. Now with the support of this interim data, we think it's going to be much more likely that MRD-positive patients choose to pursue chemotherapy. 25:18 Now on the next slide, we address the other side of the coin, with Signatera MRD negative patients benefit from chemotherapy or can they safely avoid chemo, while being serially monitored. You can see from the chart that there is no separation between the lines, which means that Signatera MRD negative patients received no significant treatment benefit from adjuvant chemotherapy in this study. Among patients who tested MRD negative at four weeks post-surgery the 12 months survival benefit of adjuvant chemotherapy was not statistically significant and it would not be worth for toxicity of chemotherapy. We believe this data could have an immediate impact for thousands of CRC patients, who are already on the borderline about chemotherapy and we look forward to confirming these results in future readouts from the trial. 26:06 In addition to the predictive findings that I just covered, the prognostic data on the assay was also very strong, as we've shown before. Based on the single time point post-surgery disease-free survival at 12 months was 95% for the Signatera negative patients and 55% for the Signatera positive patients, yielding a hazard ratio higher than 13. Signatera sensitivity was 67% at the single time point, which is stronger than what was previously reported in our 2019 paper in JAMA Oncology. Overall, we think this test performance is really exceptional. 26:44 The next slide is an updated snapshot of the addressable patient population in MRD that is built up from estimated tests per year. The short-term eligible population represents indications where we have already generated initial data and have line of sight to gaining Medicare reimbursement over the next 2 years, which we think together can support up to 4 million Signatera tests per year in those indications. This now includes several GI indications outside of colorectal, including pancreatic, gastroesophageal, and anal cancers, where we've recently presented clinical data. 27:18 Looking further out, we think prospective randomized trials may be required to unlock additional indications that, if successful, we believe could support Signatera volumes of up to 13 million test per year. We are already working on generating that data and we expect the first large prospective readouts over the next 3 to 5 years. Because Signatera is personalized and agnostic to tumor type, we have a great opportunity here to leverage the same product in the same commercial channel to drive adoption across all of these indications as it gives significant leverage on our investment. 27:52 Now, let's take a look at the coverage roadmap for the next few years. After receiving the initial MolDX coverage decision in Stage II and III CRC and the subsequent umbrella policy was released, we have been able to rapidly follow up and win coverage in pan-cancer immunotherapy response monitoring and stage IV CRC. We've now submitted additional indications to the MolDx program and we expect additional coverage decisions to come in in 2022 and 2023. Key goal we have over that timeframe is to get into NCCN guidelines. We think the CRC data we presented from CIRCULATE Japan, once it's peer-reviewed and published merits consideration for guideline inclusion. 28:34 The ASCO guideline update last December specifically referenced ctDNA as an emerging potential predictive factor and it anticipated that forthcoming prospective data could merit inclusion in an upcoming future guideline. We have now generated that predictive data and will further support that effort with additional readouts from CIRCULATE as well as data coming soon from BESPOKE, our prospective registry trial in CRC. 29:01 We will take a similar approach with the other cancer types as well, generating additional evidence to support clinical utility across each of them. Although, we feel good about our chances for NCCN guideline inclusion, it is ultimately outside of our control. So, we do remain cautious in terms of the potential impact in our guide for this year. 29:21 Now, let me hand over the call to Mike to discuss the financials. Mike?

29:27 Great. Thank Solomon. I’ll first recap how we finished 2021 and then move to the 2022 outlook. This slide is just the annual financial comparison. I think Steve and Solomon covered the volume and revenue trends well. Just to note a couple of factors Steve highlighted on our Q4 performance. $173 million of Q4 revenues represents roughly 9.4% sequential growth over Q3 2021 and test process were almost 8% sequentially over Q3. This is despite the fact that Q3 was an unusually strong quarter, as Steve mentioned, for us with one-time benefits, both for volumes and revenues. So Progenity exited in the market in June. And on the revenue side, we had roughly $7 million of incremental reserve and prior period true-ups in Q3 versus Q4. 30:20 In Q4, we only had about $0.5 million in net true-up revenue benefits, which is a little unusual for us and that we generally had something like $1.5 million to $2 million this quarter, but that’s part of the typical lumpiness that we've seen in the past. That lumpiness also creates some volatility in the quarterly gross margin, which is a little lower at 45.6% in the quarter. Another key driver of gross margins is paradoxically the success we are having with Signatera volumes. 30:49 The P&L for Signatera is really immature right now and I think is poised to improve as we get further into the launch. The patient's first Signatera test is expensive for COGS, since we run that upfront exome as an one-time event. We expect significant improvements in first-time point COGS in the next 18 months or so as we scale up. Subsequent volumes, of course, are much less expensive to run since we are just delivering the plasma test. So as the increasing percentage of our volumes come from repeat testing, the cost per test on average will drift downward. The same logic applies for ASPs. We benefit from ADLC pricing in recurrence monitoring and also we are implied to receive reimbursement on a broader range of tumor types, as Solomon described. 31:37 Given the strong organic adoption we have seen across tumor types, the relatively streamlined path to CMS reimbursement and the lung side we have provincial guideline inclusion in colorectal cancer, which would drive commercial coverage in CRC. We think the best strategy to take advantage of our lead with Signatera is to drive volume in multiple different cancers, even if this puts some modest pressure on gross margins in the immediate term. 32:04 In contrast, underlying ASPs for Panorama, Horizon, and Prospera were strong in the quarter. We made some meaningful sequential gains in the Panorama ASP over Q3 as one of the larger plan suspended their prior authorization requirements for average risk in IPP. I think we still have significant room to improve on Panorama ASPs given a large fraction of our NIPT volume is not yet reimbursed today. The OpEx lines represent the scale-ups of our commercial channels and transplant and especially Oncology as Steve and Solomon covered. 32:37 In R&D, we have a couple of large projects focused on the next version of each of our core products. We are very excited about those and we will be able to spend more time on these innovations on future calls. We also are developing products that can be used in conjunction with Signatera similar to the way that Altera is being used today. When thinking about R&D, it's worth a reminder that essentially all of our volume and revenue comes from products we have developed internally, whether it's the development of the new algorithm used in the SMART trial or inventing Signatera or launching innovations that dramatically reduce the cost of goods sold per unit, we've had a very high win rate with the investments we've made in our R&D efforts. We expect that productivity to continue, particularly as we focus more on the next version of already successful products and inherently take less technical risk as a result. 33:31 Another huge benefit from this internal development pipeline is that, we haven't needed to pay a premium to acquire other companies. So, we think this approach is also the most capital-efficient path for future growth. R&D in 2022, also incorporates a major step up in clinical trial investment for Prospera and Signatera. For reference, clinical trial spend was roughly $20 million in 2020 and we expect it to be roughly $80 million in 2022. A large chunk of that increase is coming from the large randomized controlled trials going on right now. Once completed, they won’t have to be run again. 34:08 Given this increase, we've been selective with the trial that we sign, they must prove our clinical utility in a way that we think will drive broader adoption and/or change practice guidelines. I don't think clinical trial spend needs to increase meaningfully beyond our expected 2022 levels to achieve our goals in the indications Solomon presented. Beyond that, we would pursue larger trials on a case-by-case basis and only on the back of very strong performance. 34:37 The last major source of investment is capital expenditures require to scale the lab for all this new volume. For context, we had about $19 million in CapEx in 2020 and we expect about $60 million in 2022. We'll get into this in the guide, but CapEx is also not something that needs to remain elevated, but we expect to transition to maintenance levels in the future. Just a note on the balance sheet, we exited the year with about $915 million in cash and equivalents and we think this amount of capital will allow us to pursue all of the objectives we've outlined today. 35:11 Okay. So that is a good segue to the 2022 guide on the next page. Overall, we think this is a bullish guide that implies significant revenue and volume growth while holding gross margins and cash flow stable versus last year as we continue to make the investments we described today. We are guiding revenues of $770 million to $790 million, pro forma for the one-time [indiscernible] revenue recognition of $28.3 million in 2021, this represents 31% growth on top of a very successful year we just produced. 35:42 Steve mentioned, we took a note of caution with this guide, while case counts are thankfully down, we've built in some conservatism in the volume forecast to account for Omicron and future COVID-19 spikes. While we haven't seen anything that would significantly disrupt our business, we want to hear on the side of caution as each spike represents its own challenges. We do expect the new product volumes to continue to grow and that's based on the trends we've seen so far this year. 36:08 On ASPs, on balance we expect Signatera ASPs to improve this year driven by expanded reimbursement and higher mix of recurrence monitoring tests. This improvement is going to be held back a bit by the volume we are driving at tumor types that are not yet reimbursed, but we do expect net improvement in ASP this year. We've taken a cautious approach with the potential guideline inclusion and broader reimbursement in colorectal cancer. Solomon had that on his coverage roadmap and described it as a goal for 2022 and 2023, so we are keeping that potential benefit out of the financial guide for this year right now since we don't fully control the timing. 36:43 We expect stable ASPs in Prospera and Horizon, which is modestly more bullish than where we've been in the past. As a reminder, we normally bake-in some ASP erosion into these products, but the underlying trend was much stronger than they have in the past several years. On prenatal testing, we think the trends for Panorama was strong, as I mentioned and expect continued linear improvement and reimbursement. Steve mentioned the colorectal screening program, which is a bit of a wildcard since we haven't formally signed all the proceeds. The guide incorporates what we expect right now, which is that we offer a narrow test at a lower price build on a test specifically later. Practically speaking, the counter of this should be significant volume growth for any [indiscernible] volume and complementary products. In the guide, however, we've been very cautious with this part of the forecast as there are a lot of details that we worked out and we may not participate at all. 37:33 So, the contribution in the guide is an increase in volume from this narrower panel at a lower gross margin with room left for upside on the other women's health products. The gross margin guide also reflects the expectation that we drive a lot of first time Signatera patients as we talked about. Our gross margin in 2021 pro forma for the [indiscernible] was about 46.7%. So, this gross margin guide holds margin stable as we get through this launch phase with Signatera. 38:01 Steve touched on the path of 22q guidelines today and while we feel very good about that process, the guide does not incorporate any meaningful change to 22q reimbursement given that it's not fully in our control. The drivers for R&D and SG&A are consistent with the Q4 trends I described. We've built a strong commercial team that we think can now get significant operating leverage from this point coupled with a step up in clinical trial spend in 2022. So, the net of all that expanding revenues, improving ASPs, scaling operations is that we expect the 2022 cash burn to be roughly similar for last year. We think the commercial team build out is reflected in this guide and to remain relatively stable in future years, even as the volumes continue to grow in these large markets we're pursuing. 38:50 So, even as we continue to make investments in R&D and lab capacity, we expect cash burn to start to go down meaningfully in '23 and 2024 based on the markets and products we are pursuing today. It's worth remembering that we've gotten scale like this before. In 2019, we said the number one goal of the company was to get the women's health offerings to cash flow breakeven. We did that by driving growth through ever greater efficiency from our sales teams, delivering excellent data and securing broader reimbursement. 39:20 Transplant and oncology offer a few new advantages. Many of the markets are much larger, most patients receive repeat testing and we think the path to broad reimbursement is shorter, but fundamentally we are pursuing the same strategies that worked for us in the past. So it's an exciting time for Signatera and we are very pleased to have been able to serve these results with you. 39:40 Now, I'd like to turn it over to Q&A. Operator?

39:46 Thank you. [Operator Instructions] And our first question comes from Tejas Savant from Morgan Stanley. Your line is now open.

40:04 Hey guys, good evening, and thanks for the time here and congrats on a strong finish to the year and a healthy outlook. Maybe just to kick off on the guide, one for you, Mike. Can you share some color on what's included in terms of Signatera and Prospera contributions relative to reproductive health at least directionally? And on a related note, given how far ahead of at least all model you were in terms of both Signatera and Prospera volumes. Can you give us a sense of what fraction of that volume you're reimbursed on at the moment?

40:40 Yeah, Tejas. Thanks for the question. Yeah, so obviously as these businesses ramp, they're going to contribute an ever larger proportion of the volumes in the revenue as we go forward. I think that's the way that we've guided it. Having said that, I mean there is a lot of pretty exciting dynamics happening in the NICC space that may end up having women's health business grow quite rapidly, but we are obviously we've been more cautious with that type of guide. 41:11 So, directionally you seem to be an increasing portion of the other revenue for 2022 and I think that's implied by the ramp that you've seen here in 2021. The proportion of Signatera that's reimbursed today is a minority of the volume, just because of where we are on our reimbursement timeline. So, we've got volumes coming from multiple different cancer types, majority of which is colorectal cancer, but a significant minority is coming from other cancer types. They're are not yet reimbursed, although were implied on a number of additional reimbursement from [indiscernible] number of additional tumor types. 41:57 And then within colorectal cancer, of course, we're just reimbursed from Medicare and Steve and Solomon laid the pathway out where we think we can potentially broad that guideline inclusion. So, right now it’s a minority that's getting reimburse and that's what's -- that's obviously reflected in the guide, although I think some commentary now presuming that we do make some progress in the – in terms of the overall Signatera ASP [indiscernible] .

42:20 Got it. Super helpful. And one quick follow-up for Solomon here, if I can. Solomon on the MRD front, some of your peers here are starting to talk about more than 16 markers for their version of a tumor informed panels for MRD. I was just curious as to your latest thoughts on what do you think where diminishing returns to sensitivity begin to kick in in terms of the number of variants? And then on the screening side, any early color from the FDA in accepting your Aarhus cohort in lieu of a prospective trial for colorectal screening?

42:55 Yeah. This is Steve, I'll take that. And then Solomon you can jump in. So, first of all --

43:01 Sure.

43:01 I think it's important to see on additional variance that were already running broad variant panels in the RUO lab and we have been for quite a while. So, if you remember with Panorama we multiplexed 13,000 probes in a single reaction. So for us to develop an assay with 100 variants or 200 variants, it's really easy to do. We do that all the time. I think we chose 16, because we thought that was the right optimization for performance and I think largely that's turned out to be true. 43:39 So obviously, we have the capabilities to run broader panels, but we're really pleased with the performance that we're seeing today. I mean, look at our volumes in MRD testing, we think we're now getting very, very close to being the market leader overall in the entire field of liquid biopsy, not just including MRD testing based on the test that we have on the market today. 44:02 So of course, we're always looking at opportunities to improve. There is multiple different things that we're doing right now. Investing in the future of Signatera, additional variants is something that we can do easily if we chose to launch that in the clear setting. 44:19 I think on early cancer detection, we're not giving any additional updates today. I think our plan is to generate some data and hopefully have that towards the end of 2022, early 2023 that we can share publicly. We do plan on meeting with the FDA to discuss the all health study. And as a reminder, the all health study is not just a biobank of randomly collected samples. I mean this was an IRB approved early cancer detection study, very similar to many of the other studies that are being run today where samples are collected and then they are banked and then they'll run at a singular time. So, these are all prospectively collected samples under an IRB for the purposes of validating early cancer detection. 45:08 The only difference is that, we've been swapped in as the biomarker of choice versus I think others were the biomarker was defined initially. So I think we're in good position, we're going to get some feedback. But you should plan on getting some data towards the end of the year or the beginning of next year.

45:29 Got it. Very helpful. Thanks for the color guys.

45:33 Thank you. And our next question comes from Puneet Souda from SVB Leerink. Your line is now open.

45:43 Yeah. Hi guys. Thanks for taking my questions. So, the first one is on NIPT and another one on Signatera. Maybe just for the California screening program, I mean, could you maybe size that opportunity for us and what's the timing of that? And could you elaborate, is that something exclusive to you or should we assume that you're going to maintain your sort of market share in that large opportunity?

46:13 Yes. So, as far as market share goes and things like that. I mean, we know that we've been selective. I believe there are other labs that are also being considered, although we don't know the exact details. It doesn't mean that we're definitively participating. But if we do, we think it's going to be a lower-priced assay where we will offer additional less content. We've applied for an individual PLA code there, we think we'll get to sell additional content alongside the program. So, I think we're in good position, but there's a lot of details that still need to be worked out there before we can really give a lot of the specifics. 46:59 Mike do you have any other comments there?

47:03 No, I think that covers it.

47:08 Okay. And then on the Signatera and Altera volumes. I appreciate you providing the details here, but it was clearly a significant pickup in the fourth quarter. And it's clear that you are emphasizing volume growth and indication expansion while ASP is expected to grow more longer-term. I think the biggest question here from investors is just sort of the growth rate that you're seeing here in Signatera and volume. Maybe just give us a sense of how should we imagine that for 2022 within the context of your guide? And given the fact that what Solomon said is, you're only 10% of your commercial footprint right now. So a number of factors are going into it. So anything you can provide in sort of the growth rates that we should be assuming for Signatera. I know it's still somewhat early days for the product, but that would be super helpful? 48:07 And then have a -- just a final quick one for Mike on gross margin. Just want to understand what's the longer-term gross margin objective, the gross margins are a bit softer versus our expectations for 2022? Thank you .

48:22 So, maybe I'll comment briefly on just kind of Signatera trajectory and then Mike, you can talk about how we incorporated that into the guide. So obviously we've given an annual volume here. But of course, this means on a sequential quarter-on-quarter basis things are accelerating. I mean we feel like at this point, we're doing exceptionally well from a volume standpoint, significantly better than any MRD company out there. I mean things are going really well. I mean we sort of know what other companies are reporting out publicly with regards to like their entire company's book of liquid biopsy volume. And as we said, we think we're very, very close to being the entire market leader for the entire book of liquid biopsy. So, things are on a good trajectory. 49:19 Mike, do you want to talk about the guide?

49:22 Yeah. So, I think Steve covered it in terms of the volume growth and the trajectory kind of similar to the answer to Tejas' question. I mean, we expect both of these products based on the trend that we've seen so far this year to continue to contribute and continue to grow. So there is an increasing percentage of the acquired volume gross percentage here. Part of the reason why we want to share the numbers -- the volumes is [indiscernible] gross margins. I mean because this is a relatively low gross margin test right now, but over time, clearly a high gross margin test. We feel like it's worthy to be driving this volume here despite the immediate term pressure on gross margins. 50:05 As we talked about it in the past, I mean nothing about the past year just waiting me from that concept [indiscernible] be a 70% plus gross margin business overall, over time. And I think we can -- we've shown a lot of ability to drive gross margin traction for those of us on the call who have been around for 4, 5 years and recall gross margins in the low '30s range and we've driven them to this level. 50:32 The gross margin guide implies basically a stable gross margin despite a new wave of Signatera test they're coming in ahead of reimbursement. So, what that implies is that the other products are really delivering a lot of gross margin leverage, so that's exactly what we're seeing in Prospera, Panorama, and Horizon for example. So, this is a dynamic situation, but I think on balance it's a bullish thing and we think it is the right thing to do to make the investment just given the demand that we're seeing and the traction that we have toward getting reimbursement for MOLDX and additional cancer types.

51:11 Got it. Okay, helpful guys. Thank you.

51:16 Thank you. And our next question comes from Tycho Peterson from JP Morgan. Your line is now open.

51:24 Hey, good afternoon. On multi-cancer MRD you mentioned you've submitted some additional indications to MOLDX. Can you just clarify which those are? And I guess you're expecting 5 to be reimbursed next year, so have you submitted all five at this point? And then you also alluded to some adjacent products like Altera, can you maybe just clarify what you're talking about there and if that could come this year?

51:47 Yeah. So the guidelines basically state that you have to have published data before you can submit the tech assessment. And so, if you look at the areas where we published data, I think we now have 15 peer-reviewed papers in Signatera and we think this year we can publish an additional 20 or more papers that we have 100 different clinical trials that are ongoing right down in the field of Oncology. So I think it's really targeting in on where we published data, those would be the candidates for submitting to MOLDX. And we think this -- I think not only it's great because we get the performance of our product out there to talk to physicians, but we think we're leading the field and we have a significant margin on the number of studies and number of papers that are out there. 52:43 So, things like bladder for example, it is one of the areas where I think it would make sense for us to submit it so forth, you can go through the list if you go back to the slide of what's been published. Then as far as additional content goes, I mean one of the strategies that has worked really well for us in women's health that we talked about on this call is offering additional content and additional products at the same call point. And so in women's health, if we sell a Panorama tests we can also sell a Horizon carrier screening and we can also sell 22q screening. So we think long-term oncology will be the same way where there'll be a portfolio of products. So things like Altera, for example, therapy selection, something that we already have on the market today. I think liquid biopsy therapy selection, it's something that probably makes sense. 53:43 And so, as we talk about our R&D budget and the spending that we're doing there, a lot of that is going towards making sure that we have a rounded portfolio long term and that we continue to invest in a very significant way into enhancements to Signatera.

54:05 Okay, that's helpful. And then on Panorama, can you just update us on your latest thinking around microdeletions, could we get something this year?

54:15 Yeah. So, I think we're -- at this point we're sort of in a holding pattern. We're waiting for the guideline committee to meet and then we're going to see what the results are. I think it's definitely possible we can get something this year. I think the SMART -- the big news that's happened this year is that the SMART study was published in The Gray Journal and the results were excellent. So all the other earnings calls will be talking about this, we didn't have the results published. And so now I think we're at a point where the guideline committee could meet and they can assess whether they want to incorporate this into guidelines. 54:53 So, if you go back to prepared remark, we sort of kicked off all the different reasons why we think this might meet the criteria, but ultimately it's out of our hands, but it certainly meets the criteria and definitely without a doubt the publication that was -- the study that was done was very significant and the fact that is now published makes it eligible for coverage.

55:23 Great. And then just lastly, I know you don't want to talk about screening much at this point, but can you just clarify with the data set that you have, will you be doing other cancers in parallel with that dataset or should we just think about data later this year around colorectal?

55:35 Yeah, I think the initial readout is going to be colorectal, but I think longer term, it makes sense to have a multi-cancer offering. But the initial readout that we'll be doing and the initial, I think, launch will be in, in colorectal.

55:53 Okay. Thanks.

55:57 And thank you. And our next question comes from Catherine Schulte from Baird. Your line is now open.

56:06 Hey guys, thanks for the questions. I guess first maybe on the ASP assumptions for NIPT in the guide. Can you just talk about where you are in terms of getting state Medicaid plans to cover average risk and what kind of progress do you expect on that front in 2022?

56:23 Yes. So, that's been an area of continued improvement. I think there is still some commercial plans that we're still working on. But there's a long tail of plans including State Medicaid plans that are still kind of in the process of putting coverage in place. And we think that has improved on an annual basis and is going to continue to improve in the future. So certainly, we're expecting some improvement there. 56:53 Mike, do you want to comment on kind of your thoughts on like NIPT ASP trajectory?

57:02 Yeah. I mean I think what we've -- what we've presumed in the margin and the guide and the model is just kind of modest and linear improvement in the NIPT ASP over the course of the year. And I think as we've talked about before, I think that's something that is poised to continue over a couple of years as we just win reimbursement coverage long tail. It's not just coverage decision it's, for example, getting prior authorization requirements removed, which helps us actually sequentially in the quarter on the NIPT ASP, as I mentioned in the prepared remarks, so there is a laundry list of activities to pursue there. And on balance, things look quite positive for NIPT ASP trajectory.

57:53 Okay, got it. And then you had a big step up in licensing and other revenue in the quarter, were there anyone timer's in near it? Was it really RUO Signatera driven?

58:05 Yeah. I think here is a mix. We have -- as we got to some milestones with our progress will Foundation Medicine that was a contribution, but then also, we have very strong continued progress with Signatera Pharma, I forgotten to mention in the prepared remarks.

58:26 Okay. Great. Thank you.

58:31 Thank you. And our next question comes from Max Masucci from Cowen & Company. Your line is now open.

58:41 Thanks for taking the questions. One on transplant. Just curious what portion of the transplant volumes are coming from your competitive wins versus greenfield or new adopters? And if the mix of volumes coming from competitive wins versus non-competitive has shifted at all over the last 12 months?

59:03 Yes. So, I think we're doing really well in transplant. As we've said for a long time, but now I’m glad we finally are able to really share the volumes with you guys. And we did -- we're doing healthy, greater than 42,000 units last year, I think that's really exceptional. We see a mix there, there is some competitive wins and there are some greenfield wins. We're now like working with a very, very significant portion of the top transplant centers, we've outlined and sort of picked through that before, but if you go through the top 10 and you go through the top 50, I mean we're working in the premier centers. Many of the top centers. So, we're doing really well. 59:50 I do think our competitors in the space have done a good job growing their business and they've proven that there is a very significant growth trajectory here and a very significant business here. And so, I think we are on that same growth trajectory now and we're pleased with our performance and we're continuing to see momentum. I think one of the things that's going to accelerate our ability for competitive wins are these 3 major peer-reviewed papers that we expect to come out in 2022. That's the Trifecta study in kidney, that's the large multi-site study in hearts and that's the prospective -- the large prospective trial on lung that we described earlier in the presentation. So, I think we're in a good position, but things are – we have the potential to accelerate.

60:50 Great. Maybe one for Solomon. I’d be curious to hear about the work you're doing in multiple myeloma and any other blood-based cancers and just curious if you're using bone marrow or blood upfront to design the follow-up test for myeloma?

61:09 Yeah. We're -- thank you for the question. We're very excited about solving a pretty big clinical unmet need in monitoring for patients with multiple myeloma. Today, those patients in order to get MRD testing done need to get serial bone marrow biopsies, which are painful and expensive, and really therefore underutilized. And so a lot of patients just aren't getting enough monitoring or as much as they want and as much as physicians think would be useful. We're able to do to run Signatera the same way we do in solid tumors, so running it off from a blood sample, getting cell-free DNA and analyzing the personalized assay there. We design that personalized signature from an analysis of several different specimen types that we've done in research. We presented data at a conference last year showing really strong performance that exceeded that what you'd get from flow cytometry using FFTE samples as input, followed by custom design of the assay and analysis in the plasma. So we think this could really improve care for thousands of patients and we're looking forward to talk more about that when it's ready for market.

62:31 Great, thanks for taking my questions.

62:36 And thank you. And our next question comes from Mark Massaro from BTIG. Your line is now open.

62:45 Hey, guys. Thanks so much for the disclosures on oncology and transplant. I guess on the oncology side, is it safe to say that the vast majority of the split between Signatera and Altera is on Signatera itself? And then secondly, I think in the past you've talked about Signatera all in ASPs at around $500 per time point, is that right? And then thirdly Altera, should we think of that is getting reimbursed similar to like a FoundationOne?

63:20 Yes, so let me make a couple of comments. And then maybe Mike, you can talk or Solomon about the ASPs a little bit. But yeah, the vast majority of volume here is Signatera. I mean, we launched that before Altera, but also it's a much, much bigger opportunity. And then we're only really promoting Altera in a targeted way as well. I mean, generally for patients that want to get IO monitoring that are getting Signatera set up, we'll then also add Altera because of the convenience factor. So yeah, vast, vast majority in Signatera, vast majority in colorectal although we are starting to see growth in IO monitoring and then as we said in the call, more of the pan-cancer volume coming in. 64:13 I think on the ASP side on Altera, I think there is FDA approved versions which get the premier ADLT pricing, and we don't expect to get that. But I think we'd be participating to get more general CMS rate. But, Mike, do you want to talk about ASPs in general for Signatera or Alterra?

64:38 Yes, so Mark that's not right in terms of the ASP range for Signatera and you can see that that's a far cry from the price we get when we actually get paid. So, we have the ASP rate at $4,500 and the adjuvant time point ASP is in the $2,000. So, what that means is just we're driving that volume that are not yet reimbursed for Medicare or their commercial lives. And those are volumes that we think we can get reimbursed in the relative near term. So, we're pretty excited about the ASP trajectory for Signatera given the reimbursement wins with [indiscernible] it does mean that at the moment ASPs are just quite mature. And as we've said in the prepared remarks, even net of volume growth in Signatera we think some of these factories will drive the ASP higher in the year and that includes the higher mix for current monitoring tests. And just a broader plan B to reimbursement indications for MolDX.

65:48 Okay, great. And then, it certainly seems like there could be a step function increase in MRD testing as there -- now that Signatera IO is reimbursed. Is that fair – I means, the 76,000 was certainly very impressive for 2021, but it seems like you guys are just getting started, '22 in my opinion could be a step function increase. Would you agree with that? 66:11 And then second part, have you received pricing yet for Signatera IO?

66:18 Yes. So, I think we certainly are expecting growth, I mean the trajectory is excellent right now. And as we said it kind of accelerating throughout 2021. I think that the MRD testing opportunity versus the monitoring opportunity is still going to drive a lot of the growth. Although IO is a big opportunity and we're starting to see that accelerate. I think just when you just look at the number of patients available and I think where physicians are more comfortable now using the testing, it's in that that CRC MRD and recurrence monitoring setting. So, I would expect the vast majority will be there, but IO is certainly making a contribution and that contribution is growing. 67:10 Point me the second part of your question, I apologies?

67:13 Yeah. Have you received a price for Signatera IO yet? And if so, what is that?

67:19Yes. So we're still in the final stages of that, it's just a standard individual discussion with the MolDX program. I think our expectation is that's going to be roughly similar to the adjuvant colorectal pricing where there is a bundled price for the initial testing that occurs. And so, we think it will be like roughly similar to what we saw in that adjuvant bundle.

67:49 Got it, okay. If I can sneak one final one. It looks like, I believe you're getting paid something around $2,841 per test for Prospera kidney, are you getting paid on any commercial lives at this time? And then I imagine that the vast majority of that bucket was Prospera kidney as opposed to Renasight?

68:12 Yeah. So right now, there's really not any commercial coverage in place. I think that's an opportunity, but we're seeing -- we're seeing Medicare consistently reimbursed, but really nothing from the commercial plans. And I think that could change over time. I think that's an opportunity for upside, probably about half of the patients roughly are sort of in Medicare at this point. As we're getting volume for transplant centers and also from the committed nephrologist, there are a decent number of commercial lives there. The contribution from heart and lung is currently available on the market, we're actually seeing good utilization there, but we're very, very early stages. So those aren't really incorporated here in a meaningful way. And then Renasight is in here, it is a meaningful portion of this, but the vast majority is Prospera.

69:11 Terrific. Thanks so much.

69:16 And thank you. And our next question comes from Dan Leonard from Wells Fargo. Your line is now open.

69:26 Thanks for taking the question. Could you share your thinking on the topic of price sensitivity in NIPT? Does the California contract signaled more price sensitivity or is that an isolated incident?

69:41 Yes. So, I think the -- what we think is the situation in California, we're still working through the details. There is going to be a lower priced offering. There is going to have very limited content. And I think we've applied for a specific PLA code from the AMA, which will signify the priced specifically for that more limited content. So, I think California is unique, they've had a state program for probably, I don't know, 20 plus years. And I think it's not something that really been deployed broadly across the United States. I think we're considering whether we participate or not at this point. If we do participate, we think there is definitely volume upside as we access additional offices that we're not currently in. So it's something we have to assess and take it from there as details emerge and as thing crystallize.

70:47 And Steve, what is narrower content mean? Is this just trisomy 21 or does it include 18 and 13, just what a narrower panel look like?

70:57 Yeah. I think -- I think the details need to be fully flushed out, but from what we understand, it would be probably 21, 13 and 18 for example only.

71:14 Thank you.

71:15 Sure.

71:19 And thank you. And our next question comes from Alex Nowak from Craig-Hallum Capital. Your line is now open.

71:31 Hey, great. Good afternoon, everyone. It looks like the FDA is looking to use near ties investigation in the prenatal test here. Is there some fuel for a broader push to regulate lab to test again. Can you just comment your thoughts there. What FDA's oversight might mean for the business?

71:47 Yes. So, we actually really support any additional regulatory oversight. I mean, we're already very heavily regulated today, but we've looked at this kind of valid act that's out there. We strongly support that. I think the good news is that, we are by far without a doubt the most thoroughly validated NIPT products on the market today. We have significantly more patients that have been studied in clinical trials and the largest multi-site prospective real world studies that have ever been done in this space. So, if there is regulation which we completely welcome, we're in an excellent position and we're in a probably the strongest position out of anybody.

72:40 Okay, got it. And then we've been hearing that the MolDX tech assessment process is actually been taking a little bit longer than what somewhere initially expected, and there is couple of examples out there in the markets. So, I think some of that could be COVID backlogs, but just what are you hearing and then specifically seeing with regards to your own tech assessment process for new Signatera indications?

73:00 That's [indiscernible] forward. But let me -- maybe I'll make some comments and then you can go ahead. Our experience so far hasn't been in that way, but that doesn't mean that there's no delays. I think so far we've after getting the initial colorectal coverage we then additionally submitted a tech assessment for stage IV CRC oligometastatic and we got that I think last fall. So that was a follow-on under the tech assessment process after the peer-reviewed paper came out last spring. And then obviously we got the IO coverage, which was part of the pan-cancer LCD that came out. And we submitted multiple different tech assessments at this point and we're in active discussions. 73:55 Solomon, do you want to comment further?

73:58 Sure. Yeah, I think certainly a year, year and a half ago we were seeing Medicare backed up, they were reviewing so many submissions for new COVID tests coming to market, but that --they're not really seeing that from what we've heard so much in the last few months and what exactly what Steve said, we're not seeing anything out of the ordinary right now.

74:27 That's great to hear. I appreciate the update. Thanks.

74:32 And thank you. And our next question comes from Kyle Mikson from Canaccord Genuity. Your line is now open.

74:41 Great. Hey guys, thanks for taking the questions. So you've mentioned Signatera volume is shifting in favor of the current monitoring settings as an ASP tailwind. I guess just quickly, is there repeat test that you're expecting for 2022 and 2023? Is that mostly CRC or is it other tumor types? And just -- obviously there is implications on reimbursement ASP, unlike a cancer type or cancer type basis. So I'm just curious what you're thinking there for like next year and going forward?

75:07 Yes. So the vast majority of orders that we see where the doctors requesting a protocol or in the field of CRC, but we are starting to see in the additional tumor types as doctors become comfortable they start to move to a repeat order model. So we think over time it's going to be both, but the vast majority of the volume and the repeat orders is in CRC.

75:41 Okay. And then just a quick one for Mike. I think you were talking about this in your prepared remarks, but COGS per test, does that increased or stayed flat in 2021? Could you just confirm if that's true? And then how COGS per test could evolve going forward and why that would decrease as the new products receive reimbursement?

75:59 Yeah. The reason why the COGS per test are going to go down is because we're just really immature in particular on the Signatera COGS. So we touched on the prepared remarks one of the big projects in the R&D lab is to get more efficient on that first time point [XM] (ph), which we think we can do. It’s surely more a matter of scaling up more than anything else. The COGS before the other for the risk monitoring test for Signatera and for NIPT and Prospera really all leverage and a lot of the core technology that we've developed here over time. 76:39 And for example on NIPT, we've got a -- we think a clear pathway from the 160 range to 125 range or so over time and potentially lower. So it’s this similar trajectory across the other products. So that's the path to reducing cost of goods sold per test and we've got a long track record doing that going back 7 years plus.

77:09 Okay. It makes sense. Thanks guys.

77:17 And thank you. And I'm showing no further questions. This concludes today's conference call. Thank you for participating. You may now disconnect.