SOPHiA GENETICS S.A. (SOPH) Q3 2021 Earnings Report, Transcript and Summary

Good day and thank you for standing by. Welcome to the SOPHiA GENETICS Third Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. [Operator instructions] I would now like to hand the conference over to your speaker today, Alexander Kahn [ph], Investor Relations. Please go ahead.

Thank you. Earlier today SOPHiA GENETICS released financial results for the quarter ended September 30, 2021. If you had received this news release or if you'd like to be added to the company's distribution list, please send an email to ir.sophiagenetics.com. Joining me today from SOPHiA GENETICS Sofia are Jurgi Camblong, Co-Founder and CEO; Ross Muken, Chief Financial Officer; Lara Hashimoto, Chief Business Officer; and Philippe Menu, Chief Medical Officer. Before we begin, I'd like to remind you that management will make statements during this call that are forward looking within the meaning of the U.S. federal securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated. Additional information regarding these risks and uncertainties appears in the section entitled Cautionary Statements Regarding Forward-Looking Statements in Exhibit 99.2 of the report on Form 6-K on file with the SEC. Except as required by law, SOPHiA GENETICS disclaims any intention or obligation to update or revise any financial or product pipeline projections or other forward-looking statements whether because of new information, future events, or otherwise. This conference call contains time-sensitive information and is accurate only as of it's broadcast, November 10, 2021. With that, I would like to turn the call over to Jurgi.

Thank you, Alex and good morning, everyone. I'm excited to be here today and welcome you all as we continue on our journey as a public company. On today's call, I will start with an overview of our progress during the quarter under the framework of our five pillars as it relates to network development and platform usage. After which, we will hear from Lara regarding our menu expansion. Next, I will discuss in more detail various partnerships and relationships which we are excited about. Finally, I will walk through our goals and objectives for the balance of the year and beyond. I will then turn the call over to Ross for a more detailed look at our third quarter financial results and our outlook for the remainder of 2021. To further expand and leverage the power for our platform, we remain focused on the five key objectives we have previously highlighted. First, expanding customer adoption with new clinical customers, especially in the United States. Second, increasing utilization within our existing clinical customer base. Third, further advancing our platform through continued innovation to increase it's capabilities and broaden it's applications. Fourth, developing partnerships and collaborations across the ecosystem. And fifth, leveraging our platform and database to continue to drive adoption with biopharmaceutical companies. Starting with a new customer adoption. During the third quarter, our total customer base continued to grow now including over 780 customers globally. We're especially focused on growing the adoption of our platform in the U.S. market which we view as our largest addressable market opportunity. Additionally we're very excited and encouraged by the size and scale of our new customer relationships. In the U.S. we recently signed an agreement with City of Hope, national leader in cancer care, to expand their use of our technology to include a more comprehensive solution for cancer research that will advance analytical performance. Utilizing SOPHiA DDM for TSO500, City of Hope plans to upgrade the quality of molecular research capability to ultimately benefit thousands of patients. Our platform will allow City of Hope to report expert by informatics in one easy to use workflow, including somatic tumor analogies, expanded variants and CMD coverage and more. Our intent is to help elite institutions like City of Hope and lots of old faces around the world extend the scope of their cancer research with our ability to simplify the process without sacrificing the quality of the record. As we have previously highlighted, our growth offering as of yet provide value to any customer in oncology using TSO500. As we continue to expand our presence and offerings, we are achieving great traction within the U.S., where we are penetrating a highly centralized market. As a partner of choice, we also remain independent in our approach to establishing valuable relationships within the industry. Our expectation is that City of Hope will be just one example demonstrating the strong value proposition that SOPHiA brings to the market as our platform capitalizes on the industry trend of decentralization. In the EMEA region, we also recently signed a multi-year agreement with [indiscernible] to support their data analytic initiatives, further underscoring our ability to obtain expanded usage to existing relationships; [indiscernible] is one of the largest cancer treatment centers in Europe and is considered among the top specialized hospitals in the words, along with such prominent names as the Mayo Clinic and Dana-Farber Cancer Institute in the U.S. In addition, we see similar dynamics in other geographies around the world. For instance, we have signed a competing deal in the APAC region to support the decentralized usage of liquid biopsy testing. As a transition toward decentralization is ongoing, we're now seeing this not only hereditary and solid tumor testing but incrementally as it relates to liquid biopsy as well. Altogether, we endeavor to expand our base of relationships with additional agreements. And in conjunction, with the opportunity to bridge one with another, we see many expansion, further increasing the size of the network as Lara will discuss in more detail later. Now moving on to our second objective regarding the utilization of our platform, we employ a land and expand commercial model that is focused on winning new customers and then driving greater utilization of our solution by those customers. Once we have secured the customer, we use our direct sales force to build further engagement and help that customer profitably increase testing operations. We also target additional clinician users and departments within each institution. During the third quarter, total and recurring platform customers grew from 367 customers in the second quarter of this year to 375 customers. And the total number of analyses for the quarter was approximately 62,000. The strong year-on-year momentum is underpinned by growing demand from new customers as well as existing customers, broadening their usage to growing number of applications. I'm also excited about our momentum in North America. In the third quarter, regional platform analysis volume grew 67% year-on-year and 11% quarter-over-quarter. During the quarter, we also added several key customers in the region. Now, shifting to our third objective related to menu expansion, I will turn the call over to Lara Hashimoto to discuss some exciting developments in further detail. Lara?

Thank you, Jurgi. At SOPHiA, we are continuing to invest in scientific innovation to land new customers and bring new high impact content to our customers through regular updates to our platform. This menu expansion includes new features, new applications, new data modalities and new services. Furthermore, we intend to augment our offering across a multi-modality framework, generating novel insights enabled by our expanding data assets, including genomics data, radiomics data, clinical data and future additional data modalities. Later on, Jurgi will also discuss two exciting new products we have launched in oncology and rare diseases since our last earnings call to fuel our land-and-expand model. Building on our suite of over 200 oncology applications, we have launched a new innovative algorithm which applies the power of our advanced analytics with a diverse datasets generated in our platform to accurately detect fusions, gene expression and other mutation classes in RNA. This new algorithm has been designed to get maximum information from precious samples from which there is limited tissue, such as lung biopsies. With growing therapy options on market and in development for lung cancer, the ability to make the most of precious tissue sample is critical for researchers. At SOPHiA, we continue to see strong demand for decentralization, an increasingly important trend in the industry. In our continued pursuit of decentralizing data-driven medicine, we are on track to launch early next year our clinical decision support solution comprised of ONCOPORTAL Web and reporting tool. ONCOPORTAL Web is our newest genomics interpretation tool developed for the molecular pathologists or variant scientists, who are facing a growing volume of complex genomic cancer data as labs adapt larger CGP or comprehensive genomic profiling panels. ONCOPORTAL was designed to simplify the interpretation process through transparent logic and clear visualization. Importantly, ONCOPORTAL Web employs molecular profiles which is a more intuitive way to represent co-occurring biomarkers, reducing the probability of missing interfering variance while improving the efficiency of the interpretation process. With an increasing number of targeted therapy options, this feature is becoming more important as a potential combination of actionable mutations may expand exponentially. To support labs in a decentralized setting, we will be launching a new reporting tool which has an intuitive drag-and-drop feature for labs to design their own report that is tailored to local oncologists needs, namely a clear and concise format. ONCOPORTAL Web, the pathologists can select which variant and supporting information to automatically populate the report generated on the SOPHiA platform. The reporting tool gives labs the flexibility to tailor the report to local needs. The ability to create, customize, control and change the format and content of the board is particularly valued by U.S. laboratories. With our expanded menu and additional capabilities, we are getting closer to our goal in cancer research of getting the right result to generate the right insight by the end user in a digestible report. This requires a comprehensive oncology offering that excel in three areas. One, accurate detection of a broad spectrum of variants at high sensitivity which is one of SOPHiA GENETICS core competencies that has evolved from our proprietary bioinformatics algorithms, combined with our diverse network representing more than 850,000 genomic profiles in over 70 countries. Two, interpretation tools that can sort through a multitude of knowledge sources with a focus on quality over quantity of insights. And three, reporting these findings in a format that can be quickly digested and acted on by the end user. At Sophia, our team is excited to share our progress and all of these new developments. And in a moment, Jurgi will discuss how we are moving beyond genomics to multimodal data in oncology, building on our increasingly expanding offerings. Overall, menu expansion continues to be a significant part of the SOPHiA story and I am thrilled to be able to share these updates with you all today. With that, I now turn the call back to Jurgi. Jurgi?

Thank you, Lara. You've already heard us talk about genomics in the context of oncology in which we have made tremendous progress. We have also discussed the development of our capabilities as well as our participation in prospective and retrospective observation studies, the main one being deep-lung. Along those lines, I've previously discussed the ambitious deep lung study is well on it's way. And as planned, we will expect to announce details of this study by the end of this year. Moving on to our fourth objective of partnerships, we are committed to developing partnerships and collaboration across the healthcare ecosystem with companies who provide products and services to our customers. We believe that each new collaboration we develop helps facilitate further adoption of our platform, the evolution of this solution that we provide to customers and the growth of our network and product capabilities. A larger network enables us to continue to collaborate with customers to develop new solutions and to commercialize these solutions, benefiting all users across the healthcare ecosystem. Our established partnerships continue to be productive in expanding our menu offerings. With the launch of two new products, we are affirming our decision to be technology agnostic by complementing our partners with our analytical capabilities. We have extended our platform genomic analytics capabilities to another industry-leading Exon, SureSelect Human AllExon V8. The platform is tailored to the unique features of this product, supporting Agilent customers. Additionally, we have made our SOPHiA platform available to use with MGI's Techo [ph] solution which is already gaining traction; this addition further demonstrates the robustness of our data analytics capabilities and reaffirms our commitment to providing users with a universal platform for bioinformatics solutions. Further, as some of you may be expecting, we have exciting news that I am proud to share. In July, we entered into a letter of intent with GE Healthcare and we have now executed a final Master Alliance Agreement. Under this agreement, we will be working together with GE on a variety of opportunities in the healthcare market and collaborating on different initiatives and projects in the fields of digital oncology and radiogenomic analysis. The first project we're working on together relates to the creation of infrastructure to integrate data between GE's Edison platform and the SOPHiA DDM platform, as well as commercial collaboration focused on co-marketing and pilot-sized equipment in the digital oncology and radiogenomic analysis space. We also intend to work together to combine our and GE's existing capabilities to jointly develop and provide multimodal analysis. This new alliance is an important milestone as we see many future opportunities to help accelerate the adoption of our platform worldwide. Furthermore, while today our centers are tailored to a specific application, this alliance could support our transition from the application setting to the enterprise setting. We are thrilled with this alliance with GE Healthcare. It is highly consistent with our collaboration philosophy and we believe this could be a significant catalyzer for SOPHiA as it could expand the size of our network and degree of access. We intend to pursue more audiences because we strongly believe that relationships like the one with GE will allow us to move faster. Through collaborations, we believe we will be able to accelerate innovation, more quickly increase the size and scale of a network, connect with a larger volume of data and offer a greater expansion of capability. This all together shows why we create and foster collaborations and we are excited for what comes next. Moving now to the exciting array of biopharma market. With regards to this piece of objective, we are making excellent progress in this arena. As a testament of our continued momentum, I am excited to announce that we have signed an agreement with AstraZeneca. And as SOPHiA continues to make strides in collaborating with leading global biopharma companies, we see opportunity to pursue similar agreements going forward. In this important market, we currently serve pharmaceutical and biotechnology companies and clinical research organizations, CROs. We continue to promote our current products and services which we believe will strengthen existing collaborations with biopharmaceutical companies as well as lead to new relationships. Additionally, we plan to develop new offerings for biopharma as we expand the number and type of new applications and data modalities in our platform. SOPHiA has achieved great performance in executing and in gaining more access and data in clinical market. We continuously find ourselves better positioned in serving the biopharma market. We believe these opportunities go hand in hand as success in one arena supports success in the other. Along these lines, last quarter we discussed great traction in the vital area of homologous recombination deficiency, or HRD, in clinical markets and mentioned that we had tremendous momentum within the biopharma market as well. HRD is a complex biomarker, notably important for PARP inhibitors that helps identify whether a cancer patient may respond better to specific treatments and it's use could ultimately lead to personalized therapies that benefit the individual patients. HRD is one of our most exciting product offerings at SOPHiA and we are already seeing strong interest in this solution across our biopharma customers. We have initially focused on developing our solution using ovarian and breast cancer tissue types but we believe other cancer types, including prostate, pancreatic, bladder and urethral biliary tract and head and neck cancer will require HRD testing. Those are being investigated using PARP inhibitors across a continuum of care in over 150 actively recruiting clinical trials as reported on clinicaltrials.gov. Conceptually, our approach could also be relevant beyond PARP inhibitors for other targets that are part of the HRD pathway and if mutated could lead to genomic instability. I am pleased with our progress across the biopharma landscape and we are now investing heavily to expand this team to meet the growing demand for our services in these market segments, including our HRD offering. As we look ahead to the remainder of the year and into 2022, we are focused on continuing to grow across these five pillars, particularly in the U.S. Overall, I am very proud of the progress our team has made to date and I am confident we are well-positioned to execute our strategy going forward. There is much to look forward to at SOPHiA, including our exciting progress in HRD, growing penetration in North America, expanding opportunities with biopharma partners and potential inorganic growth opportunities. With that, I would now like to hand the call over to Ross to discuss our financial results. Ross?

Thanks, Jurgi. Total revenue for the third quarter of 2021 was $10.4 million, compared to $7.2 million for the third quarter of 2020, representing a 45% increase. As a reminder, our third quarter revenues were impacted by the direct and indirect effects to the COVID-19 pandemic as well as seasonal trends. The increase in year-over-year revenue for the third quarter of 2021 was primarily driven by new customers onboarded onto our platform and improved usage rates across our existing customers, particularly in North America. Our strong growth during the quarter was underpinned by three key SOPHiA-centric KPIs. They include platform analysis volume growth, recurring platform customers and average revenue per platform customer. Our core platform customer base is comprised of those who access our platform through our bundle and dry lab offerings. During the third quarter, we saw significant growth as we onboarded new customers through our land strategy and grew usage rates through our expand strategy. Platform analysis volumes increased to approximately 62,000 analyses in the third quarter of 2021, compared to approximately 41,000 analyses in the third quarter 2020. Recurring platform customers grew to 375 customers in Q3 of 2021, compared to 318 customers in Q3 of 2020. In addition, our average revenue per platform customer during the third quarter increased to $89,000, compared to $67,000 for the prior year period. Additionally as a software company, we also track a number of industry specific KPIs which we believe are also indicative of our underlying financial performance. These key software KPIs include net dollar retention, churn rate and LTV to CAC ratio. Even with the impact of COVID headwinds in 2020 and 2021, our net dollar retention for the rolling 12-month period has improved to 137% which is competitive with top decile SaaS companies. The metric indicates that we are growing our revenue generated from existing customers net of churn, highlighting the effectiveness of our expand strategy. With respect to our churn rate, I would note it's remained at a historical low of less than 1% of total revenues for the first nine months of 2021. Furthermore, our LTV to CAC ratio remains above the industry coveted three times threshold, demonstrating our ability to efficiently generate additional value through investment and customer acquisition. Gross profit in the third quarter of 2021 was $6.5 million, an increase of 53%, compared to a gross profit of $4.3 million in the third quarter of 2020. Gross profit margin was 63% in the third quarter of 2021 as compared to 60% in the third quarter of 2020. Adjusted gross margin was 65% in the third quarter of 2021 after adjusting for the capitalization of our software development expenses. Gross margins improved year-on-year as a result of continued improvements in managing computational and storage related cost while adjusted gross margins were in line with the same period last year. Total operating expenses for the third quarter of 2021 were $27 million, compared to $13.7 million in the third quarter of 2020. R&D expenses for the third quarter of 2021 were $7.7 million, compared to $5 million in the third quarter of 2020. This was primarily due to an increase in employee-related expenses for R&D initiatives related to the development of new products and applications. Sales and marketing expenses for the third quarter of 2021 we're $7.7 million, compared to $4.1 million in the third quarter of 2020. The increase was primarily due to an increase in headcount-related expenses, commissions and sales-related costs and higher variable expenses, including marketing and travel-related expenses as COVID-19 restrictions continue to be lifted. General and administrative expenses for the third quarter of 2021 were $11.7 million, compared to $4.6 million in the third quarter of 2020. The increase was primarily driven by continued scale up of the organization, the development of quality-related initiatives to support potential expansion of the business into more regulated markets, increased share-based compensation expenses related to IPO, an IPO and new public company-related expenses. Operating loss in the third quarter of 2021 was $20.5 million, compared to $9.4 million in the third quarter of 2020. Net loss in the third quarter of 2021 was $21.2 million or $0.35 per share, compared to $10.5 million or $0.24 per share in the third quarter of 2020. Adjusted net loss in the third quarter of 2021 was $18 million or $0.30 per share, compared to $9 million or $0.20 per share in the third quarter of 2020. Cash and cash equivalents were approximately $281 million as of September 30, 2021. Turning now to our outlook for 2021. SOPHiA GENETICS now expects full year revenue for 2021 to be greater than $40 million, representing growth of at least 41% over the prior year. With that, I'd like to turn the call back over to Jurgi for closing remarks.

Thanks, Ross. I'm immensely proud of what we have accomplished SOPHiA and continues to be even more excited about what lies ahead of us. 2021 as being and continues to be a momentous year for our organization and we remain confident in our objectives and mission going forward. We're still at the onset of our ambitious journey and look forward to updating you as we continue our progress. With that, we now open up the call for questions. Operator?

[Operator instructions] Our first question will come from the line of Tycho Peterson from JPMorgan. You may begin.

Hey, good morning. Jurgi, I want to start with maybe the menu buildout strategy and just thinking about some of the more complex analysis, comprehensive genomic profiling and HRD. Can you just talk a little bit about early interest, traction and then how you think about those impacting ASPs over time as well.

Yes. Thank you so much, Tycho. Indeed, so what we observed is that the more, I would say, data-driven medicine, procedural medicine goes ahead; the more the biomarkers be contacted [ph], right. So the more bioinformatics become essential in identifying these biomarkers. And along those lines as well what we observe is that as these biomarkers are being now added into the biopharma pipelines, there is a chance that they will be better reimbursed. And so as you anticipate that the ASP will go for these types of applications.

Okay, that's helpful. And then on GE, congrats on getting that deal finalized. Can you maybe just talk a little bit about next steps, timelines. Are there particular milestones we should be paying attention to from the outside from that partnership?

Sure. I will take you to high level and then let Ross develop. So as you may remember, we had mentioned that the intent here is to partner with a player, who has 4 million imaging devices around the world. And so by partnering with them, accelerate the potential of breaking data silos across hospitals but as well across data modalities. And the two first initiatives we're working on are regarding the commercial co-promotional platforms as well as the connectivity of their Edison system which is locally with our SOPHiA DDM platform to accelerate this, breaking -- the break over the data centers. Ross, do you want to give some more color?

Thanks, Jurgi. So obviously, a lot of work, Tycho, has already been done with the GE team since we last spoke so we're incredibly excited about the progress made on a number of the initiatives that will benefit us in 2022 and beyond. I would say, obviously, there's a very large radiology conference coming up soon; we'll have a dual presence there. So I think you'll see continued momentum in our partnership coming out of that event into the New Year. And overall, we'll be updating you over the next several quarters as we start to embark on a number of the key initiatives underlying the partnership. And we'll update you obviously relative to the impact but I would say certainly we have many partnerships and we intend to have many more but this is obviously one where we're committing a lot of resources and as are they. And so we're very excited about ultimately what this will bring for us and SOPHiA as a business.

Great. Maybe the last one just on some of the recent and ongoing trends with the pandemic recovery. I mean you kind of noted the COVID headwinds although you haven't really, I think, quantified. But how do you think about kind of volumes versus where we were pre-pandemic? And can you give a little bit more color on the incremental site ads this quarter, how many were kind of hospitals versus labs? How much is driven by oncology versus neurology versus other parts of the menu? Thanks.

Sure. Thank you, Tycho. So indeed as you see from our numbers, first, we are quite happy to see consistent growth, right, despite the pandemic situation and the fact that there are being as well some companies affected by the pandemic in terms of there are a number of tests that they would deliver to the patients. So in our case, the utilization has continued to grow and the number of hospitals and labs that are using our platform has continued to grow as well quarter-on-quarter, moving from 348 users of our platform for bundle and dry lab in Q1 to 367 in Q2, to 375 in Q3. So, I would say this numbers highlight the importance of our platform and the fact that despite the situation, our model still enables us to grow. For the forward-looking perspective, I leave Ross to address that.

Thanks, Tycho. So I would say in terms of how the quarter played out overall, right, in volumes, I would say it was generally as we expected. Overall, obviously last year we had fairly significant impact from COVID and so we obviously called that out from the prior year. But I would say the quarter essentially came in as we were modeling and, frankly, we're also seeing very strong momentum into the fourth quarter. Hence, the change in guidance and so we're quite confident are on our trajectory. And I would say overall with some of the new product introductions as well as some of the new announcements you heard on this call, we're quite constructive on our ability to deliver on our plan and deliver very strong momentum into '22.

Great. Thanks so much and congrats on the quarter.

Thank you.

Thank you. Thank you, Tycho.

Our next question comes from the line of Tejas Savant from Morgan Stanley. You may begin. Tejas, your line is open. Once again, your line is open, Tejas. You may be on mute. All right, we'll go to our next questioner. Our next question comes from line of Dan Brennan from Cowen. You may begin.

Great. Thanks for the questions. Maybe just starting off just with guidance of 41% at least growth -- at least 41% growth full year. Are you guys comfortable saying at least 4Q will be up sequentially because at the low end of that, you could have a flat sequential quarter. Just trying to get a sense of kind of what we should be thinking about for a minimum for 4Q.

Sure. Thank you, Dan. Ross, can you please answer?

Sure. So, Dan, appreciate the question. So yes, we will see revenues volumes, etc., up in the fourth quarter. I think just given the highly visible nature of our business and multiple drivers, given we obviously went public in the summer. We've stuck to this sort of methodology of guidance. I think you'll see from us a more formal range, right, when we eventually guide for '22. But I can confirm we are seeing very strong demand here in the fourth quarter and October and November and quite confident about the trajectory into 4Q and end of the year. And that we'd note that a number of the key customer announcements you heard on today's call starts late in 4Q and then start to contribute more in '22. And so the magnitude of the sequential, I think, remain sort of consistent with the cadence we were expecting but obviously it should give you also increased confidence for our trajectory into next year.

Great. Thanks, Ross. On the biopharma side, have you guys disclosed how big that business is? And can you give more color on the Astra deal?

Yes. Thank you, Dan. So first I would say we do see more and more demand from the biopharma industry. As you may remember, we started our journey first addressing the clinical work, right. The intent being that the broader would be our penetration the clinical world, the more our offering would get complete, the more data we will capture, the better we will be positioned to serve the biopharma industry. And so I think the announcement around the AstraZeneca deal which is around their PARP inhibitors program today highlights that our strategy is effective. Now we're not disclosing specific numbers of the Astra deal but you can expect in the next quarters that we will announce other similar deals with other biotech or other biopharma companies.

Great, thank you. And I know you talk about the kind of flywheel effect as you add more customers and you drive utilization up. Obviously, it just contributes to the total growth of the business. Is there a point at which you do see like an inflection in the growth? Kind of as you look out beyond Q4, just wondering any kind of color in terms of maybe the duration of the relationship? Or as we think through, could there be a point in the model where growth can fly?

Sure. This relationship will be multi-year with that biopharma company. And indeed, as you said, there are flywheel effects. And along those effects, we expect as well eventually that the collaboration and the development plans that we are now much relating with GE will further accelerate our ability to serve the biopharma industry, right, because we will be in a unique position combining that scale genomic and phenotypic data longitudinally in oncology. And this is, I think, what's the biopharma industry expects to be able to leverage fully on real world data and stratify patients for your post-clinical trial.

Got it. And then, maybe just one more high level kind of question. Just your competitive positioning versus the big cancer labs, Garden Foundation and the like, do you coexist with them? Is it a zero-sum game? Just kind of give us a sense of your success and their success. Just kind of as you go into your customers, are they are they kind of looking to adopt SOPHiA as opposed to them or do you have a lot of customers doing both?

Thank you that question, Dan. So as you know, right, the U.S. market is more centralized. And as we have predicted there is a trend toward decentralization and nowadays we are discussing more and more with different labs and specialty labs and central labs that either wants to be centralized if you like their offering or don't have necessarily all the contacts. And Lara will give you some more color there on what we predict is going to happen in the space as basically we're moving from low to high volume data into a precision medicine. Lara?

Yes. So what we are hearing is that there is a movement toward decentralization. I think we're seeing as precision medicine become standard of care that there's more interest in being able to maintain control of the sample and the data within that institution as well as translate that into a better patient experience in terms of turnaround time and having a holistic approach to that patient.

Great. Okay, thank you very much. Congrats.

Thank you, Dan.

Thank you, Dan.

[Operator instructions] Our question will come from the line of Tejas Savant from Morgan Stanley. You may begin.

Hey, this is Neil [ph] on for Tejas. Sorry about that. Was having technical issues earlier. But I had a quick question on the HRD, ROU solution. What remains on the To-do list ahead of rollout in early '22? And will this initial launch be limited to ovarian and breast? And what's the timeline for expansion into other cancer types from there?

Yes, thank you. Lara, do you want to take this question?

Yes. So we are still on track for our release of the HRD. We believe that this provides the market with a unique approach for measuring genomic instability as caused by HRD. And the ability to expand beyond our current tumor type is being sort of facilitated by our early access program. So through the ROU program, we are able to get some research going around other tissue types, other tumour type.

Yes. And maybe, Philippe, you could as well further develop on the input of the HRD signature and HRD-like genomic instability signatures beyond ovarian and breast cancer. As we know, there are a lot of clinical trials that are ongoing. Could you please further develop there, Philippe?

Yeah, absolutely. So I think HRD can be a very potent biomarker in ovarian, as you know, today. We see a lot of traction and interest from biopharma in HRD. In other disease areas prostate, breast, pancreas, where you already have a sure approach [ph] as well. I think when we come back to our solution, what I think distinguishes us from the rest is we're probably one of the only ones that take a comprehensive view of HRD, so we only want to look at the cause but also the consequences. So we have a panel 28 targeted genes that look any known mutation that cause HRD and we also look at the low basal genome assay that essentially captures the consequences of HRD in terms of genomic instability. So being able to combine the two, it allows us to very finely characterize HRD signatures but also the potential to go beyond HRD to other causes and types of genomic instability which we believe will also open other opportunities for biopharma in ovarian but also other tumor types.

And maybe to last, Dan, what I would add is that the HRD, as an answer to Tycho as well, I think it's the proof of the benefits of our algorithmic capabilities, right. And so the more the oncology applications will require complex biomarkers, the more you will be seeing SOPHiA being involved.

Got it, thanks. And one more for me. Any impact from tightening labor markets on your hiring plans?

Yes, thank you, Tejas. Sorry, Dan. I apologize. Ross, can you further develop on the hiring plan?

Thanks. So obviously like many we have seen challenging conditions, particularly in some of our more technical roles. So I'd say fortunately post-IPO and as well given we have multiple geographies that we are hiring in, where we are a very desired employer, we're seeing actually quite nice still pacing on our hiring and haven't seen really wage inflation outside of what is typical. And so we tend to be, again, I think an employer of choice in many of our regions. And I think because of that and so many folks come to SOPHiA for the mission. And given the promise of what we're doing, we really haven't seen that, I would say, influence us. And we also, again, as a software company, don't tend to have too FTEs and some of the areas on the labor side that we've heard some of the peers call out, right, relative to maybe lab technicians and so forth. And so from that perspective as well, I think our mix also probably benefits us a bit here from that dynamic.

Thank you, Ross. And, Tejas, maybe to completely answer from Ross, as you may remember, the motivation for us going public was, one, being more being able to accelerate our penetration in the clinical market and the biopharma markets. The two, as well being visible to attract high quality individuals. And in the next months you will see we will have few announcements which I guess conference what Ross just mentioned about the attractiveness of SOPHiA to attract really very qualified individuals in joining our venture.

Got it. Thanks for the color. And apologies, again, for the earlier technical difficulties.

No problem. Thank you so much, Tejas [ph].

And I'm not showing any further questions in the queue at this moment. There are no questions in the queue.

Yes. Before disconnecting, thank you, everyone for having heard our Q3 announcement. And we're very much looking forward to engage in the next weeks, in particular, around a couple of conferences at our -- in our roadmap, and where we intend to participate with Ross. Thank you, all.