SOPHiA GENETICS S.A. (SOPH) Q4 2021 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by and welcome to the SOPHiA GENETICS Fourth Quarter 2021 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker’s presentation there will be a question-and-answer session. [Operator Instructions]. I would now like to turn the call over to your host, Jennifer Pottage, Head of Investor Relations. You may begin.

Good morning and thank you for joining us on SOPHiA GENETICS Q4 fiscal 2021 earnings call. My name is Jennifer Pottage and I am the Head of Investor Relations at SOPHiA. Joining me today are Jurgi Camblong, our Co-Founder and Chief Executive Officer; Peter Casasanto, our Chief BioPharma Officer; and Ross Muken, our Chief Financial Officer. Before we get started I would like to remind you that management will make statements during this call that are forward looking within the scope of U.S. Federal Securities Laws. These statements are based on management’s current views and assumptions which are subject to material risk and uncertainties that could cause actual results or events to materially differ from those projected. Additional information regarding these risks and uncertainties are included 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 its broadcast, March 15, 2022. Please note both the replay of this call and earnings release will be available on our website in the Investors section. And with that, I would now turn the call over to Jurgi.

Thank you Jen and good morning everyone. 2021 was a transformative year for SOPHiA and I am pleased to share with you today our strong finish and momentum we experienced closing out our first fiscal year as a publicly traded company. I want to take this opportunity to express my sincere appreciation to the 500 SOPHiA employees for their extraordinary efforts and dedication. Our talented team drives our success and I am thrilled to announce that we were recently recognized as one of Boston’s best places of work for 2022, a fantastic achievement to start the year. I am immensely proud of the success we have achieved so far and I am eagerly looking towards to what lies ahead in our ambitious journey to democratize data driven medicine. On today’s call I will touch on the impressive progress we have made in the fourth quarter and 2021 fiscal year as it relates to the six strategic pillars guiding our long-term growth trajectory. Our new Chief BioPharma Officer, Peter Casasanto will then offer a more detailed look into our BioPharma pillar and the massive -- penetrative opportunity that exist in this market. And finally Ross will review SOPHiA’s financial results for the period and outlook. We remain fixated on six key pillars to drive long-term growth and value creation. First, accelerating the expansion of our network through new customer adoption. Second, increasing utilization within our existing customer base. Third driving further innovation in our platform to broaden the applications we support. Fourth, developing key partnerships and collaborations. Fifth, leveraging our platform to drive further growth with biopharmaceutical companies. And lastly, this sixth strategic pillar is excelling operationally within SOPHiA. Before diving further in I would like to remind those less familiar with SOPHiA’s story, what a powerful business model we offer as a technology player in the healthcare side. Over the last decade there has been a dramatic increase in the amount of digital data being generated within the healthcare industry. The ability to create insights from this data has led to an acceleration in our understanding of biology. However, much of this data is siloed preventing it from being fully leveraged for the benefit of patients. SOPHiA which also means wisdom in Greek has built a unique business model to address this untapped opportunity. We develop the SOPHiA DDM platform to take the data of patients today to inform on how to diagnose and treat the patients of tomorrow. SOPHiA DDM is a platform that lives in the cloud and uses AI and machine learning to analyze complex, multimodal digital health data to generate insights. SOPHiA represents a new category of software company, unlocking data silos and helping healthcare professionals work together as a community and deploy their collective expertise. Through SOPHiA DDM we can enable the practice of data driven medicine in any hospital laboratory or pharmaceutical company around the world. We sit at the center of a virtual cycle and benefit from powerful network effect. This means as the number of SOPHiA DDM users increase, the volume of our data input increases which then leads to a further increase in actionable insights continuously being generated. The platform improves and scales as more data is analyzed which ultimately snowballs into more and more patients benefiting from data driven medicine. Our software model was optimally designed to support rapid growth which further strengthens our position for the future. And now onto our six key pillars. Starting off with our first pillar of customer adoption and network expansion. Healthcare institutions continue to choose SOPHiA as their trusted cloud based analytics platform. We have the strong finish on the fourth quarter with a total of 791 customers across more than 70 countries. The company's priority has remained on the growth of the platform in the U.S. market which we view as SOPHiA’s largest addressable market at an estimated 8 billion for clinical oncology and rare diseases. We're continuing to invest in our U.S. opportunity and firmly believe there is significant runway ahead of us. We are pleased with our progress off onboarding clinical customers in this region and are expecting several signed agreements with Tier 1 institutions in the coming months. In the NorAm region we added seven new logos in 2021. Additionally, we are seeing solid growth with our clinical customer base in the EMEA, LatAm and APAC regions. On a global level we are matching our momentum in NorAm. In the APAC region we recently announced onboarding a leading Taiwanese genetic testing company called SOFIVA GENOMICS. This important to highlight as it is the first clinical institution in this region to offer SOPHiA’s newly launched HRD Solution which is one of our most exciting product offerings. The validation of our solution by this important customer is already underway. SOFIVA GENOMICS found great success while implementing our solution in a clinical setting for advanced HRD detection powered by the deep learning algorithms embedded in our classroom. Beyond HRD where it seems substantial demand in APAC for oncology applications and we recently signed new customers in Japan, South Korea, Singapore, and Hong Kong. Our continued success in landing customers across a broad geographic landscape is a testament of our talented team and execution. We recently appointed Ken Freedman as our Chief Revenue Officer to lead our global clinical sales efforts. Ken has more than 25 years of experience serving some of the most innovative providers of technology. His expertise in go to market strategy and execution will be a fantastic addition as we continue our U.S. and global footprint expansion plans. Moving on to our second pillar of increasing utilization within our existing clinical customer base. As communicated on our last quarterly call, we employ a land and expand strategy that concentrates on winning new customers and then driving greater utilization of our solution by those customers. We are encouraged with the momentum we see with users continuing to increase our consumption after experiencing the value of SOPHiA’s platform. Total recurring platform customers grew to 382 in the fourth quarter of this year up from 375 customers in the third quarter. Total number of families increased to 66,000 in the first quarter up from 62,000 analyses in the third quarter representing a growth rate of 6% quarter-over-quarter. For us one way of growing is continuously delivering new content which leads to our next pillar of expanding new offering. This is an instrumental part of SOPHiA’s story and we are laser focused on driving innovation across our offerings. We continue to provide platform users with frequent updates incorporating new features, new applications, unique modalities, and new services. In addition to our newly launched HRD capabilities we expect to unveil several exciting new products later this year, one being CarePath which was recently introduced at the J.P. Morgan Healthcare Conference in January. CarePath is a model of the platform within our oncology applications. CarePath will guide clinicians along the care continuum by better predicting an individual patient’s disease progression and treatment options. It provides user and indication specific comprehensive use of patient molecular clinical and imaging data powered by robust machine learning algorithm. We are extremely excited about this product and believe it will further differentiate SOPHiA as a tech company. SOPHiA's observational clinical study called DEEP-Lung-IV, which was announced at RSNA in November, validates a predictive model fueling CarePath. The study leverages machine learning-enabled analysis of the aggregation of real-world reality model data to identify and validate predictive signatures associated with response to immunotherapy and prognosis of patients with metastatic stage 4 non-small lung cancer. Such signatures could help identify patients that are likely to benefit from immunotherapy versus that are not, as well as stratified patients according to risk. Ultimately, this will empower clinicians to make more informed therapeutic decisions for their patients and accelerate the recruitment of the right patients for clinical trials run by the biopharma companies. Since launching the study in November, 16 sites across six countries have signed up to participate. This should contribute to over half of the 4,000 total patients targeted for enrollment over the course of the study. The demand and appetite we have seen from institutions, including prominent academic centers and hospitals, to join this study has been tremendous, and 13 centers, including UMass, have already been activated. We are pleased with the strong traction of the study, and we view the positive reception from the participating sites as a testament to the high level of interest in unlocking the predictive potential of multimodal L state [ph] assets through large-scale real-world studies. From an operational perspective, we have already enrolled hundreds of patients into the study, and we will provide an update on preliminary findings at ASCO this year. And now on to our fourth pillar of developing key partnerships and collaborations. Our robust partner ecosystem is united by a common and novel goal, to better the lives of patients. We are achieving great momentum with our partners in enabling our shared customer base to generate actionable insights. We announced last July that we entered an alliance with GE Healthcare to integrate data between GE's Edison platform and SOPHiA DDM platform, as well as commercial collaboration focused on co-marketing and pilot site recruitment in the digital oncology and radiogenomic analysis space. We are currently working together on a new statement of work to begin developing the software infrastructure and architecture that will enable the bidirectional exchange of data between GE's Edison platform and the SOPHiA DDM platform. Our partnership has been going well and we have already seen significant commercial traction in lead sharing. This collaboration integrates well with the developments mentioned earlier, including CarePath and the DEEP-Lung-IV study. In additional collaboration news, we announced this month that we signed a letter of intent with Ambry Genetics, which is a genetic testing and clinical diagnostic company. Our collaboration will be centered around our shared long-term focus of leveraging multimodal data to accelerate research and the understanding of human diseases. Of the many opportunities in this collaboration, our focus will start on HRD. Shifting over to the next pillar, which is further strengthening our biopharma strategy. This represents a massive opportunity for us. While we have made excellent strides in enhancing our business in the pharmaceutical industry, we believe there is still significant market share to be captured. It bears reiterating that in this important market, we currently serve pharmaceutical and biotechnology companies as well as clinical research organizations. We continue to promote our current products and services, which we believe will strengthen collaborations with biopharmaceutical companies. To head our dedicated efforts in biopharma, we recently brought on Peter Casasanto as Chief BioPharma Officer. The executive team is thrilled to have Peter, who has a high degree of expertise and deep relationships in this area, with more than 15 years of industry experience. He joined us in January from CellCarta, a global leader in precision medicine. Prior to CellCarta, Peter was in a senior corporate development role at Tempus and previously held leadership roles at NeoGenomics and LabCorp [indiscernible] pharmaceutical strategies. I am delighted to welcome Peter to the team and look forward to his contribution. Later on the call, Peter will walk through our plans and positioning to further strengthen SOPHiA's presence in this space. And now shifting to our sixth and final pillar, excelling operationally within the organization. We remain well positioned from a capital perspective to execute our near-term operating and strategic plans while retaining a level of flexibility to pursue select strategic initiatives. As Ross will discuss later, we are monitoring market conditions and remain focused with our capital to continue excelling operationally as a company. With that, I will now turn the call over to Peter.

Thank you, Jurgi and hello, everyone. I'm excited to be joining the SOPHiA team at this point in the company's journey, and look forward to help strengthening the biopharma strategic positioning. SOPHiA is a company that I have long admired for its mission-driven business model and successful performance track record. Biopharma represents a large opportunity for us given our cloud-based architecture and decentralized global model that allows us to ingest, harmonize, and analyze multimodal data. This is valuable and unique data spanning hospitals, laboratories and institutions that is, frankly, difficult to get elsewhere. These data bring a much-needed heterogenetic dataset to represent the environment seen in the real world, particularly for areas like oncology. The ramp-up of the SOPHiA DDM platform on the clinical side is in turn feeding our unique ability to support biopharma in finding patients and associated biomarkers of interest. This applies to trials and for marketed drugs as well as helping our customers understand the global testing landscape. Together with our own solutions, these real-world data insights can scale and ramp up rapidly, supporting a future revenue opportunity. Among the many exciting opportunities we see in the biopharma arena, SOPHiA's HRD solution stands near the top. Now taking a step back, HRD stands for Homologous Recombination Deficiency. HRD is a complex biomarker, notably important for PARP inhibitors that helps identify whether cancer patients may respond better to specific treatments, and its use could ultimately lead to personalized therapies that benefit the individual patient. We currently have one European patent application and one U.S. patent application relating to a method to detect HRD, which will be used in our solution. The solution's decentralized nature allows users to preserve ownership of data and save time, while also offering comprehensive genomic insights without compromising the data's quality. In line with the strong traction we are already seeing with the solution, we recently announced the partnership with AstraZeneca to expand access to in-house HRD testing across European laboratories and institutions. Having AZ as a partner further validates our model to democratize data driven medicine, leveraging a decentralized model and an innovative platform for clinical decision support. This is just the tip of the iceberg, and we are excited to talk with other biopharma partners around our capability to develop and deploy similar solutions globally, with a focus on patients and technology-forward approaches. We expect this to be one of many biopharma partnerships that we will form on our journey. The market right now is robust. Data has become front and center for most of the large pharma companies, and are now instrumental sources to fuel both early adopters and newly-formed informatics and analytics teams, intersecting across multiple stakeholders from discovery to R&D to clinical development, health economics and outcomes research, digital health and commercial, among others. Each of these represent potential SOPHiA customers with the end goal of supporting the biopharma industry with an enterprise-wide data solution. A lot of effort is going into evangelizing the SOPHiA value proposition, especially as we continue to grow our genomics database and add in other key multimodalities. These include imaging radiomics via the GE partnership, and clinical and biologic features to develop, test, and validate our predictive analytics algorithms. The addition of the radiomics feature extraction, coupled with genomics and outcomes data, represent a unique and significant value proposition to the biopharma market. It's an exciting time, and I look forward to the opportunity to support SOPHiA's plans for growth within the biopharma space. And now, I will turn it over to Ross to review the financial results in more detail.

Thank you, Peter. We saw continued strength across the board in Q4, with excellent execution and operational efficiencies setting us up for a strong end of the year. There were solid consumption trends across our customer base in the fourth quarter, with total revenue growing 40% year-on-year to $10.9 million on a reported basis despite FX headwinds, which negatively impacted our growth by approximately 250 basis points. For the full year, total revenue for 2021 was $40.5 million compared to $28.4 million for 2020, representing 42% growth. The growth in revenue was primarily driven by new customers added to our platform coupled with increased usage rates across our existing customers. Our net dollar retention rate for the full year 2021 was 142%, which is considered best in class among elite cloud-based software companies. Our quarterly revenue churn remains below 1%, and our annualized revenue churn rate has remained at a historical low of approximately 3% of total revenue for 2021. Additionally, our LTV to CAC ratio remains noticeably above the coveted industry benchmark of three times. Platform analysis volumes increased to approximately 66,000 analyses in the fourth quarter of 2021 compared to approximately 44,000 analyses in the fourth quarter of 2020. Average revenue per platform customer for the full year increased to $92,000 compared to $70,000 for the prior year period. Gross profit in the fourth quarter of 2021 was $6.8 million, an increase of 40% compared to a gross profit of $4.9 million in the fourth quarter of 2020. Gross margin was 62% in the fourth quarter of 2021, in line with the prior year period. Adjusted gross margin was 65% for the fourth quarter and 64% for full year 2021. Total operating expenses for the fourth quarter of 2021 were $27.8 million compared to $16.2 million in the fourth quarter of 2020 on an IFRS basis. R&D expenses for the fourth quarter of 2021 were $6.4 million compared to $5.2 million in the fourth quarter of 2020. Sales and marketing expenses for the fourth quarter of 2021 were $8.6 million compared to $4.2 million in the fourth quarter of 2020. General and administrative expenses for the fourth quarter of 2021 were $13 million compared to $6.8 million in the fourth quarter of 2020. Operating loss in the fourth quarter of 2021 was $21 million compared to $11.3 million in the fourth quarter of 2020. Full year operating loss was $71.5 million compared to $37.4 million for 2020. Adjusted operating loss in the fourth quarter of 2021 was $17.6 million compared to $10.9 million in the fourth quarter of 2020. Adjusted operating loss for 2021 was $61.5 million compared to $34.2 million in 2020. Net loss in the fourth quarter of 2021 was $21.4 million or $0.33 per share compared to $10.5 million or $0.22 per share in the fourth quarter of 2020. Adjusted net loss in the fourth quarter of 2021 was $17.9 million or $0.28 per share compared to $9.9 million or $0.21 per share in the fourth quarter of 2020. Net loss for the full year 2021 was $73.7 million or $1.33 per share compared to $39.3 million or $0.93 per share for the full year 2020. Adjusted net loss for the full year 2021 was $62.3 million or $1.13 per share compared to $35.7 million or $0.84 per share for full year 2020. Cash and cash equivalents were approximately $265 million as of December 31, 2021. With respect to our capital position, we believe we are well-positioned to execute our near to medium-term strategic and operational plans. We will continue to selectively invest in our business to drive growth while maintaining a strong capital position and the optionality to pursue strategic initiatives, including both organic and inorganic investments. Now, let us turn to our guidance and outlook. Consistent with the forecast we provided earlier in January, SOPHiA expects full year revenue for fiscal 2022 to be in the range of $51.5 million to $54 million, implying growth of 27% to 33%. With respect to our quarterly revenue cadence, we would anticipate our results to be slightly more second half-weighted versus 2021, given the timing of several key product launches as well as the anticipated ramp of key new business wins. Overall, we remain confident in the momentum of the business as we build an even stronger SOPHiA in 2022 and beyond. With that, I would like to turn the call back to Jurgi for closing remarks before taking your questions.

Thank you, Ross. After a successful and unforgettable year in 2021, our focus shifts to SOPHiA's future. We're extremely proud of our performance, which we believe reflects our continued ability to execute our vision and the opportunity ahead. Our six pillars remain our foundation to drive growth and value creation for this year as well as the years to come. I am encouraged and as confident as ever about the long-term path that we have embarked on. We have a fantastic opportunity to drive compelling returns and shareholder value. As I reach the end of my closing remarks, I'm pleased to announce that SOPHiA will be hosting an Investor Day in the second half of this year. Stay tuned for more details to come. Thank you to our partners, customers, investors, and employees for joining us on this journey. Without you, none of this would be possible. I look forward to continuing to update you on our future success of democratizing data-driven medicine. Operator, you may now open the line for questions.

[Operator Instructions]. Our first question comes from Tejas Savant with Morgan Stanley.

Hey guys, good morning and thanks for the time here. Maybe one for you, Ross, to kick things off. Can you just walk us through your assumptions of the low versus the high end of the guide and then perhaps lay out what's excluded from the guide at this stage?

Yes, good morning Tejas, this is Jurgi, and I leave Ross on for the rest of your question.

Thanks, Tejas for the question. So I would say, obviously, a number of different variables relative to utilization assumptions, ramping of new business, also FX we did as I noted in the prepared remarks, have an unexpected, I would say, detriment in the fourth quarter and we're continuing to see some of that in the first quarter. So a lot of it is, frankly, just relative to some of the uncontrollable factors we have in the business. But overall, I would say, relative to what we presented, we tried to offer what we have extreme visibility on, right. And clearly, as you pointed out, there's a number of pieces whether that's around some of our pharma contracting, whether that's around HRD, whether that's around our relationship with GE and some other elements that could provide incremental contribution over the course of the year. We're very fortunate to have a business that's incredibly visible, and so we wanted to present something that we felt, based on our backlog that we were carrying into the year as well as the bookings momentum we saw in 2021 and the utilization trends, something that we felt very comfortable with at both ends of the range.

Got it. That's helpful. And then just on the point you made about visibility, guys. I mean, in terms of things like labor shortages in hospitals or perhaps shortfalls in cancer screening volumes, are you seeing any of those sort of -- did any of them impact January and have those trends improved here into March? And can you comment on customer appetite to trial new solutions given the uncertain operating environment here and inflation pressures?

Yes. Thank you, Tejas. So indeed, the current environments have been, I would say, a bit unpredictable overall, right, in the world. Now said that, you may remember that we're lucky or fortunate with our business to support academic centers primarily. And so in terms of volumes of patients, their volumes are not fluctuating, right, with COVID or as well with what's happening now in Ukraine. So we don't see an impact on the volume of activity of our clients in the platform. That is updated every hour, so we have an hourly view on what's the consumption of the platform. We haven't seen that in January, we haven't seen that in February, we haven't seen that in March. And I would say thanks, God, right, because in the end, it's patients that otherwise wouldn't benefit from this type of testing, and then maybe as well treatment options that they could benefit from. Now in terms of appetite, Tejas, we do see a lot of appetite in particular, and I think we've been quite clear about that. But regarding HRD testing, as you may have heard as well now, a PARP inhibitor started to be used as adjuvant for breast cancer treatment. So people understand that many more patients will have to be tested with the HRD score. And we do see a lot of demand there across the board from APAC to NorAm to LatAm as well as Europe.

Yes. Just to add on to what Jurgi shared, I would say, in terms of the first quarter, it's always tough to ascertain sort of certain factors, right, in what drives. So I would say, overall, demand has been pretty consistent and strong throughout the period and so we've seen a number of the notes from peers and, frankly, haven't seen that same level of volatility. That being said, I would say, on the new business side, it's a really interesting period for us. We're seeing, I would say, unprecedented activity with very large customers. So the size of certain RFPs or quotes are much bigger than what we have seen in the past and some quite significant. That being said, I do think decision-making, particularly in the early part of the fourth quarter, likely was impacted in terms of folks being distracted in January. But we've certainly seen -- I would see continued activity throughout the quarter on the new business side and frankly, overall, for us, I'm as encouraged as I've been around not only the size of the conversations, but the types and the players that we're discussing with. And so I would say overall, it's still quite a healthy environment for us. But obviously, as I mentioned when I answered your question with respect to the range, there are some things we can't control, and you can obviously see the situation in the Ukraine, what that's done to some currencies. And so that's probably, for us, more of the volatility than the underlying, I would say, drivers of the business.

Got it. And then one final one for me here on CarePath. Jurgi, can you help us put some numbers or perhaps size this opportunity, in the past, you've sort of mentioned he radiologists and pathologists being the initial demographic, but longer term, there is a broader opportunity among payers who could be interested in multimodal data as well. Help us think through some of the addressable market sort of implications of CarePath?

Yes. So to start with, I can't disclose numbers regarding the addressable market, Tejas. But beyond that, I think given that we are touching on something very important, it's an opportunity for me to share with you again what is our vision like, right. So we believe that there will be a tech player that will break data silos across hospitals and data modalities. And in particular, in cancer, this will enable hospitals to basically monitor real-time, real-world patient cases versus other patients that suffered from the same type of cancers and have been treated with different type of therapies. And so by doing that, one can start clustering patients to better empower oncologists in making decisions when it comes to the most promising treatment path. As you remember, we launched an effort in the CarePath for DEEP-Lung-IV cancer, so Stage IV non-small cell lung cancer, which are patients that today primarily benefit from immunotherapy. And where actually there is not great predictive model to know who will benefit from the therapy and who will not benefit from that therapy. And as you know, immunotherapy becomes more and more prominent in cancer, right, so which gives you an indirect sense of the size of the market. And so the numbers that we've been highlighting this quarter are more related to our adoption of the CarePath in the context of the DEEP-Lung-IV where we said that we've been already able to activate 16 sites to run this clinical trial or clinical study which is tremendous. Because as you remember, Tejas, we announced the launch of this study in November last year at RSNA and since then, we are being I would say, very appealing to many and being able to attract 16 sites across these six countries, including recently UMass and we're going to present the first results at ASCO this year. Beyond the clinical market where the CarePath could serve the oncologist, as I was explaining, this data are extremely important obviously as well for the biopharma to deliver to the market more targeted treatments, so which is in -- with our technology.

Got it. Very helpful. Thanks guys.

Thank you Tejas, have a good day.

Our next question comes from Mark Massaro with BTIG.

Hey guys, thank you for taking the questions. I guess, Ross, you talked about you're seeing unprecedented activity from large customers. Can you give me a sense for how much of this is coming from academic centers or labs in the U.S. versus maybe hospitals, labs and/or biopharma globally?

Yes, hello Mark. Good morning. So indeed, as you may remember, we've been primarily serving academic centers from inception. Which, as you know, are very sophisticated centers, and I think this demonstrated the uniqueness of our technology. Because to be able to penetrate these academic centers, you need to come with the technology that is highly differentiating. And more recently, we have been announcing important contracts, we've been signing with some reference labs around the world. So last year, we announced [indiscernible] being upgraded with our HRD capabilities. This quarter, we announced SOFIVA GENOMICS in Taiwan being upgraded or actually adopting our HRD capabilities, so another private land. And as you know, there was always a question whether a technology player like SOPHiA could have as well a great success in the U.S., where more samples are growing to the reference labs and the central labs versus other countries which are much more decentralized. So the good news is that, yes, we do see traction. You may have seen our press release with Ambry Genetics, where we are partnering, so that we will be able to eventually support all their bioinformatic needs. And we see the same traction with many other reference labs and central labs in the U.S. right now, Mark. And I think to some extent, the industry is becoming more sensitive about industrializing solutions and so favoring tech players like SOPHiA, who can bring robust day-to-day outcomes from a platform rather than build themselves their own bioinformatic teams. So we expect to be signing much more of this type of contracts in the future, and by doing so, grow our business in the NorAm market.

And then I would just add on to what your --

Go ahead, Ross.

I was just going to say, Mark, I'd just add on, I think, obviously, these deals are larger and more complex and take a bit more time. But I think it's interesting, if you look again at our activity levels in the business, it's interesting the number of players in the realm that Jorge spoke to in the U.S. and ex-U.S. that are all coming to, I think, a similar conclusion at or around the same time, right. So to me, it feels like there is some shift in recognition that elements on the data side aren't core, to many of these businesses, and/or they need to have someone like us who's a technology enabler, allow them to achieve sort of the strategic merits that they want to strive for in a cost-efficient way. And so I think that's very encouraging for us, and it's frankly a new development over the last number of months. And I'm again, quite excited about what I'm seeing in the activity levels. And hopefully, we'll have more to share for you over the balance of 2022.

Okay. And then as we think about CarePath, you talked about UMass. I think you talked about 16 sites have adopted. And how should we think about the rollout of CarePath in 2022, maybe into 2023? And then I think you talked about a study that we may expect to see at ASCO. How should we think about just CarePath rolling out and any data readouts over the coming year?

Yes. So the stage we are in basically, Mark, is a stage where we are demonstrating the value of following this radiogenomic data longitudinally, right. And we decided to start with non-small cell lung cancer Stage IV for patients that are being treated with immunotherapy because, as I was telling to Tejas, there is not good biomarker to predict who would respond or would not respond to immunotherapy. And these type of treatments are expensive and can be toxic as well. So with CarePath, as one is gathering data, we believe that thanks to our machine learning techniques, we will be able to create cohort of patients, basically give a more informed perspective to the oncologist on what would be the chance for that next patient versus other patients to benefit from immunotherapy. So along those lines, the market adoption is anticipated, not before we start disclosing the numbers. So we're building it thoroughly step by step. First, for non-small cell lung cancer, as I explained, the third data will be exposed to the market in ASCO following what we are going to continue the study. And just as a recap, the study aims to follow 4,000 patients longitudinally and should end by 2023. So if you like, for these potential predictive capabilities, Mark, you shouldn't expect the CarePath being commercialized before end of 2023. But aside that, as we do so, we are building capabilities for the biopharma industry. And we could -- before we release the results, the final results on DEEP-Lung-IV study, already leverage on our CarePath capabilities throughout the biopharma industry basically further pilot these type of studies. And maybe, Peter, you want to give a perspective of what's the power of our model here versus what you have seen in other companies where you had senior leadership roles?

Yes, sure. Thanks, Jurgi. The DEEP-Lung-IV study is definitely a very -- area right now in the biopharma conversations that we're having, particularly around, as Jurgi mentioned, how can we look at these patients longitudinally. I mean, I think that's the key, really understanding their treatment outcomes in coordination with their genetic radiomic data. And to have a platform that can follow these patients in the real world is critical. And so I think the other key piece there is now we're having conversations with biopharma as to potentially how we could stand up CarePath for clinical trials. So I think when you straddle those clinical trials and real world data, the market potential really becomes quite large.

Yes, that makes sense. My last question. Obviously, you have strong visibility with your base business. That keeps clicking and resonating around the world. But I'm just curious, you've talked in the past about pursuing digital pathology, spatial genomics, transcriptomics, metabolomics, proteomics. So how do you balance maybe some of the investment in your base business and going out and winning new customers versus investing in new platform plays for the future?

Sure, Mark. So as you may remember, our philosophy is first to be able to support labs in the clinical market as well as biopharma companies with data that already exists today. And so imaging data are the prominent in the field of cancer to follow longitudinally patients. Genomic data started now to be adopted. Of course, pathology information is very important, but there are still a few scanners to digitalize the slides out there in the market. So our philosophy is that as this type of technologies will move from the life science field to the clinical market, our platform needs to be right so that we can onboard this type of data modalities. But along those lines, maybe on the biopharma side, Peter can give you a sense as well of what is the appetite and the demand today for multimodal and diverse OMIC data sets.

Yes, sure. Thanks, Jurgi. So Mark, we're actually having these exact conversations with biopharma right now. They're looking at what we're doing on our version of multimodal, which has been, I think, focused more so on genomic and radiomic with the clinical data, and these biopharma have other OMIC data that they've been generating with partner labs. You mentioned digital pathology, for example. That's just -- that's definitely been a sort of a hot ticket item, if you will. Because they know we already have the infrastructure and the algorithms to do imaging segmentation for radiomics, they want to also then bring in their digital pathology data and add that as yet another data set that we can bring -- include it into our predictive algorithms. So whether it's us doing the digital pathology segmentation or even just kind of bringing in their own segmented data from a partner that they have been working with, either way, they see the power of adding that plus radiomics and genomics and clinical. And so you just kind of continuously adding these layers and the data stacks, that then -- it just increases and helps with the fidelity of the algorithm, right. So I think digital pathology for sure, and then we have some other sort of genomic type data as well as proteomic data that they want to also bring in. So that's where this is heading, and that's why we're excited because it's really going to make these predictive algorithms stronger as we move forward.

Okay, that’s it for me. [Multiple Speakers]

Yeah, okay. Just one comment around that, obviously, we're as well very careful about cash management, and maybe Ross wants to make a comment around that.

Yes. One other thing, Mark, just to keep in mind, right, we already have a fairly, I would say, established commercial model and a product market fit for our platform. And so in that sense, our LTV to CAC remains really robust. Frankly, it may even be too high right now. And so in that our commercial investments are yielding incredibly strong returns, and so that really allows us to think about a number of these opportunities and also utilize partnerships which tend to be capital efficient. And so we're fortunate in our model that we're able to balance many of these ambitions, being a software player without having to materially ramp up spend. And so on that, we're able to move into many of these exciting growth areas, but maintain, I would say, the operating burn in profile you would expect for a business like ours which differs from many of the other peers, right, traditional peers in the life science space.

Thank you. Our next question comes from Dan Brennan with Cowen.

Great, thanks guys for the questions Jurgi, Ross and Peter. I guess maybe first question would just be on the 2022 guide. So you grew 42% in 2021 and FX, excuse me, is close to 45%. The guide this year, I think at the mid-point is about 30%. Obviously, you've got some of the Omicron impact still. But I'm just wondering, is that just conservatism or there other factors to be considered with the step down in growth?

Thank you, Dan and good morning. So first, I would say, Dan, we are very proud about this growth, 42% year-on-year has been tremendous for SOPHiA. And Ross can give you more color on your question.

Yes, I think, just philosophically, right, we want to set realistic expectations. And again, our business is super visible. So our goal is to consistently be able to perform or outperform. And so you should think about that and we're relatively conservative as a team in terms of how we externally communicate, and so you should think about that in the context of the guide. But I would say, I would certainly not think about the growth that we've guided to the 30%. It's not being still quite strong. I think it's a very robust environment. Obviously, as I've talked about a bit, we will see from an FX perspective, at least in the current market, a reasonable headwind year-on-year. But I would say aside from that, we hope to be able to share with you consistently strong performance. And again, as the macro hopefully does not deteriorate at least further from where we are, and we consistently outperform and you see from us several of the other exciting things we've alluded to on this call, we hope to be able to continue to deliver strong results over the balance of 2022.

Great. Thanks for that. Maybe on the U.S. side, it's obviously a critical growth aspect or focus to you as a percentage of revenues, it's picked up here in the past couple of years. Can you just -- or I think it's running 10% or so. Can you just walk us through kind of your mix of customers in the U.S. today between AMCs and maybe some of the larger maybe more reference lab-type customers and smaller community and is -- what can drive a bigger inflection in the U.S. growth rate here to see it become a bigger part of your business going forward?

Yes. Thank you, Dan. So as you may remember, right, when we started in the U.S., we started really with academic centers. And we've been sharing a number of names, which are really Tier 1 prominent institutions like [indiscernible] or Mayo Clinic and others who are users and customers of our platform. Now, as you know, a lot of samples as well go indeed in the U.S. to reference labs and central labs, and we are seeing more and more traction there with those type of labs. And we just announced this week, as you may have read the press release regarding the Letter of Intent we have signed with Ambry Genetics, which I think can highlight what we can do with any reference labs and any central labs as being an enabler for their own business. So this will be definitively a way to grow for us in the U.S. Beyond that, Dan, beyond penetrating is like this account in the U.S., we can grow as well with multimodal capabilities. And this goes as well in line with what we have been discussing again with Ambry Genetics or Mayo Clinic, to take two examples where beyond genomics, our results are starting together as well to build capabilities, which are multimodal to combine genomics and radiomics data. And last in that journey, obviously, our partnership with GE, which is already very well set in the U.S. labs and hospitals. It could be an accelerator for SOPHiA to penetrate the market.

Great, thanks Jurgi. Maybe in terms of the ASP per customer, is the right way to think about it kind of in that mid-single-digit plus type of level or as you add these capabilities, could there be an inflection in kind of the revenue capture per customer going forward and when would that be?

Ross, can you take it?

Sure. So I would say on the ASP side, obviously, we've had now, for many years, a very favorable trend. I would say, consistently, it should be certainly apples-to-apples in that mid-single or low to mid-single range. I would say, overall it will very much depend on product mix and how the market develops. So you think about the shift to larger panels, you think about adding on incremental capabilities over time and radiomics or digital pathology or some other areas, those are going to have different impacts on the mix and on the ASP. And so I would say, overall, we feel quite confident that our percentage of the total value share of a patient or diagnostic will go up materially over time. And I would say, again, maybe going forward, we'll try to provide a little bit more color on same-store ASP movement versus overall ASP movement because, again, I think mix will have a huge impact at periods on how that may trend. And so with that, I would say, stay tuned. But again, overall, we feel quite confident that as a percentage of that total diagnostic or patient cost, our value share is moving in the right direction.

And last along those lines, Dan, we very welcome as well the fact that more and more things will be regulated in our space because this should increase as well the reimbursement per patient for genomics and beyond. And as well, would -- I would say, make the market bigger because for -- not the early adopters, but the late adopters having a regulated market basically reassures them on the fact that they will be able not only to support patients, but be well-reimbursed for this activity. So along those lines, again, regarding HRD which is something we've been speaking a lot about, we have good hope that the paper analysis will be significantly superior to what we have today in terms of ASP, and that they should contribute on seeing our ASP go up as we have been seeing over the last eight years.

Great. And if I could just sneak one more in. Just on biopharma, how do we think about the impact on your revenues and kind of profitability as biopharma becomes -- grows as a percentage of mix, so could you help us think through like what's assumed from biopharma contribution this year, could we expect to see additional agreements like the ASH agreement and then any comment on kind of where biopharma could go over the next few years?

This is a bit early to share with you, Dan. We like to share numbers on things where we have, as Ross said, supreme visibility. And so this requires having already an ongoing business. But when it comes to numbers and traction, Peter, can highlight you the number of discussions we're having right now with the pharma.

Yes, sure. Thanks, Jurgi. So the biopharma is definitely -- the number of conversations have picked up quite a bit. I mean, we're now speaking with 18 to top 20 large pharma globally, and so -- and these really range from our genomic insights to real-world data to the multimodal studies that we've talked about, all the way through to new product launches like HRD. So while we can't give the revenue mix today, I mean, just rest assured that these conversations lead to more proposals, more proposals lead to more bookings.

Great. Thanks a lot.

[Operator Instructions]. Our next question comes from Julia Groom [ph] with J.P. Morgan.

Hi, good morning. Thanks for taking the questions. Just a couple of follow-ups. Regarding the DEEP-Lung study, could you give us a sense of the timeline, and when we might expect a product to be commercialized around it? And is this the main study that you're planning to run as a beachhead for multimodal or are there other potential indications that you are planning to pursue in parallel?

Yes, good morning and thank you, Julia. So a couple of answers, right, to your question, which is an important question. So as we have been clear, so we are building this platform to be multimodal and so this is extremely important to be able to cluster patients and basically give to the oncologist a more informed perspective of, one, how a patient, a given patient, looks like other patients. And so in this context, we started to fire up our CarePath module in the platform with the DEEP-Lung-IV data, which intend to basically follow in a study 4,000 patients across about 30 sites for the next 18 months now, so that we would be eventually able to equip oncologists with new ways to follow patients. But on top of that as well, be able to eventually predict which patients suffering for non-small cell lung cancer would respond or not respond to immunotherapy. And that's important because, as you know, immunotherapies have become very prevalent. But in the meantime, are very expensive and there is no clear biomarker that can explain who will benefit from this type of treatment or not. So in terms of product, to answer your first question, in the clinical market, we don't intend to sell this CarePath DEEP-Lung-related capabilities before the end of the study. Because we have to make it very thorough, and we are developing everything as well under design control to support our claims. Beyond that, the CarePath capabilities are very important for other type of cancers, to answer your second question, and so we contemplate to launch as well other studies. Eventually around brain cancer, eventually around breast cancer, to be seen. But indeed, the platform capabilities on the CarePath are being used so that they can be universal and holistic to any type of solid tumor, and that's a very important point. So thank you for the question. Last, beyond the clinical market we can already leverage on the CarePath with the biopharma. And Peter and his team today are having discussions over the last week with 18 out of the top 20 pharma worldwide, including our CarePath capabilities to eventually, as well, support real-time, real-world clinical trials in a decentralized way while harmonizing and collecting the data into our platform. And in that sense, to finish, Julia, the GE partnership as well is important for us because if we connect the CarePath and SOPHiA DDM into the Edison platform of GE, we can accelerate as well the collection and the harmonization of imaging data as well as clinical data that are already being collected by the Edison platform locally into this sites.

Thank you. That's very helpful color. And then just in terms of large central labs, and you mentioned that you expect a number of large customer announcements in the coming months. Is it possible for you to give us a sense of how many central labs you're working with or in discussion in the pipeline today? And then presumably, the central lab customers are stickier and run at a much higher pull-through versus your regular customers, do they demand the whole menu or only pieces of the workflow, I mean, is there a difference for the central labs in terms of the capabilities demand or their willingness to share data and how should we think about the pricing and profitability profile of the central lab customers?

Yes. Thank you, Julia. So first, I cannot share with you numbers, right, regarding our pipeline. But what I can tell you is that we're discussing with most of them today. And to answer your second question, we're discussing with many of them for different type of applications. It is very rare that it's to cover all their needs because stem cells have already established solutions for some of the testing that they already have in routine. Now, Ambry, it's a bit different. So Ambry, that we just announced, could be indeed a very broad and global partnership to eventually cover all their needs. And I think this is obviously what we aim to do with any. But our job in the end, Julia, is very meticulous. First, we need to demonstrate the central labs that we bring benefit for a specific application, such as HRD or such as gene fusion detection, or Exon data computing. And once we have done that, we move to the next application, the next project. And so this is how we've been always growing as well in the academic market through this so-called land-and-expand business model. When it comes to the stickiness, from what we have seen, indeed, the type of partnerships that we have built with the Central Labs and Reference Labs like Dasa, and we've been very public about that, being always very long-lasting, very close, and so in terms of the ability of SOPHiA to be, I would say, embedded in the system, is pretty profound. But aside that, just as a reminder, our churn rate, even in the academic centers is very low. It's below 1% a quarter, right. So we, I would say, benefit from the efforts we initially set in the academic center now to grow in the U.S. with the Central Labs, but we don't operate the growth very differently than what we have been experiencing with the academic centers. Which is something quite nice, frankly, because it means that in terms of execution, our recipes work very well as well in the Central Labs.

Great. Super helpful. Thank you so much.

And I'm not showing any further questions at this time. I'd like to turn the call back to Jurgi for any closing remarks.

So given there is no more question, I would like to thank you all for having heard our earnings call and Q&A session today. Stay in tune, and indeed you can expect news from us in the next weeks and months as we are penetrating the U.S. market, delivering our capabilities to the biopharma space as well as building our multimodal capabilities. Thank you all, and have a great day.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect, and have a wonderful day.