Good afternoon, ladies and gentlemen and welcome to Veracyte’s Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] As a reminder, today’s conference call is being recorded. I would now like to turn the conference over to Ms. Tracy Morris, Veracyte’s Vice President of Corporate Communications and Investor Relations. You may begin.

Thank you, Robert. Good afternoon, everyone and thanks for joining us today for a discussion of our second quarter 2020 financial results. With me today are Bonnie Anderson, Veracyte’s Chairman and Chief Executive Officer; Keith Kennedy, our Chief Operating Officer and Chief Financial Officer; and John Hanna, our Chief Commercial Officer. Before we begin, I’d like to remind you that various statements that we may make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements include those regarding our future plans, prospects and strategy, financial goals and guidance, product attributes and pipeline, drivers of growth, expectations regarding reimbursement and other statements that are not historical facts. It also includes statements regarding the potential impacts to our business resulting from the COVID-19 pandemic, the potential timing for a recovery of our business and anticipated timing of the launches of new products, availability of our tests internationally and our total addressable market. Management’s assumptions, expectations and opinions reflected in these forward-looking statements are subject to risks and uncertainties that may cause actual results and/or performance to differ materially from any future results, performance or achievements discussed in or implied by such forward-looking statements, and the company can give no assurance that they will prove to be correct and will not provide any further guidance or updates on our performance during the quarter unless we do so in a public forum. Please refer to the company’s July 30, 2020, press release and the risk factors included in the company’s filings with the Securities and Exchange Commission for a discussion of important factors that may cause actual events or results to differ materially from those contained in our forward-looking statements. Prior to this call, we announced our second quarter 2020 financial results, which are available on our website at veracyte.com under Press Releases in the Investor Relations section. We also published a business and financial presentation, which we will reference during our remarks. This presentation is also available on our website under Events and Presentations in the Investor Relations section. I will now turn the call over to Bonnie Anderson, Veracyte’s Chairman and CEO.

Thanks, Tracy and thanks everyone for joining us today as we discuss our second quarter 2020 results and share an update on the business. We are pleased with our second quarter results given the significant challenges from the COVID-19 pandemic. Our total revenue was $20.7 million, this included testing and product revenue of $16.9 million, which is better than the 50% decline we had anticipated given the pandemic. Our biopharmaceutical and other partnership revenue, which was less susceptible to the COVID-19 impacts was strong at $3.8 million, marking a 10% increase over the same quarter last year. We began to see an uptick in test volume during the quarter regionally as some hospitals begin conducting more non-emergency procedures and physicians began to open. In fact, we doubled our genomic testing volume in June compared to April. We are closely tracking our customer status and ordering practices to determine whether this trend will continue. We still believe a U-shaped recovery will onefold, and with that, expect our test volumes to return to prior year levels in early 2021. Given the fluid state of the pandemic, we are not updating our guidance at this time. I would like to now turn to our second quarter 2020 results and highlights beginning with our core business, which includes testing and product volume and revenue, evidence development and pipeline advancement. I will then provide a progress on our strategic partnerships. Our testing and product revenue was slightly higher than our expectations from the pandemic. Our testing revenue was $15.2 million, a 43% decline from the second quarter of last year. This reflects the reduced number of patients entering the funnel for our tests via routine doctor visits, imaging scans before elective surgeries, screening and other procedures through which potential cancer would be found. We saw…

Thank you, Bonnie. I will also refer to our business and financial presentation which Bonnie mentioned earlier and which is available on our website. Turning to Page 6, the table and footnote shown here, along with the details in our SEC filings, further explain how we recognize and report revenue under U.S. GAAP. For discussion purposes, we may combine testing and product revenue to describe our diagnostic testing business, and biopharma collaboration revenue to describe our strategic arrangements. As a reminder, net sales of data or other services to our customers are classified under biopharmaceutical revenue and all other noncustomer revenue are classified under collaboration revenue in our consolidated statements of operations and comprehensive loss. Turning to Page 7 of the presentation, our performance against six key performance indicators or KPIs, for the second quarter of 2020 compared to the prior year quarter was as follows: total revenue of $20.7 million, declined $9.4 million or 31%, principally from a 44% decline in genomic test volume, offset by an increase in product and biopharma revenue. As Bonnie mentioned, genomic test volume recovered month-over-month in the quarter with June volumes twice the April low. Though cost of revenue declined $1.1 million compared to the prior year gross margin of 63%, declined 800 basis points as testing and product volumes declined faster than we could adjust our cost structure. Operating expenses, excluding cost of revenue, declined $0.4 million. Net loss of $11 million, increased $8.5 million. Net cash used in operating activities was $8.4 million compared to $2.5 million in the prior year quarter. And genomic volume of 5,379 declined 44% and included 4,795 Afirma; 385 Percepta; and 199 Envisia reported tests. To complete the year-to-date picture for genomic volume, for the first quarter 2020 and the 3-month period ended March 31, 2020,…

Thanks, Keith. To wrap up, I’ll refer you to the Q2 key takeaway slide on Page 4 of our business and financial presentation, and we’ll reiterate that we had a solid Q2 results in face of the pandemic headwinds, our comprehensive menu of advanced genomic tests provides real value to patients, physicians and payers, reducing invasive procedures and follow-up visits at a time when this reduction is desperately needed. We are also advancing new models of engagement to bring increased efficiency to our sales and marketing efforts. We are progressing an exciting pipeline of products and are on track to commercialize four genomic tests in 2021, further accelerating our growth. And lastly, our growing roster of strategic partners is helping to fuel our efforts and maximize value as we expand to address a more than $40 billion global market for our products. I will also point you to the next slide, Slide 5, which lays out the catalysts that will drive our momentum through 2021. As you can see, we are making solid progress on a number of them. In closing, I would like to thank our employees for their continued commitment, focus and passion as we advance the business, I am truly grateful for all that they do. And now I would like to ask Robert to open the call up for questions.

[Operator Instructions] First question will be coming from the line of Brian Weinstein with William Blair. The line is now open.

Hey how are you guys. Thank you for taking my questions.

Great. Thank you for joining in the call Brian.

Of course. So first one, that’s kind of near-term and then one question that’s a little broader in thought. So on the near term, I mean, it looks like if we would have kind of just continued the trajectory, and we were not dealing with this pandemic, it looks like there were about 6,000 tests that you guys have lost. I am just curious how you think about whether those patients come back, when they come back, why wouldn’t they come back, just sort of how are those lost patients kind of come back into the system and over what period of time does that happen?

Yes. I mean, we are very pleased. One of the reasons we went ahead and gave the extra color on July is to really share the fact that we are pleased to see the recovery coming back. I think, though, that we still, given the pandemic is still looming and the fact that we don’t know whether people will really be taking vacations in August and things like that, that typically has happened, we still see a step-by-step process of getting back up to where we were last year. And with our own probably cautious projections given the backdrop of that, we still believe it will be early 2021 around Q1 when we see things sort of back, neck and neck with prior year. Keith, any additional comments?

No. We always believe the products are standard of care when doctors go back and see patients, we’re excited to see they are ordering our tests and we just believe continuing to provide further and further evidence behind these products and more and more information to physicians in a way that’s noninvasive and keeps people out of having surgical procedures is clearly taking root in the market. So we are encouraged by that.

Yes. Physicians are seeing fewer patients in their offices than they were prior to the pandemic, and that has created the slowdown.

Yes. No, I get that. Okay. And then just on a high level here. Is there potentially kind of – you were just talking about silver lining here with COVID. I mean if you think about diagnostics in noninvasive testing, keeping people out of surgery, is there a way this effect becomes an accelerate to your business longer term?

We think we are extremely well positioned to be an emerging success story in the back of that. When we began this journey with our very first test in thyroid testing, it was solely aimed at delivering value of keeping patients out of surgeries that didn’t need them. We have probably kept over 60,000 patients out of a $20,000 surgery and lifelong hormone replacement therapy that wasn’t needed in the first place. And now we have expanded that to include less invasive testing in lung cancer. The portfolio we are bringing to market next year is going to expand that reach in lung cancer critical disease, where not only is it important to get the diagnosis done early, but get it done early with accurate tests that can both rule in and rule out and with Percepta Atlas combining the samples that are collective for diagnosis with the most comprehensive way of informing treatment decisions. And again, if that patient is an early detected likely cancer from a nasal swab and has a very small module with a stage I cancer likely they could go to surgery and have the cancer removed for a cure. So I think bringing all these decisions upstream, earlier detection, less invasive testing is exactly what we are all about. And with our Envisia Classifier, the new data that came out there was the same thing, showing that doctors can actually use Envisia and being confident in diagnosis without ever having to take the patient to surgery. So we are at a great place with that. And are positioned well with new data that supports that coming out, allowing us to lean into moving forward with getting broader reimbursement for these tests, and we think the backdrop that COVID has created should be very attractive for that.

Great. Thank you guys so much.

Thank you, Brian.

Thanks, Brian.

Next question will be coming from the line of Puneet Souda with SVB Leerink. Your line is now open.

Great, thanks. So Bonnie, first question on the return volumes. I appreciate the comments in June and doubling the recovery from April and then July. But just trying to understand, is there – what’s unique in Percepta here among the pulmonologists? Is there anything that’s stopping it from recovering at a little bit faster rate? And in that, if you can also help me explain if the 30 sales reps, were they tied more closely to Percepta or to Afirma, just help us understand how does Percepta recover from the current levels?

Yes. So I will turn it over to John in a minute to talk about the sales and the Percepta question. But we do believe, just naturally, I mean, first of all, we call on pulmonologists with our lung portfolio, many of them are still tied up, taking care of COVID patients. So there are probably fewer of them focused on working lung cancer patients up. And there has also been, in the interest of these invasive work ups, there has been a shift to maybe be more conservative in working nodule patients up. That might mean patients with a little higher risk go through that work up. The sad thing with that is that 3 years from now, we could see an emergence of people with later stage lung cancer because they weren’t worked up early enough. So I think it’s yet to behold all of that. But let me turn it to John and have him walk you through how the structure of the team has unfolded and what he’s doing and why we are still very well positioned with the lung portfolio.

Thanks, Bonnie. And thanks for the question, Puneet. I co-heartedly agree with Bonnie’s comment. The bronchoscopists that diagnose lung cancer are also critical care medicine physicians and so many of them are on the frontline of caring for and treating patients that come into the ER for COVID. So naturally, we just see a shift there where they’re doing less bronchoscopy for lung cancer detection, some of the interim guidelines recommended being more conservative about the procedure, as Bonnie mentioned. And so we don’t see any kind of fundamental shift in thinking or use of the product. Just to hear a depression because of their focus right now, given the surge in cases, capacity in ER, but as we explained in the last call, we acted really quickly as the pandemic began to focus on organizational readiness of our team, virtualizing our customer engagement and emphasizing the value proposition behind our testing around avoiding unnecessary procedures, which we do think is really becoming even more relevant in this pandemic era. Clinicians believe in the science behind our products and the benefit they’re bringing to patient outcomes. And so we expect them to continue to use the products as they reemerge from the pandemic and start to see more patients in their practice. We did eliminate the 30 positions in the U.S., and we did so to take advantage of the opportunity really that the pandemic has presented where the new normal for clinicians is virtual engagement, both with sales professionals and with patients, quite frankly. And so we now have approximately 110 field sales professionals across the U.S., which we believe is appropriate to support the growth of the business as we reemerge from the pandemic. We are investing in training, tools and programming to enable those sales professionals to engage with clinicians. And while we never like to lose a field team member here, we as a management team, are very excited about these decisive moves that we took as is our field sales team because we think that they believe it enables them to more effectively engage with their customers. So we are looking forward to reporting on the impact of these changes in future quarters, and we believe we have structured the organization appropriately to continue to grow as we reemerge from the pandemic.

Thank you, John.

That’s great. Thanks for that clarification and Bonnie, I have sort of a three part question on COVID testing. This is, obviously, given the sheer magnitude and significance of COVID testing to the entire country, the solution with MAVIDx looks very appealing, but can you walk us through what is the potential product offering here? What is it going to look like in terms of automation capabilities? And what is the timing of that launch? And lastly, if you could elaborate a little bit on – I think the question we’re getting is around the pricing of the test. Could this be – given that the high – ultra-high volume, could it be a test that is in the range of $1 to $2 per test sort of benefit to Veracyte? Or is it likely to be more, if you can elaborate on those three points that would be very helpful.

Okay. Let me try to get to all those. First of all, when we acquired the diagnostic exclusive rights from NanoString for the nCounter System we said at that time we believed it was a best-in-class technology. And I think the – what has unfolded with the attractiveness that both we have seen and others have seen in the platform has really unfolded over the last – it hasn’t even been a year yet, 7 months, actually, since this has been in our hands. And we also are strategically, as very focused on our vision of becoming the first advanced genomic testing company to build a global footprint on our own distributed platform, which we believe is essential to driving really great advanced genomic testing products into clinical care. And so for us, our strategy isn’t to pivot and go after a COVID-type opportunity, but we were very excited about the opportunity when approached about it to team up with MAVIDx, given the brilliance, quite frankly, of the founder of the company and his long-standing expertise in working with the technology to probably get it to do things that nobody else may be able to do. He will be working to put a front-end highly sophisticated automation and a back-end reporting mechanism using the base and kind of technology and system to create an almost real time ongoing processing solution that will be able to highly multiplex these patient samples as opposed to today, we were excited about the technology to highly multiplex genes in a given test, and he’s going to use that capability maybe in the other way to highly complex – multiplex patient samples. So I don’t want to speak too much on that company’s behalf on exactly how they are going to approach it because I…

That is great. Just following up on that, is there – in terms of – I appreciate it’s hard to define precise timing of the launches. And I think you highlighted an EUA submission by the year-end. Can you maybe just elaborate sort of the level of confidence you have in reaching that time line and those targets? Obviously, given the scale up that scale that you can deliver here, the opportunity is fairly large. So just wanted to clarify on those two points?

Yes. I think what we said in the press release is that’s Mavi’s goal is to file and get that authorization. And I don’t have opinion on our confidence or not, they appear to be confident in putting that out there. And obviously, if they are able to do that, then they would be looking to make testing available pretty quickly after that. I don’t think, as a company, they are going to give up and go to global markets in the first year. That probably would not be what to expect. But I think instead, they will take a step-by-step approach at building up access, possibly through a single service lab initially and then reaching out to other partners that have the capability and capacity to initiate the same kind of testing in their environment, whatever that would be. And this is pretty recent. We turned this deal pretty quickly. We thought the opportunity required us to move quickly. And so as things move forward, we’ll keep everybody abreast of the progress and this could be a 2021 commercial effort for all of us.

That’s great. Thank you, Bonnie.

Thank you.

Next question will be coming from the line of Sung Ji Nam with BTIG. Your line is now open.

Thanks for taking the question. Maybe starting out with lymph part, very exciting about the IVD potential there, just could you remind us again, Bonnie, what the value proposition there is? Is that type – is that a companion diagnostic to certain therapeutics? Or is there a utility right away from a diagnostic standpoint?

Yes, so very good question. So LymphMark by itself has the potential to improve the sub typing and diagnosis of the certain subset, as I mentioned in the script, of B-cell lymphomas. And this is an area of high clinical unmet need. In fact, the World Health Organization had come out earlier making a recommendation that a genomic test with the ability to do this sub classification be used because it’s critical that these patients get on the right treatments based on their subtype. So with that knowledge and information, there is a method of doing some of this by IHC today. So it’s not like a brand-new indication that’s never been answered, but the results tend to be very poor quality and very difficult to reproduce, as we know, is often the case with these kinds of tests by the microscope. So we are excited to bring this forward long-term. There could be other avenues of increasing the value and the positioning and the utility of the test. This first step is strictly in that diagnostic subtyping to break those lymphoma cases into the proper subtypes. And with that, we filed our De Novo request with FDA and that is moving through their review, and we anticipate assuming that they accept and we get through that review process that this could be a commercial product made available to our specialty laboratory customers that are working with us with Prosigna today in the U.S. as an FDA-cleared product that would obviously allow us to immediately allow them access to switch their sub-typing over to a genomic test that should improve patient outcomes.

Okay, great. And then if I could, just a quick follow-up on that. So from a pricing standpoint, obviously, a very sizable market in terms of from a volume standpoint, so, I am curious – I am not sure if you are able to comment right now, but what’s the total...

I think we will wait and provide a little more color on that and guidance when we get close to knowing that the product is through FDA and when we have near sight, we can give you that information. But this will be a – it will be clearly higher value than what you would expect from an IHC test or we wouldn’t have invested in moving in along and invested in the clinical study to do it. But we don’t have a specific answer on that just yet.

Okay, great. And then I was just wondering – I am hearing about COVID-19 potentially resulting in certain patients in pulmonary fibrosis. And I was wondering if there is a correlation there and if this is a potential opportunity for Envisia in the future? I don’t know if it’s too early to...

Yes, absolutely. And thank you so much for joining in for the questions. Yes, there is a lot of focus right now. Certainly, a lot of the thought leaders that we work with, a lot of Twitter noise and other work to get some data pulled together on these early cases to see what can be learned about the impact of the damage on the lung from COVID infections. What’s interesting about Envisia, which is sort of a rinse and repeat from Afirma and a rinse and repeat on what we are doing in the lung cancer space, is that Envisia, even though the signature that provides the diagnostic UIP call, is made with a couple hundred genes that formed at classifier, the test is run on our whole-transcriptome unified assay, so we will have the potential to inform on all this biological content that we are collecting, just like we are doing in thyroid cancer. And just as we were talking about Xpression Atlas and the value that is having now, not just on informing on benign patients, keeping them out of surgery, but helping to inform treatment decisions and the discussion I had around how well we are positioned to deliver a Percepta Atlas to market that will answer this very, very large scale comprehensive biology and genomic content. In lung cancer, the poster child for targeted therapy, we could find that, that backbone of our Envisia Classifier could very well be the most comprehensive information to start looking and mining that data as we get Envisia patients through our lab and enroll them so that we can get follow-up data and work with our thought leaders out there to see what we can uncover with the test. These things are exactly what creates the next pipeline product because you are already collecting all the comprehensive data you need to develop the classifier. And we have done that. Our 7 classifiers that we have developed using this concept would have never happened if we couldn’t have gone back to that comprehensive data and generated the next test. So we are very saddened that we are at this point of knowing that patients that get infected, even if they recover, they may have this underlying damage. But we are hopeful that if anyone can figure out a way to inform on that, it should be Veracyte.

Great. And then just lastly from me, it’s great to see the versatility of the nCounter platform, especially with the partnership with MAVIDx as well as CareDx. I was curious kind of looking forward, are there a lot of opportunities outside of oncology in your view for the nCounter platform? How we should think about where is the greatest value generation in the period do you think from the platform standpoint?

I think the platform has phenomenal capability. One of the things that really, really attracted to us in addition to the ultimate simplicity, elegant simplicity, to be honest, is the fact that you can measure proteins, DNA and RNA and the level of comprehensive nature up to 800 genes in each of those. So, we try to be very focused on advancing our strategy around our own vision and where we are headed. We have a lot to get done, a lot of exciting pipeline products coming to market. And as you see, we are very open to considering partnerships where it makes sense, on markets that we may not want to compete in directly. And so I think that there could be opportunities to expand this beyond the partners we have today. But we are not like out pounding the pavement to look for these. Most of these actually come – are incoming requests. And then when we take a look at them, we can evaluate whether each is the right opportunity to take advantage of. We believe that the 2 that we have done to date, CareDx being a real leader in transplantation testing, their investment in this space, their global presence in this space is going to be just a great complement to what we are trying to do. And of course, the more nCounter’s we can install based on the menu that’s available, the more menu will be pulled through, so that’s a win for our customers who can run a lot more tests after making an investment in a platform, it’s a win for us because we are at the base of all of the revenue that we will be generating over time here. And then thirdly, our partners win because if they have a large installed base of nCounter’s in clinical laboratories and medical centers all over the world, that gives them a ready-made market to drive growth in. So we are pretty excited about the strategy, the approach and the incredible value of the technology we acquired.

Great. Thank you so much.

Thank you.

Next question will be coming from the line of Thomas Flaten from Lake Street Capital. Your line is open.

Thank you so much for taking the question. Just one quick one. Back in April, when the COVID really hit, you guys had made some significant changes or, I guess, taken some steps, including furloughing, I think it was 60 people. So from that, can we make the assumption that the 30 sales positions that were eliminated were out of that 60 that were furloughed? And given, I guess, some of the signs of positivity we are seeing in the recovery, have you made any decisions about what to do with the remainder of those furloughed employees?

Yes. Tom, thanks for joining the call and thanks for the question. Yes. So first of all, yes, Keith pointed out and as you reiterated, we made very early decisions, and we are glad we did because we think that really positioned us and preserved a lot of cash that, that would have been spent, have we not moved quickly. And we were also this quarter, I think, readily able to move quickly at making another final decision. And that was to bring 30 positions back. They were not all exactly the same people necessarily because we looked at how we could restructure the team. And so some of that had to move, made different decisions around which was fine. But ultimately, we did final terminations of about 30 individuals, so 30 positions came back, 30 got terminated. And it’s always sad and always hard, as everyone knows, as a CEO especially to have to make those kind of decisions. But I think our employees really appreciated that we did something quickly to be right for the business. We then evaluated very quickly. I mean, John, really, as a leadership person, looking at exactly what we think is going to come out of the – what is the environment that we are going to come out of this look like. And how do we really position ourselves as leaders in leading in a new wave with customers in a way that, quite frankly, they love working in a different digital engaged manner because then they don’t have to worry about putting rules in place for reps to come in and out of their doors. So this is also win-win. And so from that, we moved very quickly to evaluate what we wanted to look like going through 2021, anticipating the growth we want to drive in 2021 as well. And then we made final decision so that everyone could settle down, get back to work and know that we are done. And that’s the 3-step approach we took. And now I think we have everybody back engaged. Everybody is getting up to speed on the new tools and things like that. And we feel really good that we are positioned and have the right structure and right number of people, not only to emerge from this, but to get us through the growth we want to see in 2021 as well.

That’s great. Thanks for that.

Thank you, then.

With respect to the nasal swab data, do you still anticipate that coming out at one of the fall pulmonology oriented conferences or will that be – do you think that will be distributed in some other vehicle or via some other vehicle?

Well, I mean, as a company, we always look for either having it come out in a vehicle or creating a vehicle. One or the other, we like to get the data out there when it is available. So we have said and have expected that there would be additional data emerge. Obviously, the product isn’t targeted to launch until we said today, the last half of 2021. So any kind of final pivotal validation data will yet be pending into 2021. But we are excited that, that is moving along our continued generation of revenue from our partnership with J&J supports the fact that things are moving along well there. And so I think that as per our catalyst side, we pointed to additional data, not only coming out on the nasal swab, but also Percepta in lung cancer, we believe we are on track for all this new data to still emerge between now and the end of the year.

Great. Thank you so much. Appreciate it.

Thank you.

Thanks, Thomas.

Next question will be coming from the line of Steve Unger with Needham. Your line is open.

Great. Thanks. Hi, everybody. As far as the – I appreciate the color on the volume breakdown. And I was just curious if you could provide revenue from the pulmonary franchise. And then I noticed that the revenue per test increased this quarter. And I was wondering, Keith, maybe Bonnie has done most of the talking, and I was wondering if you could maybe provide some color on revenue per test?

That’s a great idea. Keith?

Don’t include me. You have done a great job. The revenue per test, I mean, we continue to accrue and have good rates there. We got our no result rate back online, and we are doing a great job on cash collections. Our DSOs were almost at a record for the company. And in the last 12 months, our cash collections exceed our revenue, which guys now since I have joined here 4 years ago, it’s been real focus as to, there is cash and there’s GAAP, and we do a real good job of pushing on making sure we get paid for everything. So that’s just been a really good story. Envisia has been a great story on the rate we have been able to collect on that. There’s a real clinical need there. We have done a really good job getting paid. Percepta does well. So just across all of our products, I think we just had another really great quarter in light of COVID. There’s just a lot of uncertainty what was going to happen with payers going into COVID, and it’s just – it’s been a really great story.

Yes – yes, we did get a lot of requests, and certainly, you were one of them of desiring a little more granularity on the lung franchise since we have multiple tests there. I think that Keith’s ability to lean into that and give you the volumes for each of those will give you a good idea. Our rates haven’t changed on those. So that will give you a good idea of where revenue landed, even though we didn’t call all that specifically.

We have historically always talked about it being around 1,500 on a blended basis for both tests on the lung side. I think that’s not the exact number, but we just always talked about getting a round number around there. We are going to move – we are moving hard to get commercial payers on that side. We are still getting paid from commercial payers, but getting commercial contracts in place has a big push internally. So we will continue to move that, managed care effort forward as well.

Yes.

Got it. And then my last question, just on – you have done some cost cutting, and it doesn’t appear to have impacted R&D. A lot of what you are doing is with partners. So that spend is sort of off your books so to speak. And I am just curious as to what’s your plan for the R&D function in the back half of the year? And should we expect to see you ramping that up now that – I mean, you have got several products launching in 2021?

Yes. I mean the way to think about R&D, I mean, quite frankly, the pipeline that we talk about launching next year the R&D may be with the exception of the LymphMark test, which was close to being finished when we acquired that from NanoString. I mean the other 3 products are major, major R&D undertaking to get those products to market. Our nasal swab, first ever development of a test, it’s going to be a combination roll out and roll in for diagnosing lung cancer early and getting patients on treatment decisions with Percepta Atlas, major, major undertakings. And then the Envisia development taking a classifier that’s on the market with expected performance today and recapitulating that performance on a brand new platform and we are already pointing to that, still being on track for launch next year. And that’s not easy. I mean, others have really struggled to move technology platforms and maintain the performance of their classifiers. And we have done it multiple times and have done it with just utter flawless excellence. And I don’t say that as bragging about me, but bragging about our R&D team, which I think is one of, if not, the most high-quality R&D team in this industry. The number of tests, the fact that we have never missed end points, where every test achieves its end point, and comes out, and is able to deliver very high-quality patient care decisions, and we are changing clinical practice with every one of our tests. So the fact that we have been able to do that and have 3 tests, the largest investment is at the stage that those tests are now in R&D, so no, we don’t likely won’t need to increase spend beyond that when we get these tests to market, but think about how incredibly productive our R&D team is to be able to advance 3 new tests to market, and we are spending very little more than we had in the last couple of years. So it’s not always about the number of people and the spend in R&D. It also has a lot to do with how you set up those discovery and development engines to be very efficient. And of course, that covers the cost of our clinical trials as well. And then I will just mention that we have been very successful at bringing partnerships to bear with the company that do help us cover the cost of some of those pipelines. That’s strategically one of the levers of value that we are working toward. And certainly, that’s the case with J&J. So that’s kind of how that all threads together, but I think we have been incredibly productive with our R&D spend.

Yes. Just to put numbers beyond that. As you know, on Slide 14, we dropped these numbers in here. And I love how the bar chart sort of – you can draw a line. We put R&D and G&A at the bottom, right? We separate outlets, sales and marketing. And you can see how we pivot the business to run it so we drive value for our investors. And so since I have been here, that number has been anywhere from, call it, $3 million to $4.5 million a quarter. So call it, $16 million, $17 million run rate right now. And I think since the last 2 years, we have had over $17.5 million in biopharma collaboration revenue. So if you put that in perspective of what you typically see in this industry for companies that are building tests that have 20-year futures, that just sort of underlies or supports Bonnie’s point here that we are trying to be very, very thoughtful about how we invest across that platform with 4 products coming out. So in 2021, it’s a pretty impressive result. Giulia Kennedy and the team deserve a lot of credit for years and years of building a great R&D business.

Sure.

Alright. I agree.

Thank you, Steve.

I appreciate the color. Thanks.

You bet.

[Operator Instructions]

I think we are ready to close the call.

Thank you.

Ladies and gentlemen, this concludes our call today. Thank you for joining us. You may now disconnect.