Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Biodesix Inc (BDSX, Financial) reported a 51% year-over-year growth in revenue for Q2 2024.
- Gross margins remained strong at 78.4%, marking the fourth consecutive quarter in the upper 70s.
- The company raised its 2024 total revenue guidance to $70 million to $72 million, up from $65 million to $68 million.
- Lung diagnostic test volumes grew by 42% year-over-year, contributing to a 44% increase in revenue from these tests.
- Biopharma services revenue saw a significant increase of 228% compared to Q2 2023.
Negative Points
- Net loss for Q2 2024 was $10.8 million, although this was an improvement from the previous year's $13.4 million loss.
- Operating expenses increased by 14% year-over-year, primarily due to higher sales and marketing costs.
- The company is still facing administrative challenges with certain Medicare Advantage plans, with no resolution reported yet.
- Enrollment delays in the altitude study due to the pandemic have pushed the expected completion date to late 2025 or early 2026.
- Despite the strong revenue growth, the company continues to operate at a loss, with adjusted EBITDA showing a loss of $5.6 million for Q2 2024.
Q & A Highlights
Q: You're seeing some nice momentum in the business, especially on the volume side this quarter. Can you share where you're seeing that strength?
A: We're seeing consistent growth across all opportunities and sectors. Nodify, our nodule management tests, are driving growth. As we expand the sales force, we're reaching new physicians and seeing broader adoption within practices. Growth is balanced and equal across the board.
Q: Can you discuss pricing improvements and the funnel for additional contracts or coverage policies?
A: We are not building in any real improvements in reimbursement in our guidance. However, the team is working on expanding coverage and contracts for all tests. Medicare accounts for about 60% of our business, so each private payer policy doesn't move the needle much individually, but collectively they do. We have a great funnel and payers understand the problem we're solving.
Q: Can you elaborate on the ongoing Salesforce expansion and its impact on demand creation and test volumes?
A: We completed a fundraise intra-quarter and brought new sales reps on later than usual. Despite this, the existing team excelled. Sales rep productivity remains around $1 million per rep annualized. Bringing new team members on earlier in the quarter is advantageous for quicker contribution.
Q: Is the altitude study still on track for year-end 2024 completion, and what's your confidence level in the trial?
A: We feel confident in the study design, but due to early enrollment delays from the pandemic, we expect completion in late 2025 or early 2026. The data safety management board will provide feedback soon, and we'll update on interim analysis and data.
Q: With the Louisville facility complete, are there any significant investments needed there or in De Soto?
A: No significant investments are needed in Colorado. We are planning to improve the Kansas facility for long-term results, but this will occur in 2025-2026. The majority of growth and expansion will occur in Colorado.
Q: Will the sales team expansion have you ending the year with around 75 reps?
A: Yes, we plan to end the year with around 75 reps. Bringing them on earlier in the quarter allows for quicker contribution, setting us up for success in 2025.
Q: Are there mature accounts or pulmonologists that aren't fully penetrated, and what's their hesitancy?
A: It varies by practice and patient population. We see continued and deepened penetration in mature accounts. Once an account orders 10-20 tests and reviews results, reorder rates jump significantly. We feel good about adding sales reps and sharing the value of our tests.
Q: Can you provide more details on the financial performance and guidance?
A: Second quarter total revenue was $17.9 million, a 51% increase year-over-year. Lung diagnostic revenue was $16.5 million, a 44% growth. Biopharma services revenue grew 228%. Gross margin was 78.4%. Net loss improved by 19% to $10.8 million. Adjusted EBITDA loss improved by 38%. We ended the quarter with $42.2 million in cash. We are increasing 2024 revenue guidance to $70-$72 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
