UBS Global Healthcare Conference - BIODESIX INC

Explicit Guidance:

• FY2026 Profitability: Management targets achieving a major milestone of self-sufficiency/profitability by the end of next year (FY2026), driven primarily by top-line revenue growth from commercial expansion.
• 2027 Outlook: Expects 2027 to be a "banner year," contingent on new test timing announcements, data releases, and full ramp-up of sales headcount.
• FY2027 Revenue Growth: No specific dollar or percentage range provided for 2027; outlook focuses on the trajectory of growth following FY2026 profitability.
• 2028 Commercialization: Targeting commercialization of the radiomics-based digital diagnostic product (in partnership with Vanderbilt) in 2028 to complement the blood-based Notify portfolio.

Business-Segment Outlook:

• Notify (Blood-Based Diagnostics):
  • Volume & Channel Mix: The primary care channel now accounts for 15% of patient volumes (representing 50% of the total market); management expects continued growth here despite seasonality differences compared to pulmonology.
  • Product Mix (CDT vs. XL2): Introduction of CDT for smaller nodules (4–8mm) in Q2 reduced overall Average Selling Price (ASP) but captured a "halo effect," increasing orders in the 8–30mm category; gross margins remain >80% for six consecutive quarters.
  • Physician Acquisition: October was the strongest month for new physician acquisition in the current cycle; existing customer ordering patterns improved.
• Digital Diagnostics (Radiomics):
  • Stratify Study: Currently underway to validate clinical utility and optimize the workflow between blood and imaging data; initial platform data expected at RSNA (upcoming).
  • Pipeline Validation: Additional data releases and the first publication on the test's performance expected shortly after RSNA.
• MRD (Minimal Residual Disease) Partnerships:
  • Tumor-Informed: Partnership with BioRad to develop a distributed test; validation data presented by Memorial Sloan Kettering (MSK).
  • Tumor-Naive: Partnership with Thermo Fisher for a methylation assay; planned for distributed availability across the U.S. and globally.
  • Commercial Strategy: No plans to build a massive internal oncology sales force; relying on partners for distribution while leveraging existing pulmonology infrastructure.

Market and Competitive Outlook:

• Addressable Market Expansion: Current U.S. incidental nodule estimates revised upward from 1.5M (15 years ago) to 5–6 million annually.
• Clinical Guidelines: Anticipated formal inclusion of biomarkers (like Notify) into official CHEST guidelines could occur in early 2027 (Q1/Q2), following a recent structured framework endorsement.
• Programmatic Ordering: Shift from high-touch manual ordering to automated, programmatic algorithmic ordering as health systems adopt the new CHEST framework; two West Coast health systems currently implementing this model.
• Competitive Positioning: Unique position as the only diagnostic sales team specifically calling on pulmonology; no single biomarker is viewed as a complete solution, creating a "multimodal" opportunity.

Macro / Industry Outlook:

• Primary Care Seasonality: Acknowledges stronger seasonality in primary care ordering compared to specialists (due to patient willingness to delay appointments), a dynamic not seen in previous quarters.
• Reimbursement Environment: Successfully maintained Medicare rates and private payer rates; health economics data utilized to shore up pricing under PAMA.
• Biopharma Data Monetization: Recognizing potential to leverage the "Diagnostic Cortex" AI platform and multimodal data sets (blood + CT) for partnerships with biopharma/AI companies, though this remains a secondary revenue stream.

Strategic Initiatives:

• Sales Force Expansion:
  • Headcount Target: Aiming to increase sales team from 101 (Q3 avg) to 115 reps by year-end.
  • Hiring Cadence: Planning to hire 6–8 reps quarterly to optimize training throughput and reduce dropout rates.
  • Productivity Ramp: New reps expected to be self-sufficient within one quarter, with full catch-stride productivity achieved in 2–3 quarters (6–9 months).
• Partnerships:
  • Vanderbilt: Collaboration for radiomics-based digital risk assessment targeting 2028 launch.
  • BioRad & Thermo Fisher: Joint development and distribution of MRD assays.
  • Memorial Sloan Kettering (MSK): Validation partner for both MRD programs.
• Infrastructure: Continued investment in customer care, billing, and marketing support to enable sales team productivity and margin expansion.

Risks and Headwinds to Outlook:

• Guideline Delay: Significant risk that formal guideline inclusion by CHEST takes longer than anticipated (rumors of early 2027), slowing the shift to programmatic ordering.
• Sales Ramp Volatility: New rep productivity may be impacted by attrition or training delays; full ramp-up could take longer than 6–9 months.
• Primary Care Dynamics: Potential for continued seasonality or delayed patient engagement in the primary care channel compared to specialists.
• Contract Execution: Biopharma services may face delays due to contract execution timing or study accruals, pushing revenue recognition out.

Management Tone on the Future:

• Confidence Level: Cautiously optimistic; management views Q3 shortfall as transitory, citing strong momentum in October.
• Strategic Shift: Moving from "survival" mode to aggressive growth with a clear timeline to profitability (end of FY2026).
• Long-Term Vision: Believes the company is "set up really well" for 2027, viewing the current market dynamics and guideline framework as a compounding opportunity for market penetration.

Miscellaneous:

• Key Metrics for Success (Next 12 Months):
  1. Sales Headcount: Achievement of target rep count (115+).
  2. Rep Productivity: Tests per rep (normalized for reimbursement changes).
  3. Milestones: New test timing announcements and data releases regarding the digital/MRD platforms.