GeneDx Holdings Corp. Q1 FY2024 earnings call

• Transformed GeneDx over the past few years, focusing on industry-leading exome and genome.
• Hit milestone of interpreting over 600,000 clinical exomes since 2012, with half interpreted in the past 3 years.
• Organized team around 3 goals: driving exome utilization, improving average reimbursement rates, reducing cash burn.
• First quarter saw $61 million in revenues, 61% gross margin, and eighth consecutive quarter of cash burn reduction.

In the first quarter, GeneDx generated over $61 million in revenues. The exome and genome portfolio was a key contributor, with revenues of $44 million from over 16,500 whole exome and genome tests, representing about 70% of total revenue. Gross margin was 61%, up from 34% the previous year.

• Raised annual revenue guidance to $235 million to $245 million.
• Raised full-year adjusted gross margin guidance to 60% or higher.
• Reduced cash burn guidance, expecting to use $70 million to $80 million in net cash for 2024.
• Expect to turn profitable in 2025.

• Nearly half of exome claims are still denied, with a large portion due to administrative issues and nonmedical payer requirements.
• Medicaid coverage for exome and genome varies by state, with still a long way to go for nationwide equitable access.

Q: Dan Brennan from TD Cowen asked about FDA LDT guidance and its impact on the company.

A: Katherine Stueland responded that they were happy with the FDA guidance, had hired a Head of Regulatory, and were well-prepared to comply.

Q: Mark Massaro from BTIG asked about revenue growth and exome/genome mix shift.

A: Kevin Feeley said sequential revenue growth could continue, with exome growth expected but non-exome volumes potentially declining as they shift to exome/genome.

Q: Matthew Sykes from Goldman Sachs asked about exome/genome ASP and denial rates.

A: Kevin Feeley mentioned the $2,600 average reimbursement as a new floor, and denial rates were being addressed through process improvements, not just adding staff.