Biodesix, Inc. Q3 FY2025 earnings call

• Biodesix's mission is to transform patient care through personalized diagnostics leveraging genomics, proteomics, radiomics, and AI. In 2025, the company focused on growing top-line revenue, improving operational effectiveness for adjusted EBITDA positivity in the fourth quarter, and advancing the pipeline. • In lung diagnostics, a 3-tiered commercial strategy for lung nodule management was implemented. Primary care sales representatives were in the field for the full third quarter, with tests ordered from primary care growing 75% year-over-year. • Development services revenue saw a 97% year-over-year growth in the third quarter to $1.9 million, and the funnel for development services had $12.9 million under contract, an all-time high. • The product pipeline includes a combination proteomic and genomic MRD test, expanded indications for VeriStrat, and a partnership with Bio-Rad Laboratories for assay development.

In the third quarter, total revenue was $21.8 million, representing a 20% year-over-year increase. Lung diagnostic testing revenue was $19.8 million from approximately 15,700 tests, up 13% year-over-year, contributing a significant portion of the revenue. Development services revenue was $1.9 million, marking a 97% year-over-year growth. The gross margin percentage in the third quarter of 2025 was 81%, an increase of 400 basis points from the third quarter of 2024. The company ended the third quarter with $12.9 million under contract for development services, which was a 16% increase compared to the same period the previous year.

• Biodesix updated its full-year 2025 revenue guidance to $84 million to $86 million. • The company expects to achieve adjusted EBITDA positivity in the fourth quarter.

• Ongoing efforts to collect on older Medicare Advantage claims that were not previously recognized as revenue or booked as accounts receivable. • Continued supply cost pressure and macroeconomic uncertainty that could impact gross margins.

Q: Maggie Boeye asked about proof points of primary care expansion.

A: Scott Hutton stated that there are warm handoffs from pulmonologists to primary care physicians, tracking of earlier detection by primary care physicians, and progress in marketing materials and feedback from providers.

Q: Alex Vukasin inquired about the sales rep ramp-up and peak sales per rep.

A: Scott Hutton mentioned that the company aims for $1 million per sales rep in productivity, with consistent ramp-up from hiring, training, and onboarding, and plans to add 6 sales reps per quarter.

Q: Alex Vukasin also asked about competition in lung cancer testing.

A: Scott Hutton said Biodesix has a first-mover advantage, and more awareness in the space helps, with broader screening adoption benefiting Nodify testing.

Q: Thomas Flaten asked about Medicare Advantage back pay and ASP sustainability.

A: Robin Cowie responded that there was little back pay in the third quarter, with consistent payment on new claims and normalized ASP to be noted if back claims are collected.

Q: William Ruby asked about confidence in adjusted EBITDA positivity and capital needs.

A: Robin Cowie said the company is confident in achieving adjusted EBITDA positivity in the fourth quarter and is confident in capital needs with revenue growth, improved gross margins, and controlled operating expenses.