SOPHiA GENETICS SA Q3 FY2024 earnings call

Q3 Performance: Clinical volume reaccelerated, and strong cost management led to a 39% year-over-year improvement in cash burn. Biopharma revenue was down but leading indicators suggest the business is regaining momentum. ### MSK-ACCESS: MSK-ACCESS powered with SOPHiA DDM attracted strong interest with 18 customers globally, spanning 5 continents and 10 countries. The launch of MSK-IMPACT powered with SOPHiA DDM in October offers another growth area. ### Leadership Changes: Ross Muken was promoted to company President to oversee global business operations, and George Cardoza joined as Chief Financial Officer with extensive financial and scaling experience.

In the third quarter, SOPHiA GENETICS performed approximately 91,000 analyses, representing a year-over-year growth of 16% (17% when excluding COVID-related volumes). Biopharma revenue was materially down. Core genomic customers were 462 as of September 30, 2024, up from 431 in the prior year period. Gross margin for Q3 2024 was 67.2% compared to 69.1% in Q3 2023. Adjusted gross margin was 73.1% in Q3 2024.

2024 Guidance: Reaffirms revenue guidance of $65 million to $67 million (4%-7% year-over-year growth). Adjusted gross margin guidance is in the range of 72% to 72.5%, and adjusted operating loss guidance is between $45 million and $50 million. ### 2025 Outlook: MSK-ACCESS and related products are expected to contribute meaningfully to growth, with 18 customers signed to date and 13 in the implementation phase.

Biopharma Risks: Budget constraints in biopharma lead to longer sales cycles and potential revenue pushouts. ### Regional Risks: Some regions like Spain faced pricing pressure in solid tumor, and reimbursement dynamics in Latin America impacted performance.

Q: Congrats on the quarter. Maybe just zooming out a bit on MSK...

A: Jurgi and Ross discussed MSK-ACCESS and MSK-IMPACT, with 18 customers signed and 13 in implementation, expecting material growth in future.

Q: This is Jason on for Tejas. Congrats on the quarter. So maybe just a question on pricing...

A: Jurgi and Ross mentioned some pricing pressure in Europe, particularly Spain, but stabilization in Italy and France expected, with newer products having higher ASPs.

Q: This is Vidyun on for Mark. on the biopharma piece...

A: Jurgi and Ross talked about biopharma strategy focusing on DX activities and market access, with pipeline growing but pharma budgets still tight.

Q: Jurgi, flowing up on biopharma comments...

A: Jurgi discussed meeting with pharma companies and SOPHiA's position as part of the solution, with focus on oncology and complementary portfolio.

Q: Ross, one for you. You guys are making good progress with operational spending discipline...

A: Ross mentioned commitment to profitability, steady progress in OpEx, and focus on path to self-sustainability.

Q: Subbu Nambi: Jurgi, flowing up on biopharma comments...

A: Jurgi talked about meetings with pharma and SOPHiA's fit for pharma needs.

Q: Subbu Nambi: And Ross, one for you...

A: Ross discussed pipeline and focus on oncology and rare diseases.

Q: Conor McNamara: Thanks for the questions. First, Ross, congrats on the new job and George, welcome to the team. First, just on the clinical revenue side...

A: Jurgi and Ross talked about clinical volume growth in various regions like North America, Asia Pacific, EMEA, with stable underlying growth despite some challenges.

Q: Conor McNamara: And then on the BioFire side...

A: Jurgi discussed biopharma spending dynamics and SOPHiA's advantage in network outside U.S. for pharma.