GeneDx (WGS) Jefferies Global Healthcare Conference summary

Business transformation and strategic focus

• Shifted away from unsustainable oncology and reproductive health businesses to focus on exome and genome testing, which now drive revenue and strong gross margins above 60%.

• Completed restructuring in 2023, resulting in a clean P&L and a focus on profitable growth.

• Retired 400 tests from the menu to streamline offerings and prioritize high-value exome and genome tests.

• Targeting 100% exome and genome test mix over several years, with a commercial strategy focused on neuropediatric segments like epilepsy and autism.

• Operating expenses have been radically reduced, with all restructuring and severance costs now behind.

Financial performance and outlook

• Gross margins reached 61% in Q1, with exome and genome tests comprising 30% of total volume and expected to become the majority.

• Average selling price (ASP) for exome/genome tests is $2,600, with potential upside as denial rates are reduced and more Medicaid programs provide coverage.

• Every 5% reduction in denial rates could add $2 million in quarterly revenue.

• Sequential declines in cash burn are expected through 2024, with profitability targeted for 2025.

• Remaining legacy liabilities include a $22 million payer settlement and $5 million in operating leases for vacated facilities.

Regulatory and industry environment

• LDT legislation is viewed as a net positive, supporting industry standards and leveraging the company’s long-standing regulatory compliance.

• Over 600,000 clinical exomes have been run, strengthening the data asset and reducing variants of unknown significance.

• In-network with over 80% of commercial payers, with ongoing efforts to improve reimbursement and reduce denials.