베라사이트(VCYT) 2026년 3분기 실적 발표: 디사이퍼 전망 재설정, 2027년 성장 둔화

핵심 요약

• 베라사이트(Veracyte)의 2026년 3분기 매출은 전년 동기 대비 15% 증가한 1억 5,180만 달러를 기록했으며, 전체 검사 건수는 15% 늘어난 약 5만 2,700건에 달했다.
• 조정 EBITDA는 매출의 27.2%에 해당하는 4,120만 달러를 기록했다. 영업활동 현금흐름은 4,030만 달러였다.
• 디사이퍼 전립선(Decipher Prostate) 검사 건수는 12% 증가해 3만 건에 육박했으나, 경영진 예상치에는 약 1,000건 미치지 못했다. 회사는 연간 추가 검사 건수 증가 전망치를 1만 2,000~1만 5,000건으로 재설정했다.
• 아피르마(Afirma) 검사 건수는 의사들의 활용 확대, 시장점유율 상승, V2 전사체 워크플로 도입에 따른 판정 불가율(no-result rate) 개선에 힘입어 12% 증가한 약 1만 9,000건을 기록했다.
• 경영진은 2026년 연간 매출 가이던스를 5억 9,000만~5억 9,300만 달러로 좁혔으며, 26% 이상의 조정 EBITDA 마진 가이던스는 그대로 유지했다.
• 2027년 잠정 전망치로는 전체 검사 건수 약 10% 증가, 한 자릿수 중반대 매출 성장률, 22%의 조정 EBITDA 마진율을 제시했다. 또한 이사회는 최대 1억 달러 규모의 자사주 매입을 승인했다.

주요 재무 실적

사업 및 운영 성과

디사이퍼 전립선(Decipher Prostate)

디사이퍼 전립선 검사는 약 3만 건을 기록하며 전년 동기 대비 12% 증가했다. 다만 검사 건수는 경영진 예상치를 약 1,000건 밑돌았다.

경영진은 이러한 성장 둔화의 원인으로 유리한 미국종합암네트워크(NCCN) 가이드라인 개정 이후 2년간 이어진 가파른 도입세에 따른 정상화, 저위험군 환자 대상 성장세 약화, 디지털 병리 및 AI 기반 진단 도구에 대한 의사들의 관심 증대를 꼽았다. 회사는 디사이퍼 처방 의사 수가 지속적으로 늘고 있고 활용도 확대 및 점유율 상승도 이어지고 있으나, 경쟁 관련 논의로 인해 더 많은 영업 자원이 소모되고 있다고 밝혔다.

베라사이트는 2027년까지 영업 사원, 의학학술담당자(MSL), 영업 리더십을 아우르는 비뇨기과 상업화 조직을 약 30% 확대할 계획이다. 경영진은 디사이퍼의 연간 추가 검사 건수 증가 전망치를 1만 2,000~1만 5,000건으로 재설정했으며, 1만 2,000건을 합리적인 단기 하한선으로 평가했다.

회사는 임상 3상 NRG RTOG 0815 및 STAMPEDE 임상시험에서 확보한 새로운 예측 근거와 2026년 초 발표된 ENZAMET 데이터를 강조했다. 경영진은 장기적으로 80%의 시장점유율과 80%의 침투율 달성을 계속 목표로 하고 있다.

아피르마(Afirma)

아피르마는 전년 동기 대비 12% 증가한 약 1만 9,000건의 검사를 처리했다. 이러한 성장은 기존 처방 의사들의 활용 확대, 지속적인 점유율 상승, V2 전사체 워크플로의 낮은 판정 불가율을 반영한다.

워크플로 개선은 3분기 전년 동기 대비 검사 건수 성장에 약 300bp 기여했다. 경영진은 지속적인 시장 성장, 침투율 심화, 추가적인 임상적 근거 확보에 힘입어 아피르마가 지속적인 수혜를 입을 것으로 기대하고 있다.

프로시그나(ProSigna)

베라사이트는 임상 3상 OPTIMA 연구 결과 발표에 따라 미국에서 자체 개발 검사(LDT) 방식의 프로시그나를 출시했다. 해당 연구에 따르면 프로시그나는 임상적 고위험군 여성 환자 중 항암화학요법을 안전하게 생략할 수 있는 환자를 3분의 2 이상 선별해 냈다.

회사는 림프절 전이가 0~3개인 1기 또는 2기 에스트로겐 수용체 양성(ER+) 적격 폐경 후 여성 환자를 대상으로 메디케어 보험 급여를 확보했다. 경영진은 2027년 초 OPTIMA 연구 논문이 발표되면 가이드라인 등재 및 보험 급여 확대를 위한 논의가 가속화될 것으로 예상했다.

베라사이트는 연말까지 전담 종양내과 영업팀을 15명 규모로 확대할 계획이다. 미국 외 지역에서는 영국과 북유럽을 중심으로 프로시그나 체외진단(IVD) 도입이 늘면서 제품 매출이 40% 증가했다.

방광암 포트폴리오

컨버전트 제노믹스 인수를 통해 베라사이트의 기존 디사이퍼 방광(Decipher Bladder) 조직 검사 및 트루MRD(TrueMRD) 혈액 기반 모니터링 검사에 소변 기반 종양 DNA 플랫폼인 유로앰프(UroAmp)가 추가되었다.

경영진은 유로앰프의 첫 번째 적용 검사가 메디케어 보험 급여와 함께 2028년 말 출시될 것으로 보고 있으며, 초기에는 유도요법 후 유지요법 결정 단계를 타깃으로 삼을 계획이다. 회사는 유로앰프 검사의 시장 기회를 보수적으로 추산해도 최소 4억 달러 수준으로 평가했다.

베라사이트는 2027년 디사이퍼 방광 검사의 도입과 임상적 유용성이 확대되고, 2028년부터는 유로앰프 적응증 출시와 트루MRD의 추가 적응증 보험 급여 적용에 힘입어 포트폴리오의 실적 기여가 본격화될 것으로 예상하고 있다.

경영진 가이던스

경영진은 2027년 검사 건수 대비 매출 성장률 격차와 관련해 이전 기간 회수금 기저 효과에 따른 영향 약 200bp와, 단가가 낮은 프로시그나 및 방광암 검사를 포함한 매출 믹스 변화에 따른 영향 약 200bp가 반영된 결과라고 설명했다.

이번 잠정 전망치는 불확실성이 존재하는 이전 기간 회수금을 제외한 수치다. 베라사이트는 2026년 들어 현재까지 아피르마에서 약 600만 달러, 디사이퍼에서 450만 달러의 이전 기간 회수금을 인식했다.

위험 및 주요 점검 사항

• 디사이퍼의 성장세는 2년간의 급격한 도입 이후 정상화 국면에 접어들었으며, 2026년 NCCN의 저위험군 가이드라인 변경과 적극적 감시(active surveillance) 확대는 저위험군 검사 성장의 둔화 요인으로 작용하고 있다.
• 디지털 병리 및 AI 기반 제품이 의사들의 관심을 끌면서, 베라사이트 영업팀은 디사이퍼의 임상적 유용성과 차별성을 설득하는 데 더 많은 시간을 할애해야 하는 상황이다.
• 비뇨기과 상업화 팀을 30% 확장하려는 계획은 비용 지출을 늘려 2027년 조정 EBITDA 마진율의 예상 하락 요인이 될 전망이다.
• 보험사 계약 체결, 보험 급여 적용, 수납 이력 구축에 시간이 소요되므로 단기적으로 프로시그나와 트루MRD의 매출 기여도는 완만한 수준에 머물 것으로 예상된다.
• 경영진은 현재의 메디케어 보장 범위와 초기 검체 구성을 고려할 때, 단기적으로 프로시그나의 ASP가 검사당 원가 수준에 근접할 것으로 예상하고 있다.
• 이전 기간 회수금의 발생 시점 및 규모, 향후 관리의료(managed care) 계약 확보 여부는 여전히 불확실하며 통상 가이던스에서는 제외된다.

애널리스트 질의응답(Q&A) 하이라이트

애널리스트들은 디사이퍼의 성장 둔화가 구조적인 문제인지 여부에 집중했다. 이에 대해 경영진은 신규 및 처방을 재개한 의사가 늘고 있고 의사당 처방 건수도 비교적 안정적으로 유지되고 있어 검사 수요는 여전히 성장세에 있다고 밝혔다. 회사는 이러한 성장 둔화가 시장점유율 하락이 아닌 성장률의 정상화 과정이라고 규정했다.

디사이퍼의 1만 2,000건 하한선에 대해 경영진은 2026년 하반기 연환산 실적 추세(run rate)와 내부 예측치가 해당 수준을 뒷받침한다고 설명했다. 2027년 잠정 사업 계획에는 저위험군 검사의 뚜렷한 회복이나 향후 임상 촉매제의 기여는 가정하지 않았다.

프로시그나의 보험 급여와 관련해 경영진은 폐경 전 환자에 대한 민간 보험 적용 확대를 위해 보험사별 개별 계약이 필요할 것이라고 설명했다. 림프절 전이가 더 많은 환자를 대상으로 메디케어 정책을 개정하는 데는 수년이 소요될 수 있다.

경영진은 또한 베라사이트의 기존 실험실, 고객 지원, 청구 인프라가 신제품들을 충분히 뒷받침할 수 있다고 밝혔다. 프로시그나와 비뇨기과 포트폴리오는 별도의 상업화 팀이 담당하며, 전전사체, 전엑솜, 전장유전체 워크플로 공유를 통해 검사 건수 확대에 따른 영업 레버리지 효과를 창출할 전망이다.

실적 발표 콘퍼런스콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Good day and thank you for standing by. Welcome to the Veracyte third quarter 2026 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again.

Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Kelly Gura, Director of Investor Relations. Please go ahead.

Kelly Gura

Good afternoon, everyone, and thank you for joining us today to review Verisight's third quarter 2026 financial results. Joining me on the call are Mark Stapley, our Chief Executive Officer, and Rebecca Chambers, our Chief Financial Officer. Dr. John Light, our Chief Commercial Officer, will also be available for Q&A. Earlier this afternoon, we issued a press release detailing our third quarter financial results, and we posted an accompanying presentation in the investor section of our website. Before we begin, I'd like to remind you that statements we make during this call will include forward-looking statements as defined under applicable securities laws. Forward-looking statements are subject to risks and uncertainties, and the company can give no assurance that they will prove to be correct. The company undertakes no obligation to update any forward-looking statements except as required by law.

To better understand the risks and uncertainties that could cause actual results to differ, we refer you to the documents that VeriSight files with the Securities and Exchange Commission, including the most recent forms 10-Q and 10-K. In addition, this call will include certain non-GAAP financial measures. Reconciliations of these measures to the most directly comparable GAAP financial measures are included in today's earnings release accessible from the Investors section of Verisight's website. I will now turn the call over to Mark Stapley, Verisight's CEO. Thank you, Kelly, and thank you all for joining us today.

Unknown Speaker

Third quarter revenue increased approximately 15% year over year to $151.8 million. And we delivered another quarter of strong profitability and cash generation, Afirma exceeded expectations while Decipher prostate volume was lower than we expected. Today, I will share our observations regarding these trends, the steps we are taking to support future growth, and why we remain confident in the long-term opportunity for all of our tests. First, I'd like to highlight some of the exciting momentum we're seeing across our portfolio. We have made good progress advancing our breast and bladder strategies over the last few months with the launches of Prosigna LDT for breast cancer and TrueMRD for muscle-invasive bladder cancer or MIBC. In September, we strengthened our urology portfolio through the acquisition of Convergent Genomics, adding a urine-based technology platform that complements our tissue and blood-based capabilities across the bladder cancer continuum. We also advanced our market access strategies in breast, prostate, and bladder cancer, helping preserve and expand access to our valuable tests for Medicare-eligible patients.

Now I'll walk through our performance across each of our growth drivers. Starting with Decipher Prostate, we delivered nearly 30,000 tests in the third quarter, representing 12% year-over-year growth, with volume approximately 1,000 tests lower than we expected. We're disappointed by that shortfall, but believe we have identified the underlying drivers and are taking action to address them. Firstly, we now believe that the highly favorable guideline updates developed by NCCN for the 2023 and 2024 practice guidelines drove a temporal acceleration in physician adoption, resulting in two years of outsized growth. Physicians who began or increased ordering following those updates remain engaged, and their order volumes are still growing. However, we believe that growth is now normalizing. Secondly, as discussed last quarter, the 2026 NCCN low-risk guideline change impacting genetic classifiers and MMAI tests, as well as a shift to more low-risk patients choosing active surveillance without undergoing further testing, has moderated growth in that setting to single digits.

Thirdly, novel technologies such as digital pathology have drawn attention as physicians consider how to incorporate those tools into their patient care pathways alongside the Decipher test. This requires our commercial team to spend more time discussing the clinical utility of molecular information, the strength and differentiation of Decipher's broad evidence base, and the complementarity of digital pathology and AI-based tools, taking time away from core selling. To address this, as well as our expanding portfolio of urology products, we are taking a multi-pronged approach, beginning with greater investment in the channel, Rather than our typical handful of sales hires annually, we plan to expand the urology team by approximately 30 percent next year across field representatives, medical science liaisons, and sales leadership. This will enable our representatives to focus on core selling while continuing to grow the commercial channel to deliver high-value transcriptome and MRD testing with Decipher Bladder, TrueMRD, and over time, EuroAmp. We're also expanding our efforts to generate and articulate new predictive and prognostic claims for Decipher, as well as other important tumor molecular features. Decipher is the most widely validated test in prostate cancer, with growing evidence for broader uses in both localized and metastatic disease as care standards and treatments evolve. We will strengthen our evidence generation flywheel by adding additional bioinformatics capabilities to capture real-world evidence of Decipher's benefit and support analysis of key ongoing clinical studies.

While we believe these investments will support broader adoption and deeper utilization, helping sustain Decipher's growth, given the factors mentioned, we are resetting our incremental annual volume growth expectations to 12,000 to 15,000 tests, with the low end as a reasonable floor for now. Several catalysts could help us reach or exceed the high end of this range, including new predictive evidence further validating Decipher's use across the cancer continuum, phase three trial readouts spanning all risk categories and continued evolution of our offering with new molecular and digital pathology insights to help inform patient care. We have advanced these catalysts, generating three new predictive claims in recent months. At ASTRO, an analysis from the Phase III NRG RTOG 0815 trial provided new predictive evidence for Decipher in intermediate-risk prostate cancer, the largest market segment, where treatment intensity remains uncertain. The data shows that Decipher can help identify patients more likely to benefit from the addition of short-term hormone therapy to radiation, extending its evidence in this setting from prognosis to prediction. And last week at the ESMO World Congress, new predictive evidence from the Phase III Stampede trial further expanded Decipher's evidence in clinically very high risk, node negative non-metastatic disease. demonstrating the test's ability to help identify which patients may benefit most from adding abiraterone to standard hormone therapy. This builds on Decipher's well-established role in high- and very high-risk prostate cancer, including prior stampede prognostic data that were recently incorporated in the NCCN 2027 Prostate Cancer Guidelines for the first time.

And earlier this summer at ASCO, data from the ENZOMET trial provided predictive evidence for Decipher in metastatic hormone-sensitive prostate cancer. Continued investment in new claims is essential to build evidence across the risk continuum. Potential catalysts, if positive, include readouts from the prospective NCI-sponsored Phase 3 Guidance and Predict RT randomized trials, which are now fully enrolled. They are evaluating treatment intensification and de-intensification in intermediate and high-risk disease, respectively. using Decipher as an integral biomarker to determine eligibility or treatment assignment. And as discussed last quarter, Phase three low risk studies, including GENIE-SPACE and G Major, are evaluating Decipher's role in active surveillance decisions and could begin reporting preliminary findings as early as next year. Finally, one of our key differentiators is the combination of GRID and our collaborations with the academic community, which enables us to continually expand the insights we can deliver to physicians as prostate care becomes increasingly complex. We are bringing clinically validated signatures, including PORTOS, P10, and PAM50, into our molecular features report to provide additional insights.

DPAI represents another opportunity to build on this strategy by bringing molecular and digital pathology insights together to better inform prostate cancer care. We expect our first publication on our DPAI algorithm in the next few quarters, building on the data presented at ASCO-GU last year and fueling further research in this important area. We believe this will lead to multiple publications supporting the complementary use of DPAI alongside molecular testing in settings where it can add clinical value to the Decipher results. In summary, our confidence in Decipher's long-term opportunity is unchanged. The franchise is growing across all risk categories, gaining share and penetration, with ongoing prospective studies designed to generate level one evidence across low, intermediate, high risk, and metastatic disease. Notably, many of these trials were started more than a decade ago and are anticipated to read out over the next few years, efforts that, to our knowledge, have not been replicated. As evidence standards rise, we believe this depth and breadth will further differentiate Decipher, expand adoption and utilization, and help address the approximately 334,000 men diagnosed annually in the U.S.

We continue to view 80% market share and 80% penetration as appropriate, achievable long-term targets, supported by Decipher's differentiated evidence base and expanding evidence pipeline. Turning now to Afirma, we delivered another exceptionally strong quarter driven by approximately 19,000 tests, 12% year-over-year, fueled by deeper utilization among existing physicians and continued share gains. With the strongest sequential Q3 volume increase since 2020, this performance underscores our data-driven evidence generation approach and our leadership in thyroid nodule molecular diagnostics. Further, our V2 transcriptome workflow significantly reduced the no-result rate, helping more patients receive results and contributing approximately 300 basis points to year-over-year volume growth this quarter. We increasingly use Affirma Grid to support academic and industry collaborations that could yield new signatures, molecular insights, and use cases, fueling further publications and presentations that expand Affirma's evidence base. At this week's American Thyroid Association, or ATA, annual meeting, Affirma will be featured in no less than 10 posters and abstracts, including two oral presentations, our strongest podium presence in recent years. The studies build on Afirma's established diagnostic role and explore how gene expression data can illuminate cancer risk and biology.

We are very pleased with Afirma's year-to-date performance and believe share gains, market growth, and deeper penetration position the franchise for continued growth in 2027 and beyond, supported by ongoing clinical evidence. Moving on to ProSigna. We launched the test in the U.S. a few months ago following the prospective Phase III Optima readout, which provided practice-changing Level Ia evidence for treatment decisions. ProSigna identified more than two-thirds of clinically high-risk women who could safely avoid chemotherapy, one of the most consequential decisions in early-stage breast cancer. Optima builds on an already substantial body of evidence, including 157 publications to date featuring ProSigna, and more than 1,200 featuring the PAM-50 classifier on which the test is built. That evidence has already supported ProSigna's inclusion in NCCN guidelines for node-negative patients, as well as those with one to three positive lymph nodes, based on its prognostic ability to assess risk of recurrence. Looking ahead, we believe the Optima data will, once published in early 2027, expand ProSigna's role in guidelines by supporting its ability to predict chemotherapy benefit in high-risk patients, including premenopausal women. A late-breaking health economic analysis presented at ESMO showed ProSigna guided treatment can deliver meaningful cost savings for the UK health system. potentially reducing chemotherapy-related costs by millions of pounds annually.

Quality of life analysis for patients within the Optima trial, expected at the San Antonio Breast Cancer Symposium in December, will add evidence on clinical utility and patient impact. We also have more than 20 studies that are either ongoing or have completed and are pending publication. These studies will strengthen our prospective and retrospective data, including head-to-head comparisons across pre- and postmenopausal patients and for those that are node negative and node positive. Together, the strength and breadth of this evidence reinforced ProSigna's ability to help predict chemotherapy benefit beyond what can be determined by clinical risk factors. This differentiation gives us confidence in ProSigna's ability to address the significant market opportunity ahead, where approximately 225,000 patients are diagnosed with ER-positive HER2-negative breast cancer in the U.S. each year. We are seeing encouraging early demand following the launch, particularly in patient populations where the Optima data are most differentiated. Physicians have also responded positively to the intrinsic subtype information provided with every ProSigna result, which offers additional insights into the underlying biology of a patient's cancer.

We also recently secured Medicare reimbursement for postmenopausal women with early-stage ER-positive breast cancer who meet the applicable Medicare criteria, including stage 1 or 2 disease and 0 to 3 positive nodes. further supporting access to eligible patients. We are on track to grow our dedicated medical oncology commercial team to 15 representatives by year-end, doubling our original goal. And as we move into 2027, we plan to enhance the customer experience and ordering workflows to make ProSigna easier to incorporate into routine practice. During the quarter, we also saw significant momentum outside the US, where ProSigna is already well established as an IVD test. Product revenue grew 40% year over year, driven by strong adoption of ProSigna IVD, primarily in the UK and Nordic region, the Optima readout. We continue to expect Prosigna to drive meaningful share gains over the next two to five years and become an important growth driver for Veracyte while helping more physicians make better informed treatment decisions for patients with breast cancer. Turning now to bladder cancer. Our recent acquisition of Convergent Genomics strengthens our position by adding UroAmp, a differentiated urine-based tumor DNA platform Together with Decipher Bladder for tissue-based risk stratification and TrueMRD MIBC for blood-based recurrence monitoring, we are building a portfolio spanning non-muscle invasive and muscle invasive disease to inform bladder cancer care from diagnosis through post-treatment surveillance.

Approximately 85,000 patients are diagnosed with bladder cancer each year in the U.S., including 65,000 with non-muscle-invasive bladder cancer, or NMIBC. Urine is particularly well suited for testing in NMIBC because it comes into direct contact with bladder tumors, while localized disease may shed limited tumor DNA into blood. uAMP addresses this critical unmet need with our initial focus on three applications, informing the post-induction maintenance decision, monitoring response to therapy, and post-treatment surveillance. EuroAMP has a strong evidence base with nine peer-reviewed publications and more than 40 abstracts and posters. Four additional abstracts have been accepted for the upcoming Society of Urologic Oncology, or SUO, annual meeting, including data from the prospective INSIGHT trial, evaluating the clinical utility of EuroAMP for our first application. informing the post-induction maintenance decision. This data has also been accepted for peer-reviewed publication, helping support the technical assessment for reimbursement and representing an important step toward commercialization. We expect to launch our first UROAMP application in late 2028 with Medicare reimbursement with additional applications to follow. Earlier this year, we launched our first commercial true MRD test after securing Medicare reimbursement for recurrence monitoring in patients with MIBC following radical cystectomy.

True MRD uses whole genome sequencing for both the landmark test and longitudinal monitoring, providing a broader view of tumor biology and the ability to track tumor evolution over time. We believe this is an important differentiator with potential to extend to additional tumor types and clinical applications. We expect the bladder opportunity to build over time, beginning with broader adoption and expanding clinical utility for Decipher Bladder in 2027, followed by more meaningful contributions from the portfolio in 2028 and beyond, Uromap applications launch, and additional TRU-MID indications gain reimbursement. Together, these tests will uniquely combine to determine risk of progression, predict response to therapy. monitors for recurrence, and track the genomic landscape as the cancer evolves while also determining the time point that localized disease becomes systemic. In closing, we remain confident in our business and opportunities ahead. Our consistent growth over the past several years reflects the strength of our portfolio and the scale we have built. I believe we are well positioned to build on that momentum with exceptional Afirma performance and expanding Decipher evidence base to support this long-term opportunity and strong investment in our growth drivers.

I'm particularly proud that during the quarter, we served our one millionth patient, a milestone that reflects the impact we are having and the reach of our tests. I would like to thank the entire Veracyte team who made this milestone possible. With that, I'll turn the call over to Rebecca.

Rebecca Chambers

Thanks, Mark. Third quarter revenue grew 15% year over year to 151.8 million and total volume increased 15% to approximately 52,700 tests. We generated 40.3 million of cash from operations and ended the quarter with 370.5 million in cash, cash equivalents, and joint short-term investments after a $150 million cash payment for the acquisition of Convergent Genomics. Testing revenue grew 15% year-over-year to 146.4 million, driven by 12% Decipher Prostate and 19% Affirma Growth. Testing volume increased 13% to 49,498 tests and ASP increased 1% to 2,960. including approximately 2.5 million in prior period collections or PPCs. Excluding PPCs, normalized ASP rose 2% compared to the prior year to approximately $2,900, reflecting sustained pricing gains from operational improvements implemented over recent years and managed care wins. Turning to gross margin and operating expenses, I'll focus on our non-GAAP results. Non-GAAP gross margin was 73.7%, up 90 basis points year over year, driven by strength in our testing business.

Testing gross margin increased approximately 70 basis points to 74.7 percent, reflecting operational efficiencies from our V2 transcriptome workflow and higher ASP. Non-GAAP operating expenses rose 24% year over year to $72.9 million. As discussed, we moved software development and project management costs from G&A to R&D to reflect their full focus on product development. R&D increased 15.2 million to $29.2 million, with approximately $6 million from the realignment and the remainder from increased product investment. Sales and marketing rose 3.5 million to 25.9 million, with approximately half of the increased funding our new Prosigna sales team. G&A declined $4.5 million to 17.8 million, reflecting primarily the movement of cost centers. GAAP net income was 31.5 million.

Adjusted EBITDA reached 41.2 million, or 27.2% of revenue, exceeding our 25% annual long-term target. Turning to our 2026 outlook, we now expect full year revenue of 590 million to 593 million, up 14% to 15% year-over-year, versus 590 million to 596 million previously. We expect testing revenue of 571 million to 573 million, up 16%. as compared to our prior expectations of 576 million to 582 million. We expect approximately $10 million in other testing revenue from cytology services and Decipher Bladder with minimal contributions from recently launched tests. As Mark noted, early U.S. Prosigna demand is encouraging, and the patient mix to date suggests only a modest portion of volume will translate into fourth quarter revenue. Our guidance assumes approximately 16% Decipher Prostate revenue growth, with full-year ASP slightly above 2025, reflecting year-to-date PPCs and stronger-than-expected ASP performance. Quarter-to-date trends are encouraging versus Q3, but with two fewer selling days in the fourth quarter, we expect volume to be roughly flat sequentially.

For AFIRMA, we raised revenue growth guidance to approximately 16% from 12 to 14%, reflecting Q3 outperformance, favorable year-to-date prior period collections, continued ASP improvement, and an expected approximately 3% full-year no result rate benefit. On the fourth quarter of 2025, the V2 transcriptome improved the no result rate by approximately 200 basis points. We expect continued benefit this year, though with a smaller year-over-year impact compared to what we've seen year-to-date. Strong year-to-date profitability supports maintaining our adjusted EBITDA guidance above 26%. It also creates a reasonable possibility that a potential partial release of the valuation allowance could favorably impact our effective tax rate on a GAAP basis within the next 12 months. Looking ahead, we'd like to share our preliminary view of 2027, starting with key headwinds and tailwinds, most of which have been discussed previously. We currently expect Decipher volume growth near the 12,000 incremental test floor mark outlined, allowing time to assess how the catalyst discussed affects the business over coming quarters.

We expect approximately 5% for Afirma volume growth as we lap the no result rate improvement from the V2 transcriptome transition. PPC has contributed meaningfully to growth in 2026 with approximately $6 million for AFIRMA and 4.5 million for Decipher recognized year to date. when PPCs have uncertain timing and magnitude, we typically exclude them from guidance, creating a tougher 2027 comparison. Much of the AFIRMA 2026 PPCs resulted from payments related to last year's LBM issue, so we don't expect that outsized level to reoccur. Excluding PPCs, we expect the strong ASP gains this year to persist in 2027 and beyond, supporting underlying revenue growth. Our ProSigna and TrueMRD revenue expectations remain modest, reflecting typical first-year adoption timelines and limited coverage for our current ProSigna sample mix. Despite encouraging reimbursement progress, establishing commercial payer contracts and collection history takes time. Given these factors and our volume mix to date, we expect ProSigna ASP to be similar to our cost per test in the near term.

As a result of these dynamics, we expect approximately 10% total volume growth and mid-single-digit total revenue growth next year, with prior period collections, dynamics, and revenue mix accounting for the difference. We expect approximately 22% adjusted EBITDA for the full year, with Q1 representing the low point due to expense timing. margins improve to approximately 25% as we exit the year. This outlook reflects continued investment and growth, including expanded Decipher sales and marketing, while our long-term adjusted EBITDA goal remains unchanged to 25%. As we move through 2027 and into 2028 and beyond, we believe that growth will accelerate due to expanding evidence for Decipher Prostate around all risk categories, as well as increased momentum surrounding our newer growth drivers, namely breast and bladder, which will contribute in 2027, but to a greater extent in 2028 and beyond. We expect our differentiated financial profile to sustain strong profitability and cash flow while funding long-term portfolio opportunities. Reflecting on this profile of favorable long-term trends, strong cash generation, and confidence in our outlook, our board authorized a share repurchase program of up to $100 million. In closing, despite our moderated near-term expectations, we are confident in the long-term trajectory of our business.

Our vision is to transform cancer care for patients all over the world, and we continue to do this with our growing portfolio of tests spanning bladder, prostate, thyroid, and breast cancer. We'll now move to the Q&A portion of the call. Operator, please.

Operator

Open the line. Thank you. At this time we will conduct the question and answer session. As a reminder, to ask a question, you will need to press star 11 on your telephone and wait for your name to be announced. withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Puneet Souda from Leerink Partners. Your line is now open.

질의응답

Puneet Souda

Hi, guys. Thanks for the questions here. First one, look, Decipher is your largest revenue product. It has very strong clinical evidence that you're built with NCCN inclusion and the volumes have been strong. Just I'm trying to understand, I mean, look, you missed the volumes slightly last quarter, lowered the volume expectation, and this is another miss, which comes as a surprise to us. So just trying to understand why is this not a structural bleed in volumes that could accelerate further? Why is 12,000 an annual volume increase that you're talking about for Decipher? the right floor when just one quarter ago it was only 20,000, you know, 20,000 was the right number in your mind. Yes.

Unknown Speaker

And I have a follow up. Yes, thanks, Puneet. That's a fair question. Let me take you through. I mean, we cited on the call three factors that we we've analyzed for this quarter. And last quarter, we talked about the low. That was clearly the first impact we saw, and that's continuing this quarter. But to your point, as you mentioned, the NCCN guidelines and the strong evidence drove what we now believe is two years of outsized growth. In fact, it fueled growth very strongly for late 23 to early 24 and then 25.

And it feels like we're now coming off the back of that and getting to a more normalized level of growth. what is that new normalized level of growth? If you think about the second half of this year, based on the guidance that we've given you in the Q3, the guidance that we've given you in the Q3 result, we're running at about, call it a run rate of 12,000 tests a year. We've also done a lot of internal forecasting and analysis of what that range should be that normalized range, and that's where the 12 to 15 came from. And, you know, we feel as a team very confident in the 12. But we think it's prudent and important and transparent to, build our business around that 12, including, you know, how we think about resourcing, how we think about profitability, how we align and focus our teams, rather than on the higher number. And then, you know, as the year progresses, you know, that gives us an opportunity to revisit that. And then we also felt it important to share that today so that, you know, you will have some sense of what we're thinking. Now, I'll be clear, our budget isn't done yet.

It hasn't been approved by the board. We'll continue to work through that as we normally do during this cycle of Q3 into Q4. But, you know, we feel very confident in that 12,000 number at this point. And I don't anticipate that changing between now and Q4, to be clear. That's why we're giving it to you now.

Puneet Souda

Okay, and then on the competitive front, I think you talked about digital pathology. Just wanted to understand, look, there's a competitive digital pathology assay that saw a step up in promotional activity from a peer, from a competitor, through 2Q. Just trying to understand, seeing an impact from that and then also wanted to gain understanding of how any are you seeing any competitive impact from the AI tests that are also in NCCN now and competing with Decipher.

Unknown Speaker

So Decipher is still growing, right? Which means we're adding new customers. and existing customers are expanding use. What we're seeing here is the accelerated growth we had has moderated, but we're still growing in Decipher, right? So we're still growing into the white space and we're still taking share. What we are seeing is activity. You mentioned it, promotional activity around DPI is one good example. recent new product that is getting some attention from physicians, and that requires our sales teams to spend quite a lot of their time. effectively talking through the difference between molecular testing and digital pathology. the evidence base for Decipher, how to interpret guidelines and so on. And so that's clearly a distraction that means that they're not able to spend as much time on core selling activities. And so to target that, Puneet, what we're doing is, as I mentioned on the call, we're increasing our resources on the sales side by 30%, which is significant. So the customers are going to feel it.

The other players in the market are going to feel that that's a significant increase, but we're going to do it thoughtfully and appropriately and not rush into it. We don't want to change our quality and our culture around our sales team. They're very high performing, and we want to keep it that way, but it'll certainly be felt out there as well. So that's how we think about that. So the thing about that is we're not losing share.

Puneet Souda

that there is some mindshare that needs to be regained. Got it. And last one, maybe for Rebecca. You're hiring more reps in 27, OpEx is going to be higher. You talked about adjusted EBITDA being lower. I'm just trying to understand how are you thinking about any offsets to that I think you called 20 22 percent adjusted EBITDA for a first quarter being the low and then improving from that but just trying to understand you know but true MRD and prosigna is still our 2028 so what are some of the things that can help you you know offset and continue to improve.

Rebecca Chambers

profitability? Yes, Puneet, thanks for the question. Just to clarify, 22% was for the full year and exiting the year at 25, so Q1 will actually be below that 22% given the timing of spending. What could take that number higher is prior period collections. As you know, we do not guide to prior period collections, and so those tend to flow through. quite nicely and then just operational efficiencies you know we have gone through the organization with a fine-tooth comb at this point in time obviously given the revenue Delta over the last couple of months versus our prior expectations and have succeeded and getting to that 22% number which which I think, given the revenue deltas, is quite powerful and quite a powerful statement for the profitability of our business overall. And so you always have things that could be timing and related, timing in nature or prior periods in nature, better ASP, X prior periods as well could help profitability. and then just vacancy. So, you know, I think there, we tend to budget to a certain number, that number for next year is 22%, and that's what we're aiming for at least, and hopefully the board will align with that. And then from there, hopefully we will underspend and outperform, but that's not for today's call, that's for the future.

Unknown Speaker

Okay, I'll hop back in the queue. Thanks. Thank you.

Operator

Our next question comes from Subbu Nambi from Guggenheim. Please go ahead.

Unknown Speaker

Hi, this is Ethan on for Subbu. Thanks for taking our question. Just on Prosigna, Medicare coverage follows the original LCD, so it's limited to post-menopausal patients with zero to three nodes, but Optima's strongest data is in pre-menopausal patients and those with four to nine nodes. So we're just wondering, what's the timeline for asking Medicare to expand the LCD, and how far along are commercial payers for premenopausal patients? Okay.

Unknown Speaker

Yes, so, by the way, obviously we're very happy to get that coverage, and to your point, it was absolutely tied to the original LCD, and there is a process we'll need to go through to get the four to nine nodes covered, of course, but that is a small part of the market. And it's also, I think it's also the hook that will bring some of the data that we're some customers to Prosigna, but not the only one. And I think it will take a while to get that included in the LCD. Of course, premenopausal is more commercial coverage, and we have some commercial coverage and plans to get into contracts around that as well. And we expect the Optima data when published to be a key component of getting that done? Anything you want to add, John, on the reimbursement side? Not on the reimbursement side, but just on the Optima data.

John Leite

itself, it's important to remember that most importantly, aside from the clinical impact that Optima had on premenopausal patients and on patients with higher node burden is the fact that it found that nodes of themselves are not predictive of chemo sensitivity, so we believe the opportunity is far broader than just the premenopausal population with high node burden.

Rebecca Chambers

And then just one last thing to call out, and this is effectively one of the factors in the delta between the volume and revenue guide for next year. And effectively what we've assumed for ProSigna ASP is that it's roughly approximating cost. And that is exactly for the reasons, Ethan, that you highlighted vis-a-vis the Medicare policy.

Operator

as well as commercial. Thank you, guys. Thank you. Our next question comes from Doug Schenkel from UBS. Please go ahead.

Alexander Vukasin

Hey, good afternoon. A few here. You're increasing commercial investment to address the challenges facing Decipher while also pursuing the ProSigna opportunity. How are you going to sequence those priorities and allocate resources so that strengthening the core and expanding pro-signa reinforce each other rather than compete? Specifically, what can leverage the existing commercial infrastructure? what requires incremental investment and what milestones will guide and gate the pace of expansion, because it does seem like given the current situation, you're taking on a bit more than I think most of us thought you were going to be taking on as we turn to 2027.

Unknown Speaker

Yes, thanks Doug, great question. So a couple things, firstly on the Decipher, the urology sales team, let me talk about that. One component of that is giving us more resources out in the field to help with the messaging, as I talked about, around other emerging technologies, and to bolster the sales team there. But also, and this is important, a key component of adding our resources there is we've built a urology portfolio that's extensive and broad. between prostate, bladder, with TrueMRD, and then obviously our acquisition of the UroAmp product line with tissue, blood, and urine-based testing. We have to make sure that we have sufficient resources to cover all of that, and while maintaining the, in fact, maintaining and increasing the focus on our core decipher as well in prostate, given the dynamics I talked about. So that's the first thing. Part of that 30% investment is a portfolio investment. It's not just decipher prostate. And as I said, we'll be thoughtful about how we add that. We know how to build that sales team and align territories.

And so I'm not concerned about that. I'm also not concerned about any competition for resources with Prosigna. Separate sales teams, the Prosigna team will grow to 15, which is double our original estimation. And I'm very comfortable with how we'll focus our time on building that team as well. So the sequencing will be very much in parallel. you know, done very much um independently of each other. And, you know, while you're right, I think, you know, we are doing more than we might have originally anticipated doing next year in terms of building those resources that doesn't faze me at all. And maybe to your question on shared resources, Doug, it's actually a great one.

Rebecca Chambers

the operations of this organization. Effectively, we have one team across customer service, billing, and the lab, and effectively, we'll be able to leverage all of those quite nicely as volume scale. The other thing we've done, and I'm pretty sure you're aware of this, is we've introduced our new V2 transcriptome, which effectively is the backbone of both Afirma and so introducing new products into the lab has been much less disruptive. between having a whole exome or a whole transcriptome workflow as well as the whole genome workflow, we really have, you know, effectively the entirety of what we need right now from a laboratory infrastructure perspective. And so, you know, I think when it comes down to it, those are the types of resources that we'll be able to leverage as both of these portfolios ramp, whether it's the process Signatera or the urology portfolio opportunity that Mark mentioned. Okay. Thank you for that.

Alexander Vukasin

Rebecca, Decipher revenue growth appears poised to fall below 10% in your 2027 construct. I want to make sure I have that right. if I'm in the right neighborhood, when you contemplate the addressable market, the penetration of the market opportunity, competitive dynamics, which that combined with guideline changes clearly came back to get you here in a way that you didn't expect. And ASPs Can we look at this as a sustainable double-digit growth business in the long term, or does this look more like a single-digit grower factoring in all of these things? Again, I know there's things you're trying to do to reinvigorate this, but there's a lot of variables in this equation that suggest to me that 10% might be the ceiling, at least. as we're thinking about multi-year models.

Rebecca Chambers

Yes, it's a good question, Doug, and I think the 12 to 15 thousand test cadence is the right one. Next year we do have a lot of unique situations. You know, we do not guide with prior periods, and we had 4.5 million of prior periods year-to-date for Decipher. And so when it comes down to it, that 12,000 to 15,000 range we think we're very comfortable with, then there are other opportunities above and beyond Decipher Prostate in the urology portfolio that we think can help augment the comfort. to a double digit growth number and obviously, you know, this is Afirma and Decipher continuing to grow nicely is core to that, but if you look at UroAmp, if you look at Decipher Bladder, TrueMRD, Prosigna, you know, we do think this is a double digit opportunity at the highest level across the entirety of the portfolio. is growing double digits within that portfolio at any given point in time. It's going to ebb and flow based on things like prior periods and comps and the V2 transcriptome and all the different nits and nats, if you will. But this is a great business, it's a great portfolio, it's incredibly profitable, it throws off a ton of cash, and the top line is growing and volume growing 10% next year is a good indication of that. And you do see embedded in that guide some, you know, significant growth from Prosigna, Decipher Bladder, and to a much lesser extent, True MRD.

Alexander Vukasin

Okay, last one, ASPs, I know you said take out the prior period collections. What does that mean for Affirma and Decipher next year? What should we be plugging into our models?.

Rebecca Chambers

I think ex-PPCs, you can put the current run rate in there for next year, and that should get you pretty close. Okay, thank you. And that doesn't take into account, obviously, any managed care wins between now and, you know, the timeframe that we're discussing.

Operator

Thank you. Our next question comes from Tycho Peterson from Jefferies. Please go ahead.

Lauren Timmins

Hey team, this is Lauren on for Tycho. Just a few more on Decipher. Are you still adding new ordering physicians for Decipher at the same pace? And if so, does the volume miss imply utilization per physician is weakening or is it more so softness weighted towards the low risk? And I guess on that same metric, are critical call points, I guess, going into 2027, do you kind of see necessity to have low-risk return to growth to hit kind of the double-digit volume growth targets as the market becomes more penetrated and competitive?.

Unknown Speaker

Yes, so I'll ask John to talk about the dynamics with respect to the addition of physicians and physician utilization. Sure.

John Leite

So, yes, so the addition of new ordering physicians does outpace or, I should say, is the more important driver of our program. of our growth overall. Our orders per physician has been fairly stable over the last few quarters, which tells you that there are a cadre of physicians who have been ordering Decipher for a longer period of time who are much more high volume orderers, as opposed to those who've been just joined, who order at a lower rate until such time as they secure more tenure and then start ordering at a higher rate. So overall, to maintain that steady orders per doc, as we're adding new docs, you can tell that there's a bucket of physicians that just order more as they progress over time.

Unknown Speaker

Yes, I mean, one of the, you know, when you look at the numbers in the third quarter, you know, we actually saw some growth in new physicians. In fact, we're seeing that go into October as well, new and reactivated physicians. And I think John's spot on there. Now, when they come on, they come on at a lower ordering rate per physician. And obviously, the better you do that, the more you dilute and drag down. I'd say when you look at the kind of the active loyal physicians, you've got that group at the top that are more penetrated, and then you've got the tier below them that are becoming the new top tier. So I think there's a lot of these dynamics going on.

The kind of high-level messages we're seeing both new physician ads and for those physicians that are in the lower tier, or they're starting to order more. The exception to that is low, the low risk. The low risk, that's why we say single digit growth, low single digit growth, it is more a case of physicians are engaged and they remain engaged, but they're not growing at the same rate that they used to, and their utilization isn't growing at the rate that it used to. And then the only thing to add to that,.

Rebecca Chambers

Lauren, is that you asked about low risk next year. We're not going to bifurcate by risk category or guide. It's, you know, it's pretty early to even have a guide, let alone to do so. But I think when it comes down to it, you know, on the back of the 0815 data, intermediate is going to continue to be incredibly important for us and we're seeing good momentum. there post that data being released. And, you know, low, we aren't necessarily assuming anything material changes or there are any catalysts that, you know, that Mark cited. We do expect those catalysts to be coming out over the next few years, but that's not assumed in anything for that in the 27 number.

Operator

specific to low. Perfect. Thank you. Thank you. Our next question comes from Mason Carrico from Stevens, Inc. Please go ahead.

Mason Carrico

Hey, guys. Thanks for the question here. I'm going to ask a question that you guys may have just said that you're not going to break out, but I'll try anyway. So the 12,000 to 15,000 Decipher unit kind of changed to the outlook here. Could you just clarify the delta between that and 2020, what is lowered expectations from low risk compared to last quarter? How much is, you know, a step down in intermediate and high risk expectations?.

Rebecca Chambers

Yes, Mason, you were correct. I think at this point in time, quantifying that would be an exercise in futility. I think when it comes down to it, you know, the dynamics we talked about in the prepared remarks was low continues to be the same dynamic that we spoke about in Q2. The competitive noise is taking more time away from the field, which is why we're increasing our commercial activity so significantly. And, you know, I think we aren't necessarily seeing anything dramatic or anything even slightly negative, actually, the contrary, on intermediate and high post the 0815 and ESMO data in high risk. And so, you know, I don't want to quantify those, but I think the dynamics underlying are pretty clear. at this point in time. And, you know, I think we're doing great things in the intermediate and high category, and low is a function of the overall market dynamic.

Mason Carrico

Got it. Okay. And then maybe moving to ProSigna, I think on the Q2 call, you guys called out you're engaged with 100, 100 plus institutions. Would you be willing to share, I guess, how many have moved from, you know, evaluation to ordering at this point? And if adoption has skewed more towards, you know, certain patient segments or maybe, you know, institutions adopting across, you know, the broader patient population for that test? Okay.

John Leite

Yes, thanks for the question. Yes, we are continuing to add more institutions, which is a clear leading leading indicator for us. Of those, we're starting to see more and more institutions that are becoming repeat orderers, which is another solid leading indicator for us. And lastly, to your point, we are looking to whether the case mix changes significantly. As you can imagine, in these early adopter days, they're testing the tests on the patient population that's currently underserved by the current providers, and that's where the Optima trial data had its most highest impact. The next leading indicator for us is to monitor the transition of those ordering patterns towards a broader, more representative population. Got it. Thank you. I'll leave it at that. Thanks, Mason. Thank you. Our next question comes from Canaccord Genuity.

Please go ahead.

Kyle Mikson

Hey guys, thanks for the questions. I know, I think you talked about how you'll be expanding the urology commercial team by like 30% or so next year, but just in terms of like qualitatively how like that kind of call point and market is evolving given, you know, I guess competitors have some, you know, kind of bladder cancer stuff going on as well as prostates evolving too. So maybe how are urologists and similar oncologists thinking about maybe this area now from end to end the whole continuum and why does the convergent sort of addition here address that? Thanks.

Unknown Speaker

I think if you think about the urologist market, we're not seeing much change in our engagement with them, certainly on the prostate. side, in fact, a couple of interest in molecular diagnostics. We don't see that going in any direction other than up. And that's why we still feel 80% penetration, 80% share is the goal there. And that would be urologists and RadOncs. Now, the bladder fits so beautifully into that market and that channel. And we want to make sure that as we launch and really research the level of activity around Decipher Bladder as we launch or push on TrueMRD, which we launched this year, and as we launch Euroamp, we are really working with that community around recognizing the benefit of this multitude of tests in the portfolio. And so, you know, setting that up for these product launches is absolutely key.

So, again, the same thing that we're seeing in prostate it is fueled by evidence and so getting publications out around the use of UroAmp and the utility getting reimbursement getting into guidelines are all part of the playbook that works very well and that's going to work the same way in bladder.

John Leite

The only thing I would mention, just to touch on one of the points you had mentioned, the call points are exactly the same. The same physicians who are managing prostate cancer are also doing bladder and their urological surgeons are following the same population of patients. I'm sorry, the same physicians following these two very distinct populations of patients. What we're hearing about the addition of UroAmp is just that it's incredibly complementary to our Decipher Bladder Tissue Test, which is going to become a focal point for us in 2027. It's complementary to our TrueMRD test in blood, which measures recurrences in more advanced systemic disease, whereas UroAmp is very much complementary. much a solution for detection of recurrences in localized disease from the bladder. We're sensing quite a bit of enthusiasm from ordering physicians and KOLs, and we're pretty well set up for bladder cancer in 27 and in the future. One thing that I'd add, you know, that I mentioned briefly in the remarks, but I want to make sure people pick up on it,.

Unknown Speaker

is by having these multitude of tests that we have, the multiple stages of the patient journey in multiple sample types, we will be able to track the evolution of the patient's cancer and tumor over time. And because we follow the same grid approach that we always do, which is we look at whole transcriptomes, we look at whole genomes, we will have incredibly rich and valuable data. And we've seen a lot of interest around that, particularly in bladder cancer. And so that is becoming much more important part of our conversation with collaborators and potential partners. And I think that's one of the things I'm actually most excited about for this franchise going into 2027 is the opportunity to expand on that.

Kyle Mikson

So more to come on that in the future as well. Awesome, thanks guys. And I want to just bump two thoughts here in the last question. First is on Pristina. Are you, is the plan to sort of expand back, you know, to Med-Onc reps next year as well, or are you going to be good to go with the 15 by year end here and you'll kind of just assess things going forward? And then secondly, wanted to ask for an update on the Decipher international plans. I don't think you have any.

John Leite

touch on that yet. Thanks. Yes, so on the Prosigna reps, yes, it is our plan to continue to add reps as we anticipate the growth in volume. We have a pretty prescriptive process about how we assess the opportunities within a territory when it's ready to place a new rep in either a vacant territory or split the territory. On international, our goal.

Unknown Speaker

remains to get Decipher you know in the hands of physicians all around the world so they can be used to help patients with prostate cancer anyway so very focused on Europe. I'd say one of the things with our acquisition of Convergen is we've moved around a few priorities a little bit, including that one. There are multiple other ways that we are looking at of making that happen in certain countries. Nothing that I can share on that at this time. But yes, I'd say our primary focus right now is shifting more so towards the bladder side as well as continue to grow the COVID. Thank you.

Operator

Our next question comes from David Westenberg from Piper Sandler. Please go ahead.

Unknown Speaker

Hey guys, this is Farhan on for David Westenberg. Maybe I could ask the...

David Westenberg

position penetration question another way. Historically, have you ever broken out percentage of penetration divvied up between academic versus rural providers. And if so, you know, channel checks suggest that academic utilization is probably a little bit higher than rural. I guess what percentage of sales reps and efforts are going to expanding.

Unknown Speaker

rural physicians? Yes, we haven't broken it out. I'm not sure it would actually add a tremendous amount of value if we were able to do that. I mean, let's just put it this way. We have our sales team focused on as much of the population as is actually possible and makes sense. Because especially as you get out into the community, you don't see as many cases. obviously, and that's part of why we say 80% penetration, part of why you don't get to 100% penetration, because in some cases you never get there. But we've got them focused on all parts of the channel. I would say, obviously, in the academic centers, intermediate would be quite well penetrated, but there's plenty of opportunity still in intermediate, high and low, and the catalyst that we talked about will be the catalyst that will drive growth in academic centers, and then obviously that will follow in the community, especially once you get guidelines.

And the guidelines are more important to drive that community adoption, which is why we keep focusing on evidence and guidelines as being the fuel that drives this business. So, no, I don't think breaking it out actually would create a tremendous amount of value. The white space is significant. The penetration of our overall prostate cancer test, as we said coming into the year, was around 35 percent. There's still plenty of opportunity to grow. The question I think we're dealing with on this call is the velocity of that growth at this point, which is why we're resetting to the 12 to 15, it's not the opportunity. Understood. Well, thanks, guys.

Operator

Thank you. Thank you. Our next question comes from Mike Mattson from Needham and Company. Please go ahead.

Michael Matson

Yes, thanks. So I wanted to see if you could help me kind of bridge this 10% volume growth you're talking about next year to the 5% revenue growth. I understand the PPC impact, but that seems like it's maybe 2%. It sounds like Like you still expect some positive underlying pricing, I guess, maybe partially offsetting that. But then what gets you to the rest of that kind of like 3% differential there between the 10 and the kind of 5, I guess is what I'm thinking of.

Rebecca Chambers

Yes, happy to answer that for you. You're absolutely right. About half of it, and I'm, you know, call it a couple hundred basis points, is prior periods, and that being in the 26 number and not in the guide. The other half is really a revenue mix piece, right? So, you will have volume for Prosigna at a much lower ASP. You'll have volume for bladder at a lower ASP. And then we don't necessarily forecast biopharma revenue that explicitly unless it's an order in the bag. And so we have had biopharma revenue. And so those are the different bits and pieces.

So I would break it into, just to summarize, PPCs, about 200 bps, and the, I would call those three buckets, revenue mix being the other 200 bps. And the no result rates in the 10s. Okay. Got it. Yes, and then just for Euroamp, I mean, I know when you announced the deal... And definitely, Mike, can I just do one more thing before you get there? I mean, I do think it's... Like those are, no, I should have had the thought at that point in time, so my apologies. But really, when it comes down to it, all of those items I just referred to are things what's the word I want? They're unique in nature and they aren't necessarily, the business isn't really growing at that mid-single digit type revenue growth, right? These are all very... temporal things that over time, volume and revenue should approximate each other much more closely. And so, you know, I recognize that we have a relatively large delta for 2027, but if you take a step back and you look over a multiyear process, that revenue and volume conversation should be one and the same.

And so, you know, I recognize that the mid-single digits is a bit of a surprise, but we are facing all, for the most part, from good things, right? Prostate volume growth, bladder volume growth, you know, collections being better than expected. We are facing a harder comp in 27, which is lending it to that delta. Thanks for letting me get that out.

Michael Matson

Yes, yes, no problem. That all makes sense. And then just on the UroAmp test, so you gave some numbers in the press release around like people, number of people with bladder cancer, but I guess what I'm wondering is specifically for the indications you're going after, so BCG initially and then the intravesical maintenance monitoring, you know, can you talk about, like, how big those are, either in terms of patients or, you know, dollars?.

Unknown Speaker

Yes, we'll talk about that. We, you know, as we said on the call when we announced that acquisition, you know, you've got the incident population, of course, which is, I think it was about 80,000 non-muscle invasive bladder cancers, the bulk of that, and then you've got muscle invasive, but then you've got this, you know, the prevalent population, if you like. And the benefit of this test is it's multiple tests per patient. Now, of course, we've got to get through the reimbursement challenges of multiple tests per patient, which is part of what we're developing the evidence to achieve. And so when you look at it, it's hundreds of thousands of patient TAM, or sorry, I should say test TAM, not patient TAM.

Rebecca Chambers

And we took a very conservative approach in sizing it, you know, around the 400 million mark, but that was incredibly conservative. So I think, you know, you can assume it's at least that conservative. Okay, thank you.

Operator

Thank you. Our next question comes from Keith Hinton from Freedom Capital Markets. Please go ahead.

Keith Hinton

Great, thanks for taking the question. So I wanted to start on Decipher ASP. So I think it was about a year ago that you talked about maybe being able to get 300 to 500 bips of leverage over the next five years from ASP. So sort of setting aside all the temporal kind of P&L noise, do you think that that's still a realistic goal over the next four or five years? And in terms of getting to that, or if it's lower, getting to a lower number, how much of that is managed care wins versus operational efficiency, making sure you get paid when you should be. And then I have a follow-up.

Rebecca Chambers

Yes, I do think that's still the right kind of framework. We've had great success across Afirma and Decipher this year, and I don't necessarily see that changing too dramatically in the future. The teams that are going after both the collections as well as the managed care wins are doing an amazing job, and I think we're going to see that change. when it comes down to it, we should, you know, we will continue to do so. The challenge is timing, right? It's effectively calling when that's going to happen given so much of the managed care conversation is outside of our control. So when we think about forecasting in any given year or guiding in any given year, we don't necessarily count on wins that we don't know. And so, you know, I don't want to say in 27 we'll have, you know, X percent gain because, again, that's a long ways away. So I think from a framework perspective, absolutely.

There's still room to go here. It's been a good news story for a long period of time for us, both on Afirma and Decipher. The 2,900 roughly ASP ex-PPCs is amazing to see. But you know, again, in any given year, it's hard to time those out in a way that we could include them in a guide. I would say on market access,.

Unknown Speaker

you know, kind of both strategy and operational execution alongside our billing and collections team. It's an exceptional team, and they do a really great job of managing this stuff, both from a Medicare and a commercial contracting and reimbursement perspective. So that's one of the things that we've got probably one of the best in class teams. teams are one of the best in class yields there, but there's still always room to continue to grow and we have a lot of focus on it. And the other point is, our reimbursements, it's extremely durable because of the way we approach it, but also because, again, comes back, it sounded like a broken record, but it's evident. The evidence is what creates the adoption, it's what creates the durability, and ultimately it's what creates the guidelines.

Rebecca Chambers

And just one thing to clarify, the ASP is a revenue comment, not necessarily an EBITDA comment. So, you know, we do often take ASP gains and reinvest them into growth drivers because we're obviously working to maintain or to gain access to patients and help as many patients as we can. So in the spirit of revenue growth as well. Just wanted to clarify that one comment and make sure that they weren't tied perfectly. And we manage that on an annual basis. So some quarters will be below the annual guide, some quarters will be above. Yep.

Keith Hinton

Understood. So basically what you're saying is, you know, even if there is a little upside on ASP, some of that might get reinvested. So that shouldn't, we shouldn't just drop that down all the way to the bottom line. Exactly. Right. Understood. Okay. And then the follow-up is just on Prosigna. Once you have, you know, OPTIMA data published, what's the process for getting, you know, the expanded reimbursement so you're no longer going off of the old LCD and you can get premenopausal and high-node patients? And how do we think about kind of a reasonable? timeline for that process.

Unknown Speaker

I think there's a couple of things on the pre-menopausal side. You know, it's a lot of commercial contracting. So it's blocking and tackling one by one, something that we do and have done for many, many years. And we're not starting from scratch there. Obviously, some of those already include ProSigna. On the higher nodal involvement, that will take longer. I think that'll take a few years to get that LCD adjusted for the higher nodal involvement, which is a smaller part of the market.

But that's included in our ASP assumptions going forward in our model. Great. Thanks for taking questions. Yep.

Operator

This concludes the question and answer session. Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

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