Biodesix, Inc. Price & Performance (BDSX)

Descriptions of these non GAAP financial measures and reconciliations of GAAP to non GAAP financial measures are included in today's press release. I would now like to turn the call over to Scott Hutton, Chief Executive Officer. Scott? Thanks, Chris. 2024 was an excellent year for the Biodesix team. As we delivered on our annual objectives across the board.

We delivered $71,300,000 in total revenue, exceeding the midpoint of our improved revenue guidance and delivered 45% year over year growth. We increased our already strong gross margins and improved our adjusted EBITDA loss by 32% on our path to profitability. At BioDesk, our mission is to transform patient care and improve outcomes through personalized diagnostics that are timely, accessible and address immediate clinical needs. We leverage a multimodal approach that includes genomics, proteomics and radiomics combined with AI to discover, develop and commercialize innovative diagnostic [indiscernible] for physicians, biopharmaceutical life sciences and diagnostic companies to help improve patient care. Clinically, we focus on lung disease because there's a massive unmet medical [indiscernible] Pulmonologists diagnose, treat and manage over 50 different lung diseases, including lung cancer. In The U. S, one in sixteen people will be diagnosed with lung cancer in their lifetime. And it is responsible for one in five deaths from cancer annually. Our commercial team currently sells five Medicare covered tests addressing lung nodule management, and treatment guidance following the diagnosis of lung cancer supporting clinical decisions to expedite personalized care and improve outcomes for patients with lung disease. In 2024, we continued to invest in the [indiscernible] professional development of our long focused sales and commercial teams.

Extending our reach in clinics specializing in the management of lung nodules, the diagnosis of lung disease and their referral networks. We grew 2024 lung diagnostic testing revenues by 43% over 2023.

Driven by 40% test volume growth and the expansion of reimbursement coverage of our nodule tests throughout the year. As the leader in lung nodule management testing, our initial sales approach focused on interventional pulmonologists. Who are specialists in diagnosing lung cancer. After gaining clinical experience with the test, and observing the utility for their patients, leading interventionalists worked with the BioDesix team to educate and enable their referring pulmonologist to order the notified test.

As a result, the proportion of high risk patients seen by interventionalist increases. Conversely, the general pulmonologist keeps the patients at low risk and monitors them with CT surveillance. In 2024, we began seeing some interventionalist and general pulmonology identify opportunities to educate and enable high volume primary care providers to implement the same testing and referral practices. Claims data shows that approximately forty nine percent have their first imaging workup conducted by primary care providers. The majority of which are managed by approximately 10,000 to 15,000 primary care physicians. We conducted a pilot program in the second half of twenty twenty four to assess how best to leverage the referral networks and access more of the existing addressable market. The pilot tested the viability of having a sales teammate support the lead sales professional in territory and follow the referral pattern from primary care into pulmonology. That pilot was a success. Demonstrating that adding additional sales professionals supporting a senior pulmonology sales representative facilitates us accessing more of the addressable market across pulmonology, and primary care in a given territory. So what does that mean? We will continue to grow and expand the sales force in 2025 by adding approximately six sales teammates per quarter, ending the year at approximately 95 teammates supporting 50 territories.

Up from 71 teammates supporting 48 territories in the fourth quarter of twenty twenty four. With the majority of these new additions going to support this approach.

To support the ongoing adoption of our test by healthcare providers and payers, we published and presented new clinical data and health economics and outcomes research data at various key physician society meetings throughout 2024. Also announced the launch of our new clinical study Clarify, the fourth quarter. In this study, we are collecting patient outcomes and other clinical information on 4,000 patients who've received notified testing in clinical practice with at least one year of available follow-up. The CLARIFY study uses a cost effective study design that is faster to execute compared to a standard prospective design. In the three months that the study was opened in 2024, we accrued over 300 patients with that increasing to over 600 While the primary goal of the Clarify study is to confirm performance, of the Notify CDT and Notify XL2 test, in a broad population of patients the study will also allow us to answer several that are of particular importance to healthcare professionals. Such as the relative performance utility of notified testing compared to PET scans.

We know PET scans are used extensively despite having a very high false positivity rate, which limits their utility.

We have observed in several physician practices that the incorporation of Notify Testing in a system wide structured nodule management program have a positive impact on the early diagnosis leading to more cancers being caught in the early stages of the disease. This is something we will also look to document within Clarify study sites and are excited to see this effect demonstrated a broader population. We expect to start releasing data from the Clarify study in 2025 and a number of presentations and publications to be generated over the course of the next two years. Enrollment and patient follow-up in our prospective randomized clinical study, Altitude, is progressing well under the supervision of the Data Safety Management Board. The DSMB is scheduled to meet again in the second quarter and will provide timing expectations for the study mid year. If the DSMB recommends closing the study due to the endpoints being met at that time, we could be in a position to start releasing data before the end of the year. Now let's shift to our Diagnostic Development Services. We've talked over the past year about the increasing demand for our services, resulting in 70% growth in Diagnostic Development Services revenue year over year.

With dollars under contract but not yet recognized as revenue improving, to $12,200,000 at the end of twenty twenty four. 54% versus the end of twenty twenty three. That leverages our multimodal approach and R and D expertise to help deliver insights that our partners use to personalize patient care and help improve disease detection and treatment evaluation across various disease types.

New data from one such partnership demonstrating the in advanced prostate cancer was presented at the AACR liquid biopsy meeting in San Diego in the fourth quarter. The early findings showed that the immune classifier, Verastrat, may accurately stratify metastatic prostate patients initiating standard of care hormonal therapy into good and poor prognosis groups. A second study showed that Verastrat may also be valuable in predicting response Keytruda in a wide spectrum of metastatic solid tumors. Further validation studies are ongoing. We will see new data and continuing research and development efforts on our existing test and new tests throughout 2025, including a new presentation at the Precision Medicine Tricon on March 11 entitled Accelerating Drug Development in Prostate Cancer using MRD as an endpoint, We look forward to sharing more in our upcoming calls. Moving on to establishing expectations for company performance. In 2025, we expect to one, deliver $92,000,000 to $95,000,000 in total revenue driven by growth in our lung diagnostic testing and our diagnostic development services. Two, maintain our already strong gross margins in the mid to upper 70s. And three, achieve adjusted EBITDA profitability in the second half of the year based upon our [indiscernible] disciplined approach in revenue growth.

With that, let me turn it over to Robin to review the financial performance Robin?

Thanks, Scott, and good afternoon, everyone. Revenues for both the fourth quarter and the full year were in line with the numbers pre announced in January. Fourth quarter total revenue was $20,400,000 a 39% increase over the prior year.

Full year revenue for 2024 was $71,300,000 a 45% increase over 2023. [indiscernible] Lung diagnostic testing revenue in the fourth quarter of twenty twenty four was $17,200,000 from approximately 14,600 tests as compared to 12,800,000.0 from approximately 10,900 for the fourth quarter of twenty twenty three. Representing 34% growth in revenue and test volume. Lung diagnostic testing revenues for the full year was $64,700,000 from 54,300 tests representing 43% growth in revenue and 40% growth in test. Diagnostic Development Services revenue 2025, with $12,200,000 under contract, but not yet recognized as revenue, which is a 54 increase over the prior year Gross margin percentage in the fourth quarter twenty twenty four was 78.7% up from 77% in the fourth quarter of 'twenty three and seventy seven point zero percent in the third quarter of 'twenty four. The full year gross margin was 78.2% up five percentage points over the full year 2023. Overall operating expense excluding direct cost [indiscernible] was $22,700,000 in the fourth quarter was a 25% increase over the fourth quarter of twenty twenty three and flat to the operating Full year operating expense was $90,200,000 which was an increase of 17% over 2023. Operating expenses include $2,700,000 in non cash stock compensation and $12,400,000 for the year, an increase of 3243% as compared to the prior year period.

The increase in operating expenses versus the prior year quarter is primarily the result of an increase in to support lung diagnostic testing sales growth to enhance product awareness and drive adoption as well as an increase in non cash depreciation expense related to the leasehold improvements in our Lewisville, Colorado office and laboratory, opened in January of twenty twenty four. Net loss for the fourth quarter of twenty four was $8,300,000 an improvement of 10% as compared to fourth quarter of 'twenty three and twenty percent improvement sequentially. For the year, net loss was $42,900,000 which was an eight Adjusted EBITDA, which excludes non cash and other one time items, was a loss of $3,900,000 which was a 19% improvement over the fourth quarter of twenty twenty three and a 30% improvement sequentially. For the full year, adjusted EBITDA was a loss of 22,100,000.0 a 32% improvement over 2023. [indiscernible] ended the quarter with $26,200,000 in unrestricted cash and cash equivalents, as compared to $31,400,000 at the end of the third quarter. Subsequent to the end of the quarter, we amended our term loan agreement with Perceptive Advisors to extend the availability of the 10,000,000 tranche fee loan. Based on our expected growth and the leverage we have seen in the business over the past year, we believe we can fund the business to profitability with the available cash on hand.

Now, I'll turn it back to Scott for some closing thoughts before the Q and A. Thank you, Robin.

It is an exciting time at Biodesix.

We believe that we have both the opportunity and the responsibility to transform the standard of care in diagnosis and management of patients We have the best pulmonology focused commercial team in diagnostics. With first mover status in lung nodule management, and an ever increasing body of robust clinical and health economic data have the momentum to drive greater clinical and payer adoption for this large underserved population. We expect 2025 to be a transformative year for BioDestix in which we will increase revenue from the adoption of our lung diagnostic test and diagnostic development services and present new data on our existing test and pipeline test to further support adoption. We look forward to sharing more with you in the coming quarters. Let's now move to questions.

Thank you.

And our first question today will be coming from the line of Andrew of William Blair. Your line is open.

Hi, guys. Good afternoon. Thanks for taking the questions. Two for me on the financial side of things. One, as it relates the revenue guidance, can you maybe just sort of peel back those targets a little bit? How should we be thinking about that between testing business and the biopharma business? Just any color that you can share with respect to the assumptions between volume and ASP growth for 2025 And then separately here, just on the profitability outlook, appreciate you guys reiterating the adjusted EBITDA target for the back half of this year. Can you maybe just sort of talk to us though about the drivers of that? How do we bridge from today to that goal?

As on the adjusted EBITDA front. Thanks, Andrew.

Yes, we expect the biopharma services component of revenue. For 2025 to be pretty consistent with [indiscernible] The portion that it has contributed in prior years. I expect it to be sort of about 8% to nine Pharma Services bucket and the remainder coming from lung diagnostic services. In our models, we tend to be pretty conservative on the ASC and reimbursement front and And while we do model in a slight uptick in ASP over the course of the year, from the improvements we expect to see from our increasing number of coverage policies. The vast majority of that revenue growth is all from volume and not either one time items or any big changes in ASP. On the EBITDA front, it's it's the combination of the growth in revenue and then a tight tight control on our expenses While we are expecting to add sales teammates across the year, consistent with what we've said in the past earnings calls. We are keeping very tight clamp on all other expenses to to ensure that we get to adjusted EBITDA breakeven in the second half.

Perfect. And then Scott, maybe one for you. You gave a lot of nice color on sort of the expansion of the sales team and also the pilot that you ran in the back half of twenty twenty four. You maybe just talk a little bit more specific about what you saw in that pilot? What you learned from and sort of the key takeaways and what drives the confidence of the expansion of that model?

Yes. Thanks Andrew. It's a great question. What we were aware of is what the claims data told us. And we knew that one of the challenges pulmonologists have is getting those patients that have a lung nodule that's already been identified getting them out of primary care. And the estimates are that approximately forty nine percent of them are managed at primary care or stuck. So through that pilot program, not only were we able to demonstrate that they were accessible we followed the lead of ordering pulmonologists that helped guide, educate and train how they would like the test results received there's a couple of other things that make that call point a little more viable than most may think. One is that primary care physicians are very comfortable with phlebotomy services and offer them on-site. So what we noticed was that we were more effective and efficient in those call points because we weren't having to offer mobile phlebotomy services or our self collection device provided by TASO. So we found that that makes us a little more effective and efficient right upfront.

You also worry when you you have a patient that leaves the office. That there's a retention gap. And so what I mean by that is patients head away, what's the likelihood that they're compliant to that follow-up blood draw and then subsequent visit. So much of that we were able to demonstrate early on that that those patients were viable, they were accessible And what we saw with the primary care physicians was they were pleased and saw the utility in the test It really helped guide them where to refer those patients on and maybe even more importantly, which pulmonologist to refer them to. Is that helpful, Andrew? Very helpful. I'll stop there and let others ask Thanks, Scott. Thanks, Robin.

Thank you, Andrew. Thank you. One moment for the next question. And our next question will be coming from the line of Kyle Meikson of Canaccord. Your line is open.

Hey, guys. Thanks for the questions. Congrats on the quarter and the year. So you're getting closer to EHA breakeven. Could you just provide an update on the pipeline? Seems like that's still off to some scope based on the 10 ks, but just Is that given you're kind of getting to a point where you could be sustainable from a capital perspective, you could probably invest more in there. So could you just provide an update on that? I wanted ask a follow-up on that note as well after your answer. Thanks.

Yes. Thanks, Kyle. Great question.

We've stated in the past that our product pipeline is robust. But we would be mindful of where we were in utilization of cash. And we also want to be mindful of the ever changing kind of reimbursement landscape. And so coming into the year, what we have highlighted is that, we will not be launching or commercializing any new test in 2025 But as we progress through 2025, we'll start providing additional updates on the progress that is being made. Specifically, we're very pleased with our partnership with Memorial Sloan Kettering and the work that we're doing there We highlighted some of the presentations that have come out of there I fully expect that as we progress into the year, Kyle will provide more detailed updates specifically around risk of recurrence, and MRD. And then we've got a couple of other things that we're pursuing and exploring. That I think provide exciting opportunities for us to continue to leverage this commercial channel this opportunity to partner in advancing care for those with [indiscernible] Yes, fantastic. Thanks for that, Scott.

Follow-up on that. So can you just provide more info on the MRD program MSK [indiscernible] a reminder basically refresher because it seems like it could be based on the TASK inhibitors on proteomics and GDPR and it seems like it could be like a pan cancer test now with a prostate like illusion that you just provided. So just a little bit of a snapshot before you provide the update, I guess, in a few months or kind of soon?

Yes, very good question. Haven't provided a lot of detail, but you're thinking about it exactly how we are.

We had disclosed a few years back that we had discovered a test that we called risk of recurrence. This was a test where we were able to identify those patients that would recur via a simple blood draw prior to their surgical resection. And then as we entered into the collaborative partnership with Memorial Sloan Kettering, we highlighted that we were going to prioritize MRD and minimal residual disease as we know is a very, very interesting topic, but also a lot of utilization from a test perspective from competitors out there. So the way that we're looking at this is we do have the potential to be the only company that would have a pre surgical resection test highlighting those that would have the highest likelihood of recurrence upfront and then monitoring and surveilling those patients to pick up MRD over time.

I think what we've demonstrated in some of those early presentations are exactly the direction we're going. We still believe that a multi ohmic approach is going to be the most impactful long term.

That's really kind of been a foundation within Biodesix from a scientific perspective.

Think that applies here.

It's critically important to not only understand what's going on with the cancer or the tumor, but it's equally if not, more important to understand what's going on with the patient and their immune response.

Perfect. Thanks, Scott. Again, and just finally, seems like there could be some HEDIS quality measure updates possibly this year for lung cancer screening. How would that affect your outlook in 2025 or 2026, if that [indiscernible] Thanks.

Yes. Really good question. Just a reminder, had shared last year that we were expecting updates on the heated measure front, especially and specifically around lung cancer. We still expect that but I have to be mindful that in the current environment, with all of the ongoing changes and uncertainty within the current administration, HHS and CMS This is one that we're monitoring closely. And we'll give updates if and when we hear of anything. Related to HEDIS.

If you think back what we've stated prior, anything and everything we do in the lung disease population to help identify and diagnose patients with lung cancer sooner will have a significant impact We still function in a world in The United States where less than ten percent of this eligible population is participating in screening programs.

So what we do know is we're not doing an effective job. We can improve And just like the single cancer early detection or the multi cancer early detection test focused on that screening population We fully expect this to expand our addressable market a significant and meaningful fashion And many of the pulmonologists that we partner with and some that you may have spoken to, they highlight that that there's more false positives with those tests it's going to break them in terms of finding and highlighting those patients that truly do have a malignancy and most importantly coming out of that is where will they have confidence in sending a patient to CT surveillance. Taking a wait and watch approach So almost every physician we've spoken to has said we play an integral role there and that the addressable market for us is going to expand significantly. Awesome. Thanks, Scott.

Thank you, Kyle. Thank you. One moment, please. And our next question will be coming from the line of Dan Hi. This is William Ruby on for Dan Brennan.

Question I have is that what impact do you think the Altu publication could have on usage and awareness After it's published, how quickly do you think And do you think that Outseam study has the opportunity potentially sway chest guidelines down the road.

Yes. Thanks, William. Really appreciate the question. As a reminder, Altitude is the first of its kind in the pulmonology community. There has not been a prospective controlled trial focused on lung nodule management. [indiscernible] to answer your question, would that be in the case, And then looking at the the 26 sites that have been enrolling and who they are, whether it's Mayo, Cleveland Clinic, Johns Hopkins, we're working with the thought leaders in the space. And so We do believe that it's very meaningful and it will have a significant impact. As it relates to guidelines, we've highlighted that within CHEST or ACCP, the guidelines related to lung nodule management have not been updated in over ten years. What is worth sharing today is that last year towards the end of the year, CHEST leadership actually stated in an open forum that they were well aware of the delay in updates and that they had prioritized it and that updates were coming in 2025. So we haven't heard any material updates or changes in that.

But that was the first time that CHF leadership went out and stated that they were aware and acknowledging it and working on it. So we feel pretty confident that we've done a very good job of putting strong data that's not only useful but compelling out there We know that a number of the major academic institutions that help [indiscernible] consensus statements or guidelines either have used Notify or involved in the Altitude So for us, a positive result in the study and publishing that like any other amount of data that we get out there, it will be helpful. It's really just a question on the timing related around guidelines.

But for the first time, I'm able to sit here on an earnings call and state at least CHEST has acknowledged it and stated that they're working on it and plan to have enough released in 2025. We think that's a positive And like anything else, inclusion in guidelines and additional data getting out there helps the sales team with physicians but it also helps with payers. And so we're really excited think this will be a big year on a data front. Which also translates into what we expect with Clarify, the new study that we launched.

Thank you.

Thanks, William.

Thank you. One moment, please. And our next question will be coming from the line of Thomas Flaten of Lake Street Capital Markets. Your line is open.

Hey, guys. Appreciate taking the questions. Scott, I'd love to get too much in the weeds, but with respect to the pilots that you ran last year on the sales force, should we read that as there might be a need to have to maybe further segment your territories to give the reps the opportunity to engage with with more primary care docs. Is that an appropriate read through? The way we're looking at it Thomas is We have 48 territories right now. We're going to add two additional territories this year We're going to end the year at 50 territories. Within those territories, there's going to be approximately two sales professionals per We've talked about the expansion that we plan this year in the sales force. So we'll be close to 100, somewhere between that 95 sales professionals and 100 sales professionals and they will be segmented within those territories. What our sales ops team spends a lot of time looking at is claims data, going back and really looking at payer data and ensuring that we're doing the best we can to track the referral patterns and the diagnosis of of lung cancer in that pulmonology community And what we want to be very clear with is this is not us going after all primary care physician.

This is us really looking at it through the lens of our pulmonologist, leaning heavily on them They know who refers into them.

They also know the claims data. Just like us. And so working with them to make those introductions and have a team that's working to ensure that there's a warm handoff and that we're getting to those patients. So there will be some segmentation We've talked in the past, Thomas, about having pulmonology sales consultant, which is the leader and then in some territories hiring an associate sales consultant.

We're going to add this in where we look at it and say, if there's a focus on On the general practitioner, that could be a subspecialty. Super helpful. And then Robin, just one for you. What's left in terms of upside on the gross margin line? Is it just long term volume that's just going to drive that up on a per unit basis? Or are there other things you're working on to kind of maybe tick that over the 80% mark?

Great question. Yes, volume always helps. And so as we grow, we do some small incremental improvements. Our team is constantly working on operational improvements. And so while we don't have any forecasted in for the year, we're anticipating maintaining sort of these already very strong gross margins in the upper 70s We do think there is still some opportunity for improvements and the team is constantly working to make those those changes. So both the operational improvement side and volumes are give us some some potential in the later quarters of the year and into 2026.

Thomas, we appreciate the question because we've highlighted before that that's pretty much industry leading. And like Robin said, we still think that there's small opportunities here and there to improve it. But proud of having such strong gross margins and eager to continue to improve when where we can.

Got it. Appreciate it. Thank you, guys. Thank you, Timothy.

And our next question will be coming from the line of William Bonello of Craig Hallum. Your line is open.

Hey guys, it's Bill. Couple of follow ups on some of the things we talked about. Just again, sort of revisiting this primary care effort. Just trying to understand how you I mean, clearly, there's a lot of in that channel, but how you sort of think about that and prioritize that relative to expanding presence with pulmonologists that currently are not ordering the test as well as maybe expanding within some of the pulmonologist offices to more fully utilize the test. Even if they're existing customers.

Yes. Thanks, Bill. Great question. We've stated towards I think it was towards the end of last year that we estimated we were approximately 7% penetrated into this opportunity. So you highlight a great point. We have tremendous room to continue to grow within the pulmonology community. A lot of this, really the genesis was some of our early adopters who were pulmonologists after gaining experience with forty, fifty, 60 tests all of a sudden what they noticed is where there was an inefficiency in their practice, was when a referring physician oftentimes that primary care physician was referring a patient did not have notified test results but also was not appropriate. They were a benign patient that they could have continued to manage themselves So the genesis of this really started with a few pulmonologists, some were general poems, some were interventional poems, but they started this on their own. And asked us to assist them because they reached out into that referral networking community and really looked at it and said, hey, if I'm an interventionalist, I want you to refer every one of the CDT positives to me as quick as you can If it is not CDT positive and it's an XL2 positive, then you go ahead and manage and watch that patient ultimately surveilling them more than likely supported with an annual CT scan, And if and when anything changes refer them to me So because we saw that, we also had a number of physicians that started doing it.

It at least gave us some insight to say, hey, there's a high likelihood this could be a success. And that's exactly what we saw.

This was not us going out and just blindly knocking on primary practice doors know they're busy. We know that they won't have the number of nodules on a daily basis. So it really was a targeted approach. And so I think in time, you'll see a balanced approach where the territories that are more mature and have had more time and more success selling notify. Those are right for us to continue to focus on shifting some of our resources into that primary care referral network. And in the territories, especially West Of The Mississippi, where we still have some sales reps covering large territories geographically, There we'll continue to focus on the pulmonologist because we've seen how this works over a period of time. And we think it's still successful. And reproducible. It really just is about increasing our access to that really large addressable market.

Sure. Okay. That's really helpful. And then maybe just kind of a two parter on the cash and cash burn situation. So So you talked about adjusted EBITDA, but not necessarily about cash flow or free cash flow or cash burn. Can you maybe just tell us about sort of your expectation for cash burn for the the full year and then maybe how that paces over the course of the year? And then I'm also curious when you talk about being able to reach breakeven, I thought you said with cash on hand. I just want to clarify if that means you think you'll get there without accessing the Perceptive line or the ATM or if you're kind of talking about getting there with the resources that you have.

Yes, happy to go into details. [indiscernible] We believe we can with our revenue growth and our cost conscious approach can get to adjusted EBITDA breakeven and shortly thereafter cash flow breakeven with the cash we have on hand. We did amend the Perceptive tranche C loan to provide access to extend access to that tranche, which if we drew that down would be additional cash on hand would provide more buffer to the balance sheet. We also, as you mentioned, have our ATM, which we put in place in November of last year, but have not yet accessed. We anticipate that cash burn always goes up in the first quarter. So we expect to see that in the first quarter. You have the annual bonus payments resetting of payroll taxes and costs at the beginning of the year. And then steady decrease in that cash burn across the year culminating in adjusted EBITDA breakeven at the end towards the end of the year in the second half followed by cash flow breakeven.

Okay. And just in total sort of what you think the cash burn for the year might be?

We haven't guided that number. But we do believe that we can get to cash flow breakeven with the cash we have on hand.

Okay. All right. That's very helpful. Thanks. That was all the questions I had. Thank you very much.

Thanks, Bill. Thank you.

Our next question will be coming from the line of Sung Ji Nam of Scotiabank. Your line is open.

Hi, thanks for taking the questions. Scott and Robin, just a clarification question on the sales force expansion plans. Would you be able to comment on what kind of what inning you're in in terms of at the end of the year with 95 reps and 50 territories kind of in terms of optimizing or rightsizing your commercial structure?

Yes. Great question, 48 territories and expanding to 50 when you look at it that way, territory alignment is pretty consistent. So you kind of look at that and say eighth to ninth inning where We're really secure with that plan. Because the pilot was the second half of last year, we continued to take a lot of those learnings all the way up and through December. And so as we presented the budget for approval this year, [indiscernible] kind of nuance changes and adaptations were part of that plan. So we're in the midst of implementing that now. So one way to think about it and it builds off some of the earlier question [indiscernible] approximately six sales reps a quarter As we look out on the year, about 60 ish percent of those are going to be focused on that primary care physician call point. So we don't have them all in place but that goes back to the question that Bill just asked really is if we can continue to grow and focus on the pulmonologist and we'll do so, we're going to add those primary care specialist, if you will, if and when there's a need and there's a critical mass and volume in those territories, again, where the pulmonologist is guiding us and leading us to help work our way back through their referral pattern So we can time that or gate that over time based upon continued growth and development.

Is that helpful?

Yes. Thank you. And also in terms of we're increasing increasingly hearing more about AI and diagnostics. I don't know if that gets overused now, but just given [indiscernible] with your multimodal approach. Just kind of curious to the extent that you can comment on it, kind of what your current capabilities are there? And how you might be able to leverage AI to further differentiate your product going forward over the next few years?

Yes, it's a great question. You might be right. It might be a phrase that's overused. But we think it's critically important going forward We have a long history of utilizing AI machine learning in both the discovery and development of of test and in our biopharma services offering So we're big believers We haven't disclosed anything just yet that we may have been working on. But we do plan on participating [indiscernible] continuing to hopefully be a leader regardless of whether that's a proteomic, a genomic a radiomic solution, that leans heavily on machine learning and AI. We do think that there's great value We think there's an opportunity to continue to invest and improve not only your existing portfolio of tests, but really enrich your discovery and development efforts that are fueling your pipeline. More to come as we progress through 2025. We still have a massive opportunity to continue to grow We've got laser focus on this path towards profitability. And really all of our efforts are focused on getting to more lung disease patients this year than ever before.

Great. Thank you so much.

Thanks, Sung Ji.

Thank you. And that does conclude today's Q and A session. I like to go ahead and turn the call back over to Scott for closing remarks. Please go ahead.

In closing, I want to express my gratitude to all the remarkable members of the Biodesix team who have shown unwavering belief in and dedication to our mission, vision and culture. Our collective commitment and daily contributions are centered around making a positive in the lives of patients and I'm truly thankful for your efforts. Thank you, operator.

Thank you. This does conclude today's conference call. You you all for joining. You may now disconnect. [indiscernible]