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Okay, it looks like we're running a couple of minutes behind, so we can quickly get started. Callum Tishmarsh here from the Life Science Tools and Diagnostics team at Morgan Stanley. Really pleased to be joined by the team from Adaptive. We have Chad Robbins, the co-founder and CEO, and Kyle Biscoll, CFO. Thank you both for being here. Just before we get started, research disclosures, morganstandy.com forward slash research discos. Research disclosure is because someone will tell me off if I don't call that one out. Lots to discuss, obviously, lots to dive into. Maybe we can just start with the State of the Union. I know there was also some updates today that you want to hit on out there in the market. So maybe just set the scene. What is exciting you the most right now, Chad? Yeah, relevant today and kind of unexpected, we had a major guideline update in multiple myeloma. And I'm actually going to look at my notes because this kind of came in from my team recently. but the NCCN multi-myeloma guidelines were updated, but they now include a dedicated page for MRD testing. This is very kind of similar and parallels the structure that they do in ALL guidelines. And it really, what it does is it signals that the panel views MRD as an assessment is essential for management of patients with multi-Myeloma. But kind of more specifically, The recommendations for MRD said that MRD is recommended using an FDA-approved assay, such as Clonoseq or flow cytometry, but this is the first time that Cloneseq is being specifically named in the NCCN guidelines, and it's actually pretty rare that a test manufacturer is named in guidelines, so we're pretty excited about that. The second thing that's really important is that while 10 to the minus 5 minimum sensitivity is recommended, it's now stated that 10 to minus 6 is stated as preferred. So this is huge because that's what ClonoSeq does is 10 tothe minus 6. And then it gives you all of the different points throughout the patient care continuum that Clono Seq should be used. But the one that I want to highlight specifically is at regular intervals during maintenance and surveillance. And so So kind of MRD assessments during surveillance, this is an entirely new thing. So I'll kind of stop there. But multiple points of those guidelines are specifically kind of what we've been talking about, what we think is critical for clinicians to use on their patients for clinical decision-making to really guide interventionally to guide treatment decisions. So we couldn't be more thrilled and, frankly, surprised at how comprehensive this update was for us. Very exciting. Yeah, how could that evolution look, do you think? Obviously, it's still super early days, but any numbers you could perhaps give around that and how you think the scale-up could look more broadly in the market? Yeah, I mean, it is interesting because as soon as we did this, we did it for a few months, So we had an updated TAM number, increasing the TAM by kind of $800 million. And, frankly, we knew when we put it out. And that goes from 2.5 tests to 3.5 test per patient per year on the overall addressable market. And, you know, this, I would say, at the very minimum kind of reinforces that, but it's also going to allow us to dust off some of those assumptions. And a lot of these things work together. It also called out peripheral blood for the first time that you could use peripheral blood in multiple myeloma assessment. This was in the guidelines, and we've been talking about kind of increasing the use of peripheral blood over bone marrow and multiple myelooma. All these things kind of work together to talk about more testing per patient per year. So the net-net is I think this is a nice opportunity to look at a further TAM expansion. It sounds like I might need to revisit my model. Karina and Kyle can help you on that. Maybe just rewinding a little to Q2, strongest you've had in MRD, and you obviously raised both the revenue and volume outlook for the year. What do you think the biggest source of that upside was versus your expectations through the first half of the year, and then what gives you confidence that that momentum can continue? Just let us know what you're seeing out there in the field. Yeah, yeah. So first, I mean, clinical volumes continue to be great. You know, we're really excited about what we're seeing and what we continue to see into this quarter. It's been really nice. Kind of one of the components of clinical volume that I think was, I don't want to say, I will say, really a surprise that we're just really excited about is if you look at the number of clinicians that are clicking on the repeat ordering button in the flat iron or ongoing EMR, I know we'll talk more about it later, that's just the serial testing's been a really nice kind of source of upside for us, and the compliance rate on that is also extremely high. Other areas of upside, our pharma business is really doing well. I mean, If you look at the ODAC decision in 2024 that was codified into draft guidance earlier this year saying that you could use MRD as a primary endpoint in multi-myeloma, that's not only had an impact on the myeloma business, but that's also bled over to the other, I said bledover, no pun intended, in heme malignancies. But it's bled Over to the Other Indications, particularly in ALL and CLL. Well, one area that we're kind of monitoring is, if you look at our, related to volumes, is kind of our ASP. We need that increasing volume. That increasing volume may put some short-term kind of transitory pressure on ASP, there's a lot of ways we're solving it, we'll talk about that. But overall, I should also say we have a submission into kind of Moldex to increase the number of tests per the episode, which will kind of immediately alleviate that pressure, and we're expecting to hear back relatively soon on that. But, you know, overall, the business is in really strong shape, volumes, pharma, et cetera. Everything's kind of moving up and to the right. Great. I want to first just hit on the separation that was announced or the intent to separate. You had a strategic review a couple of years ago, and you decided to keep the two businesses together. So I guess what changed since then and what made now the right time to pursue that separation? Yeah. The result of the strategic review a couple years ago was to keep the businesses in-house, but to start having a very disciplined focus and capital allocation towards those businesses and to allow them to mature to the point where it was kind of a natural separation. We feel like that's happened. And MRD, for some of the following reasons I just mentioned, we've become the gold standard within the market. It's being used clinically, interventionally. It's gotten to scale and profitability where we want to have kind of a dedicated focus around leveraging that platform in MRD and more broadly diagnostics. At the same time, if you look at the immune medicine business, we've developed what I would say is one of the most important data sets in immunology, which is kind of the next iteration of AlphaFold, which solved protein folding. Now we're solving an in silico model of protein-protein interactions, which is T-cell receptor to antigens. We can kind of double-click on it, but it's the applications of that and what's happened from a macro standpoint within the industry with now, because we have got this incredible data set with the advances in AI in the last two years since we've done that strategic review, the utility of that to true clinical applications is really gone up. Even to mention one of them If you look at the news coming out of Moderna and Merck And the personalized cancer vaccine The application of that is So I just think the time is right To allow our MRD business and our diagnostic business To be able to flourish on its own And at the same time Get a set of really focused, dedicated investors In the tech AI data space to capitalize that business. But we're doing it in such a way that kind of adaptive shareholders are going to own a piece of and or benefit from kind of whatever comes out of it. Yeah, and as you consider different options for separating the immune medicine business, what's your value to the framework there? What does that look like? And I guess how are you spending your time today through that? Yeah, I mean, the first framework I have is what's going to be the best for shareholder value of adaptive shareholders. And I say that in the context of, like, one decision could be made, okay, you've got this great data set, you can go, you just go sell the data. That may be kind of a, quote, unquote, a short-term win, but that may not be in the best interest of, if we're really trying to capitalize on kind of what's going on with AI and the fact that we're sitting on a data set that's proprietary and has significant moats around the business, Because we may be, I believe that we're kind of at the start of something that could have durable long-term and potentially outsized value for our shareholders. And that's kind of the framework we think about. As you know, also, we hired some folks on the other side of your business, Morgan Stanley, to help us kind of evaluate the potential options. We're having some really good conversations around those options. And we've committed by year end to kind of outlining what the path forward looks like. And Kyle, maybe for those investors a bit newer to the story, could you talk through the different financial profiles of the businesses, the MRD business and the immune medicine business? I know obviously nothing formally out there today, but just directionally would be helpful. Yeah, I mean, I think starting with the MRT business, that's what we are referring to now as the core business going forward, which is, you know, a healthy revenue profile with a healthy margin. And it's generating the majority of our revenue growth and has been generating the majority of revenue growth the last few years. I think when you step down to the operating expenses, again, most of our investment has been focused in the MRD business. You know, I'd say about 75% of our OPEX is dedicated to MRD. Currently, we have a segment in immune medicine, which we've been, you know, ring-sensing and, you Know, prudently managing the investment with the opportunity in front of us. And then there's a corporate unallocated piece. I think when you, you know, fast forward to post separation, the MRD business will absorb much of that corporate unAllocated and those corporate functions. But the scale of the MRT business and the growth profile we're seeing is not going to financially hamper the MRB business. Both the capital we have on the balance sheet and the cash flows that the business is starting to generate will be sufficient enough for the entire adaptive company to start to generate free cash flow in the fourth quarter. as well as just the deep end. Yeah, makes sense. And maybe just a little bit more on the guide for the rest of the year. Sure. When I go through kind of unit growth in Q3, Q4, consider all the, you know, top line drivers we're aware of and see the momentum you had in the first part of the year, seems a little conservative. So is that, are you seeing anything out there in the market that would imply that unit, sequential unit growth, you now, takes a little step back or, you know, are we feeling, you know, very comfortable with kind of... I think we're extremely confident in terms of what's happening in the in the volumes what we're seeing in the field the adoption rates are continuing to you know continuing to outpace kind of even some of our own internal expectations and so i think as it relates to the volumes and the you know sequential comps and you know comfortable with where the street's at but i think there's you know opportunity to kind of drive past that um you know we said 38 to 40 percent we're confident in that guide and i think there's potential upside on on that front and as chad mentioned even in the pharma business we're seeing you know good momentum in that business and i think that can be underappreciated in the story um strong momentum in the farm of business and I think we'll continue to see that play out in the back half of the year uh so yeah makes sense and the mix shift from from bone marrow to blood-based testing has been a uh you know an important unlock for clonaseq I believe I think it reached 51 percent of volumes in q2 so how has that impacted the size of the market and the realistic number of tests we can be performing, you know, per patient? Yeah, I think that's related to a couple different topics. Number one is, you know, the ability to test in the blood versus the bone marrow is obviously less invasive. It's also very specific, not specific and confined only to the community, but the community only does, doesn't really do bone marrow testing. So we also have this whole KOL initiative for the academic medical institutions. You've got KOLs from there going out and teaching the community that you should be using peripheral blood, at least as the initial kind of workup, and then the MRD kind of follow-up testing. So we've had, along with kind of serial testing from Flatiron, there's certain indications that are only blood-based tests, but it's really that conversion. If you now see kind of multiple myeloma has now gone up, you know, to 30% of testing is now done in the peripheral blood. So it's been increasing across the board, close to 40, 48% in ALLs done in, in, in the blood. So it, it's the, the ability to serial monitor to test and to test in blood, to do more in the community, all those are leading to kind of the increased volumes that we're seeing across the board. And how does that blood-based, you know, testing factor into the recent strength you've seen in the Community setting? I guess, how does That also think, you Know, when you think about your kind of ambitions from here, how Does that play into it? Yeah, it's been a great driver of growth in the Committee center, one of many, but if you look at it now, kind of 36% of overall volumes are coming from the Community, that's up from 30% a year ago. And I wouldn't attribute that only to blood-based testing, but blood-base testing is a major factor, along with the serial testing button as well. All of this is underpinned by data. So what we're seeing is that instead, in relation to solid tumor, where they're now showing their data is prognostic. You know, our data has been prognostic for maybe over a decade, but now we're showing that data sets are coming out and saying, how do you intervene on a patient's clinical decision using an MRD test? So it's being used in a transplant setting. It's being used in escalation, de-escalation, and then in maintenance to take a patient off of therapy. So they're using our tests, making a decision on how to treat the patient. And that's what's also been responsible for driving more uptake both in the academic medical institutions and in the community hospital setting. And you've invested pretty heavily into the EHR integration and just making that process for the physician as seamless as possible. How much friction do you think you've removed from that ordering process? And I guess, is there anything else you could do from here to make it even easier? Yeah, so first of all, it's been EMR integration has been amazing, but we consider it necessary but not sufficient, meaning we think it's the first step. But once you are integrated into the system, then those reps have the ability to go kind of really optimize within the account, kind of the ordering profile, the whole workflow kind of process to make sure that we're kind of getting everything we can out of that account. and the clinician really knows how to not only use the system but also clinically knows kind of when to treat the patient. One of the things I mentioned about serial testing, but I'll be more specific about it, is in OncoEMR Flatiron there is a functionality that we built in for repeat ordering where there's essentially a radio button that says you can test a patient every 3, 6, 9, or 12 months. over 70 percent of clinicians are clicking on one of those buttons and of when they click on that 70 we have three cohorts worth of data three three quarters 75 percent are in compliance after clicking that button the patient is coming back in and getting the test when they're supposed to get that test that's i mentioned that kind of in your first question in the opening remarks that's been a source of kind of surprise the upside surprise we didn't think those numbers would be quite that high. So we're excited about it. We have a team dedicated to working these accounts to really optimize the EMR integrations. Then I'll also kind of move over to Epic. In Epic, you can build in kind of the functionality of what's called a standing order. We've done that for our first account, which was Duke. Quarter over quarter growth, we saw 57% quarter over quarter growth in that one institution. Now, it's not as easy where you can turn on 150 accounts at one time, but going one by one and getting those dedicated IT resources and the clinical mind share to be able to do that and to kind of map out the pathway as to when they want to test patients is something our team is very focused on because of the growth rates we're seeing. And any color you could give on the average test number per patient today and where that could get to with time? And obviously you've spoken to EMR integration as being one of the potential drivers, but anything else you would perhaps point to? Well, clinical data that continues to develop across multiple indications is kind of a huge driver. Blood-based testing is a huge diver. The EMR integrations, again, the focus on the community, the pathways that we're putting into the large network practices, you know, all those things got to work together. We talked about, you know – and then the TAM going from 2.5 to 3.5 tests per patient per year. Again, I think we've got to dust that off. But, you Know, guideline inclusion certainly is massively helpful to that as well. So it's not – I mean, we talk about this a lot, and hopefully this is becoming apparent because you're seeing kind of these these different tactical layers kind of build on each other it's not one thing and these things are all kind of synergistic and work together and our multi-pronged strategy um really across all of our indications i had a question here on multiple myeloma catalysts but i think we probably get on that so just on col uh what are some of the ways uh col management is being reshaped as a result of guideline changes just around mrd and serial testing yeah i mean if you look at the guidelines, it's MRD guided regimen as opposed to fixed duration kind of regimens. So really specifying in the guidelines how to use MRD, it has been a real win for us. And remember, those guidelines came out last year, and what we said was within the community hospital setting, it kind of takes nine to 12 months for the uptake of those guidelines. And I can kind of happily report over the last kind of two quarters, if you look at the growth in CLL, we're starting to see those guidelines really, really, really kick in. And we've got some really nice kind of trials around this as well that are starting to go read out. And then DL, BCL, and MCL becoming more meaningful contributors to growth. What needs to happen clinically and commercially for Clonaseq to succeed in lymphoma, I guess, when we look out the next few years? Well, one is guidelines. We have this kind of land and expand strategy within guidelines, and we've gotten guidelines in DLBCL, but we need to really expand and really strengthen kind of the wording around those guidelines. And the second is really commercial coverage. So we have Medicare coverage on DLBCO, but we need to get much stronger commercial coverage to get our ASPs up, really, from a commercial perspective. And the third is really getting on more pharma trials, more data, et cetera. I mean, the more data that we have in those indications showing how to use, when to use throughout the patient care continuum, you know, the More. But we're seeing nice growth in both of those. You said DLBCL and MCL, right? And then MCL we've got really, really nice guideline inclusion. One of the areas that we're seen in MCL is like you can make a transplant decision based on MRD status, which has been – which is really, really nice for the patients, right, because if you can avoid a transplant because you're MRD negative, I mean, obviously that's a huge benefit. Amazing. And I guess outside of the indications we've discussed, any that you think investors or the sales side perhaps don't pay enough attention to, you know, further down the line that could be interesting? I mean, I think the opportunity in front of us at DLBCL is a bit understated. I think, you know, what we're seeing with, you know, our ability to generate, you know, use our own clinical data to generate new data and insights into how the assay is being used and the clinical actionability that could come in the future is a massive opportunity for us. We talked about CLL. We talked about myeloma. I think those are, you know, things and catalysts that we'll use as we go into these other lower penetrated indications to continue to see, you know, strong growth and strong adoption. And it's an area we're going to continue to invest in and get better at is data generation and how can we provide more utility, more touch points, time points for clinicians to use our assay. And how are you feeling about the competitive mode? Obviously, when you see a market with good growth opportunities, more people want to come into it. But you have the data, the guidelines now. So I guess relative to perhaps a couple of years ago, how are feeling about that competitive positioning in spite of obviously new entrants coming in? I feel very strong about our competitive positioning. The one area that we have competition entering the market is in DLBCL with Natera's acquisition of Foresight. I said this at the time. Now the data is playing out. Our competition really isn't Naterа or Foresights in DlBCL. It's PET scans. MRD is not really being... We're 2% to 3% penetrated. When Natera entered the market, it disproportionately benefits Klonoseq in the short term because it's using a big pulpit to say you should be doing MRD testing and DLBCL. Who's in all those doctor's offices with a great reputation and brand is Klononseq. This isn't to say that Nateras, they're going to take some market share in DLBCL, but it's very very very early on and I do think in the long term that our technology will win the day we're looking for something very specific which is a rearranged immune receptor in this case I'm rearranged b-cell receptor that doesn't pseudo randomly generate so our specificity rounds to a hundred percent it's like ninety nine point nine nine percent with a incredibly high sensitivity of 99 plus percent, right? You can't get that data when, if you're looking at, you know, rearranged mutations or mutations in cancer, you will get some false positives. Anyway, that being said, again, I have a lot of respect for Beneterra. They're going to take some market share, but again, this is, and I'll just say in the other indications, it's going to be very hard to compete, especially on any disease that's cellular, because, again, our specificity and sensitivity is so high. We've got a ton of competitive moats around the business. We're on every, take myeloma, we're on Every Pharma Trial, every KOL. We're in guidelines specified by name now. It's going to be a tough one to compete in. Indeed. And when I think about the masses of data you're starting to generate in MRD, how are you thinking about leveraging that data to make the test smarter? And how, I guess, internally has the team adapted in this era of AI drug discovery to kind of shift to, I suppose, commercialize it in a more meaningful way? Yeah, that's a great question. That's the entire premise of the immune medicine business, and we can maybe talk about that and take that separately. But I do think within the MRD business, we're sitting on a very valuable data asset. And I'll talk about it in a couple of different contexts. The first is we've invested in real-world data capabilities. I'll give you two examples of where we've specifically used it. Number one is supporting our Moldex submission for increased number of time points per the episode. Number two, we have an ASH abstract on DLBCL that's come directly from our data. So that's really, I think we're going to continue to make significant investments in the data from that side of things. And then secondly, you know, it's early, but there are certainly ways to monetize the data and potentially look at kind of selling this data to pharma as they look at different use cases, patient stratification for their trials, things of that nature, I think is a potential future business opportunity. Again, not to get ahead of our skis, but you asked the question. I think we're going to be sitting on a treasure trove of the most comprehensive heme MRD data by far out there, and I think that will have significant value. And then the third area, just you mentioned AI broadly. I mean, operationally, we're using AI across many areas of the business, particularly in the revenue cycle management for appeals processes, prior authorizations, letter of medical necessities, time to cash, things of this nature in our call centers, in our account ops. I think there's a lot that we're doing to just make the business better that, frankly, every business should be doing. And just, I guess, we have five minutes, so maybe shifting onto immune medicine and keeping with AI, how would you describe the value of that immune medicine business in the context of AI when it comes to things like training models, increasing target discovery efficiency, or guiding clinical trials? Yeah, I'll give you two examples. First of all, I think there's immense value in that data as, again, the next kind of big problem in immunology that we're solving, which is moving from AlphaFold, which was generated on public data. This is a proprietary-owned data set. Think about like if AlphaFOLD was owned by one company. think about it from that perspective or context, number one, but like in terms of particular applications, because I mentioned it earlier, but I'll highlight kind of personalized cancer vaccines, cell therapy, but even personalized cancer vaccines, there's kind of three things that you need to do. You have to be able to deliver the vaccine. You Have to be able to pick out the antigens that go in the vaccine constructs. And then you've got to be able to kind of monitor kind of the vaccine. Moderna and BioNTech have figured out number one with mRNA. Number two, what antigens to pick, right? We don't have to guess, right. We can tell you kind of what the TCR response is to the epitopes or the antigens that go into that vaccine contract. So we can essentially help design for each patient a personalized cancer vaccine. Here are the antigems that should be put in the construct. Now, essentially, I don't want say getting lucky, but now what they're doing is they're putting more and more antigens in, hoping that kind of one or more of them will elicit immune response. We can be much more efficient and effective and increase the rate of effectiveness on that vaccine by telling it, well, these are the antigens you should pick. It's a really similar exercise with TCR-based personalized cancer cell therapy. By the way, this is where we started with Genentech. We were doing really well on our side of that program. They did not shut down because they basically had an internal restructuring kind of moved away from cell therapy, not related to adaptive. It allowed us to essentially get off and running and building this. The other area, and you mentioned it, but I'll highlight something specific, is in the area of target discovery and really understanding the root cause and biology of diseases by understanding what the antigen targets are that the T cell receptors are hitting. We anticipate that a publication will be coming out in the next, I'll call it several months, in a very high-impact journal that we've basically, with our technology, we've been able to kind of unravel the mystery of what drives type 1 diabetes. It turns out that these HIPS or hybrid insulin proteins are kind of rearranging, and these are the targets that your T cell receptors are attacking self-tissue with. And this is just the tip of the iceberg, we believe. We think that so many discoveries are going to be coming out of this ability to connect your immune response or your T-cell response to clinically relevant antigens and to be able to do this kind of in silico where you can, if you have the T-cell receptor, go to reverse engineer or impute what the antigen is and vice versa, the applications of this are significant across many different disease states. But I'll say this in the context of having had thousands of investor meetings who have said, just focus on the MRD business, that I think that even if the decision was, which isn't going to be, that, hey, you shut it down, don't spend any money and focus on the MRD and grow the diagnostics business, that would be a win. And the value we create, which I do believe could be significant, could be a massive upside from there. And we've committed, just to be clear on the timeline, we've submitted by year end to everything won't be done and separated, but we will outline what the path forward is in working in conjunction with our colleagues on that. Amazing. Chad, Kyle, thank you so much. Thank you. Thank you, appreciate it. Appreciate it.