GeneDx Holdings Corp. Class A Common Stock Canaccord Genuity's 46th Annual Growth Conference

Appreciate it. Yeah, thank you.

Yeah. Appreciate the opportunity. Yeah, had a chance last week to put out our second quarter results. We're pleased, in particular, with the highlight of continuing to demonstrate really strong demand for our services, which are anchored on providing exome and whole genome sequencing for pediatric rare disease. Volume growth 32% for the year. We did return back to profitability on an adjusted basis, about a quarter ahead of what we had anticipated. We think setting up a strong second half of the year and really underpinned by a sea change in policy coverage. One notable point, if you look at underlying payer coverage in a commercial realm for whole genome sequencing, saw a step-up to now having 88% of commercial lives be covered, have some level of coverage in their policy.

We have yet to recognize and realize the full benefit of that policy momentum in our earnings. We expect to do that over time. Go back just a quarter ago, and only 47% of commercial lives had whole genome coverage. That was an addition of 56 million lives. As we typically see, coverage does not equal payment automatically. It does take several quarters for that to materialize. We need to see payers adjudicate consistent with their policy. If you look at where the space is moving, the last several years have seen many state Medicaid programs pick up coverage, and now nearly all commercial payers having some level of policy coverage. The way I like to think about the second quarter is that 32% volume growth really representing a large unmet need out in the marketplace. One in 10 Americans is walking around with an undiagnosed rare disease.

The lack of testing is exacerbating what we call the diagnostic odyssey. This first half of 2026, we think, turns the page from a question on being whether there is durable demand for services, but more so now how do we monetize that demand into revenue. We are not at a point where our revenue growth rate matched the volume growth rate for the quarter. We are singularly focused moving forward on improving that in order to recognize our full earnings potential. We put out a guide for the remainder of the year, reaffirming at least $475 million of revenue. The second half of the year really focused on converting demand into recognized revenue.

Yeah. There is an underlying secular trend into whole genome, which is really a continuation of an evolution that GeneDx started 20 years ago, really being the pioneer to move from single-gene tests into multi-gene panels. Over the past decade, moving the space from multi-gene panels into exome, eventually recognizing the space will end up at a whole genome backbone for all. We picked our ticker symbol intentionally many years ago. Exome today still representing the majority of tests that we run in that exome genome portfolio. I think important to recognize 50% of all tests that we ran at GeneDx are still multi-gene panels and single-gene tests, still in a long-term evolution from legacy technology into exome and genome. What we have seen in the last year has been a high velocity of transfer into whole genome from exome.

The second quarter, 32% of our outpatient business was whole genome. That is down, though, from in the first quarter, 40%. Compare that, though, to a year ago, the portfolio was roughly 80% exome and 20% genome. In the last year, I think an acknowledgment by geneticists in particular that speed and cost have reached near parity with legacy technology, and we would expect that secular shift to genome to continue. What we did, though, is introduce an important offering that is being really well received in the marketplace in order to somewhat manage that transition between exome and genome, that being of Exome-to-Genome Reflex, launched in February. In that case, it is run on a whole genome backbone. An exome report goes out to the physician.

It reflexes to a genome if there are relevant findings on the genome content, and that reflex product priced and reimbursed similar to exome. The fact of the matter today is exome is reimbursed at a higher price and more often than genome is. It is our intention to change that over time. All to say it is going to be several years before we see a genome-only world. Ultimately, it is our responsibility as the market leader to properly manage that transition, and we think we have done so fairly effectively in the second quarter.

Yeah, we think we can, and that Reflex product really meant to be a bridge to mature the revenue cycle processes to collect far more often. Today, in the second quarter, 32% of all genome tests were paid. Frankly, that is not acceptable to us. If you look at more mature specialty diagnostic products, we have looked at some analogs. We think a long-term target of close to 70% collection rate is viable within a couple of years. What that will take, we outlined some on our call last week. It is really designing payer-specific workflows. If you look at the documentation requirements, medical necessity requirements, administrative forms that need to be filled out, prior authorization protocols, all very different across what is close to 1,000 payer plan combinations. It is incumbent on us when we are submitting claims to make sure that we are following payer-specific rule sets.

If we look at the overall denials today that we're facing, very little are actual disputes around medical necessity. The majority, frankly, are, we think, addressable administrative documentation related. The investments we're making into process change, into people change, and into AI and tech enablement are all geared to making sure that we close that gap. If you look at the second quarter, over 60% of all volume was submitted to payers with underlying policy change, yet we're only being paid 30% of the time. That's the addressable gap over the next few quarters. That will be the single largest driver of revenue growth to eventually get to the point where our revenue growth rate matches or even surpasses our volume growth rate.