Daniel Sammarco: Hey, Chris and Aaron, I’m on tonight for Dan Brennan. Thanks for taking the questions. So the first one, in the reduction in force press release, you noted that you plan to develop clinical evidence across 10 different clinical studies. Could you just go into a little bit about how much R&D dollars you expect to invest in order to publish evidence in MRD?
Christopher Hall: Yeah. I mean, it’s one of the reasons why we spend a lot of money on R&D is that we have invested heavily in this test. We think it’s a significant opportunity. The 10 studies that you mentioned, there’s the TRACERx collaboration on running those samples and getting that submitted. We’re well on track and most of that work has already been done is in the rearview mirror and the P&L. We’ve in the breast cancer, we’ve working with Royal Marsden. We’re working with Dana-Farber. We’re working with the Curie Institute. A chunk of those samples have already been run and you’ll start to see that data come out in mid-2024. We have a prospective clinical trial with the B-STRONGER collaboration. And we’ve got our first sites.
We’re enrolling our first set of patients, but we’re probably still early days there in terms of the spending. We think it’s really important to have a prospective clinical trial there to establish the evidence and the clinical utility of the product, triple-negative breast cancer. And we’re really excited about that indication, because the opportunity to deescalate patients is really exciting with an ultra-sensitive approach. In IO-therapy, we have run most of the samples for VHIO. And you should start to see that data in mid-2024. And we’ve run many of the samples with our Duke and UKE collaborations. And then the University of San Diego collaboration continues onward. So, I don’t know that we have a fixed percentage, but we’ve significantly – we’ve spent a good chunk of the dollars that we need on those 10 studies.
But I think as you know in this space, we’re not done with just the 10. We think the 10 give us the good cornerstone to drive the right kinds of submissions that will get us Medicare coverage, because we think these data sets are strong and robust and comprehensive. But we’ll be deepening the work in these three indications as we go forward. And it’s a journey to build the evidence and show the clinical utility that’s ultimately going to make a product like this, standard of care.
Daniel Sammarco: Great. Thanks, Chris. Just digging a little bit deeper into gross margins for the guide. Apologies to you, you mentioned it earlier, but would you mind going through a little bit of your assumptions for 2024 and then possibly how they develop into 2025?
Aaron Tachibana: Sure. So, in terms of gross margin that’s embedded in our guide, so we’re assuming somewhere between – somewhere around 25% plus or minus a point here or there for the full year. And then in terms of 2025, gross margins will increase, it will accrete. We haven’t guided for 2025 yet, so I’d be hesitant to give you a specific number, but we should be in the low-30s in 2025, especially if we can get to this $100 million number that we’re targeting, right? Because we’re not going to be adding a lot of fixed costs. Most of the footprint for the lab operation has been invested in. We will need to add variable costs as volume grows, but for the most part, we’re going to leverage the fixed cost footprint.
Daniel Sammarco: Awesome. Thank you. Have a good night, guys.
Aaron Tachibana: Thank you.
Christopher Hall: Thanks.
Operator: [Operator Instructions] Our next question comes from Mike Matson with Needham. Please proceed.
Unidentified Analyst: Hey, guys, this is Joseph on for Mike. And maybe just touching on that 2025 revenue number, I guess maybe what are the main assumptions in getting to that number? I guess, more broadly, do you need VA MVP revenue to remain stable or increase? Do you expect a lot of this to be driven by biopharma mainly and is VA MVP upside, just given the uncertainty around future task orders?
Christopher Hall: No, I mean, I think we – so, I mean, we walked through those three drivers. But right in the heart of that is our Win-in-MRD strategy. We’re sitting here in 2024. We’re well along the way in evidence development across key indications. And we intend to submit for Medicare reimbursement across these three large indications this year, and we’re on pace to do that. And we expect that to yield efforts and significant revenue, because we’re also growing the commercial traction with our partner Tempus. So as that starts to come together, we expect the revenue for our NeXT Personal and clinical market to really start to grow and get traction, and that’s a big driver. But then secondarily, we’re seeing a lot of interest and excitement among the biopharma customers with NeXT Personal, and then that’s starting to move in needle in terms of our growth rate.
And you see that embedded in the guide with the traction in 2024 and the growth rate starting to pick up. And that’s just going to – we expect that to pick up steam as we come through the year and come into 2025. That’ll be a big year. We do have a 5-year sort of renewable set of agreements with the VA for the Million Veterans Program, but we don’t expect that. That would be nice if that grew, and there’s certainly the possibility, because there’s a lot of untapped opportunity there that they have not sequenced yet. And so it’s possible that that would pick up steam. We have not assumed in any way that that’s going to be a driver of us getting there. We’ve assumed that that’ll be pretty stable, to be honest.
Unidentified Analyst: Okay. Yeah, thank you very much. That’s super clear. And then, I guess, just to understand the Tempus relationship a little bit more clearly. In terms of like samples, cancer type samples, are you guys going at this as kind of agnostic to cancer type, or is this a little bit more targeted towards the submissions you expected to do in 2024? I know you guys said you’re kind of just like stealing it out and learning how to work together and integrate systems.
