Jim Davis : Yeah. So thanks, Kevin. So look, we don’t know what the final rule is yet. We’ve all seen the proposed rule. It largely follows 21 CFR Part 820, which is the regulated device code. So we’re preparing for it, but let me just tell you, look, we start with a strong quality management system and a very strong quality organization in Quest Diagnostics today. As you know we follow the CLIA guidelines. CLIA was implemented in 1988. It’s a very robust and strict set of guidelines that we follow, and we feel good about that. I would also tell you that myself and many other people in Quest Diagnostics have come from regulated device manufacturing companies in the healthcare space, so we know what to do, we know how to do it.
Certainly there’s gaps between what CLIA recommends and what 21 CFR recommends, and we’ll address those gaps once we know what the final rule is, but we’ll be prepared. There’s not going to be any impact on earnings or EPS here in 2024. As you know the timeframe laid out was a three to four year timeframe. So we’ll address this in a thoughtful way. We’ll be prepared, and we’ve got the confidence and quality organization in place to do it.
Operator: The next question will come from Brian Tanquilut of Jefferies. Your line is open.
Taji Phillips : Good morning. You’ve got Taji on for Brian. Thank you for taking my question. So first, just on the M&A contribution, obviously called out 60 basis points, contribution to total volume. Just curious, is the 50 basis point expectation for the full year contribution to revenue still stand? Thank you.
Jim Davis : Well, if we don’t do any other acquisitions this year, then yes, the 50 basis point trend will continue for the following quarters. But, as we mentioned in the script, our funnel is good, it’s robust and we would expect to close some additional transactions this year. But timing is involved and these things do take time. We’re cautiously optimistic.
Sam Samad : Yeah, just to be clear, our consistent approach is always going to be, that we will include in the guidance that we provide only the things that have been announced and our carryover acquisitions. So, anything that we haven’t announced will not be included in our guidance. To Jim’s point, if we do close any other transactions, we will include them in our guidance perspective going forwarded.
Operator: The next question will come from Erin Wright of Morgan Stanley. Your line is open.
Erin Wright : Great. Thanks. I wanted to ask on just the broader advanced diagnostic segment. How that’s tracking relative to kind of internal expectations. You’ve made advances in areas like Alzheimer’s, for instance and now you did Haystack acquisition. Can you talk a little bit about potential holes in your offering that you see as opportunities? And then on the Haystack front, just what’s the next catalyst on that front? Thanks.
Jim Davis : Yeah. So, from an advanced diagnostic standpoint, it certainly met and even exceeded our expectations here in the quarter. So, let me talk about brain health first. The uptake of our AB 42/40 test, which is a blood-based test for amyloid plaque has again exceeded expectations. We’re really, really pleased with how that test is doing. We announced yesterday in a press release that we’ve added a p-tau217. We had already introduced p-tau181. So we feel like the brain health blood-based portfolio is in great shape. The CSS side of the portfolio continues to do well as well. On the women’s healthcare side, prenatal genetics and carrier screening are doing very well. We continue to see double-digit growth there. With respect to Haystack, as you know, it’s still pre-revenue, but we are about to embark on what we call our early experience program.
We said in the script that we were oversubscribed. We saw it somewhere between 15 and 20 partners to start the program with, and we filled that up a lot more quickly than we thought and had to cut it off at 20 customers. So, feel good about that. We’re going to run that early experience program for the next several months, which will position us for a broader national launch later in the quarter. So, feeling good about the contribution of advanced diagnostics across our portfolio of tests.
Operator: The next question will come from Michael Cherny of Leerink Partners. Your line is open.
Michael Cherny : Good morning. Thanks so much for taking the question. Maybe, Sam, if I can turn back to the guidance you talked about, the dynamics of utilization and the expectation that it will be a slightly more normal environment. As you think about that, how does that factor into your expectations for organic volume, not only on the total number, but also on mix and how that…
Sam Samad: Hey, Mike, sorry. We kind of lost you for two seconds there. Can you please repeat the question? Because I missed a portion of it.
Michael Cherny : Is this better?
Sam Samad: Yes, this is much better. Thank you.
Michael Cherny : Okay, I’m going to try to fix my headset after this. Apologize for that. So, it’s a question just on the dynamics of what’s ingrained in the organic volume expectations, is included both from a normalization of the market, but also a mixed perspective and how that factors into your expectations for margin expansion, and where are the push and pull points that will allow you to make sure you hit the margin expansion versus areas that you could potentially fall short?
Sam Samad : Yeah, I can start, and by all means, Jim you can add some color as well. I think as Jim talked about earlier, Mike, we’ve got some areas within advanced diagnostics that are growing in the double digits, which really helps us from growing some of the key tests that we have in that portfolio, and also helps us from profitability standpoint as well. But overall base volumes, we grew in revenues 5.7%, grew less than that in volumes in Q1. Our expectation is that we’re growing in the sort of close to mid-single digits, maybe slightly below that in terms of volumes, and that drives a lot of productivity and improvement in terms of our margins as we look forward. So, both in terms of mix and some of these advanced diagnostics tests that we have, but also in terms of volume growth overall for the remaining three quarters, we expect that to drive an improvement in terms of productivity.
