Operator: Thank you. One moment for our next question. Our next question comes from the line of Mason Carrico of Stephens, Inc. Your line is now open.
Mason Carrico: Hey guys. Congrats on the quarter, really strong performance. Maybe just a quick question here, I know it’s probably not this simple, but how promotionally responsive is the thyroid market? Is there somewhat of a linear relationship to repetitions and growth, could adding a few reps potentially bump up that growth rate, or how are you thinking about adding reps going forward within your thyroid franchise?
Marc Stapley: Yeah. And we’ve been at this for a lot of years in the thyroid business. So we’ve got a lot of experience there. And there’s always an optimal point that you get to with commercial teams. And of course, when you start adding reps, it’s not as simple as adding a rep, you have to redesign territories and reallocate territories and that creates some disruption and where you have very good relationships between existing reps and their accounts. And so we always ask ourselves that we have continued to grow that team, but we don’t have to grow it significantly in order to achieve the kind of results we’re getting. I think what is — what really matters is sales reps effectiveness and the sales reps having a lot to talk about with their customers and a good reason to go and visit another customer and have a conversation.
So a good example, again, turn it’s — again, while it wouldn’t be ordered in every patient case, it’s another reason to go out and talk to the physician about the addition of turn and what it means and when they should order it and so on. So just that routine cadence of good, strong communication between our existing sales reps and their customers. And then obviously, being out on the street, finding new customers and converting new customers over to a firm is a big part of it. As we’ve talked about before, this product, total thyroid testing, molecular diagnostic testing is about just over 50% penetrated. There’s a lot of customers out there, a lot of physicians who aren’t ordering this test and should be when you actually look at the yield in terms of the number of surgeries that have been avoided thanks to a firm, it should be a fairly easy conversation, but it takes some investment from the sales team in going out and visiting those accounts.
Rebecca Chambers: And the only thing I would add to that, Mason, is while we are adding headcount here, we’re not nearly adding at the same growth rate as revenue is growing, right? So we’re seeing immense leverage over the sales and marketing line and expect to continue to do so, which is one of the benefits of the specialty oncology channel. These markets can be served with, call it, 50, 55 sales heads and you don’t need to build sales forces that are 100 to just serve different types of physicians. So, we obviously really like this model and really are benefiting from a differentiated cash position and cash generation as a result of the leverage we’re getting through the sales and marketing.
Mason Carrico: Got it. Thank you. That’s helpful. And maybe on Decipher Prostate. I think last I checked, you’re at like 195 million covered lives, something like that. Still seems like there’s a lot of room to run there. You guys have been publishing a lot of studies. So could I just get your updated thoughts on potential coverage wins or how you’re thinking about that going forward?
Marc Stapley: Yes. Yes. As you quite rightly pointed out, there is a lot of room there. There are some key coverages that we need to get. And when you think about it, you’ve got a test here that is very well — reasonably well penetrated at least so far is as NCCN Level 1 guidelines, more than 70 peer-reviewed publications, there’s so much evidence out there supporting the use of the test that it’s still a little surprising that it can take this long. It’s not for lack of trying. There are a lot of — we have a market access team that this is what they do. And they’re working with payers in order to drive the coverage decision. So, more to come on that in the future. That’s one of the opportunities that we have for future tailwinds here and just — we just got to keep driving it.
We’re still getting, as you heard today, a firm has been on the market, what now 11, 12 years, 12 years, and we’re still driving commercial coverage in some cases. So it’s a core part of what we have to do in diagnostics, as you know.
Rebecca Chambers: And Mason, as we shared, I think, on the last earnings call, we’re expecting the vast majority of the Decipher growth to come from volume as it already has quite a favorable ASP and this quarter was no different. Afirma volume grew in the mid-40s, pricing did add a little bit — but I’m sorry, I said Afirma, I meant Decipher, Decipher — I mean I would be very happy with Afirma volume growth in the mid-40s as well. But Decipher grew in the mid-40s and price there was not necessarily — it added a little bit to it, but the vast majority of the growth came from volume. Thanks for bearing with me.
Mason Carrico: All good. Thanks guys. Appreciate you taking the questions.
Marc Stapley: Thank you.
Operator: Thank you. Our next question comes from Matt Sykes of Goldman Sachs. Your line is open.
Matt Sykes: Hi, good afternoon. Thanks for taking my questions and congrats on the performance this quarter. Maybe, Rebecca, I just wanted to start out on the OpEx side. I know there was a bit of an increase. Obviously, the revenues were up as well. You had mentioned IVD development ramping clinical trials. But just what should we expect from an OpEx standpoint this quarter. You gave kind of the gross margin guide, but just sort of below that, can you kind of give us a sense for OpEx trends over the course of this year?
Rebecca Chambers: Yes, happy to. And obviously, if you look at our year-over-year growth, a good chunk of that came from increased R&D as we cited in the prepared remarks. And we’re investing heavily not only in IVD development, but also in the NIGHTINGALE study for the benefit of Nasal Swab. We expect that trend of sequential growth for R&D to continue throughout the course of the year. R&D growth will be the largest contributor to OpEx growth over the course of 2023. As I mentioned earlier, sales and marketing is not expected to grow that materially throughout the year, if anything. And so again, that’s a great source of leverage for us. And on the G&A line, as we invest in really ensuring the systems and facilities and infrastructure to scale over the course of the coming years, especially with the incremental volume growth we’re seeing, we will expect G&A to grow slightly, albeit at much less of a rate — growth rate than R&D.
Matt Sykes: Got it. And then just maybe to follow-up on some of the comments or questions have been asked on Decipher and thank you for that volume number. Just wondering, just I think in your March presentation, you still had the penetration rate around 25%. So, I assume that’s probably pretty consistent with where we are today. But just maybe any update on sort of the competitive landscape that you’re seeing there and where you’re seeing sort of the most traction with that product just given the volume growth?
