Freenome Q3 2026 Earnings Call Transcript

Freenome (NASDAQ:FRNM) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Freenome achieved significant financial milestones in Q3 2026, reporting total revenue of $183.5 million, primarily driven by FDA approval of Simple Screen CRC and recognized licensing revenue.

The company went public on NASDAQ, raising approximately $310 million, and is focused on building its commercial infrastructure for AI-enabled cancer screening platforms.

Freenome launched Simple Screen CRC and Simple Screen Lung tests, receiving FDA Breakthrough Device designation for lung cancer tests and achieving early interest from over 2,000 clinical sites.

Strategic partnerships with Abbott and Roche aim to expand the reach of Freenome’s products, with Abbott providing a significant salesforce and Roche assisting in international market expansion.

Freenome anticipates future growth through innovation in test development, with plans for additional single and multi-cancer tests and ongoing efforts to expand reimbursement coverage.

Full Transcript

OPERATOR

Good afternoon and thank you for standing by. Welcome to Freenome’s third quarter 2026 earnings conference call. All participants will be able to listen only until the question and answer portion of this call. During the question and answer session you’ll be able to ask your question by pressing star 11 on your touchtone phone. This call is being recorded by Freenome, with the exception of any participants’ questions asked during the question and answer session.

The entire call, including the question and answer session, is material copyrighted by Freenome. It cannot be recorded or rebroadcast without Freenome’s express written permission. I would now like to introduce Mr. Bill Taggart, Director of Corporate Communications.

Bill Taggart (Director of Corporate Communications)

Good afternoon and thank you for joining us. With me today are Aaron Elliott, Chief Executive Officer; Riley Ennis, Co‑Founder and Chief Product Officer; and Lynn Le, Chief Financial Officer. They will provide opening remarks, and following their comments we’ll take your questions. Before we begin, please note that this call will include forward‑looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to our most recent SEC filings for important risk factors that could cause our actual performance and results to materially differ from those expressed or implied in these forward‑looking statements. Any forward‑looking statements made on this call represent our views only as of today, and we disclaim any obligation to update any forward‑looking statements.

During this call we will refer to certain non‑GAAP financial measures, including non‑GAAP net income, adjusted EBITDA, and free cash flow. These non‑GAAP measures should be considered in addition to, not as a substitute for or superior to, our results prepared in accordance with GAAP. Reconciliations of these non‑GAAP measures to the most directly comparable GAAP measures are included in our earnings press release issued today, which is available in the Investors section of our website at investors.freenome.com, and now let me hand it to Aaron.

Aaron Elliott (Chief Executive Officer)

All right, good afternoon everybody. Thank you for joining our first earnings call as a public company. Today we are really proud to introduce Freenome and share with you how we are working to bring our AI‑enabled cancer screening platform to millions of patients. And we really look forward to establishing an ongoing dialogue with the investment community as we execute on this mission. In July we achieved a major milestone by going public on the NASDAQ under the ticker FRNM, raising approximately 310 million in gross proceeds. And this couldn’t have been possible without our incredible team, our clinical and commercial partners, the patients in our clinical studies, and the ongoing support of our shareholders. And as we begin this new chapter as a public company, we are focused on building out our commercial infrastructure and advancing our broad product pipeline.

And we are incredibly excited about the potential of our technology to truly transform the landscape of cancer screening. Now, since some of you are getting to know Freenome for the first time, I want to start with just a brief overview of who we are. We were founded in 2014 on a pretty simple premise that the traditional approach to cancer screening is highly inefficient. Today’s testing options are fragmented and burdensome, requiring patients to navigate completely different processes for different cancers, and as a result, a large percentage of eligible people never get screened at all.

We’ve turned this premise into our mission to make early detection simple, accessible, and affordable so cancer can be caught at its earliest, most treatable stages. Over the past decade, we’ve built a proprietary AI‑driven multiomics discovery platform that has the ability to look at numerous biomarkers, including DNA and protein signatures, and incorporate the signals into our tests that are most informative for each cancer type. This platform serves as the foundation of our expanding portfolio of blood‑based tests, which began with colorectal cancer, now extends to lung cancer, and will soon include other single and multi‑cancer tests.

By aligning screenings with an individual’s risk profile, we believe we’re uniquely positioned to scale AI‑driven diagnostics, and we call this approach personalized cancer detection. And the data generated from these tests will really be key. Beginning with an FDA‑approved, reimbursed CRC test enables the collection of massive population‑level molecular data sets and the establishment of a longitudinal relationship with the patient. This data, we believe, will rapidly improve existing tests, confirm efficacy for other cancer types, and enable our potential expansion into broader disease areas beyond cancer.

Now, it’s been a pretty busy quarter for us. In addition to going public, we achieved numerous other milestones including the FDA approval and commercial launch of our first test, Simple Screen CRC; validation of an updated version of that test with improved performance; FDA Breakthrough Device designation for our lung cancer tests; and then most recently, the commercial launch of our Simple Screen lung LDT. In July, the FDA approved Simple Screen CRC based on data from PREEMPT CRC, which was the largest prospective clinical validation study ever conducted for a blood‑based colorectal cancer screening test. And while colorectal cancer is highly preventable when caught early, nearly half of the 120 million eligible U.S. adults still remain unscreened. And we believe the simplicity and convenience of a blood test can really overcome traditional barriers to testing and dramatically increase screening adherence.

Now, the full results of PREEMPT CRC were published in JAMA in June 2025 and, in a pre‑specified analysis adjusted to the U.S. Census, Simple Screen CRC detected colorectal cancer with 81.1% sensitivity at 90.4% specificity. Also in this quarter we released top-line data for an updated version of Simple Screen CRC. This is our version 2 test, and we were able to do it within one year of our first version, really demonstrating our ability to rapidly iterate on our technology and improve performance in detecting advanced precancerous lesions, which is really the most important. And Riley will speak more to that here in a minute.

Now let’s turn to commercial. Our unique commercial model is to efficiently and cost-effectively scale Simple Screen adoption by leveraging strategic partnerships like the Abbott partnership for Simple Screen CRC when it’s ordered as a standalone test, and Roche for international kitting, combined with our internal sales team focused on targeting the approximately 600 health systems in the U.S. that are dedicated to increasing patient screening rates.

This combination of partner-driven bottoms-up awareness of Simple Screen and top-down health system channel strategy is how we plan to scale our commercial foundation. Now Freenome maintains full U.S. commercial rights when Simple Screen CRC is ordered in tandem with any other Freenome test where the patient meets criteria. That means we receive the full CRC reimbursement for those tests, and this partnership structure was deliberate, as we anticipate the market will naturally shift towards risk-based multicancer screening from a simple blood draw, and the data really supports this. 84% of the 120 million people eligible for CRC testing also qualify for another cancer screening test.

And of course you then get almost complete overlap when pairing with an asymptomatic MSAID test. So we believe our personalized cancer detection approach layered on top of Abbott’s reach into primary care with CRC will really allow us to capture a disproportionate share of the value as multicancer screening becomes more common. Abbott holds exclusive U.S. commercialization rights for standalone CRC testing, backed by a licensing arrangement worth up to 885 million in potential payments to Freenome tied to regulatory market access achievements and funding for joint research and development. To date, we’ve received 242.2 million of these payments, including most recently the 100 million milestone for CRC version 1 FDA approval. Now most importantly, to capitalize on the potential long-term success of the test and maintain financial upside, we also receive a 10% royalty on net sales once a 20% gross margin is achieved.

Abbott provided many of the attributes that we were looking for in a partner, including one of the largest primary care sales channels and, importantly, the ability to reach the unscreened patient population with high efficiency. By scaling the Simple Screen brand, Abbott effectively primes the market for our Simple Screen commercial portfolio while generating the critical test data required to fuel our pipeline of next-generation AI-enabled cancer diagnostic tests.

Abbott began marketing and selling Simple Screen CRC on September 30, integrating the test into its existing colorectal cancer screening portfolio and drawing on its established relationships with primary care providers and health systems nationwide. Now we’re only about a month into launch, so it’s too early to really provide any specific volume guidance, but Abbott has trained its approximately 800-person sales force and begun the reach-out to their 380,000 provider channel.

At this stage of launch, the focus is really on EMR integrations, health system and provider engagement, putting in place the proper ordering workflows, and engaging payers on coverage. As of now, more than 2,000 clinical sites have requested blood collection kits, showing early interest, and we’re watching this test conversion closely. We’re currently working with Abbott to put together the commercial KPIs that we believe best track progress and future potential.

We’re highly encouraged by the recent momentum surrounding blood-based CRC testing, which has secured pivotal inclusions in both clinical guidelines and major insurance policies. This progress is highlighted by the American Cancer Society’s recent August update, which officially added Simple Screen CRC as an improved screening option for average-risk adults. On the payer side, in addition to Medicare coverage, which set an initial price for Simple Screen at $920, UnitedHealthcare led the industry by becoming the first major commercial insurer to establish coverage for blood-based CRC testing, really marking a crucial milestone towards widespread commercial acceptance. Carelon revised its clinical guidelines to cover Simple Screen CRC as a medically necessary second-line option every three years for average-risk individuals, and then Cigna.

Most recently, eviCore, one of the nation’s largest specialty benefit managers, will implement a policy covering blood-based CRC screening across the 20 states that mandate alignment with ACS guidelines. Together, these developments represent a transformative shift toward broader market access and patient adoption. Separately, in September, HHS announced new appointments to the U.S. Preventive Services Task Force, really an encouraging step as it brings USPSTF back to full strength and enables it to resume its important work. We look forward to the future developments of this body.

In addition to our commercial partnership with Abbott in the U.S., we have an exclusive license and option agreement with Roche to develop a kitted version of our multicancer test outside of the U.S. We believe this partnership can meaningfully expand global access to blood-based cancer screening over time, while Freenome retains ex-U.S. multicancer centralized testing rights. Now beyond CRC, we recently reached a significant milestone by launching our Simple Screen Lung test. This test is designed for adults aged 50 to 80 with a minimum 20 pack-year smoking history who are currently not up to date with annual low-dose CT screening. While nearly 15 million Americans qualify for lung cancer screening, fewer than 20% are actually up to date. We believe Simple Screen Lung addresses this gap by offering physicians a practical and convenient screening option for their patients.

Though we’re just at the beginning of the launch, we’re already engaged in encouraging discussions with health systems across the country. Our top-line results released last month demonstrated 85% sensitivity at 50% specificity, including 82% sensitivity for stage one disease and a 99.8% negative predictive value. Looking ahead, we are actively advancing enrollment for our PROACT Lung registration study, which remains on track to support a future FDA submission.

Now with that, I’d like to turn it over to Riley, who’s going to walk you through the capabilities of our platform and how it’s driving our long-term single-cancer and multicancer test portfolio.

Riley Ennis (Co‑Founder and Chief Product Officer)

Thank you, Aaron. It took us nearly a decade to develop our first FDA-approved CRC test. Within a year we up-versioned the ASCN algorithm, demonstrating improved performance, expanded to lung cancer, and have two additional indications reading out before the end of the year. I share these examples as they reflect what we set out to build when we started Freenome: an AI-driven, multi-analyte platform that interrogates multiple analyte technologies, improves over time, and enables an expanding portfolio of early detection tests while working closely with health systems to build a longitudinal real-world dataset through embedded digital products that can provide a long-term view of an individual’s health.

I want to walk through three of our core pillars that are illustrating how Freenome’s approach is beginning to deliver. First, how we approach test versioning. The next-generation CRC test incorporated a comprehensive set of assay and algorithm improvements. We ultimately 3x the number of unique molecules derived through our assay, focusing on improving the detection of advanced precancerous lesions. In our pivotal study, the next-generation Simple Screen CRC met all prespecified primary and secondary endpoints in the U.S. Census–adjusted analysis.

High-grade dysplasia sensitivity increased from 30.5% to 41.9%, approximately an 11% increase. The overall advanced precancerous lesion sensitivity increased from 13.7% to 18.2%, approximately a 5% increase. CRC sensitivity was 80.4%, in line with the first version, and all at a 90% specificity among participants with no finding on a colonoscopy. Finding and removing advanced precancerous lesions creates an opportunity to prevent colorectal cancer.

Our peer-reviewed health economic model, COSMOS CRC, projects 143 fewer CRC-related deaths and 1,582 additional life years gained per 100,000 people screened compared with the first version. These modeled outcomes demonstrate a meaningful difference when you think about the 60 million people who are currently not screened for CRC. We plan to submit a supplemental PMA by year-end and anticipate approval in the second half of 2027. Approval and successful technology transfer to Abbott would trigger a 70 million milestone payment, currently expected in the first half of 2028.

The second pillar is how we tune our platform for different indications across our personalized cancer detection pipeline. A blood sample contains millions of DNA fragments, RNA, proteins, and other biological information. The earliest cancer signals are only present in a small fraction of that molecular background, and cancer signals can be scarce and differ across indications, stages, and individuals. We built our platform to address this complexity. measure individual omics at high resolution such as our DNA methylation assay that quantifies epigenetic changes at a single base level. We also approach a discovery process with breadth, for example the comprehensive profiling of non-NGS proteins and other secreted analytes. These are just a subset of the internal external technologies that we evaluate to identify potentially additive signal and ultimately the best integrated technology.

We then use several machine learning and deep learning architectures to incorporate complementary information across each of the biological inputs and tune those models based on the specific populations and clinical need. Our lung LDT product demonstrates this flexibility. The protein signature has provided the strongest stage one performance among the technologies we evaluated. This resulted in the launch of our LDT while in parallel we continue to optimize the multi-omics version of our lung IVD which recently received FDA Breakthrough status. We plan to validate this final multi-omics version through our PARIAC lung study which will complete enrollment in 1H27 and read out towards the end of 27.

Beyond CRC and lung, our current Simple Screen assay embedded information from 10 additional cancer types, providing a foundation that we are building upon for the future single cancer and multicancer tests. Those indications we are targeting account for approximately 65% of cancer diagnoses and 70% of cancer related deaths. We expect our next two single cancer readouts in December and our first asymptomatic multicancer detection readout in mid 27.

Our third pillar is our learning engine reimbursed CRC screening. Abbott’s reach and established data sharing and linking capabilities give us a path to build a multimodal molecular and clinical data set for millions of screening encounters over time. Preempt illustrates this potential. We are linking our molecular measurements collected throughout the CRC screening study and have roughly five years of real world longitudinal follow up. A preliminary analysis of the clinical data identified 2,000 internal findings of other cancers.

We can now go back and investigate whether signatures were present in the early stages of disease and in those original blood samples. We can also envision using different cohorts for validation of those other indications and this really shows what’s possible as we think about the commercial data flywheel. As the training corpus continues to grow and those larger data sets also play an important role in as we think about scaling into other more complex models.

Based on a fragment level deep learning architecture that our team developed and data presented at ICML and a special conference at ACR, we observed for the first time that the fragment level deep learning model outperformed our linear baseline machine learning model. This is important because these data sets are still small and will continue to grow over time. The real world data and clinical information also has a role in how we think about expanding access and identification of patients through the screening journey. As Erin mentioned, when you look at the CRC screening population, around 84% of people would be eligible for another cancer screening test. When you look at the overlap of different single cancer multicancer screening tests with the CRC screening population, around 84% of people are eligible for another cancer screening test.

For example, when you look at a single indication like lung, about 15 to 20% of people were eligible for both CRC and lung and we think about the individual indications as well as an asymptomatic multicancer test. This really allows us to offer multiple tests to the same individual and expand our impact as our test menu also grows. And when we work with our health system partners, we really see the convergence of the real world data linkage and our health system strategy. We’ve been building a set of digital products through Freenome Digital Health which really empowers our partners to improve the identification of eligible patients, engage them in the screening journey and support the necessary screening follow up and navigation, and embedding these into the clinical workflows also allows us to collect the necessary data and additional data that can augment and improve as we think about incorporating those data for future products or test improvements.

Taken together, our North Star is to generate the most impact from a single patient sample and collect data over time that allows us to derive better versions of our tests and we’re excited by this next chapter to bring our technology to millions of people. I’ll now turn the call over to Len to go through the financial results for the quarter.

Lynn Le (Chief Financial Officer)

Thank you Riley and good afternoon everyone. Let me start with our financial results for the third quarter ended September 30, 2026. Total revenue was 183.5 million compared with 1 million in the third quarter of 2025. License and collaboration revenue was 182.5 million. This was driven primarily by 180 million recognized under our collaboration and license agreement following FDA approval of Simple Screen CRC. That 180 million included 157.5 million for the exclusive commercialization license along with 22.5 million cumulative catch up adjustment to revenue recognized in earlier periods.

Service and other revenue was 0.9 million. Cost of service was 0.5 million compared with 0.6 million in the third quarter of 2025. Turning to operating expenses, total expenses were 113 million for the quarter compared with 65.7 million in the third quarter of 2025. Research and development expense was 68.4 million, up 17.8 million from the third quarter of 2025. General and administrative expense was 44.6 million, up 29.6 million over the same period. These increases primarily reflect non-cash stock-based compensation. This included 9.9 million in research and development and 29.8 million in general and administrative expense related to restrictive stock awards.

The service condition for those awards was satisfied at the closing of the business combination. Operating income was 70 million compared with an operating loss of 65.3 million in the third quarter of 2025. Net income was 60.1 million or 0.58 per share. This compares with a net loss of 64.5 million or 0.95 per share in the third quarter of 2025. We used 103.2 million weighted average diluted shares outstanding to calculate net income per share. Now turning to our non-GAAP measures, Adjusted EBITDA was 117.9 million for the quarter compared with negative 56.3 million in the third quarter of 2025. Free cash flow, also a non-GAAP measure, was 35.7 million compared with negative 44.8 million in the third quarter of 2025. This quarter’s free cash flow includes the 100 million milestone payment from Abbott.

Turning to the balance sheet, we remain well capitalized. We ended the third quarter with approximately 430 million in cash, cash equivalents and marketable securities. This includes the net proceeds from our July business combination and concurrent private placement as well as the 100 million milestone payment received from Abbott. We continue to expect our current cash resources to fund our operations into 2028. As a reminder, our agreement with Abbott provides for up to 885 million in total potential value.

Of that amount, we have already received 242.2 million. The remaining 642.8 million is contingent on future regulatory and market access milestones and other conditions. Royalties on test sales are in addition to that amount. Finally, let me turn to our outlook for the remainder of 2026. We expect fourth quarter revenue of 2 million to 4 million. This would bring full year revenue to between 192 million to 194 million. With the commercial launch still in its early stages, we do not expect meaningful testing revenue or royalties in the fourth quarter. Our revenue guidance reflects three components. First, research and development fees from Abbott for joint work under our agreement.

Second, service revenue from our UK operations. And third, a modest contribution from lab service fees associated with Abbott’s commercial launch of Simple Screen CRC. As a reminder, lab service fees represent Abbott’s reimbursement of our cost to process Simple Screen CRC tests in our labs. This revenue is gross margin neutral and its contribution would depend largely on the pace of Abbott’s launch. I will now turn the call over to the operator for Q and A.

OPERATOR

Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star 11 on your telephone. If your question has been answered, you wish to move yourself from the queue, please press star 11 again. We’ll pause for a moment while we compile our Q and A roster. Our first question comes from Puneet Sudha with Learning Partners. Your line is open.

Puneet Sudha (Analyst)

Hi guys. Congrats here on the first quarter as a public company. And a couple of questions here. First one just wanted to clarify that 157 million. Could you provide what’s there beyond the milestone payments? Apologize if I missed that and I have a few follow ups after.

Lynn Le (Chief Financial Officer)

Sure. Thanks for the question, Puneet. That 157.5 relates to the commercial contract we have with Abbott and as a result of the 100 million for the V1, we received that triggered recognition of an amount.

Puneet Sudha (Analyst)

Okay, okay. And maybe the second question, and I could follow up on the more details later, but maybe the second question is just in terms of the, you know, look, 2 to 4 million for the fourth quarter, that’s understandable given the milestone payments this year. But next year, wondering if you can provide some sort of guidepost in order for us for the models to be aligned. You know, you have milestone payments coming in next year as well, as well as, you know, the products are going to be ramping.

Maybe just give us some thoughts on 27 if you could.

Aaron Elliott (Chief Executive Officer)

Yeah, thanks, Puneet. This is Aaron. So for next year, if you think about it from a partnership perspective, we will have R and D contribution to revenue. You know, some of this will depend on, you know, where some of the other milestones could potentially fall. You know, right now we’re guiding for the version 2 into 2028 and as of now we’re not giving guidance for, for Abbott as it relates to the service fee revenue and our own internal revenue for the next earnings call.

We will likely provide guidance for 27 from a commercial standpoint.

Puneet Sudha (Analyst)

Got it. Okay. And then maybe just last one, in terms of Simple Screen launch, I mean you have 800 reps. That’s sizable for any product launch. Maybe just give us, you know, how you’re thinking about now with the reps trained, how should we think about the momentum there? And you know, just given, given how the, the existing Abbott products are and how this fills the bag for the reps. Thank you.

Aaron Elliott (Chief Executive Officer)

Yeah, so I would say, you know, we are only, you know, about a month into the launch. So a lot of the activities right now is really, I would say, laying the foundation for long-term growth. And it’s really, you know, three things. One, you know, the engaging and educating of providers. You know, how does blood-based testing fit within their workflows and fit, you know, within ACS guidelines? So part of that is obviously, you know, training and deploying those 800 sales reps and just that whole sort of Abbott commercial engine around that education piece.

Another big part of the activities ongoing is the negotiation with payers. Not just from a coverage standpoint, but even the payers that have put policies out there negotiating pricing for those payers. As you know, that takes some time to do and Abbott is actively engaged with most of the top 20 payers currently. And we do expect in the next couple quarters to be able to announce some successes there. And then finally, and maybe the biggest one, is the activities around integrating with EMRs and getting health system workflows in place. And that’s really to drive bulk ordering. And those activities are ongoing and picking up momentum. I do think one encouraging sign as of now that we are releasing is the 2,000 clinical sites that have ordered SimpleScreen collection kits. You know, in the first 30 days we think that’s a good sort of leading indicator as those start converting over to volume.

And we do expect significant traction heading into ’27. We are working with Abbott pretty closely on, you know, what commercial KPIs beyond volume that we would communicate to you all to reflect progress. And we’ll have a better update for that on the next earnings call.

OPERATOR

One moment for our next question. Our next question comes from Sabu Nambi with Guggenheim. Your line is open.

Sabu Nambi (Analyst)

Thank you so much, guys, for taking my question and congratulations on your first earnings call. Your royalties from Abbott begin once Freenome reaches 20% gross margin on SimpleScreen CRC. I know it’s super early, but have your expectations changed on timing? Given the current trajectory you’ve observed post launch and the current 920 price, how are you viewing the opportunity to pursue an ADLT rate? And could a higher Medicare price move the royalty timing meaningfully?

Lynn Le (Chief Financial Officer)

Yeah, thanks for the question, Sabu. So you’re correct that we have a 10% royalty that triggers on a 20% gross margin. Before that we receive 50% of the gross margin and as of now there’s no expectations on timing as it relates to royalty. Obviously royalty is a function of cost of goods, which scales with volume, but also ASP. And, you know, Abbott is in charge of driving ASP with their commercial payers and also dictating the coding strategy for Medicare for SimpleScreen CRC, the 920 rate.

I think with Abbott one thing we are trying to balance is what is an appropriate price that in the long term can really drive blood-based test adoption. So that was part of the thinking going into coding strategy and pricing strategy as it relates to Medicare. So that’s why we went that direction initially with Abbott. You know, we will readdress coding with the version 2 test as it relates to potentially ADLT.

Sabu Nambi (Analyst)

Thank you for that, that’s helpful. My follow-up, what drove the decision to launch the protein-only assay now ahead of the multi-omic version for lung? How do you plan to move ordering physicians to the multi-omic test once it’s available, and should we expect the protein-only assay to be retired at that point?

Aaron Elliott (Chief Executive Officer)

Yeah, I can take the first part and then Riley can add some additional color. You know, when looking at the performance of the protein-only test, you know, we do think there’s some additional upside for our multi-omic assay as it relates to performance. And, you know, we will show that hopefully on our PROACT readout. But it does provide us a lot of pricing flexibility. You know, the protein-only test is a fraction of the cost of goods of the multi-omic assay.

And really in this time period before FDA approval and established reimbursement, our focus really is on priming the market with the lung cancer test and getting these patients onto our platform. Not just for lung, but also for other indications like CRC and other indications that we have in the pipeline. But that drove a big part of the decision when we looked at what assay to roll out initially before there’s established reimbursement. I know. Riley, do you have additional thoughts?

Riley Ennis (Co‑Founder and Chief Product Officer)

Yeah, we were very encouraged by the stage I sensitivity at 82%, which really highlights the unique nature of some of these secreted analytes for detecting earlier-stage disease. And that’s what led to the launch of the lung LDT.

Sabu Nambi (Analyst)

Perfect. Super helpful. Thank you so much.

OPERATOR

Thank you. One moment for our next question. Our next question comes from Dan Britton with TD Cowen. Your line is open.

Dan Britton (Analyst)

Great, thank you. Congrats on first quarter here. Maybe just the first one on lung. Just could you let us know how many reps were in the field? And I know there’s no guidance at this point, but I’m just wondering, like we have 9,000 tests next year. Is there any way to even comment? Are we in the zip code on that?

Aaron Elliott (Chief Executive Officer)

Thanks, Dan. You know, right now when we look at the commercial infrastructure, it’s really scheduled to start building out next year. From a commercial standpoint, you know, right now it’s about 20 individuals on the commercial side really targeting health systems and setting up our platform. I mean, that’s the majority of the focus currently. As you would expect, we’re not giving guidance on volume for ’27 yet, just the fact that we’re only a couple weeks here in the launch.

But as we said in the prepared remarks, we are seeing a lot of encouraging signs from the health systems as it relates to interest in lung and getting these unscreened patients screened. A big focus of ours right now again is priming that market with our protein test and having that sort of pricing flexibility to drive volume.

Dan Britton (Analyst)

Got it. Okay. Thank you. And maybe just related to that, when we think about attach rates, you know, Guardant has over 50% attach rate so far with the REM said. When we think about attach rates of lung to CRC, any way to at least think about that? What’s a reasonable proxy?

Aaron Elliott (Chief Executive Officer)

Yeah, right now as, you know, Riley mentioned, if you look at the overlap, it’s right around 20% overlap between CRC and lung. And we are interacting with health systems that are interested in our platform in general, not specifically a single indication. So we do anticipate being able to drive that attach rate, but we don’t yet have the data to give any sort of trends as far as putting together what that attach rate would look like. But we are expecting somewhere in that 20% range based on the data.

Dan Britton (Analyst)

And then I know you mentioned the next two single-cancer readouts will be in December. So I guess you’ll announce those when they hit, because I know you’ve talked about in the past esophageal, pancreatic, and liver. So, I mean, can you confirm it’s of those three, and would the launches occur immediately after, or just any sense on how soon after the data would you be launching those tests?

Aaron Elliott (Chief Executive Officer)

Yeah, we’re not revealing what the indications are, but we will plan to put out a press release with the validation data in December. And then we would be launching those tests sometime in 1H27.

Dan Britton (Analyst)

I’ll sneak one final one in. MSET. I know you said mid-year next year data. Is it still 4Q27 is when you would look to launch the MSET add-on, or could it come earlier than that? Thank you.

Aaron Elliott (Chief Executive Officer)

That’s correct. We would still be anticipating the data release in Q2 of ’27 with a launch in the back half of ’27.

OPERATOR

One moment for our next question. Our next question comes from Mark Massaro with BTIG. Your line is open.

Mark Massaro (Analyst)

Hey, guys, thank you for taking the questions and congrats on your first call as a public company. I wanted to start on SimpleScreen CRC. So far, lots of questions about the early launch. I recognize you’re only a month in. Given the size of the Abbott salesforce, I think obviously they made a large acquisition of Cologuard. I wanted to get a feel for—my sense is that Cologuard might be first in their bag, blood might be second in their bag. Can you just give us a sense for—it sounds like all 800 reps are trained on your product.

I’m just curious if your understanding is that Cologuard would be offered first and that blood would be offered only after stool would be rejected.

Aaron Elliott (Chief Executive Officer)

Yeah, hi. Thanks, Mark. Thanks for the question. Yes, currently Abbott is following ACS guidelines, which really position colonoscopy and stool-based testing as the performance-preferred options. And then, you know, individuals that, you know, are unwilling to do those options would then be offered a blood-based option. And, you know, it’s early in the maturation of blood-based testing. Of the options of colonoscopy and stool-based testing, these have been around for, you know, a very long time and there still remain, you know, 60 million unscreened people.

And that’s really the focus with us and Abbott right now is, you know, how do we identify and reach those 60 million individuals? And, you know, we do think Abbott’s in the best position to capitalize on finding these patients because they have these stool-based assays. So, you know, as of now, based on ACS guidelines, we actually find our test complementary with their stool-based test. And we do think, you know, they can leverage having that assay to find this non-compliant patient population.

That’s our focus on the early launch.

Mark Massaro (Analyst)

That sounds great. And it sounds like you talked about the 20 individuals calling on health systems for lung. Is that the size of your total commercial organization right now? And recognizing that you have over $400 million of cash on the balance sheet, how should we think about you scaling your commercial team, and where do you think you might be a year from now?

Aaron Elliott (Chief Executive Officer)

Yeah, so, yeah, thanks for the question. So, yeah, that would be the total size of the commercial team currently. You know, we are looking at ’27 to really start expanding that commercial team out, and then obviously we can gate the expansion based on performance as we go. Long term, we would anticipate a commercial organization probably in the 400 range long term. And again, we think that’s probably the appropriate size based on our commercial strategy, which allows our partners like Abbott to do that bottoms-up approach while we do the top-down health system approach and then put sort of reps in the field to support the health systems that we are partnered with.

Mark Massaro (Analyst)

That sounds great. And then I wanted to ask about lung. Obviously you put up really strong data, notably on the negative predictive value of 99.8%. To what extent do you view this as a rule-out test versus a rule-in? Showing 82% at stage one, presumably this could be both, but I’m just wondering how you plan to position it.

Riley Ennis (Co‑Founder and Chief Product Officer)

The most important is maintaining the high sensitivity in ruling people in given the care pathway and reflex to low-dose CT, maintaining as high sensitivity as possible, especially early-stage sensitivity, is really the focus of clinicians given less than 20% of people are currently getting screened today despite having low-dose CT available for quite some time. So that’s really where blood-based testing can funnel more individuals into low-dose CT where they can then receive the proper follow-up and triage care.

Mark Massaro (Analyst)

Fantastic. And maybe last one, I recognize we’re early days as we think about multicancer early detection. Is there any way to get your sense for what you think will be larger in the mid to long term? Is it the sum of multicancer early detection tests or could it be the sum of individual cancer tests?

Aaron Elliott (Chief Executive Officer)

It’s likely going to be the overlap of individuals that are choosing single cancer alongside A multi-cancer test based on coverage and reimbursement. We really think broad adoption and where volume is going to come is when there’s reimbursement in place. Right now, colorectal cancer, there is reimbursement, and potentially by early 2029 there could be national coverage for a multi-cancer detection test. So we think anywhere where reimbursement goes is where large volumes are going to be. So we’d say it’s the sum of the single cancer tests alongside multi-cancer given that potential path to coverage reimbursement.

OPERATOR

One moment for our next question. Our next question comes from Tycho Peterson with Jefferies. Your line is open.

Tycho Peterson (Analyst)

Hey, thanks. Maybe just a question on commercial coverage roadmap here. I’m curious how you think Carillon may ramp, and then obviously Abbott’s talking to a number of payers. What’s your sense of timing on any of those, and how do we think about implications around ASP uplift?

Aaron Elliott (Chief Executive Officer)

Yeah, thanks, Tycho. We do know they are actively engaged with a lot of payers, the majority of the top 20. And this will be a process as it relates to not just coverage decisions but also pricing, especially for the ones that have already announced policies. We would expect in the next couple quarters to be able to talk about two larger payers coming in network. But as of now, we’re not giving guidance on timing of the payers coming online, but we do know there’s progress being made there.

Tycho Peterson (Analyst)

Okay. And then on V2, appreciate breakthrough device designation, you shared some data on it. I guess, what are the remaining gating items to the filing, and how do we think about timing for FDA approval and tech transfer in ’27?

Aaron Elliott (Chief Executive Officer)

Yeah. So from a V2 perspective, we are on track to file that supplemental PMA by the end of this year. And then based on typical review periods, we would anticipate, you know, in the middle of ’27 for approval. You know, looking at the tech transfer with Abbott, part of that is their lab becoming an FDA-approved lab to be able to run Simple Screen. Based on where those activities are currently, you know, we are guiding to have that implemented in Abbott’s lab in the first half of ’28.

You know, obviously there’s a milestone attached to that as well. So we are, you know, actively progressing that tech transfer. But at the same time, until that tech transfer happens, we will be running all of the samples coming in from Abbott in our facility, which allows us to scale our lab as well. So there’s some give and takes on that timing as it relates to the advantage of scaling our lab, and then you have the milestone being pushed into ’28.

But those activities are ongoing. But that’s where we’re guiding as of now is a ’28 lab transfer for V2.

Tycho Peterson (Analyst)

Okay. And then just last one on Epic. You know, just curious, how many health systems do you think can be live with electronic ordering in the first six to 12 months post launch? And what does the ramp look like for other implementations?

Aaron Elliott (Chief Executive Officer)

So we do know there’s a lot of activities currently on the Abbott side for the EMR integrations. We do anticipate those going live in November with a pretty significant number of health systems. We’re not giving the exact numbers, but those activities should start going live here this month.

Tycho Peterson (Analyst)

Okay, thank you.

Aaron Elliott (Chief Executive Officer)

Thanks, Tycho.

OPERATOR

I’m not showing any further questions at this time, and as such, this does conclude today’s presentation. We thank you for your participation. You may now disconnect and have a wonderful day.

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