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Edited Transcript of NVTA.N earnings conference call or presentation 5-Nov-20 9:30pm GMT

·52 min read

Q3 2020 Invitae Corp Earnings Call SAN FRANCISCO Nov 9, 2020 (Thomson StreetEvents) -- Edited Transcript of Invitae Corp earnings conference call or presentation Thursday, November 5, 2020 at 9:30:00pm GMT TEXT version of Transcript ================================================================================ Corporate Participants ================================================================================ * Jason W. Myers Invitae Corporation - President of Oncology & Director * Katherine A. Stueland Invitae Corporation - Chief Commercial Officer * Laura D'Angelo Invitae Corporation - Head of IR * Lee Bendekgey Invitae Corporation - Chief Policy Officer * Robert L. Nussbaum Invitae Corporation - Chief Medical Officer * Sean Emerson George Invitae Corporation - Co-Founder, President, CEO & Chairman * Shelly D. Guyer Invitae Corporation - CFO ================================================================================ Conference Call Participants ================================================================================ * Bruce David Jackson The Benchmark Company, LLC, Research Division - Senior Equity Analyst * Casey Rene Woodring JPMorgan Chase & Co, Research Division - Research Analyst * Doug Schenkel Cowen and Company, LLC, Research Division - MD & Senior Research Analyst * Kevin Michael DeGeeter Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst * Ophir Gottlieb Capital Market Laboratories, LLC - CEO & Co-Founder ================================================================================ Presentation -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- Ladies and gentlemen, thank you for standing by, and welcome to Invitae's Third Quarter 2020 Financial Results Conference Call. (Operator Instructions) I would now like to hand the conference over to Laura D'Angelo. Thank you. Please go ahead. -------------------------------------------------------------------------------- Laura D'Angelo, Invitae Corporation - Head of IR [2] -------------------------------------------------------------------------------- Thank you, operator, and good afternoon, everyone. Thank you for joining us for our third quarter 2020 earnings call. Joining us today are Sean George, our CEO; Shelly Guyer, our CFO; Lee Bendekgey, our Chief Policy Officer; Bob Nussbaum, our Chief Medical Officer; Katherine Stueland, our Chief Commercial Officer; and Jason Myers, President of our Oncology business area. As you listen to today's conference call, we encourage you to have our press release available, which includes our financial results as well as metrics and commentary on the quarter. Before we begin, I'd like to remind you that various remarks that we make on this call that are not historical, including those about our future financial and operating results, our plans and prospects, the focus of our business strategy, our plans to integrate and manage businesses we acquire, market opportunities, future products, services, our product pipeline and the timing thereof, demand for and reimbursement of our services and our investment in our infrastructure and operations. These statements constitute forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act. It is difficult to accurately predict demand for our services, and therefore, our actual results could differ materially from our stated outlook. Statements on future company performance assume, among other things, that we don't conclude any additional business acquisitions, investments, restructurings or legal settlements. We refer you to our most recent 10-Q, in particular to the section titled Risk Factors for additional information on factors that could cause actual results to differ materially from our current expectations. These forward-looking statements speak only as the date hereof. To supplement our consolidated financial statements prepared in accordance with generally accepted accounting principles in the United States, or GAAP, we monitor and consider several non-GAAP measures. In this period, these non-GAAP measures include cost of revenue, gross profit, operating expense, including research and development, selling and marketing and general and administrative, other income expense, net, as well as net loss and net loss per share and cash burn. We encourage you to review our GAAP to non-GAAP reconciliations, which are available in the press release and in the earnings slide deck. With that, I will turn the call over to Sean. -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [3] -------------------------------------------------------------------------------- It's been a busy and exciting few months both at Invitae and around the industry at large. While there is a lot to discuss, if we leave you with one key takeaway from the call today, it would be the orient or reorient everyone to our mission, the long game at Invitae. Q3 was a great quarter for us and key performance metrics all indicate that we can and in time will return to our pre pandemic growth trajectory. In fact, September turned out to be our strongest month ever. Despite the uncertainty and headwinds of the pandemic last quarter, we saw much stronger tailwinds in the form of broader adoption, public and private payer decisions, and expanding guidelines. We continue to expand our addressable markets and improve our ability to grow into them faster. We see no change in the global demand for our platform and fully expect to return to a high-growth trajectory and maintain it for many years to come. On this call, we'll cover significant developments and future outlook. But first, Shelly will walk us through the quarterly financial results. -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [4] -------------------------------------------------------------------------------- Thank you, Sean. Given the recovery and growth we've seen amidst the pandemic, our intent remains the same, to exit the year with a rapidly growing business that is positioned as an even stronger competitor in the expanding genetics market. As a reminder, we closed the ArcherDX deal on October 2. I will touch only briefly on key cash considerations related to the close because most of the impact will be reported on our fourth quarter call. We're pleased to have accessioned approximately 170,000 samples in the third quarter of 2020, representing a nearly 32% growth in volume over the previous year's third quarter. Our volume bounced back from the COVID lows in the second quarter, increasing 42% this quarter over last quarter. As the business develops billable test volume has become a more relevant metric than an important benchmark given that we accrue our revenue based on the number of billable reports in a period. This quarter, billable volume was approximately 157,000 tests, a 27% increase from the same quarter in 2019. International volume remained steady at about 11% of billable volume. Overall, our volumes, product offering and mix continue to trend back toward or exceed pre COVID levels. However, we continue to urge some caution on expectations for growth over the next few quarters as we enter the flu season and COVID-19 hotspots emerge that could lead to regional shutdowns. Our accession to billable volume spread was 8% for the quarter, higher than our historical 4% in the third quarter. The impacts from COVID-19 were the primary driver of this change. We generated $68.7 million of revenue this quarter compared to $56.5 million in the third quarter of 2019, representing a nearly 22% increase. The third quarter, over 68% of our revenue came from third-party payers and nearly 32% from pharma partners and patients. The continued high percentage from third-party payers is largely due to higher Medicare payments and steady improvement in commercial third-party payer performance, particularly with our hereditary cancer and NIPS test. After seeing consecutive quarters of declining ASPs, we realized an ASP of $429 this quarter, up from $399 in the second quarter of 2020. The this increase is primarily driven by product mix changes, which bounced back to pre-COVID levels with cancer and CNP, cardio/neuro/peds, returning to higher proportions of our overall business. We saw increases in third-party payer ASPs driven by our NIPS offering after bringing the test in-house in July. Offsetting these increases was a shift in our payer mix from third-party to institutional and patient payers with lower ASP. The addition of Archer should increase the ASPs as we move into 2021. One final note, the rising ASPs over time due to payer progress represent a notable source of leverage. Our many investments in our platform and willingness to provide early access to patients ahead of the payer adoption curve is bearing fruit. As we've noted in prior quarters, the pace of M&A activity and other factors make it easier to understand our business and financials by providing non-GAAP metrics. Most line items on the P&L are affected by acquisition-related charges, primarily acquisition-related stock-based comp, amortization of acquired intangible assets and fair value adjustments to acquisition-related liabilities. To allow for the comparison of the 2 sets of numbers, we urge investors to review the detailed reconciliation to non-GAAP and tables included in today's press release and at the back of the slide deck. For the remainder of the call, we will refer non-GAAP numbers, including cash burn, which we believe provide a more relevant depiction of the operating business dynamics. Our non-GAAP cost per sample was $247 in the third quarter of 2020, down significantly from the second quarter. The per sample cost was impacted by mix changes, as well as some remaining excess capacity early in the quarter and higher stock-based compensation charges that were non acquisition related. Now we have a reproductive health test in-house that had previously been performed via a send out. We expect our COGS to benefit moving forward. Non-GAAP gross profit was $26.8 million, which translates to a gross margin of 39% in the third quarter of 2020, excluding amortization of intangibles. The gross profit improved dramatically compared to last quarter due to increased volumes, better ASPs and reduced COGS. We expect to trend back to our target 50% gross margin as we exit the year. Moving to operating expense, we continued to invest in our business while simultaneously moderating our operating spend. Non-GAAP operating expense, which excludes cost of revenue for the third quarter was $102.6 million as compared to $105.7 million in the second quarter. As we highlighted on our last earnings call, to navigate the new COVID reality, we took actions to significantly scale back our expenditures, which included both a reduction in force and a salary decrease for remaining employees. We saw OpEx decrease due to this in the quarter. A significant decrease in OpEx quarter-to-quarter was obscured by a $6.8 million stock-based compensation charge due to a special equity grant to show remaining employees our appreciation of their hard work and commitment as the COVID impact came into focus. Eliminating this, we actually saw an appreciable decrease in our OpEx in the third quarter of nearly $10 million. We intend to continue to make prudent investments in projects, programs and companies that further our business strategy and mission, such as the closing of the Archer transaction just after the quarter closed. Cash burn was $64.9 million in the third quarter, which included approximately $7.1 million of acquisition costs paid in the quarter. Moving to our cash position, cash, cash equivalents, restricted cash and marketable securities totaled $368 million at September 30 compared to $428.5 million at June 30. When considering our cash position, I note that the ArcherDX transaction closed early in the fourth quarter. Concurrent with the closing, we consummated a $275 million pipe and $135 million credit facility. After subtracting the $325 million in cash to close the Archer deal, we added $85 million without deducting the cost of the deal in cash, thereby entering the fourth quarter with an enhanced cash position. The cost reduction initiatives we implemented earlier in the year resulted in a reduction in the third quarter burn, and those changes will yield continued savings as we exit the year. However, in the fourth quarter, we expect more significant fees and costs related to closing the Archer transaction and integrating the 2 companies. On a housekeeping note, we'll be providing our traditional metrics for the remainder of the year but with the complexity and interrelated elements of our platform, we will be working to streamline and refine some of those reporting metrics. For example, we will be moving to a single volume metric versus providing accession and billable as we move into 2021. These changes will be intended to provide a simpler line of sight to the key factors driving the overall health of the business, and the long-term success of our model. Now I'll turn the call back over to Sean to discuss additional strategic activities and progress. -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [5] -------------------------------------------------------------------------------- Thank you, Shelly. I'd like to take some time to highlight our vision and goals at Invitae and why they are more important and attainable than ever. The recent notable acquisitions undertaken by industry-leading companies, like Illumina and Exact Sciences, underscore the notion that the future of molecular medicine will not be dictated by any single technology, test or segment of the market, but rather the ability to deliver the full range of accurate, accessible and actionable genetic information when and where it can best be used by physicians and patients to benefit their health, even their survival. This is the model we have been pursuing for 10 years now here at Invitae. We continue to view routine and constant use of genetic and other molecular information as a new vital sign of personalized medicine for the next 100 years. And as such, it will be a combination of information technologies in the delivery platform, reaching both physicians and patients that will ultimately determine the winners in this newly dynamic ecosystem. Key strategic and clinical milestones from the past few months demonstrate continued significant progress in the execution of that vision. Two days after the end of the quarter, we closed the acquisition of ArcherDX. The Archer technology team and approach fit perfectly with the Invitae culture and mission of delivering genetic medicine to everyone that can benefit no matter where they need to be treated. On that note, I would like to extend a warm welcome to Jason Myers, Co-Founder and CEO of Archer, and now Invitae's President of Oncology, who has joined us today on the call. Jason will play a pivotal role in leading the oncology effort here at Invitae. And on a personal note, Jason is not only a proven executive with a resume of accomplishments, but he's also the kind of role of your sleeves, hands on person who fits well with the way we try and do things here at Invitae, a fact that means the combination of these 2 companies even more attractive. Jason? -------------------------------------------------------------------------------- Jason W. Myers, Invitae Corporation - President of Oncology & Director [6] -------------------------------------------------------------------------------- Thanks, Sean. Now that the transaction has closed, it's great to be digging in as part of the Invitae team. While it's only been a month since the close, it is already obvious that the Invitae platform will be the ideal home for the Archer team, technologies and service offerings. It is abundantly clear to me that if molecular medicine is to become the standard it will need to be delivered in a broad, systemic and accessible fashion. With both centralized and distributed capabilities on board, Invitae is now uniquely positioned to provide flexibility in meeting customers (inaudible) Whatever their specialties and wherever they choose to practice and serve their community. The addition of Archer's differentiated solution provides optionality to the comprehensive menu from liquid and tissue biopsy to early or late-stage cancers and somatic and germline testing. We estimate the comprehensive menu can address a $45 billion global market opportunity. More importantly, that market will expand as our capabilities expand to inform the treatment of all cancers at all stages in any location around the globe. It's truly an exciting time to be involved in molecular medicine. And I'm thrilled to be leading the oncology team in an effort to make genetic testing and monitoring the everyday standard for every cancer patient. Which is a perfect lead-in to discuss the recent research and publications that are making ways throughout the oncology community. So with that, I'll hand the call over to Bob Nussbaum. Bob is the person directly responsible for some of that research and he can best fill you in on study findings and their significance as we look forward to the continued importance of genomic and mainstream patient [kits.] -------------------------------------------------------------------------------- Robert L. Nussbaum, Invitae Corporation - Chief Medical Officer [7] -------------------------------------------------------------------------------- Thank you, Jason. We're delighted to have you on the Invitae team I'd like to briefly touch on 3 recently published studies that underscore that genetic information is rapidly becoming standard-of-care in cancer patients. First, we published data that address the importance of both germline and somatic testing in oncology. A study performed in collaboration with researchers from Stanford and the University of California, San Francisco, show tumor-only genetic sequencing of cancer patients misses medically actionable genetic variance that germline genetic tests will identify, suggesting both tumor and germline testing are required to provide the most complete and actionable genetic profiling to inform cancer treatment. A number of patients in whom a germline variant was missed by somatic testing had second cancers that patients and their providers would have known about and might have prevented or anticipated if the germline testing had been done at the same time as their primary tumor somatic test. It is clear that both types of testing are needed to conduct truly personalized medicine and the good news is that this information, so important to patient care, is becoming more accessible every day. Secondly, a new study of 4,000 men with prostate cancer found 1 in 10 harbor genetic germline changes linked to hereditary cancer syndrome. 3/4 of the patients with positive findings net criteria for changes in their cancer management or treatment based on their genetic plan. It's clear that we must continue to explore how we can make genetic information more available and accessible for men with prostate cancer. Increased genetic testing of men will clearly benefit the millions who find themselves battling prostate cancer as well as informing their relatives, including both their sons and daughters, of significant health risk. I should note that we also began patient enrollment in a national study to explore the role of current guidelines in either insuring or interfering with prostate cancer patients receiving testing that can identify clinically relevant genetic variants that can inform prognosis and support access to targeted therapy. And just last week, a landmark study co-authored by our team and researchers in the Mayo clinic was published that are valuated universal testing among all patients with solid cancer. Results showed 1 in 8 had an inherited cancer-related gene barrier, half of which would not have been detected using a standard approach for deciding who merits genetic testing based on current guidelines. Mayo is now incorporating these study findings into the care of all patients who come to Mayo for treatment, which will substantially benefit the care of patients with cancer and their family. Taken together, these studies demonstrate the importance of making the acquisition of genetic information standard of care. Genetic medicine has labored for far too long under overly complex and overly restricted testing guidelines that are based on outdated cost benefit analyses that to-date Invitae having accomplished one of its core mission, driving down the cost of testing, thereby making it more accessible and improving care for more people by allowing their providers to bring genetic information to bear a clinical decision making. Invitae continues to be a leader in advancing research like these studies and others to break the old mold and allow clinicians to bring genetics into mainstream practice. I will now turn the call back over to Sean. -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [8] -------------------------------------------------------------------------------- Thank you, Bob. The studies Bob just walked through, further demonstrate the ever-expanding role of genetics as standard of care. It is with that feature in mind that we continue to invest in expanding our capabilities to execute on our long-term plan. We generally think of our offering to customers in 3 categories: Menu, services and platform. As we invest and integrate new capabilities, we look at how we can optimize across these 3 categories to drive increased value to customers in the coming years. Let's take a look at the last year of investments. Genelex and YouScript accelerated our entry into pharmacogenetics. With Genelex, we added PGX testing capabilities. And with YouScript, we added a clinical decision support tool focused on PGX results and patient impact. Together, they enable us to offer pharmacogenetics with a software infrastructure to further expand its use. Next, we are well along in integrating Diploid and its interpretation engine [Moon] into Invitae. As you'll recall, Moon is AI software, which further advances our variant interpretation and reporting platform and ability to quickly and efficiently turn large amounts of data and phenotypic information into actionable results. One notable area of growth, this opens up is the ability to address the needs of patients with autism, developmental delay and intellectual disability who are underserved worldwide. Clear Genetics, which we acquired 1 year ago, has been fully integrated and contributes both service and platform enhancements. Clear brought us the clinical chatbot Gia which has become a critical tool for clinicians practicing telemedicine during the COVID pandemic. She helps guide patients through background information and education remotely. Gia will continue to evolve and grow as an important tool for all our clinicians and their patients in the years ahead. Looking at our most recent acquisition, Archer brings us important strategic value across all 3 categories: Menu, services and platform. The accuracy of the Archer technology and the flexibility to provide it by a distributed model will allow customers to have the facilities to perform this testing in the community, offering unique advantages in the marketplace, eventually, not just for cancer, but for content across the entire Invitae platform. As you can see, our investments in the Invitae platform have enabled us to deliver genetic information through a broad set of tests, screens, services, technologies, channels, customers and geographies. Our approach to achieving our mission has been consistent and straightforward. We will continue to pursue new segments of this enormous and growing market, which already totals more than $100 billion across the patient life cycle. We are uniquely positioned to support clinicians and their patients around the world to accelerate the adoption of genetics into routine care. And we are just getting started. While we maintain a disciplined approach to M&A activities and seek to time those activities with market development, we are not looking to slow down our pace anytime soon. The unmet need remains immense, and we continue to position Invitae as a runaway leader in genetics across all areas of health care. Before we open up the call to questions, I'll take a minute to share some news about our team. We've begun the process for Shelly to move into a new role leading Invitae's environmental, sustainability and governance initiatives. The change represents a culmination of Shelly's lifelong commitment to environmental causes as well as Invitae's goal to increase our progress towards becoming a leader in ESG efforts. Shelly's leadership has been transformational for the company, helping us scale our team, raise capital and navigate the acquisitions of nine companies, all of which has helped drive our growth and improve our ability to meet the needs of patients who depend on us. She has been an amazing steward of her role for the company, and I'm looking forward to continuing to benefit from her leadership as she does the same for our ESG efforts, which is now rapidly growing in importance for us here at Invitae, our investors and society at large. The transition will be a thoughtful one, commencing with a formal search during which Shelly will continue to serve as CFO, and will work with the team through the filing of the 10-K and some period of time thereafter to ensure a seamless transition. We'll now turn the call over to the operator for Q&A. ================================================================================ Questions and Answers -------------------------------------------------------------------------------- Operator [1] -------------------------------------------------------------------------------- (Operator Instructions) Our first question is from Subu Nambi with Cowen. -------------------------------------------------------------------------------- Doug Schenkel, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [2] -------------------------------------------------------------------------------- This is actually Doug. And before launching into my questions, I want to congratulate Shelly on the new role and thank you personally for all your help and efforts over the years. I know you'll be just as good in the new role as you were in the last role. So congrats, and thank you again. So now for the questions. First, really just starting on Archer. I'm curious what the early reaction has been from key constituents like closed health care systems as well as a growing list of pharmaceutical partners in terms of what they think about the combination. Specifically, I'm just thinking about the fact that you have a uniquely broad menu as we just kind of think about how the combined Invitae is positioned relative to old Invitae and really your broader peer group. So I'm just wondering if the combination is already opening more doors to some of these key constituents? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [3] -------------------------------------------------------------------------------- Sure, Doug. Thanks. I'll answer first and let Jason respond for the Archer -- kind of the current Archer customers. As we had pointed out for a while, our kind of our oncology clients for at least a couple of years now have been kind of asking us to "get in the foundation medicine game and Invitae-ize it," as it were. And so the response has been positive and a bit of when can we get started from the current Invitae clients, which, of course, we're working on as our top operation priorities. But I'll let Jason speak for the -- any feedback or any input we've gotten from the current Archer clients. -------------------------------------------------------------------------------- Jason W. Myers, Invitae Corporation - President of Oncology & Director [4] -------------------------------------------------------------------------------- I think it's a good question, Doug. I think there's increased excitement. So when you look at what we have been doing, it was creating optionality for our customers and that optionality was spread across liquid or tissue biopsies early or late-stage cancer patients. Really with a platform that enabled us to provide not only to customers in the clinic, but to pharma, the ability to give them the answers they needed. So it's really about getting the right information at the right time. And now we see even greater flexibility and optionality. As you heard from Bob, the increased demand for understanding both inherited and somatic variance in a patient is becoming extremely important, and that will become -- continue to become important in drug development. And then you layer on the ability for us to really meet the patient where they're at, whether that's a patient in a trial or a patient being treated with either letting the testing happen locally or let the testing happen in the centralized facility. -------------------------------------------------------------------------------- Doug Schenkel, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [5] -------------------------------------------------------------------------------- And I should have said in my lead into the questions, welcome, Jason, and congrats to joining the team and bringing so much to the Invitae family. Kind of building off of what you guys both just described. At the end, you talked a bit about really germline inherited risk. And it's notable that there does seem to be a pickup in focus amongst pharma on the role of germline in cancer. In a way, it kind of seems like a little bit of a back to future -- back to the future development in that sense. I guess I'm just wondering specific to the prostate program, what comes next? How big a study or program are you contemplating? And anything you could share on time lines? And for that matter, whether it makes sense to take on kind of similar initiatives in other cancers would be of interest? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [6] -------------------------------------------------------------------------------- Yes. So I think the short answer is we continue working with and looking for more collaborators to publish just that kind of research. Again, I think kind of going back, we already -- I think we come from an advantaged position that we already know the math. We know the allele frequencies of all these variants in all of these different -- affect all these different diseases. And it's really a matter of just getting to collaborate together and getting the samples and getting the patient cohorts to really kind of elucidate and publish it. So we kind of -- when you already know the answer, it's a little easier to line up the folks to work with to kind of bring the right publications and third-party peer review. So bearing, now with that said, of course, we couldn't we couldn't do that level of research on all diseases. There are just -- there's 4,000 different genetic diseases, all the cancer. I think there's just a lot. But nonetheless, you're going to -- we'll continue to do that work. You'll continue to see more publications like that. I would point out we're also kind of explicitly prioritizing a lot of the diseases we cover. Section -- portion of the population that are really underrepresented in the genomic, all of the various locus specific databases, disease databases and national bioinformatics databases. So you'll see a kind of a more investment there than in the past in the norm. But other than that, like I said, just more to come. -------------------------------------------------------------------------------- Robert L. Nussbaum, Invitae Corporation - Chief Medical Officer [7] -------------------------------------------------------------------------------- I could just add two other -- color. One is, for example, in our prostate cancer program, we've looked at people referred outside or before the program was in place or self-identified as African-American versus those that self-identified as African American. And it's more than a twofold increase once we open this program up so I just want to emphasize and sort of underline what Sean just said. The other is that this research is important for patient care, but it has another use, and that uses to change the minds of clinical guidelines writers as well as third party payers. They need data. And so one of the areas that we're going to be getting into is going to be more emphasis working with outside collaborators due to health outcomes and health economics research. -------------------------------------------------------------------------------- Doug Schenkel, Cowen and Company, LLC, Research Division - MD & Senior Research Analyst [8] -------------------------------------------------------------------------------- Thank you, Bob. Super interesting. Maybe the last one is just, I don't know. It may be early to ask this, and I know you just closed on Archer and it's a big deal, but recognizing the vision for Invitae likely goes beyond the broad menu you've already built. I'm just wondering how do you would describe the readiness for more from an infrastructure standpoint? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [9] -------------------------------------------------------------------------------- Yes. So I think that there's not really a short answer to that, but I -- as short as possible, we've been acquisitive for some period of time now. I think really early considering the tenure of the company, we began putting in place the process and the infrastructure to both run an active M&A screening program and then work with partners to pull the deals into fruition and then execute on them. We've now -- I guess this is over 10 companies now we've acquired. I mean, obviously, it's -- we are a high-growth machine, and there's always -- there's always something to fix or improve. But I'd say we're reasonably comfortable that we can continue doing this. And given the market opportunity here, you're talking just in the stuff that we are commercializing today, it's more than $100 billion market across any given patient stages in life with a lot more to come, the data kind of like Bob had just represented the interest from pharma, which kind of Jason covered, and certainly, we've seen increase. We just kind of don't really see that opportunity contracting at all. In fact, it just seems to be growing exponentially. So I think you're going to expect us to keep the pacing and keep going. We're really disciplined about what moves we make, the use of capital and the investment. But we do have a relatively short -- 2 to 3 year idea of the return on any given investment. But barring that, I think given the opportunity and the numbers involved, we intend to stay at it. That's kind of generally what you can expect from us. -------------------------------------------------------------------------------- Operator [10] -------------------------------------------------------------------------------- Next question is from Tycho Peterson with JPMorgan. -------------------------------------------------------------------------------- Casey Rene Woodring, JPMorgan Chase & Co, Research Division - Research Analyst [11] -------------------------------------------------------------------------------- This is Casey on for Tycho. I guess my first question revolves around cash burn. Should we still expect the $130 million to $150 million forward cash burn that was called out in 2Q, now that Archers closed? You burned $65 million in 3Q pre-Archer at year and we can probably project Archer's burning around $50 million or so themselves. So just wondering how you guys are thinking about that $130 million to $150 million burn rate now? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [12] -------------------------------------------------------------------------------- Yes. No, thanks. It's good to touch base. It's been a pretty dynamic year, COVID and raising and acquisitions and all. So it's good on such base on it. I would say, we'll kind of get the formal annual guidance on the burn in January. There's certainly kind of -- if you -- as we did then, if you take a forward look and you put the 2 companies together, that is certainly a range that we think it could look like. I think, however, between now and then, we're probably going to ask ourselves with kind of upon closing of the deal with $400 million in the -- on the balance sheet as it were -- is that the right number given the opportunity -- given the growth opportunity, I'll be honest, I'm not certain right now, and we'll be doing that work between now and January to sort that out. But I would say that very well could be the number, and I think we're looking at what upside growth looks like and what the investment to get there needs to be, and we'll get back to everybody in January on that. -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [13] -------------------------------------------------------------------------------- And I think what this quarter showed us was that, as you noted, it was $65 million, but there was about $7 million that was cost of the acquisition. And if you take those out, we did see a decrease in the quarterly burn. So we are seeing some of the benefits for what we did when COVID hit. I think the question is, what are the good investments to be making over the next several quarters and several years that will really have the return on investment that Sean mentioned before. So that's what we're really weighing at this point with sufficient cash in the bank now and how much do we want to spend to be able to really keep our foot on the accelerator, and we'll talk about that in January. But we have proven that we can moderate it, control it and then be very smart about which investments to make. -------------------------------------------------------------------------------- Casey Rene Woodring, JPMorgan Chase & Co, Research Division - Research Analyst [14] -------------------------------------------------------------------------------- Got it. And then on the ACOG endorsement for average risk, how quickly do you see private payers following suit? And maybe how quickly do you see greater coverage in this area? Any sort of color you can give there? -------------------------------------------------------------------------------- Lee Bendekgey, Invitae Corporation - Chief Policy Officer [15] -------------------------------------------------------------------------------- This is Lee Bendekgey. We're already seeing -- making progress both in the private and public payers. It'll roll out over time. But I will say it is happening a little faster than I would have predicted. I think everyone knows Aetna is currently covering average risk. We are seeing actually rapid adoption among Medicaid -- state Medicaid and some of the smaller payers are starting to pick it up. So we expect that it will roll through the third-party payer landscape. -------------------------------------------------------------------------------- Casey Rene Woodring, JPMorgan Chase & Co, Research Division - Research Analyst [16] -------------------------------------------------------------------------------- Got you. And then just last one for me. There was a comment earlier that some product offerings were trending above pre-COVID levels. Can you just maybe give us some more color on where those -- where you saw the biggest volume trends here in the quarter? And then how is that trending now that you have some visibility in 4Q? -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [17] -------------------------------------------------------------------------------- Yes. So I think, as Sean mentioned, September was the best month ever and maybe Katherine wants to jump in a little bit here. We also did see trending back towards the cancer and CNP. As I mentioned, cardio/neuro/peds, which are more of the pure diagnostic related products. As you recall, during COVID, we saw a lot of more durability in the reproductive side, and we are still seeing exceptional growth in those reproductive products. It's just a question of how fast are some of the diagnostic products coming back, which is strong and back to prior to COVID levels. So the mix is changing a little bit as the reproductive is still growing very fast. But we are seeing firming up in the cancer side. I think it's fair to say also that a lot of the physicians have learned how to deal with some of these shutdowns and how to work with telehealth and especially with Gia. Maybe, Katherine wants to talk a little bit about that. So that's sort of where the numbers are showing us and the types of products. Katherine? -------------------------------------------------------------------------------- Katherine A. Stueland, Invitae Corporation - Chief Commercial Officer [18] -------------------------------------------------------------------------------- Yes. Thanks, Shelly. Yes, we saw growth across all of the product areas and that's both U.S. and international. So we were really pleased to see the strength in September. And I do think that the addition of Gia is most certainly helping us continue to bring on new accounts and maintain and grow new customers. So we expect that we'll continue to drive Gia as a method for being able to improve our commercial leverage over time. So across all areas both U.S. and international and aided by Gia as well. -------------------------------------------------------------------------------- Operator [19] -------------------------------------------------------------------------------- Next question is from Puneet Souda with SVB Leerink. -------------------------------------------------------------------------------- Unidentified Analyst, [20] -------------------------------------------------------------------------------- This is actually (inaudible) on for Puneet. Wanted to just start with the performance in the quarter on the volume side of things. It seems like a pretty strong quarter-over-quarter and both year-over-year. Just curious, kind of following on the last questions, what the puts and takes here are? I know Shelly, you mentioned kind of the business is moving back to the normal and slay date between the refreshes and the hereditary cancer diagnostics business, but just curious to how you think the ACOG guidelines are going to play into volumes? And then also on that note, ASPs as well. I mean, how do you think the patient pay option is going to be trending as the average risk coverage starts to come in? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [21] -------------------------------------------------------------------------------- Yes. No, it's a good question. I think kind of what you're getting at is our portfolio is now getting broad enough where kind of whether we're talking miscarriage analysis, carrier screening, noninvasive premia screening, whether it includes microdeletions or doesn't include microdeletions, whether we're talking amnio, CBS, [newer] testing, cancer, cardio, neuro, pediatric, metabolic therapy selection, cancer. I think kind of in general, the answer is kind of like Katherine's. All areas are growing. Some in a given quarter are going to grow faster than others. We'll probably next year, start moving just general top line growth, patient numbers, clinician numbers, et cetera. Short answer now is, it's all growing. In the reproductive health segment, in particular, as you -- if the question is, kind of do it -- have the ACOG guidelines changed volume trajectory? The answer is no. Kind of non-invasive renal screening has been kind of in play for now many years. I think that the ACOG guidelines as a single catalyst in the space story. I'm not sure actually -- is really playing out that way. There are a lot of ACOG payers picking up coverage before they got guidelines. There are now, as Lee just mentioned, there are more picking it up. We're particularly excited about, for example, state Medicaid programs picking it up. But it's all part of a larger trend. We have no doubt in 3 to 5 years, all 30 million women having children on an annual basis in the markets we serve, we'll be getting kind of access to this basic -- this genetic information for health of mom and baby. And I think that's pretty much on the patient pay side, there still will be women in many payer systems that are out of criteria that will be uninsured. And certainly, outside the U.S., the payment landscape is more variegated and as always, whether it's an individual payment, institutional, self insured employer. That pricing will become -- will continue to be important. It's hard to say really. I think our mix outlook payer type is probably more weighted toward insurance -- third party insurance in the U.S. markets for NPS. On the other hand again, that's going to take some payers a while to catch up, and that pricing is attractive for a much needed service. So I think we're just going to have to see. -------------------------------------------------------------------------------- Lee Bendekgey, Invitae Corporation - Chief Policy Officer [22] -------------------------------------------------------------------------------- This is Lee. On the -- with regard to ASPs, I think Sean answered with regard to the potential impact on volume. But with regard to ASPs if I'm not mistaken, I believe we have been running on our current NIPS volume about half the average risk and half heightened risk. And so the women with -- in the average risk category, to the extent that they have been ordering from us have been paying patient pay. So with improved coverage, we would expect to see NIPS ASPs continue to improve. Obviously, it's early days. So I don't think we can say what it might look like, but there should be a positive ASP impact. -------------------------------------------------------------------------------- Unidentified Analyst, [23] -------------------------------------------------------------------------------- And then, I guess, just looking at COGS, I mean Invitae has done a really good job at reducing COGS in the hereditary business, (inaudible). I guess, how should we view the cadence of this cost reduction with the addition of Archer's portfolio just in the near term, I guess? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [24] -------------------------------------------------------------------------------- Yes. I mean in the near term, gross margins on the Archer product line kind of historically have been in 60% range average, a little bit higher. So -- and it's part of the appeal of the technology, is actually, it's a very cost-effective way to get such accurate information, both for therapy selection and monitoring. I would say, kind of we are now squarely -- we are now kind of operating in a long-term trend to kind of reach and maintain 50% gross margins across the entire platform. In the near term, the Archer margins will help hold that, may even pull it up a little bit. But again, in the long term, we're targeting 5% gross margins for across the entire platform. -------------------------------------------------------------------------------- Unidentified Analyst, [25] -------------------------------------------------------------------------------- Great. And then just last one, quick one for Jason. If you could provide us any updates on the timing of STRATAFIDE and PCM? Anything that we can be expecting in the near-term in terms of filings, approvals and data would be good? -------------------------------------------------------------------------------- Jason W. Myers, Invitae Corporation - President of Oncology & Director [26] -------------------------------------------------------------------------------- Yes, STRATAFIDE was -- has been communicated to be submitted this year, and that is on track. DCM is also still on track. We haven't given exact time lines, but I think you've seen from press releases that there's ongoing work with AstraZeneca, and that continues to move forward as we predicted it would. -------------------------------------------------------------------------------- Operator [27] -------------------------------------------------------------------------------- Our next question is from Tejas Savant with Morgan Stanley. -------------------------------------------------------------------------------- Unidentified Analyst, [28] -------------------------------------------------------------------------------- This is [Edmund on for Tejas]. Just to circle back on the ASP question. Thank you for the color and the detail on the dynamics in the quarter and the additional details just provided. But thinking back, you guys mentioned that biopharma collaborations would be a contribution to improving ASPs. And I think last time you mentioned 16 new contracts in the quarter for a total of 105 partnerships. Were there any new additions this quarter? And what is your backlog in the biopharma work from the dollar point of view heading into 2021? And similarly, you guys also mentioned this time, the increase -- the inclusion of Archer would also improve ASPs. How should we be thinking about that? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [29] -------------------------------------------------------------------------------- Yes. I think I'll answer high level. So the biopharma contracts do indeed are -- they do help pull up ASPs; the Archer business also. There's very attractive pricing for -- on, everybody knows what their pricing for therapy selection is out there for CMS, and we'll see where the payers follow. So there's no doubt that's going to help as well. And likewise, biopharma investment, with 90% of the biopharma oncology pipelines full of targeted therapies, that biopharma investment into technologies to identify patients guide therapy and then look for recurrences, we have no doubt will continue to be a source of good high paid business in the future. So all of that is definitely still part of the outlook. I would say we're now -- I think when you add it all now, it's starting to get -- to be a number of biopharma companies that I think next year, we're probably going to stop keeping track of everyone we tick through this quarter. -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [30] -------------------------------------------------------------------------------- It's [33]. -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [31] -------------------------------------------------------------------------------- 33 this quarter. -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [32] -------------------------------------------------------------------------------- So about 105 last quarter. So it's getting up there, and it's probably not worthwhile continuing to count each of those. -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [33] -------------------------------------------------------------------------------- There's a lot in that. So I think that's the thing. And a lot of it now, we're getting a lot of repeat collaborations or extensions. So now it's -- like I said, I think next year, we'll probably just start sticking with the amount of business coming from biopharma or something like that as opposed to [individual] deal. But yes, it's a great -- very rapidly growing part of our portfolio, and we're really pleased with its development. -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [34] -------------------------------------------------------------------------------- Yes. And I would just say, one way to look at it and where it is placed in our 10-Q is that it's part of the institutional bucket that we have, we directly bill those clients and it's about 50% to 55% and increasing percent of the institutional bucket and probably somewhere between 10% and 15% of the Invitae business and revenue at this point. So it is nicely growing. We did say that the ASPs would be increasing as dollars. It's not tens of dollars, and the increase in ASP is due to those pharma partnerships. But each one that we layer on to a new program or each one that joins one of our detect programs, does help to bring up those payments in general for the biopharma partnerships. And so that's how we think about it is, in general, institutional payers and that we just keep watching that we can cover the various programs that allow people to have access to these tests so that we are able to service many, many more patients, but on our own. -------------------------------------------------------------------------------- Unidentified Analyst, [35] -------------------------------------------------------------------------------- Got it. That was very helpful. And maybe just a couple of questions for Jason on Archer. What were your third quarter revenues looking like? And how did they grow sequentially along with year-over-year? And can you kind of give us an idea of your COVID impact and what your exit rate looks like in September relative to pre-pandemic level? -------------------------------------------------------------------------------- Shelly D. Guyer, Invitae Corporation - CFO [36] -------------------------------------------------------------------------------- I think I'll step in briefly, Jason -- this is Shelly. The 9/30 numbers have not yet been issued. We will be filing an [8K-A] with the pro formas that will include those 9/30 numbers. So I think it's premature for us to speak in a lot of detail. But Jason, maybe you can give a general tenor of how the third quarter went for Archer. -------------------------------------------------------------------------------- Jason W. Myers, Invitae Corporation - President of Oncology & Director [37] -------------------------------------------------------------------------------- I think you could -- I mean we can say we've had continued success, both in the U.S. and outside the U.S. across lab customers or customers using the technology in their labs as well as continued progress with pharma that includes clinical trial, assay work, companion diagnostic development as well as some technical feasibility and translational work. -------------------------------------------------------------------------------- Unidentified Analyst, [38] -------------------------------------------------------------------------------- Got it. And Jason, just one last one. How should we be thinking about Archer sales to both KGA? If I'm not mistaken, I think that was about 50% of Archer's revenue and the trials are mostly completed here. So how should we be thinking about this going forward? -------------------------------------------------------------------------------- Jason W. Myers, Invitae Corporation - President of Oncology & Director [39] -------------------------------------------------------------------------------- Yes. I think, again, as Shelly pointed out, the detail's there. I think will have to be covered in the future. But I think the way you should think about it is there's a very large pipeline of targeted therapies out there. And I would argue that most of our multinational partners have a very deep pipeline. And so there's continual evolution of the customer base and who -- which customers are feeding into the total pharma revenue that is generated from, again, clinical trial assay companion diagnostic development as well as feasibility and transitional work. -------------------------------------------------------------------------------- Operator [40] -------------------------------------------------------------------------------- Next question is from Kevin DeGeeter with Oppenheimer. -------------------------------------------------------------------------------- Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [41] -------------------------------------------------------------------------------- Just kind of following up maybe on the pharma topic a bit more. We've heard from a few companies that the general trajectory of COVID related rebounds for pharma is maybe a bit more measured than they're seeing in the clinical market. So can you maybe comment with regard to the third quarter and the extent you had experienced in the fourth quarter. Relative to going into COVID, how we should think about a rebound in the pharma relative to clinical? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [42] -------------------------------------------------------------------------------- Yes. We saw kind of what you saw with everybody else that pharma patient identification, patient recruitment business did indeed recover later in the game of the kind of -- if you kind of take the time line starting March -- call it, March 15 until now that, yes, that pharma stuff was a laggard in terms of the recovery, the V-shape recovery that we've shown. With that said, with September -- like we mentioned, September was a record -- all-time record month. So the program-by-program, state-by-state, country-by-country, kind of COVID impact is getting -- it's getting hard to now see in the noise. I'll just be honest with you. Even with some like recent new shutdowns, it's not as obvious anymore. Some places -- some of our clients have put in the measures and can react to it now. I think our pharma programs included. And so while we know that there's got to be some kind of impact coming here as we kind of go through flu season now with COVID it does look to us like it's going to be muted compared to the last one. And it's, like I said, against the backdrop of the higher growth, I'll be honest, it's harder to tell for sure. But we didn't -- that trend you mentioned, we did experience as well. And I think we'll still see recovery into it. It's just hard to say what the COVID outlook is. -------------------------------------------------------------------------------- Kevin Michael DeGeeter, Oppenheimer & Co. Inc., Research Division - MD & Senior Analyst [43] -------------------------------------------------------------------------------- And on a different note, can we just talk a little bit -- I mean, we thought in the past about the opportunities to go directly to large companies for health lowness plans, et cetera. Just any update on that strategy to bring a segment of the business for self-insured companies to sort of disaggregate some of the larger third party payers? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [44] -------------------------------------------------------------------------------- Yes. I would say it's still very early days on that one, Kevin. We spent most of the effort with large self-insured employers working on direct benefits for access to genetic information and kind of giving kind of an institutional type of offering. Really like the -- if you saw the Craig Hospital announcement, been working with hospital -- whole hospital systems about basically incorporating genetics as a kind of routine part of the cross continuum care. We, of course, lease teams spend a lot of time with self-insured employers when it comes to trying to suggest improvements of medical coverage guidelines at payers in certain locations. And I'll be honest, that's where most of the action is. We do, however, see those third-party intermediaries popping up that are looking to package entire genetic and subsequent targeted treatment packages for self-insured employers. Those are some interesting conversations. We are with some of the self-insured employers talking about especially the ones that are kind of weighing in heavily on what they want their plans to look like, talking about alternative ways to do that. But they're really early stage conversations at that point on that front. And we spend most of the time kind of talking about kind of direct business and/or kind of collaboration pressure on the payers. -------------------------------------------------------------------------------- Operator [45] -------------------------------------------------------------------------------- Our next question is from Bruce Jackson with The Benchmark Company. -------------------------------------------------------------------------------- Bruce David Jackson, The Benchmark Company, LLC, Research Division - Senior Equity Analyst [46] -------------------------------------------------------------------------------- So there was a Brookings Institution study that talked about a potential drop in the birth rate due to COVID-19. And I was just wondering how much of the business right now is exposed to reproductive testing? And are there any mitigating factors that could offset the drop in the birth rate? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [47] -------------------------------------------------------------------------------- Yes. So I think that we've kind of seen that -- when we've seen those reports, I would say our -- we're a relatively new player in the reproductive health space. And our kind of market share taking, I think, is going to kind of -- it's going to be hard to see that birth rate drop affect our business given kind of the share take we've been experiencing. And also the share creation, right? Again, in the U.S., there's 6 million pregnancies a year. Maybe 2 -- a little over 2 million get served by any 1 of the current leaders in reproductive health, Progenity, Natera, Council, which is now part of Myriad. There's just so many more women out there that aren't getting this information. Our general sense is even a 1 or 2 year drop in birth rate is getting get washed out by the increased utilization of these technologies. -------------------------------------------------------------------------------- Unidentified Company Representative, [48] -------------------------------------------------------------------------------- If I could add one more thing. This Dr. (inaudible), can I add one more thing. Most of our testing in the reproduction space is occurring in the first trimester. And so the birth rate is probably not as important as the pregnancy rate because it's early in the pregnancy that this testing is being done. So if there was a drop-off in the conception and pregnancy rate earlier in the COVID pandemic, what I see is that it's starting to recover. -------------------------------------------------------------------------------- Operator [49] -------------------------------------------------------------------------------- Our next question is from Ophir Gottlieb with Capital Market Laboratories. -------------------------------------------------------------------------------- Ophir Gottlieb, Capital Market Laboratories, LLC - CEO & Co-Founder [50] -------------------------------------------------------------------------------- Congrats, Shelly. That's very cool news. I have two questions. First is given the distributed capabilities of Archer now, this opens a materially larger addressable market of, let's call it, a larger addressable customer internationally. So do you see that international germline business growing as soon as Q4, so essentially right now? And maybe if you could give a little color on the margins there, too? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [51] -------------------------------------------------------------------------------- Yes. The short answer is no. We're -- as much as we'd love to dump more on that, we're going to take it in turn, focusing first on the therapy selection, getting the cancer monitoring up and running and fully globally commercialized, both distributed and centralized. So it's not that the rest of our business benefiting from that addition to our platform of the distributed kitting and pipeline and cloud interpretation and reporting is going to kind of start getting developed and rolled out starting next year all throughout the year after. And it's not for lack of excitement. It's just kind of priorities, first things first. But that is definitely something that we will be investing in and pushing on. And I think it's something that we're really excited about. There's much of the world for 1 reason or another, will be running their own genetics locally. I have encouraged people, and I don't mind putting a plug-in again. The U.K., the NHS, just put out a few weeks ago a report about what that country health system's view of genetics and its central role in health care is going to look like. I suspect it's going to serve as a model globally. It's -- I mean, I don't think it's unfair to say. It's essentially an RFP for the Invitae business model, soup to nuts. And that's a great example. In NHS, public health laboratories, they'll be running their own stuff, and that's where the Archer capabilities on that. There's -- the technology and the IP is amazing. And then -- and there's an awful lot of really great know-how on how to package these incredibly complex assays up and basically ship them around the globe in one single room temperature box. So, yes, we're excited about that, but it is going to -- it is kind of second [priority to] primary therapy selection and cancer monitoring game. -------------------------------------------------------------------------------- Ophir Gottlieb, Capital Market Laboratories, LLC - CEO & Co-Founder [52] -------------------------------------------------------------------------------- Okay. And then my second question is a little broader. I'm just trying to understand the cash burn direction and your view of essentially COVID and the impact on Invitae. The cash burn was pulled back due to COVID uncertainty, which was the sort of the conservative and smart thing to do. And I think that was the plan until there was some sort of clarity on what the impact of COVID would be. It now sounds like you have seen enough clarity with respect to the business and the impact of COVID. So that perhaps this cash burn reduction rate isn't necessarily on for 2021? I don't know if you're commenting on that? -------------------------------------------------------------------------------- Sean Emerson George, Invitae Corporation - Co-Founder, President, CEO & Chairman [53] -------------------------------------------------------------------------------- Yes. I think -- yes, the short of it is, we'll be explicit about it in January, but you're definitely on the right path here. So you kind of take COVID happened. We pulled all the levers. It's like we've suggested. We know exactly where to pull to reduce cash burn. We did. And the cash burn did indeed go down. But there's another thing -- then, however, we acquired Archer, which then introduces deal costs, Archer cash burn, et cetera. So our -- what we had in mind as a kind of COVID reaction cash burn outlook for the year, that did change when we announced the Archer acquisition. And indeed, now we have a decent enough view of what the final net cash from the financing supporting the deal was. We're just rounding up what the deal costs are. We'll know in January that the Q4 impact in total of Archer cash burn. So that's changed, number one. And then, yes, I'd say kind of where we are on visibility. And COVID, seeing how customers are reacting to return of COVID. But I honestly, I think, honestly, [ultra] is broader trends in the business. You're seeing the world react to some of our moves in the game, and it's -- the TAM is obvious. The players are after it, we're in the pole position, and we intend to stay there. And I think that's the mindset people should be considering as we roll around here. We're going to be sure about it, right? You've got two things to make sure we're sure of, what the COVID impact is, get the Archer transaction as integration off running a good understanding of what our investment there is going to be. And then the broader market. But like I said, I think we're kind of all 3 of those things -- those time points in the year are leading to us -- I think we're now more thinking about the TAM and our growth into it as the primary objective. -------------------------------------------------------------------------------- Operator [54] -------------------------------------------------------------------------------- Ladies and gentlemen, this concludes the Q&A session and today's conference call. Thank you for your participation. And at this time, you may now disconnect.