Good morning. My name is Kevin and I'll be your conference operator for today. At this time, I'd like to welcome everyone to the SOPHiA GENETICS Second Quarter 2024 Earnings Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Tuesday, August 6, 2024. I would now like to turn the call over to Kellen Sanger, SOPHiA GENETICS' Head of Strategy and Investor Relations. Please go ahead.

Thank you and good morning, everyone. Welcome to the SOPHiA GENETICS second quarter 2024 earnings conference call. Joining me today to discuss our results are Dr. Jurgi Camblong, our Co-Founder and Chief Executive Officer; and Ross Muken, our Chief Financial Officer and Chief Operating Officer. I'd like to remind you that management will make statements during this call that are forward-looking statements within the meanings of Federal Securities laws. These statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated, and you should not place undue reliance on forward-looking statements. Additional information regarding these risks, uncertainties and factors that could cause results to differ appears in the press release of SOPHiA GENETICS issued today and in the documents and reports filed by SOPHiA GENETICS from time to time with the Securities and Exchange Commission. During this call, we will present both IFRS and non-IFRS financial measures. A reconciliation of IFRS to non-IFRS measures is included in today's earnings press release, which is available on our website. With that, I'll now turn the call over to Jurgi.

Thanks, Kellen, and good morning, everyone. In Q2, we delivered another quarter of strong forward-looking indicators and continued bottom-line improvements despite facing macro challenges, which have temporarily softened revenue growth. I will start the call by discussing the challenges we faced, and a few of the growth initiatives we accelerated to offset disadvantages. Next, I will highlight how these initiatives have positioned us well to re-accelerate growth by later this year. Last, I will provide a brief update on our path to adjusted operating profitability, which remains on track as we manage costs well and improve our bottom line. I will then turn the call over to Ross, who will give you a closer look at our Q2 financials, our updated outlook for 2024 and additional details regarding our path to profitability. In Q2, revenue came in below expectations. The two major drivers were challenges related to BioPharma and EMEA. Both of these challenges, which we highlighted in our Q1 earnings call, ended up being more pronounced than originally anticipated, but we are confident that they are temporary in nature. I will now take a moment to discuss each challenge and a few of the actions we have taken to offset these headwinds and reaccelerate growth. Starting with BioPharma, we continue to face a macro environment in which budget constraints have made the signing of large contracts difficult and costed cycles to elongate. In order to offset these challenges, we have accelerated a few of our planned growth initiatives. First, we restructured the BioPharma business by separating data and diagnostics offerings. Our data offering leverages on the large amounts of molecular data generated by our genomic business and the multimodal data computed by our platform to provide AI-powered insights to licensed companies in the areas of drug discovery and development.…

Thank you, Jurgi, and good morning, everyone. Results in the second quarter did not meet our expectation from a revenue standpoint due to the aforementioned challenging budget conditions at BioPharma as well as temporal macro challenges in our EMEA customer base. I'm confident we have taken the necessary actions to respond to these unexpected market changes and have also adapted our cost structure accordingly. Overall, I'm pleased with the new business environment which supports our view that the moderation in growth is transient and in turn we remain committed to our path to sustainable growth. And with that, I'll move to an update on the quarter. As Jurgi highlighted, Q2 revenue was below expectation and we have taken actions to return business to expected growth levels over the next several quarters. Total revenue for the second quarter of 2024 was $15.8 million compared to $15.1 million for the second quarter of 2023, representing year-over-year growth of 5%. Constant currency revenue growth, excluding COVID was 7%. Platform analysis volume was approximately 87,000 for the second quarter of 2024 compared to approximately 77,000 for the second quarter of 2023. Year-over-year growth in analysis volume was 12% or 14% when excluding COVID-related volumes. From an application standpoint, oncology outperformed rare and inherited disorders during the quarter driven by strength in hem/onc testing. The EMEA experienced the softest growth in Q2, in addition to weak performance in Latin America. This was partially offset by notable strength in North America and Asia Pacific, which both grew at over 40%. I'm especially proud of the strong growth delivered in the U.S. The U.S., market has grown from its nascent stages just a few years ago to now approaching our largest market in terms of revenue contribution. Beyond the challenges in EMEA, Jurgi also highlighted that we…

Thank you, Ross. I'm proud of what our team achieved this quarter, particularly our continued ability to expand gross margins, reduce operating loss and improve our bottom line. I also remain excited about our future. Booking's momentum is strong and end markets continue to grow. Cancer rates are increasing worldwide. Better therapies are being developed each day. And data is becoming more and more useful in diagnosis, therapy selection, drug development, and drug deployment. Given our business sits at the heart of these innovations, accelerating and enabling the adoption of each, we remain confident in our long-term growth. In closing, thank you to our SOPHiA colleagues, partners, customers, and investors for joining us in our journey to transform patient care with data-driven medicine. Please note we are presenting at the Morgan Stanley Healthcare Conference next month in New York City. I look forward to continuing to update you on SOPHiA's future success of democratizing data-driven medicine. Operator, you may now open the line for questions.

Thank you. [Operator Instructions] Your first question comes from the line of Dan Brennan of TD Cowen. Please go ahead.

Maybe first one just on pharma, since that seems to be the weak spot here or one of the key weak spots in the quarter. I know in the past, Ross and Jurgi, you've kind of sized it at maybe just under 10% of revenues last year, but that is pure R&D. I think with translational, it could be bigger. So can you just help think us like through how big that business is today, what you were expecting and kind of given this is a big part of the cut, can you just kind of walk us through what expectations were for pharma and what they are now? And then kind of related to that, so basically, on the back half of the year, it's the pharma cut, and then it's basically the clinical cut. Those are the two factors. Where there anything else? Because the back half year, you know, is definitely coming down. Just trying to figure out kind of what's in that.

Yes. Good morning, and thank you, Dan. Let me start with the BioPharma. So on the BioPharma side, indeed, this explains 60% of the delta versus the revenue we were expecting this quarter and to try to address that mid, long term, we have taken some actions, right? So as a reminder, on the pharma side, we work both with the DX teams. So when it comes to decentralized testing or when it comes to development of potential companion diagnostics, and we work with the data teams. In the data teams, our focus has been primarily on the market access needs or on the, definition of patient recruitment, for instance, to improve or speed up clinical trials. So what we have observed, on the pharma side is that between '23 and '24, there are being some pressure on the budget and signing deals of certain amount of dollars became a bit challenging and hence, the refocus on first splitting the diagnostics and the data business on our side to our teams that are really focused on that because these are different people we sell to in the pharma. And second, ongoing for deals which are at a lower value, but, more of those, so that, we can de-risk, I would say, as well the execution of the bookings as well as the execution of the delivery of those deals and so this has really been the learning and the shift for us. Now I would I like Dan that the bookings remain or the bookings, the pipeline remains strong for the BioPharma business on our side and that we believe that while this quarter and this year, given the bookings we had end of last year and beginning of this year, the number is not the one we want in terms of revenue. This is something we should be able to correct for 2025 on. Ross, do you want to give more details on the numbers?

Thanks, Jurgi. So, Dan, last year, we talked about disclosing pharma if and when it got above 10% of revenues. So you can assume it was slightly below that level on a '23 basis. That business was up triple digits last year. And so what's essentially implied in '24 is that business will not be down. So we'd originally obviously assumed continued growth. We had a number, I would say of contracts, verbal awards that we had received late in '23 that frankly still are sitting in procurement or have yet to be actualized. We're confident in sort of them ultimately getting recognized, but certainly, they have not come through in the timeframe that we had expected. I would also say that outside of sort of the direct pharma business kind of to your implication, there are products like HRD where pharma sponsorship in the market is crucial. So while our customer may remain a clinical customer, it is pharma that is obviously subsidizing to some degree that clinical testing, in order to allow for improved market access for their product. We've also seen in some key markets, particularly in Europe, where that I would say reimbursement support has been pulled back or less certain and so that is as well cause, I would say some utilization or usage differences from our original forecast. So while obviously, we're disappointed in sort of the decline in the direct to pharma business, we're confident ultimately in that improving. The other piece we're already starting to see some of that unwind is, I believe part of the reason why pharma pulled back their reimbursement support was due to government's putting in forth some reimbursement coverage. And so that'll start to get picked up at the country level. But in the end, it obviously led to a delta versus original forecast. If I think about what's implied now is essentially what we have contracted and already executed and is already underway. So it's a much more modest expectation for this year, clearly in the second half.

Got it. And then if I can just one other, you know, MSK, you cited throughout the prepared remarks about some traction that you're getting there with some new business wins. And then you also cited the NVIDIA whole genome kind of product rollout. Maybe could you just speak a little bit to like, would you be willing to quantify the MSK business today? Any pipeline impact? Just how are we thinking about how critical or not that business is towards your growth? Is it nice to have? Is it central? And that will let -- and that the whole genome product you're looking to roll out with the help of NVIDIA, kind of how do we think about that product as well from a contributing basis as we go beyond '24? Thank you.

Yes, thank you, Dan. Indeed, so our core business has been in hereditary cancer, hem/onc, minority rare, and to some extent, solid tumor testing and with the MSK-ACCESS application, we're expanding our offering in the space of liquid biopsy, which we expect to be significant as the clinical utility of liquid biopsy has now been clearly demonstrated. And in that sense, to give you some numbers, we signed 10 customers in MSK-ACCESS, 16 in total on the liquid biopsy because we support other applications. And today, our clinical pipeline for MSK-ACCESS is above $10 million and on the BioPharma, it's even more significant. And maybe, Ross, you want to give some color and remind what we did with the AstraZeneca-sponsored testing of MSK-ACCESS and how this is now being expanded.

Yeah. So, Dan, obviously, we're really excited about the early adoption of the liquid biopsy product and obviously that will be as well accelerated via our partnership with AstraZeneca, as Jurgi mentioned. I think overall this is obviously going to be a much bigger impact to 2025 revenue growth. These kind of initial lands we are seeing are much larger than our typical ACV or contract value. So we're excited about that momentum. Obviously, we've talked about in the past, this product takes a bit longer to bring into routine testing. And so that is why you're not seeing a ton of impact in 2024. So that's kind of progressing as expected. But certainly, we think the potential of this product can be quite significant. In terms of whole genome, there, I would say as well, I've been frankly a bit surprised as to the level of the sort of commercial interest. Certainly, we're seeing it in the U.S. and you've seen some of the large central labs talk about demand there, but we're seeing it ex-U.S. as well. I don't know if, Jurgi if there's anything else you want to add on the whole genome side.

Yes. Look, on the whole genome, definitively with bigger sequencers, in the clinical market, we do see that there are more and more applications, in particular for rare neuropathy disorders, but eventually as well for new applications in the future like minimal residual disease. And this, I would say, make our opportunity bigger, right, because more data means more data compute, more identification of complex signatures, and more need of AI-driven, sophisticated algorithms. So in that one, indeed, we're pretty proud then of the work we've been doing with NVIDIA and with Microsoft, which definitely enable us to scale, to be even more competitive than what we are today versus competition. And by doing so, not only to increase our market share, but in the meantime, as well protect strong gross margins. Beyond the whole genome sequencing, as I mentioned briefly, MRD. So today, we don't have MRD capabilities out there in the market for solid tumor testing, but we're very excited about a new application we launched in the market for hem/onc at capabilities, so acute myeloid leukemia, which we believe will be an application that will be quite distinguished from the others, both for the clinical needs and the biopharmonics in a decentralized way. And last, if we speak about new applications where we believe the market is going to still grow strongly, we're very proud as well of launching the MSK-IMPACT, CGP application, which is a counterpart of the liquid biopsy of MSK-ACCESS, where we already signed, as we mentioned today, two new customers, and we are going to hold in September in event in New York with a high number of U.S. potential customers and are going to show first results on MSK-IMPACT and how this can be combined as well to follow patients on two to three with MSK-ACCESS. So, in a nutshell, Dan, despite we're not where we want on the revenue side, I would say that we haven't been too bad on managing costs. And while we have been managing costs appropriately, we're still being able to expand our R&D offerings so that we can grow and increase our revenue. Again, we accelerated strong double digits by beginning of 2025 later.

The question comes from the line of Subbu Nambi of Guggenheim. Please go ahead.

Okay guys, thank you for taking my question. In an election year where there are heightened geopolitical tensions and now FX volatility, I'm curious if the new guide, you are making any assumptions on how you set guidance just to be a bit more cautious given the environment?

Yes, good morning, Subbu. Thanks for the question. Indeed, the environment, it's a bit of a challenge in one, not necessarily easy to predict everything. I will let Ross guide you on how we are creating FX for our new guide.

So, in general, Subbu, I would say, we have historically prided ourselves right on the visibility of the business. So, obviously the result in the quarter, we're not pleased with where we came out. We wanted to as we sort of revisited, we did a deep dive into the customer base and spent a lot of time as well looking at some of the usage patterns and made assumptions obviously, relative to whether some of the softness we saw in Q2 would persist for the remainder of the year and then obviously we have new business coming online. And so those tend to be the biggest, I would say, factors, right, that ultimately drive outcomes. Now we also spoke about BioPharma. And so there, I would say we cut it quite hard. And there's not much I would say in the second half in terms of any assumed reacceleration. But I would say overall, we tended to after this be quite conservative with respect to the cadence and some of the elements and we know -- we need to now focus on that reacceleration and ultimately prove out that this business, should be growing strong double digits going forward. But clearly in the interim, given some of what we've seen and what you mentioned, we wanted to be prudently conservative to make sure we don't have another experience like Q2.

Got it. And then this has been another quarter since the LDT final rule. Customers have had more time to understand what this means for them. Do you expect there to be in -- for your customers that would flow volume for this long term? Would this ever be an issue? And then similarly, IVDR as it progresses, is it a barrier? Thank you for that.

Yes. Thank you for the question, Subbu. So to your point, indeed, the legislation in the U.S. around LDT, as I would say, delayed some of the decisions for self of the year and we've experienced that with a number of prospects that we intend to sign in H2 but despite that, what we hear from other players in the field, which are the significant contributors to molecular genomics, is that probably the LDT legislation will make actually the decentralized version, so the production of data in-house bigger than what it is today. And just as a reminder, most of our customers in the U.S. are large academic centers or large private labs. So we believe that those ones are going to benefit from the LDT legislation and going to see volume increase. And as a reminder, actually, this is something we're pretty proud of. U.S. is where we've been growing the fastest this quarter in terms of volume of usage year-on-year with overall 40% growth year-on-year on utilization in both U.S. and Canada. When it comes to Europe, IVDR is still not quite there. We are making some efforts to be fully compatible for many of the applications we cover with IVDR. In some countries, it's going to be more important than in others. There are some countries where it's going to be more like the LDT like. In other countries, it's going to be more around the IVDR, but we have a very good understanding of what the market needs are and a very strong plan according to the specificities of each country.

Your next question comes from the line of Conor McNamara of RBC Capital Markets. Please go ahead.

Just can you comment on the sustainability of the accelerating growth you saw in North America? Is that a function of a market acceleration due to lower cost sequencing that we're seeing out there or the market share gains or a combination of both?

Yes. Good morning, Conor, and thanks for the question. So definitely, the accretion comes as well, not only from, I would say, the fact that, for us, it was a newer market and we can cover many of the applications. But beyond that, indeed, there is a trend. The fact that strong private lab, large private labs and academic centers are expanding their sequencing capabilities with sequencers, which are more powerful, increases as well the market itself, right? And again, for us, more sequencing, more volume, better, given we are being paid on usage. But beyond that, I would say as well, that we do see more and more demand for enterprise-like platform to do data analytics. Often, large academic centers as well as large private labs are now looking for one key provider who can cover all their needs from hem/onc hereditary cancer, rare disorders, solid tumor liquid biopsy and this enabled us to enter into, I would say, large enterprise discussions with a number of potential targets. Given that there are not many or any companies at the scale of SOPHiA who are completing over 30,000 or close to 30,000 genomics profile amounts and these credentials are extremely important, so that one can work with large academic centers or large labs, which are seeing volumes increase. Ross, in terms of other type of dynamics in the U.S., I don't know if you want to give more color?

Thanks, Jurgi. So I would say, obviously, there's been some disruption in the U.S. market with related to hereditary cancer and rare disease. I think some of that has played into an in-sourcing thesis where we've seen a number of institutions bring in some of that volume, which obviously benefited us. I also think in general, it's caused them and some of the larger institutions to rethink, sort of the mix of send-out and in-house. And so, overall, I would expect volume growth in North America to remain quite robust. Additionally, I would say that, probably the U.S. is quicker to adopt some of the newer platforms and systems and some of the chemistry upgrades, and certainly, there again, you're seeing probably more robust volume growth, both in terms of just sheer number of analyses, but also complexity or size of analyses. And so we expect that as well to play out in other parts of the world over the next 12 to 24 months. So, certainly, a favorable backdrop for us in North America. And if I look at sort of the pipeline as well as kind of our bookings trajectory there, it will support continued outside growth in the region.

Great. Thanks for that color. And then on the BioPharma weakness and the decision by you guys to focus more on some of the small -- focus on a smaller BioPharma customers, is that a function of -- is there increased competition from other AI platforms or is it just more of an overall market that is taking longer to develop than you guys have anticipated?

So just to make sure we didn't misguide the one listening to us today. On the BioPharma side, we're focusing on the top pharma needs, the top 20 pharma needs and some biotech but indeed, we're focusing within these accounts on deals which are lower in terms of the budget and the dollars and this is due to our experience of having significant discussions and delays in signing large deals. When it comes to the current need or demand, we see clear demand in anything regarding market access, so which can be sponsored testing, eventually follow on DX, which is as well access to data for market access needs. We see a bit more delayed decisions on anything which is pre-launch of a drug. So which would be leveraging on the data to, for example, design the clinical trails in a certain way or CDx development plan. Beyond that, I don't know, Ross, if you want to add anything else.

Yes, I think just broadly, Conor, and I'm sure you've heard this from peers or other companies. I mean, certainly the budget environment at pharma this year has been more challenging, right? Whether that means you're spending more time in procurement or the decision-making is elongated, it's very clear that sort of the threshold for which multiple approvals are required is lower and thus it's more challenging, even when you've been awarded to essentially move to contracting and then execution. So for us to combat that, as Jurgi mentioned, we're obviously trying to aim for smaller ACV-type business and so far I think that's gone fine but certainly, even if we think of the portion of revenue I mentioned earlier that we had assumed would impact the forecast this year that was verbally awarded that's still sitting in procurement and contracting, that's a seven-figure plus deal and so there it's been certainly quite a journey trying to get some things actually realized. So we've adapted and I would say it's much less around the competitive environment and frankly for much of what we offer, there's not a lot of comparative companies or similar offerings and so our capabilities, I would say in many senses are unique and it's quite a new market and so there as well, obviously trying to carve out new pockets of budget in an environment where things are more challenged is not easy. But the value we bring and the continued proof points right through those smaller pilot studies and or building of other examples, I think will continue to unlock these accounts for us increasingly over time, and we can already see some of that momentum as you already mentioned.

Great. Thanks for that color, Ross and Jurgi, thanks for the clarification, appreciate that. Thanks, guys.

Thank you, Conor.

Your next question comes from the line of Tejas Savant of Morgan Stanley. Please go ahead.

Thanks for the time. So, Jurgi or Ross, perhaps, I want to dig in a little bit on the pharma weakness here again, helpful color on de-value thresholds and market access and CDX work versus the rest. But as you think about your pharma revenue mix to date, how much would you say falls into that discretionary spending bucket or and how much falls into core R&D spending? Because if it's the latter, the weakness is, I guess, a little bit surprising to me because trends seem to be generally okay at least year-to-date financings and so on and so forth. Even commentary from peers seems to be holding up. So anything you can do to just parse out those two dynamics within the pharma weakness would be terrific. Thank you.

Yes. Thank you and good morning, Tejas. So our budgets don't hold on the core R&D as you define it. So there are more of the discretionary ones, although I would say the probably the easiest one to act on as well because they are mainly related to drugs that are finding their best way in the market, right? So most of them are really related to market access on the data side, and on full-on CDX or on sponsored testing on the clinical side, and we're having some discussions as well when it comes to pre-launch on the CDX side, but nothing along the line of drug discovery.

Got it. That's helpful. And then on the EMEA weakness, Jurgi, can you share a little bit more color on what drove that sort of patient volume moderation? And as you think about that strategic account focus you talk about help us thing through how you envision that helping you would some of the pricing pressures you called out for some of the core hereditary testing side of the business. Some of the core hereditary testing side of things?

Yes, sure Tejas. So I will start and then leave it to Ross. I would just like to highlight that we believe this is temporary. So we've seen indeed in the EMEA market, but in particular in three countries, which are important for us, so where we had important traction, so, Italy, France, and Spain, some challenges around uncertainty of some reimbursement, for example, in France for solid tumor testing, which now is resolved and so hence volumes are up again, and some pressure from competitors who often come with lower ASPs for an offering which is inferior, but we're -- we believe that with the actions account level, and the selling at the account level and this should be something we resolve. And beside that, I want as well to insist that just on the fact that the R&D development we've been working on make our offer more competitive. Ross, given your leading directly sales, do you want to go through the concept of the enterprise sales at the account level and the importance of that for the French, Italian and Spanish market in particular?

So thanks, Jurgi. So first off, Tejas, I would say as we spoke to the customers, particularly those where we see saw a deviation in usage trend, honestly, most of the feedback was, generally constructive and that they expected trends to resume, and that ultimately they saw this pause in some of the demand as temporal. So it's hard for us in some sense to gauge if there's a change in utilization or a change in testing pattern, et cetera. But I guess in our work, and we obviously have deep customer relationships, inherently, we did not detect anything that would lead to a more sustained change. Now as we think about some of the competitive dynamics or what you cited on pricing, I think we've seen very specific competitors, smaller competitors come in with aggressive pricing on a specific product, right, because typically their menu is quite limited and their capabilities are much more narrow and so ultimately, what we've done increasingly is gone back with sort of an enterprise presentation whereby we can obviously bundle quite a number of applications together as well as work with automation or chemistry partners to come up with a holistic solution for the lab. That essentially can help them lower the total cost of operation and become more efficient and scale their volumes and achieve improved pricing. But for us, grow materially our wallet share at the customer. And so I would say we've used that strategy now in our more established market successfully of notes, right? We've talked about historically, maybe two and a half applications per customer. We're seeing some customers where we can get to five, six, seven, eight bundled applications on the platform and really, essentially it proves out our thesis and it's also a way for us to obviously defend some of the more selective, I would say aggressive pricing we've seen from some of the smaller entities and so we feel quite good that this will continue to benefit us. And again, I'll insist on sort of the new business environment, which for me is much more of a forward-looking indicator for us, which continues to be, I would say, quite strong even in the markets that we cited in terms of Italy, France and Spain. And so overall, we really see this sort of dip in usage as temporal.

Got it. Appreciate the color, guys. Thank you.

Thank you, Tejas.

The last question comes from the line of Mark Massaro, BTIG. Please go ahead.

Hi, guys, this is Vivian [ph] for Mark, thanks for taking the questions. So just when do you think we could start to see the impacts of the BioPharma reshuffling of sales resources across geographies? And does that just represent upside to the lower guide? And could you discuss when that was completed and if there's any good trends to call out here in July and early this month?

Yes, thank you and good morning, Vivian. So we start with first reassuring that we do see market growing, right? Overall, both in the pharma, both in the clinical side. And on the BioPharma side, despite we being, I would say, refocusing our activities and defining teams that are dedicated to Dx, as well as to the data, and focusing on overall deals which are lower ACV. Our pipeline continues to grow. And on the clinical side, I think that was your second question regarding the macro events that made that the volume of analysis was a bit lower than what we had thought or what we had anticipated. There as well, the first numbers that we see of July are reassuring and demonstrating that this will reaccelerate. And our booking numbers suggest that this will actually reaccelerate from Q1 next year. And just maybe as an aside, to be clear, on the clinical market, this quarter year-on-year we still grew 14%. Naturally, what has been more penalizing us as being the BioPharma related activity? Now, that said, just to make sure that we made that point clearly as well, Vivian. Despite revenue growth was not as possible as or as large as what we had anticipated and it's more modest. We're being able in the meantime to protect our margins with gross margins that were above 73% on an adjusted basis and huge improvement as well on the adjusting operating loss versus last year where we improved by 32%.

Got you. And if I could just squeeze in one more, just on the guide. I guess you guys were pretty clear in calling out BioPharma and the EMEA headwinds. Just what baked into the guide as far as the competitive pricing pressure that you mentioned?

Yes. So, I will leave it to Ross to answer you and give you some more color.

Yes. So what we're seeing in terms of pricing is on a same-store basis, capture has been around 1%. Now obviously there is some mix shift happening in the business and obviously some of that you see through the pharma weakness but ultimately, we essentially forecast that much of what you saw in the Q2 will continue throughout the year. We do have a slight benefit in the Q4 as some liquid biopsy-related business starts to come online late in the quarter. But ultimately, I would say the trend that we saw in Q2 is what we're assuming happens throughout the remainder of 2024. And so, we will see obviously how that certainly plays out, but we wanted to be conservative with respect to our assumptions just given the magnitude of the delta versus our original forecast. So again, I feel, we've taken the steps and we're confident that it will improve, but we've not baked that into the back half.

There are no further questions at this time. I'd now like to turn the call back over to Jurgi for final closing remarks. Please go ahead.

Just thank you all for following us today and very much looking forward to reconnect early September at the Morgan Stanley event in New York. Have a good day.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.