Panna Sharma - CEO Igor Gitelman - CAO Jay Roberts - COO & EVP, Finance

Ram Selvaraju - Rodman & Renshaw Lauren Chung - Westpark Capital

Good morning and welcome to the Cancer Genetics First Quarter 2017 Earnings Call and Company Update. This morning, the Company issued a press release that provided an overview of the first quarter 2017 results. Today’s conference is being recorded and will be available online at investor.cgix.com. Additionally, CGIX has also provided a set of slides to accompany today's update that are available, both online or by contacting ir@cgix.com. At this time, I would now like to turn the conference over to Mr. Jay Roberts, Chief Operating Officer and EVP of Finance. Please go ahead sir.

Thank you, Operator and thank you all for joining the Cancer Genetics’ first quarter 2017 earnings conference call. On the call today is Cancer Genetics President and Chief Executive Officer, Panna Sharma; our Chief Accounting Officer, Igor Gitelman; and I am Jay Roberts, Chief Operating Officer and EVP of Finance. The Company issued a news release and set of slides yesterday after the market closed to accompany its earnings call. They highlighted our first quarter 2017 financial results and operational progress we have been making year to date. The presentation materials are available under the Investor Relations' section of the Company’s website. Following the Safe Harbor statement, Panna will provide an overview of the first quarter and our significant accomplishments so far this year, including our business results and progress on our strategic goals and initiatives. I will then provide a summary of the first quarter financial results, and then we’ll open up the call up for questions. I’d like to remind everyone that various remarks about future expectations, plans and prospects constitute forward-looking statements for purposes of Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Cancer Genetics cautions that these forward-looking statements are subject to risks and uncertainties that may cause our actual results to differ materially from those indicated, indicating risks described by the Company’s filings with the SEC. Any forward-looking statements made on this conference call speak only as of today’s date, Friday May 12, 2017 and Cancer Genetics does not intend to update any of these forward-looking statements to reflect events or circumstances that would occur after today’s date. This conference call is also being recorded for audio rebroadcast on Cancer Genetics’ website at www.cancergenetics.com. All participants on this call will be in a listen-only mode. The call will be followed by a question-and-answer session. With that, I’d like to turn the call over to President and CEO, Panna Sharma. Panna?

Jay, thank you for the introduction. And welcome to all of you that are listening in on the call this morning, and all those that are listening in through the Internet as well. Cancer Genetics is participating at the forefront of one of the largest changes in therapy development and medicine, the emergence of precision medicine and therapy personalization in oncology. We are actively supporting and powering over 140 studies and clinical trials in cancer with our testing technology Additionally, during the first quarter of 2017, our focus teams delivered critical molecular genomic and biomarker data on over 12,300 tests. The first quarter was very good and demonstrated a strong start to 2017, a 15% improvement in revenue, while also achieving a very significant 46% improvement in operating income losses over the same period of 2016. This year over year growth came from all market segments of our business, Discovery, Biopharma and Clinical. We also continued to demonstrate our significant progress in generating operating efficiencies and improving margins, demonstrating our commitment to moving us towards profitability. And Jay Roberts will cover this in more detail later in our call. Our revenues for the first quarter of 2017 were $7 million, a 15% increase over the prior year, driven by organic growth across all market categories. This was done in an environment where we also reduced our operating expenses by 22%, improved our net losses by 61% when adjusting for non-cash charges that were largely related to the valuation of warrants We also extended our gross profit margins from 32% during the first quarter of 2016 to 40% during the first quarter of 2017. We also maintained our overall COGS profile and had significant improvements in our cost structure. Our teams also continue to focus on innovation by growing our portfolio of collaborations and partnerships and continuing to shape the technology and tests that we have developed, including some of our latest launches which we believe will be critical in oncology going forward. I want to highlight two of those. The first is our Complete immuno-oncology flow panel, a comprehensive immuno-oncology focused panel that measures over 10 critical immune markers with turnaround times of 24 hours on this test. We believe that this immuno-oncology panel can become central in monitoring patients on clinical trials or for those selected for cutting edge immune therapies. And as you know, immune therapies can trigger a host of potential immune responses that need to be monitored for toxicity, lack of response to the therapy or other side effects. As immuno-oncology drugs and I/O combinations grow, we believe that this panel can have a central place for both monitoring of patients during trials and ongoing monitoring of patients once in routine clinical care. Our next recent launch, which we announced was Liquid::Lung, a next generation sequencing panel that assesses cell-free DNA from blood without the need for tissue or traditional biopsy material. This test assesses over 150 hotspots across 11 genes that are central to lung cancer diagnosis, therapy selection and monitoring. This focused Liquid::Lung panel has a limited detection down to five tenths of 1%. So it's able to detect variance down to one tumor DNA molecule among 2,000 normal DNA molecules in the blood. This is, we believe one of the highest sensitivity tests in the market today, and can become an essential component for cost effective and highly available lung cancer monitoring. Liquid::Lung is able to identify the hot spot resistance mutations in EGFR, including T790M, C797S and other small exon 20 insertion mutations which are associated with tyrosine kinase inhibitors - resistance to tyrosine kinase inhibitors. This test can also cause sensitive and resistance mutation in exon 18 through 21 of the EGFR gene and also evaluate the mutations in 10 other relevant cancer genes, which has implications for therapy selection and outcome for these patients. We believe there is significant clinical urgency for a test of this type and the availability of the oncologist to order the test and the patient to submit a blood sample for testing, is compelling for patient care, post-treatment tumor profiling and will definitely be useful in monitoring the emergence of new resistance mutations, which necessitate a change in treatment or a change in the management of the patient. This test is now available, not only for clinical trials for our pharma customers, but also for routine clinical care. These types of tests showcase the deep commitment that we have at CGI to changing the future of cancer and precision medicine, while also making sure that we contribute with practical and clinically validated technology that can change patient outcomes today. We believe that our portfolio, which balances innovation and execution, will be central to predicting, diagnosing, monitoring and managing cancer. While continuing the strong focus on portfolio and capabilities development this past quarter, our teams also continued strong execution during the quarter by continuing to demonstrate our value proposition with new leading edge clients such as a first in class biotech customer, eFFECTOR Therapeutics, increasing our role in immuno-oncology studies by now supporting over 32 studies by the close of Q1 and that number continues to grow, committing to an AI focused partnership with Mendel.ai to transform clinical trial matching on a real time basis for hospitals and cancer centers, by not only combining the genomic and biomarker data out of our laboratory, but then integrating this with unstructured clinical data and electronic health records, to help clinicians take the next step to getting people to precision therapy. In fact, we’d like to announce this morning the first phase of CGI Match, our clinical trial matching site and portal for hospitals, cancer centers and labs, will be live and made available to oncologists and pathologists by the end of this month. So again we announced the partnership with Mendel less than two months ago and again at the end of this month, we will be watching CGI Match, which will be an AI enabled portal to help drive the next critical action step in cancer centers. We’ll provide details on CGI Match later on his call and also later this month prior to the launch. Today, CGI is supporting the work for over 140 clinical trials and studies for leading biopharma companies in the US and also recently globally. These 140 trials and studies have an average duration of roughly two years. of course, some can be done in a few quarters and some are expected to be three or four years, especially larger phase three studies, but on average these trials are about two to two and a half years and they give us good visibility into future revenue, but also the future needs in the biotech and pharma industry. All the revenue - recognition of the revenue is based on deliverables, enrolment trends, data analysis, test delivery. And so this can cause the revenue to be somewhat lumpy in a quarter to quarter, but overall the annual visibility continues to increase. The genomic and biomarker data that we deliver, influences and informs decisions, not only in how patients are treated, but also what drugs are advanced in the clinical trials, how they’re advanced in the pipeline of these companies. And we believe that in our short time, have become a critical partner to the advancing of oncology therapies globally overall, we believe the progress we've made in the work we continue to do, are important steps to realizing our vision of being the precision oncology partner of choice from bench to bedside. With that, I'd like to turn the call over for Jay Roberts to walk through the detail of our financials and some of our operating results. Jay?

Thank you, Panna. We continued to generate strong organic revenue growth in the first quarter. Additionally, we have continued our focus on streamlining internal operations and reducing our costs and lowering our G&A expenses. My discussion today will focus on changes in the first quarter of 2017 compared to the first quarter of 2016. For additional information, please refer to our Form 10-Q for the quarter ended March 31, 2017, which will be available on our website after this call. Total first quarter revenue was almost $7 million, a 15% increase over the first quarter 2016. We recorded $3.7 million of revenue for our Biopharma Services, $3 million for our Clinical Services and approximately $300,000 Discovery Services. We experienced an across the board increase in revenues on a quarter over quarter basis. Revenue from Biopharma Services increased 11%. Revenue from Clinical Services increased 20% and revenues from Discovery Services increased 12% in relation to the first quarter of 2016. Our gross margins were approximately 40% or almost $2.8 million, which compares to 32% or $2 million in Q1 2016. Cost of revenues increased from $4.1 million in the first quarter of 2016 to $4.2 million in the current quarter, an increase of only 3%, well below the increase in revenues as we continued to create operating leverage in our lab operations and reduce our variable supply costs. While revenue increased 15%, total operating expenses decreased by 22% and totaled approximately $5.6 million during the first quarter, down significantly from $7.1 million in the first quarter of 2016. We continue to believe there is significant potential leverage in our business as we increase our quarterly revenue while maintaining a stable cost structure. While our net loss in the first quarter increased to approximately $9.6 million, an increase from $5.3 million in the first quarter of 2016, the loss in related earnings per share were impacted by non-cash valuation adjustment to derivative warrant liabilities of about $7.5 million that was reported in the quarter. You'll read in our earnings - you read in our earnings release posted last evening that the non-GAAP adjusted net loss decreased 61% to $2.1 million, down from an adjusted net loss of $5.3 million in Q1 2016. The basic and diluted loss per share went to $0.51 in the current quarter, from a basic and diluted loss per share of $0.39 in 2016. Excluding the same non-cash charges I just described, non-GAAP adjusted EPS improvement of 72% to negative $0.11 compared to negative $0.39 per diluted share in 2016. We had total cash and cash equivalents at March 31, 2017 of $9.7 million, a slight increase from $9.5 million in the period ended March 31, 2016. Now I'd like to provide a few critical housekeeping items. First, stock-based compensation was $435,000 in the first quarter this year, down from $534,000 in Q1 2016. The number of shares outstanding at March 31, 2017, was approximately 18.9 million. And at quarter end, there were approximately 6.6 million common stock warrants outstanding, up from about $4.4 million at the end of Q1 2016. Stock options were at approximately 2.5 million at the end of Q1 2017, up from 1.9 million at the end of Q1 2016. Echoing Panna’s earlier comments, our innovation will continue to drive our topline growth and revenue performance. But additionally, we are very focused on expense control and margin management that will allow us to achieve profitability as a precision medicine company. I’d like to now turn the call back to Panna.

Thank you, Jay. As Jay laid out, our significant focus on maintaining expense control yielded us an adjusted EPS of negative $0.11 and an adjusted net loss of $2.1 million during the quarter. I’d like to point out these are non-GAAP measures and were adjusted for the fair value of derivative instruments related to our warrant expense. Again, these are non-cash items. Additionally, we actually improved our cash position this past quarter by several hundred thousand, largely due to the exercise of warrants and the finalization of the sale of our New Jersey tax credit in the quarter. This strong quarter, the continual improvement in durable margins, and the well-paced innovations in our portfolio, make CGI closer to our vision of being the precision oncology partner of choice from bench to bedside. We continue to get good, strong traction from new biotech companies, but also significantly increasing traction among some of our largest biotech and pharma customers. As we mentioned earlier, we're now working with nine out of the top 10 biotech and pharma customers, and we're deepening our reach and deepening our services into those pharma customers on a monthly basis. Additionally, we're now serving nearly 400 community centers, cancer centers and hospitals around the country. And through our comprehensive portfolio, we continue to bring on new centers, new capabilities and additional tests into those sites. Later this month, as I mentioned earlier in the call, we'll be launching our first AI enabled service, CGI Match, which will be powered by Mendel.ai, a Silicon Valley VC backed company with a focus on using machine learning and algorithms to enable clinicians to transform patient care through improved and AI enabled clinical trial matching. This service will allow us to grow our clinical value proposition to hospitals and cancer centers and also better leverage the unique data coming from our labs. We believe this will add significant value to shareholders, as we help transform our lab purely from one that provides results, to one that also now is helping clinicians take the next critical step of bringing people into trials that are involved with today's therapies. Another key milestone that we’re providing updates on is the launch of our liquid renal test. It’s a test that we are in development now with several of our partners, and we believe this will be the second of our liquid biopsy test that we launch into the market following our Liquid::Lung launch this past week. We’ll also be increasing our capabilities in bioinformatics in India. We believe that's critical because it will bring additional ancillary revenue sources by offering their services to biotech and pharma companies globally. We’ll continue to add capabilities in targeted immuno-oncology testing and further increase our market share with additional biotech and pharmaceutical companies. With that, I'd like to open up the line for Q&A.

Thank you, sir. [Operator Instructions]. Our first question comes from Ram Selvaraju.

Thanks very much for taking my question. First of all I wanted to ask (crosstalk). Very good. Thank you. I wanted to ask a question about the general strategy with respect to companion diagnostics per se. And obviously I understand that you’ve been rapidly expanding the footprint of clinical trials in which cancer genetic testing is involved. But could you maybe speak to how you see the future for this involvement and when you anticipate cancer genetics potentially taking a greater role in the development of actual companion diagnostics for approved drugs in which potentially you may have some kind of economic interest and how you anticipate that evolution being driven from existing collaborations, from new collaborations you may strike, or even potentially in the long term future, from a new approach to business development that may potentially see you developing your own in-house drug candidates within the context of oncology with the benefit of your proprietary tests. Thank you.

That's a great question. I could probably spend a good amount of time on that. So I’m going to try to break it down for everyone on the call. I think the central question I'll answer first, Ram is about companion diagnostics. As we mentioned in the call, we’re now supporting about 140 active clinical trials. The companion diagnostic category today includes companion diagnostics that have two flavors. One of those that are developed internally by our team, that leverage our own unique insights such as our liquid renal test that we're coming out with or our comprehensive panel for lymphoma. We’re saying that we have developed a signature or we develop the overall profile of that test, including our tissue of origin test, which is an FDA cleared test. And there are definite pharmas that have interest in the renal in lymphoma and they’re in early phase discovery to understand how it can be leveraged for either a companion or complementary diagnostic. And that is probably less than 10 studies or trials today. The second class of companion diagnostic that we're involved with is - comes in two flavors, one where there's an existing known marker like the T790M or PD-L1 or PD-L2 where there's an existing knowledge about the marker to help stratify or select a drug or select a patient. And so that's where we're doing a lot of work with pharma companies really to bring the assay up in a high performance mechanism, one that's also very regulatorily compliant and perhaps also can support future phase three, phase four type studies. So we're doing many of those and with believe that as we bring those to market, the pharmas have a choice whether those then become companion and whether or not they share in some of the incentives. Typically those incentives include kind of a national rollout. They include potential improved or partner type pricing that improves our margin profile. The last category are really complementary diagnostics. They’re a little different than the companion category we mentioned earlier. They’re not always on a FDA label. They might not point to a specific test, but they’re typically a way to profile a patient or profile a category of disease or profile a category of therapy. And these complementary diagnostics rather than companion are spelled out differently in the label. And we believe that many of the panels that we have today can be used increasingly in a complementary diagnostic where that panel will help stratify either for risk or stratify for therapy selection. And again, we think that companion and complementary diagnostics are just kind of in the early inning of real development outside the initial markers of HER2 and PD-L1 and others that have kind of caught on. We do think that we’ll have outsized margins as some of these go down a path. So again, I think today, out of 140 trials or so, we probably have less than 20 in total that have the potential to be companion or complementary. And again, a lot of that is really dependent on the therapy class getting out and becoming approved and then pharmas making the decision on how to use that in the label.

Okay, great. And then a couple of very quick housekeeping financial items. Maybe these are more appropriate for Jay. Could you comment on what adjusted EBITDA was approximately in this quarter and also on the evolution of your gross margin? I saw a pretty significant and healthy gross margin improvement in this quarter, but how much do you think that can improve over the course of the remainder of this year? Do you anticipate at some point instituting formal financial guidance? And if so, what kind of granularity are you going to be giving on both top and bottom line? And then finally, if you could just clarify what you expect to be the potential non-cash impact from warrant liability in future quarters, if we should expect any more situations like the one you just reported with this pretty outsized non-cash impact to the net loss number. Thank you.

Okay. So …

The net loss, let’s just get that out of the way quickly. I’m sorry to interrupt, Jay. For us to tell you what the expense or income associated with the fair value of the derivative of that warrant exposure, would be really us being able to predict our stock price at the end of each quarter. And because as the stock price goes up, the associated expense with that warrant becomes higher because the stock’s value is higher. Of course it’s phantom expense. It’s phantom income, but it is GAAP. So I can't predict where our stock price is going to be at the end of June, at the end of September, at the end of December when the auditors and the accounting team sit down and look at what the impact is. The other thing, what we hope to do is over the course of this year, we'd like to really clean up the warrant structure and have the warrants exercised as our stock continues to perform so that we can bring cash into the company, take the warrants off so that we can hopefully lessen the impact. But the better our stock does, the more expense unfortunately we’ll have. And so we saw a pretty significant increase in Q1 of our stock price and obviously we did the warrant deals last year. And so unfortunately it created a lot of non-cash expense. It’s hard for us to predict. It’s all based on the stock volatility and the stock change. So I’ll get that one out of the way. And again $7.5 of that $9.5 million number was all related to non-cash items, but on a real basis, our operating loss improved significantly. I wanted go get that out of the way. Jay, you can take some of the other ones.

Sure. And the operating improvement that we're seeing at the bottom line is driven by the margin, Ram. So you keyed in on the right thing, and it's driven by a couple of things, right? As we continue to see our revenue increase, we're bringing new revenue in on top of a meaningful amount of fixed cost structure within the business. And so as we do that incrementally, every new dollar of revenue is bringing us 60% to 70% up to the contribution margin line, to our gross profit. And so - and I think the way we think about it is, we've got an existing fixed cost structure that includes things like the cost associate with our management team. So that's really labor driven. The cost associated with our facilities, so lease expense for lab operations and such, all which have capacity. So the human resource part that I just mentioned, as well as our facilities have capacity so that that fixed cost remains constant and it allows us to continue to bring in new revenue that we think is going to allow us to see a better margin profile. So as the business goes from seven to eight to nine to 10 million of quarterly revenue and we think incrementally that the margin will follow that same, that very same trajectory or pretty close to it. In terms of the question that you had about guidance, I think at the moment we're continuing to drive the topline business. Particularly in our biopharma business, we want to see continued growth there and as we have a wider distribution of overall projects being completed or being worked on, that will take out a little bit of the lumpiness of that part of the business, which I think we've talked about in the past. So while that exists and while we continue to scale the business, I think it's going to be difficult for us a do a meaningful job around guidance because of that. And then last piece, just in terms of non-GAAP, the EBITDA. So that's not a non-GAAP measurement. As you saw, the one thing that we keyed in on for that particular measurement, was just to identify the non-cash aspect of the derivative liability for the warrants that we had to post due to the change in our stock price. Everything else is pretty much embedded in the financials. We don't think that necessarily our investor base is keying in on EBITDA, but all the numbers are there, and if you’d like at some point later on I’d be happy to walk you through them. But it’s all in our disclosures between the Q and our earnings release.

Okay. And then just very quickly, what was the cash (indiscernible) first quarter? And when do you expect to potentially reach profitability? Do you think that could potentially happen this year? Thank you.

So we had $9.7 million in cash at the end of the quarter. That doesn't include the $6 million in additional capital that we have available to us from our financing partners that we set up in the last quarter. In terms of profitability, I think we're very keyed in on being profitable in between the $9.5 million and $10 million mark. I think we can comfortably achieve that on a real cash basis. Again there are a lot of non-cash items like stock-based comp and derivative value warrants and it's hard to predict what some of those non-cash items like DNA, stock-based comp and the fair value of our warrants will be. With that, we’d like to go over to the next question please. Thanks Operator.

We’ll go next to Lauren Chung with Westpark Capital.

Hi. Thanks for taking my call. Congratulations on the quarter. I have a couple of questions. One is, you have commented in the past about acquisitions. I wanted to get a sense of what you’re seeing out there and what you would like to see. And also, a second question is on the AI partnership, how should we think about that in terms of contributing specifically to the growth of your tests and do they have information about your markers or just - if you can just provide a little more granularity that would be helpful. Thank you.

Lauren, good questions. I’m going to comment first on the exciting AI opportunity because we will be hosting a more detailed update probably at the end of this month, right after Memorial Day when we launch. We’re very excited about it. We're launching the first phase of CGI Match and specifically what that will do is again, as I - we talked about before, less than 3% of patients today in the community hospital setting are involved in clinical trials. If you go to major academic and research centers, that number comes up eight, nine, 10 X in terms of percentage. And obviously they have associated improved outcomes and they get the latest cutting edge therapies. And people who are on the latest cutting edge therapies also get tested more comprehensively. They get tested more genomic and biomarker data. So it become a self-fulfilling cycle almost because a lot of that work is also paid for by biotech and pharma. So it reduces the cost profile of these cancer centers. So in the community setting, they're not bringing as many people to clinical trials simply because it's an arduous, laborious process. You’ve got to have a interdisciplinary team. You’ve got to have people look through the medical records. You have to have thoughtful planning about what trials are available. Are they available in my zip code? Are they available at my site? What do the other non-genomic and biomarker data on the patients profile indicate in terms of other clinical or health concerns? And so it becomes very involved. And so for the community oncologist or hospital, it becomes challenging. We’re taking a lot of that labor and a lot of that time and making it tech enabled. And when we look at a number of companies in the area, we’re very impressed with Mendel’s approach because not only they're using the latest deep learning algorithms, machine learning specifically, but they're also then training it with actually an entire team of clinicians. So clinicians are looking at each data point and decision cycle and helping grade and decide its relevancy to that patient management. So we think they're closing in on 100,000 data points, which we think is kind of an important point in AI. So we’ll be supplying that. It makes our business much more sticky with community hospitals that allows us to bring their cost structure down because patients who are matched to a trial, will somewhat be subsidize or paid for by the biotechs and pharmas. But it adds value to our biotech and pharma customers because it allows them to meet their enrolment criteria, either with greater transparency or visibility as to where the patient population is, or bringing on patients faster. so I think this really helps for us cement two pieces of the world in which we have revenue every day, community hospitals by making us more valuable to improve their cost structure, improve outcomes for patients, and bring that critical information with very little or no expense, and then improve outcomes for biotech partners by accelerating their trials by getting insights to where these patients are for their very targeted and nuanced trials. So on both pieces, I believe that will help us become more valuable and actually make our revenue grow potentially faster, but also make our revenue more sticky. On your second question, and again we’ll be hosting a very detailed update when we launch CGI Match and we have it in the marketplace by the end of this month for the first phase. Your second question I think is something that's really in our industry. We continue to see a lot of consolidation in the CRO space, especially as they've built and get scaled, they get to the operating efficiencies and leverage points that Jay alluded to. Just recently you saw the inVentiv Health and INC one. You’ve seen others being delivered. In the diagnostic space, you continue to see some select roll outs. But the business model continues to evolve and we've been very, very squarely focused on the right business model to be a durable company, not just a one test kind of trick. And so what we look at and that we think the space is very fragmented, it continues to need consolidators like us who are always actively looking. We don't have anything at this point in time, but we look for things such as content, capabilities, customer base if one, two or three of those things all make sense. Then we look at something very important. Can we do something more with this business than they've done with it? Can our team execute better, faster, cheaper, more powerfully? Does it bring us a new and differentiated way to grow? And so those are the factors. And we're actively always looking because we think the space is very fragmented. It needs consolidation, but we have nothing on the horizon today. But good questions, Lauren.

Thank you.

[Operator Instructions]. We’ll go next to Jordan (Sembol), a private investor.

Hi Panna. Great quarter. The revenue in the fourth quarter was $7.2 million. In this quarter it was $7 million. Was that due to the variability in the clinical testing revenue that you spoke about and things like the AI and the Lung Liquid biopsy? Is that type of thing that will address that variability and how quickly do you anticipate the Lung Liquid biopsy to start bringing in revenue?

Good question. I’ll answer some of those. So the liquid biopsy will bring in revenue this quarter, Q2. So we're already beginning to see some good demand in the clinical market. We have some early adoption customers already. So we think that will - as we market it, it will be quite an important test. As about, in our solid tumor franchise, which is about 65% or so of our clinical volume, about half of that is due to lung. So we think there’ll be very good pickup in lung from launching liquid one. So we will have revenue this quarter and obviously it will continue to grow. We’ll have to work very closely with payers. We’ll have to work very closely with hospitals to make sure that we get the right kind of reimbursement. And that’s why again we've made it into a very targeted panel, and more importantly, with super high sensitivity so that there's a clear reason to use this test over anything else. The other piece in terms of biopharma was from Q4 last year to Q1 was down slightly by about $230,000 or so. And our discovery was down slightly by $150,000. So most of the delta are those and typically discovery projects in Q1 are always slower because you’re getting those projects going. So January tends to be a lighter period for new project launches. And Q4 tends to - it could be, because projects are getting wrapped up, tends to be pretty busy in biopharma. So I think just seasonal, some seasonal variation, but also we began a lot of projects in Q1 with our biopharma customers that will get revenue later this year and into next year. So we've begun a lot of projects, specifically almost nine in immuno-oncology that are just beginning and wrapping up. So the pipeline and more importantly, our closure of new contracts continues to grow significantly. So if you look through our earnings deck, we do have a ratio that we call our bookings to billings ratio, which is well above - the ratio is well above 1:2, 1:3. So bookings and billing ratio in biopharma is quite healthy. Okay, thank you.

Thank you. It appears there are no further questions at this time. I'd like to turn the conference back to management for any additional or closing remarks.

Thank you. I’d like to thank everyone for their excellent questions. Our company believes we've made a lot of progress in the work that we are doing, are important steps realizing our vision of being the precision oncology partner from bench to bedside. We believe that our capabilities, our customer reach, our colleagues and our global infrastructure, enable us to be a durable partner in oncology diagnostics to enable precision medicine, and more importantly, we’re really accelerating the development of new therapies and making cancer information more actionable. We look forward to talking more with many of you one on one and thank you for tuning in to today's earnings call.

This concludes today's conference. Thank you for your participation. You may now disconnect.