GeneDx Holdings Corp (WGS) 2021 Q2 法說會逐字稿

Good afternoon. Thank you for standing by and welcome to the Sema4 second-quarter 2021 earnings conference call. (Operator Instructions). Please be advised that today's conference is being recorded. (Operator Instructions). I would now like to hand the conference over to Vice President of Finance and Corporate Development, Joel Kaufman. Sir, I give it to you.

Good afternoon, everyone. Thank you for participating in today's conference call. Participating for the Company today will be Eric Schadt, Founder and Chief Executive Officer; Isaac Ro, Chief Financial Officer; and Jamie Coffin, President and Chief Operating Officer. Earlier today, Sema4 released financial results for the second quarter ended June 30, 2021. A copy of the press release is available on the Company's website.

Before we begin I would like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995.

Any statements contained in this call that relate to expectations or predictions of future events, results or performance are forward-looking statements. Actual results may vary materially from those expressed or implied in the forward-looking statements due to a variety of factors.

Additionally, these forward-looking statements, particularly our target volume for 2021 and our target revenue for 2023, involve a number of risks and uncertainties and assumptions. For a list and descriptions of the risks and uncertainties associated with Sema4's business, please refer to the Risk Factors section of our definitive proxy statement filed with the Securities and Exchange Commission on July 2, 2021.

We urge you to consider these factors and you should be aware that these statements should be considered estimates only and are not a guarantee of future performance.

During the call we may discuss certain non-GAAP financial measures. For reconciliations of non-GAAP measures to GAAP financial measures, as well as other information regarding these measures, please refer to our earnings release and other materials in the Investor Relations section of our website.

This conference call contains time sensitive information and is accurate only as of the live broadcast today, August 16, 2021. Sema4 disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements whether because of new information, future events or otherwise. And with that I'll turn the call over to Eric.

Thanks, Joel, and thanks to everyone joining us this afternoon. Of course, this is a big day for Sema4 with our first earnings call as a public and independent company, a company that I conceived of in 2012 inside the Mount Sinai Health System.

What inspired the Company's formation was a foundational view that rapid advances in genomics and artificial intelligence, along with the exponentially growing oceans of molecular imaging and clinical data, could and should be integrated into an information platform able to deliver a broad array of algorithms that, when appropriately wired into physician workflows, provide state-of-the-art clinically actionable insights to patients and physicians allowing them to more efficiently diagnose, treat and even prevent disease and maintain wellness.

This vision became my and the Company's main mission. And today we are powered by more than 1,000 professionals focused on advancing the use of big data advanced artificial intelligence developments in machine learning and probabilistic causal reasoning to deliver better patient outcomes and transform the practice of medicine.

Our success is underpinned by our access to data and by Sema4's proprietary health intelligence platforms, Centrellis, one of the largest most comprehensive and fastest growing integrated health information platforms in existence. Similarly, the software and the machine learning and other advanced artificial intelligence learning capabilities built into this software are among the most sophisticated in the world.

At the end of Q2, the platform had access to roughly 20 million patients with de-identified deep longitudinal clinical records across 12 million of these patients, hundreds of thousands of matched genomic profiles and more general data assets comprised of more than 35 petabytes of genomic tests, comprehensive medical records, and among the most relevant life and biomedical science data in the digital universe.

These data are organized, structured and annotated and curated in a manner that provides easy access and facilitates analysis and reporting by artificial intelligence methods that reside within the Centrellis platform. Standing today as an independent company, we are in a strong position having completed a strategic merger with CM Life Sciences on July 22, which brought just over $500 million in cash onto the Company's balance sheet and transformed our Board of Directors, adding top active and former life sciences CEOs, CFOs and industry experts.

With the right scale of capital and strategic talent, we are now able to catalyze our efforts organically and inorganically at a level that was simply not possible while a private company inside the Mount Sinai Health System. We can also now significantly accelerate the pace of investment in people, technology and infrastructure required to extend our market leadership position in pursuit of our mission, helping physicians deliver better health outcomes for patients.

From where we sit today, and incorporating future investments that Isaac will discuss in a moment, we see a path to $500 million in revenue by 2023 with each sample process adding clinically relevant data to our platform and further informing insights to help physicians and patients make better clinically actionable choices.

Continually feeding the database is what powers our business and the long-term earnings potential of Sema4. In the last three months alone, we've processed more than 70,000 non-COVID samples and catalogued close to 4.5 petabytes of data, generating a number of new clinically relevant insight, some of which have recently come out in high-impact journals such as Clinical Cancer Research, Nature and Digital Medicine, and the Journal of the American Medical Informatics Association, some of which detail our digital phenotyping algorithms and applications to predicting risks of complications from common health course journeys such as pregnancy where predictions significantly outperformed current standard of care assessments.

Already we have demonstrated patients' willingness to partner with us with over 80% of patients using our diagnostic solutions and patient portal, giving us their IRB approved informed consent to retrieve, organize and manage their health records and data in partnership with them.

We have grown the number of patient records to which we have access by roughly 100% in the last year. And we believe that our robust, battle tested platform is ready to scale across an even broader network of partners in the ecosystem.

In fact, Amazon even recently acknowledged Centrellis as a game changer in terms of its robustness, completeness and ability to secure and manage large stores of data while scaling to execute increasingly complex clinical and research workloads on Amazon Web Services.

Of course our success to date is just the beginning. As we grow our already massive data resources our competitive moat grows stronger. Increasing the volume of tests, patient engagement and systems partnerships in a more integrated and holistic way to facilitate delivery of precision medicine as the standard of care, this all operates like a virtuous cycle. Improving the available insights, powering better health outcomes and in turn driving more volumes, which of course we expect to lead to more revenues and more profits for our business.

With a new influx of capital we are able to build out our solutions organically and inorganically and extend our footprint. Importantly and critically, our business model is one of partnership with patients, physicians and health systems, positioning us to not only help expand the information and data available on the Sema4 platform, but to deliver differentiated clinically actionable insights to patients in the context of their care at these health systems.

In fact, today we are highlighting the three new partners we have brought into the Sema4 network this year: NorthShore University Health System, AdventHealth and Avera Health. These deals have expanded our reach to an additional estimated 10 million lives and given us the opportunity to deliver better care at lower cost, which is the realization of precision medicine, impacting the standard of care across a broad range of practices.

Over the next few years, we expect to partner closely with an increasing number of health systems and to adapt our health intelligence platform to enable these health systems to deliver precision medicine across a broad range of disease categories as the standard of care.

While there are many companies that seek to address various components of our solution, none have been able to wire these components together at scale and in a way that fully engages health systems as a health delivery partner. We have been at this for nearly a decade and did so within one of the leading health systems in the US, allowing us to design a holistic delivery of precision medicine that produces results. We believe that's what makes us a partner of choice.

Our sophisticated platform draws upon information from many sources, from advanced genomic testing solutions to patient electronic medical records and physician notes to hospital records and population health, among many other large-scale sets of data available in the digital universe of data. Sema4 enables patients and providers to drive differentiated insights in real time that can dramatically improve the standard of care.

It is an incredibly exciting time at Sema4 as we scale up our commercial activities, invest in strategic collaborations and actively explore opportunities for inorganic growth. We envision a future where doctors and patients routinely query our platform of algorithms to help determine the most optimal health course journey personalized to each individual.

Before I pass this over to Isaac to review our second-quarter financial results, I'd like to take a couple minutes to share some examples of Sema4's impact on patients that demonstrate the power of the Sema4 platform and the new emerging standard of care.

After being diagnosed with stage IV lung cancer, one of our patients, a 76-year-old woman, was offered the current standard of care for this type of cancer, platinum-based chemotherapy and palliative radiation treatment.

However, after the patient's family saw the second opinion, they locked onto a medical oncologist plugged into the Sema4 oncology platform, and our whole exome/whole transcriptome sequencing solution is carried out and identified that the PD-L1 pathway was activated in the patient's tumor, a pathway that had not been identified as being in play from the initial characterization carried out on her tumor.

As a result of the insights delivered by the Centrellis platform in conjunction with a multidisciplinary team, the tumor was reclassified as a stage IIIB tumor and, with PD-L1 activated, a precision oncology combination treatment approach consisting of Keytruda, pemetrexed and carboplatin was undertaken and after six cycles the patient achieved a solid response with the tumor shrinking by 85%, no cancer growth or metastases observed elsewhere with regular CT monitoring. And the patient is again active and living a full life and planning for the next 5 to 10 years plus.

We are excited to deliver these more advanced solutions in partnership with health systems like Avera Health and our new precision oncology program we announced with them last week. Beyond this type of individual patient story, our genomic testing and information platforms demonstrate dramatic advances in patient outcomes at population scale.

Consider that with our expanded carrier screening genomic solution, we now routinely identify a greater than five-fold increase rate of carrier couples compared to today's standard of care advocated by professional organizations and large national payers out of all couples tested. Where these carrier couples are at a 25% or greater risk of transmitting a very severe genetic disorder to their offspring.

The impact of using a reproductive health genomic solution is a dramatic increase in reproductive health choices, reduce incidents of children born with rare genetic disorders and lower overall healthcare burden. That's the power of our platform and the potential ahead. Now I'm going to turn it over to our CFO, Isaac Ro.

Thanks, Eric. I joined the Company in February of this year and it has been an extremely exciting and busy stretch of time. I've enjoyed re-engaging with many of you in the investment community already and look forward to continuing the productive dialogue with this audience in the months and quarters to come.

As someone that has followed and analyzed this industry and its enormous potential, I've tracked Sema4 since inception and I'm more excited today that at any other time for the process of this business, the value of its data and how we can change medicine. Here are a few anecdotes that underpin my excitement.

First, we have one of the largest and most advanced NGF based clinical testing capabilities anywhere. And we are still in the very early days of optimizing our new world-class lab in Stamford, Connecticut. In Q2 we reported nearly 72,000 tests excluding COVID which represents 85% growth year-on-year across our strategically important areas of reproductive health and oncology.

Second, we are still expanding our menu of tests. In oncology we grew over 300% year-on-year in Q2. This business is still less than 5% of our volume today, so we are still in the early days of building out our capabilities and look forward to updating you on these efforts in the coming months.

Thirdly, we have a rapidly scaling ability to partner with leading health systems with a differentiated go-to-market model.

Finally, our volume momentum is very strong, growing 7% sequentially in Q2 excluding COVID. And while the impact of the COVID Delta variant is difficult to handicap, we think these core trends underscore our momentum as we gain share, sign new partnerships and expand our offerings.

Now turning to our financial results. Total revenue for the second quarter of 2021 was $46.9 million, representing growth of 56% compared to $30.1 million in the second quarter of 2020. Diagnostic test revenue was $44.8 million in the second quarter of 2021 with -- up 50% as compared to $29.8 million in the same period prior year. Of note, our COVID testing revenue in Q2 declined by $12 million sequentially versus Q1.

Other revenue totaled $2.1 million in the second quarter of 2021 compared to $0.3 million in the second quarter of 2020. The increase was mainly attributable to growth in collaboration service activities related to our new partnerships with health systems which have higher margins, and we expect this to grow substantially in the years to come.

Cost of services was $49.6 million in the second quarter of 2021, an increase of 36% when compared to $36 million in the same period of 2020. Cost of services were impacted by one-time investments which include COVID-19 test supply stocking expenses and the rapid buildout of lab infrastructure to support continued growth and scale in our testing volumes.

These investments are largely transitory and will enable us to accelerate volume growth, which we view as the most important factor to creating long-term value. This in turn gives us increased confidence in reaching our target of $500 million in revenue in 2023.

Operating expenses for the second quarter of 2021 were $41.9 million, up 48% from $28.3 million in the same period prior year. Overall the increase in total operating expenses for the quarter were mainly attributable to higher personnel-related costs coupled with professional services related to the merger transaction.

The components of operating expenses are as follows. Research and development expenses for the quarter were $12 million, up 28% when compared to $9.4 million in the second quarter of 2020 driven by an overall increase in depreciation costs of $1.2 million coupled with a $0.9 million increase in expenses for reagents, laboratory supplies and software.

Sales and marketing expenses were $16.2 million, up 87% from $8.7 million in the same period in 2020, due primarily to a $5.4 million increase in personnel-related expenses from increased headcount. Since the start of Q2, we have increased our sales force and field organization by over 30%, the benefits of which we expect to realize in the coming quarters.

General and administrative expenses were $12.8 million, an increase of 58% as compared to $8.1 million in the second quarter of 2020, driven by $1.6 million related to increased headcount and $2.8 million for expenses related to the merger transaction. This has largely been around the buildup of our finance department.

Moving down the P&L, we reported 2Q 2021 net loss of $44.8 million compared to a net loss of $32.1 million in Q2 of 2020.

Turning to the balance sheet, total cash, including cash equivalents, was $26.5 million as of June 30, 2021. Subsequent to the close of the quarter we received roughly $510 million in net proceeds associated with the business combination with CM Life Sciences.

Given the confidence that we have in our growth outlook, we have pulled forward our investments across the organization with the mindset that we want to be unconstrained with regards to driving growth while maintaining our commitment to providing gold standard levels of patient care as part of our cultural heritage within a premier academic medical system.

This means we are accelerating the evolution of the business to more efficient, scalable and established industry practices with the goal of supporting many millions of patients and dozens of health systems and biopharma industry partnerships in the years to come.

We also see new opportunities to support our operations and forecasting at an increasing scale with the foundation now established for best-in-class operations. It is the right time to do this. The market is fast growing, we have the capital, we have a reconstituted shareholder base and our branding capabilities are well-established and driving tremendous business momentum.

While we undergo this evolution we believe it is most important to focus on volumes and volume growth as the primary metrics we wish to evaluate our progress towards our medium- and long-term company objectives. Given the strong trends observed in the first half of 2021, our incremental investments, and despite uncertainties around COVID, we are excited to share our target for total non-COVID volume growth in excess of 50% in 2021.

Further, this represents sequential growth in excess of 20% in the second half of 2021 versus the first half of 2021. And it implies 54% year-on-year growth in the second half of 2021 versus the second half of 2020.

Finally, to help you with your models, we estimate that COVID-19 testing drove 12% of revenue in Q3 of 2020, 38% of revenue in Q4 of 2020, 24% of revenue in Q1 of 2020 and 8% of revenue in Q2 of 2021. Going forward the outlook is obviously difficult to handicap and we do expect de minimis COVID testing volume in the second half of 2021 at this time.

I stated previously we feel that core testing volumes are the best indicator of strength in our business, which does not take into account the impact of any potential M&A transactions where we do have a deep and actionable pipeline. We've been encouraged by our engagements where a differentiated data platform positions us as a value-added acquirer. And we are optimistic of being able to reach agreement on at least one transaction in the near future.

As we look to expand our menu and relationships with our health system partners, we believe there is a long runway of significant growth in testing volumes based on strong underlying genetic and oncology testing market growth rates and our continued momentum resulting in share gains. We are tracking towards our long-term targets in partnership with our health systems.

While it's difficult to predict the timing of closing any one perspective health system partnership, the level of engagement and excitement leaves us confident in our ability to announce developments on this front in the coming months. We are in growth mode and, looking forward, remain committed to driving increased value to all of our stakeholders including our new and future investors. Now I will turn it back to our Founder and CEO, Eric Schadt.

Great, thank you, Isaac. Before we open the call up for any questions, I'd like to thank all of our employees and shareholders for their dedication and support that allowed us to complete our initial public offering. I also want to recognize their performance amidst the COVID-19 pandemic, which required a tremendous re-prioritization to assist in supporting patients.

We have embarked upon a tremendous journey towards creating data and information-based clinically relevant insights to help patients, hospitals and therapeutic innovators. It has required a significant amount of energy and investment and we are just beginning to push our technology and capabilities. Sema4 is growing rapidly and we anticipate the pace of growth to flow with innovation, adoption and demonstrative success with our partners.

We look forward to keeping the investment community up to date as we progress with our strategic initiatives is a public company. Now I would like to open the call for any questions. Operator?

(Operator Instructions). Brandon Couillard, Jefferies.

Eric, maybe just to start off at a high level, it would be helpful if you could talk about maybe some of the key milestones that you would suggest that we monitor in terms of thinking about how the big health system deals are progressing. Clearly you've added three to date. I think you're pretty comfortable with the four or so right now that you have under the belt. But what are some of the key metrics we can look at to gauge how those are progressing and integrating?

Yes, thanks for that question. So, of course, again, our big focus is on driving of volumes through the genomic testing solutions, engaging patients, engaging data around those patients, and enabling those health systems to deliver precision medicine as a standard of care.

So, the way we think about success with those health systems is: number one, how -- to what extent are we penetrating the health systems with respect to genomic testing solutions across a broad array of diseases and conditions, from reproductive health, to oncology, to population health, to drug safety, to rare disorder diagnosis and so on. So, what's the degree -- so the degree of uptake of those solutions into standard of care practices throughout the system is one of the key metrics.

The amount of data, the percentage of data through the system that we are engaging to help inform on the patient care in the context -- either in the context of our testing solutions or even completely independently of those solutions, on guidance we are delivering back to the system, back to the physicians in terms of patient risks and so on. So, it's the percentage of data in those systems that we are routinely managing and engaging.

The other would be the percentage of patients that we're able to engage throughout that system as our solutions get adopted, as they spread, the number of patients we are engaging and consenting in helping manage information and deliver insights should also be growing.

So, to hopefully quickly summarize, it's the adoption of the genomic testing solutions throughout the system, what's the degree of uptake and displacement of other vendors; what's the percentage of data available on the health system that we are gaining access to in partnership with health system; and then what are the -- what percentage of the patients flowing through that health system are we engaging.

And in terms of M&A, can you talk about the types of assets that you are most interested In? And secondarily, the bandwidth of management to absorb an asset at a time when you're also very focused on making sure that these new health systems -- that those customers are happy and that you are hands-on in terms of bringing (technical difficulty) up?

Yes, for sure. So, maybe I'll take a stab at that, what we are thinking. And then maybe Jamie can jump in in terms of the ability to absorb and roll those out. So, we're clearly in a very fast-moving field with opportunities to build out our technology, distribution, increasing total addressable markets and so on, increasing/expanding the expertise of the team through [Aqua] hires.

So, a number of technologies that we have our eye on in terms of how to fill the gaps to enable better penetration, better acceleration and uptake of our solutions into the health systems. So, think of broadening, again, our portfolio of genomic testing solutions.

So, whether it's liquid biopsy based technologies for oncology, or whether it's long read sequencing technologies for better characterization of genomes, better management of commoditized components of information and structuring to achieve scale across many different health systems.

Those are the kinds of target areas that we're looking at to, again, fill out the portfolio of genomic testing solutions, but also better facilitate better information partnership and more rapid leveraging of that information for improved insights delivered to patients and physicians.

So, those are some of the areas we are looking at in our ability -- again, we have the cash infusion on hand to, we think, make a number of those kinds of acquisitions. And our ability to absorb and integrate into our culture will be driven by a seasoned team that has a long history in delivering complex solutions across the health IT and genomic testing space. Isaac or Jamie, I don't know if you have anything you wanted to add.

I would just add, Eric, that, as you said, we brought a team on board from this industry that has a huge amount of experience in integrating into the customer's workflow, which is incredibly important in the uptake of these tests and (technical difficulty).

So, we are very committed to making sure that we have the best [vehicle] in front of these health systems. And we have to both do the uptake from the physician practice level also, but also from the enterprise level is something that this industry has not done a very good job of, but we have a very experienced team in doing that.

Maybe a two-part question for you, Isaac. Appreciate the comment around the $500 million target in 2023. Does the $360 million target for 2022 still stand? And then secondarily, how should we think about ASPs moving into next year? Should we think about another step down in 2022? Or perhaps maybe 2021 is perhaps the end of that dynamic and we should expect to see some stabilization as oncology becomes a bigger piece of the mix? Thanks.

Yes, good questions, thank you. So, let me just start with a framing statement to explain why we are thinking about building this business the way we are, which is that we are not providing 2021 revenue guidance because we are focused on volume. We think that is by far the most important KPI to measure value creation, because the volumes are going to feed our flywheel.

So, as you know, we've got volumes that we are scaling already at a significant rate. And the more we do, the more patients that come into our platform to give us data to feed the database and to build better algorithms for the future.

And when I joined the Company in February, I did have a chance to really dig into the business and our long-term strategy. Super excited about where we are. And Eric and I both believe that this game will really be about driving volume and data. And so, those are the metrics we are solving for.

As we think about the near-term and medium-term, we can't at this point give you revenue guidance in part because there are a bunch of variables at play that could result meaningful swings of revenue either way that are really related to payer contracts that we think are going to be, for the most part, transitory. Very much something you'd see in the industry when it comes to companies and diagnostics scaling rapidly and becoming more important counterparties to the payers.

And as we go through that we think it's still going to be about volume. And so, what this really means is that we sell for scaling the franchise. And as we said earlier, we are expecting 20% volume growth sequentially in the second half of this year, so we need to invest for that. We need to continue closing on health system partnerships. And if we do those things, we still think we're going to get to $500 million of revenue in 2023. So, lots of moving parts in this environment but the trajectory is unchanged.

And then in terms of -- just to address I think on the ASP part of that question, just again off of some of Isaac's comments. Just as a reminder, it's very typical for a lab to renegotiate contracts when the status in the eyes of the payer changes. And so, in our case we are moving from a hospital basis into independent, or we have made that move. And from there to an even larger independent with a national footprint.

So, we've attempted to get out ahead of the -- many of our payer partners to provide as much near-term visibility on reimbursement. That said, this process takes time and no payer is the same. So, it's reasonable to assume that over time we'll end up with contracted rates that are in line with our industry peers.

We have -- for which we have comparable testing solutions. But that said, we do provide very differentiated and advanced products that are often best-in-class. And we provide these to physician and patients and hope that will garner more favorable reimbursement in those cases.

So, we can't say exactly when we expect the remaining contracts to be negotiated and where we'll see the ASP stabilize. In some cases the ASPs (technical difficulty) will likely go up, in some cases they're going to go down. Like take on the oncology front where we are working on multi-[VAX] approval and so on that should improve our reimbursement. But the exact timing of that is playing out now in real time. But we think over the next several quarters it will play out.

(Operator Instructions). Matt Sykes, Goldman Sachs.

Hi, thanks for taking my questions, appreciate it. Just maybe first, how should we think about when you bring on new health systems? How should we think about the onboarding process in terms of duration and timing to get it fully stood up and integrated?

It's a great question and it's one we are improving upon as we bring on additional systems. So, initially the systems are a big lift and our first partners like North Shore System in the greater Chicagoland area was maybe a year and 1.5 to 2 years of discussions and planning and getting to the right kind of framework agreement that handles the major operation of the agreement. So, think IP and scope and so on.

And then you get into statements of work which are kind of where you land and expand in terms of what are the initial problems you are solving with the health systems. All the health systems have the, we want precision medicine -- the common vision of we want precision medicine as a standard of care. But how they -- the initial projects to motivate that and get some of that in play may vary. So, you're working that all out with different consulting teams and so on.

Once you hit some of the driver projects, so take North Shore, which is around a genomic health testing solution that can then expand into assessing the risk of different conditions of a patient that may necessitate additional genomic testing like (inaudible) cancer testing. Once those get in swing they are pretty rapidly adopted and penetrated through the system. And then you're going into different other areas beyond that to -- leveraging on that success.

So, you start seeing -- so it's 1.5 to 2 years for those early systems to get to an agreement and begin delivering some of the solutions for precision medicine and standard of care. And then we expect those expansions to then progress much more rapidly given the earlier successes.

With subsequent systems coming on we found that we can significantly lower that 1.5 to 2 year cycle time in getting to an agreement in the initial statement of work. We think 12 months, we are at about the 12 month mark now and think we could probably get that down to 9 to 12 months for future systems.

It's important to note though that we had initially indicated five systems, that $500 million 2023 number was based on five moderate to large sized systems. We've signed 4 as of today and have several others in the hopper that we think will deliver. So, the aim wasn't to have 100, the aim was 5, maybe 5 to 10 and really learn in partnership with the system how you have to wire the various components together to deliver an effective solution.

So, those are a big lift, they take a lot of delivery and support teams, a lot of engagement with different operational and physician workflow aspects of the systems. And that's what we are primarily focused on to get acceleration and penetration of the system with our solutions.

Yes, and I'll just add one thing, which is if I take think a little bit about where we are in the health system journey, there is a term that Eric uses a lot, which is learning based partnerships. These are opportunities where the partners have given us tremendous trust and access. And so, we want to be respectful of implementation.

So, I wouldn't expect there would be a cookie-cutter number for every system. They are all going to be a little bit different, but so far so good. And our first mission is to ensure that that partnership remains collaborative and extremely constructive. So, that's been the spirit with which we've invested behind these programs.

And so, I just want to come back to the earlier question on the outlook for how all this maps back to revenue. I think it's important to point out the existing business that we have, we have a tremendous amount of reach both in women's health and increasingly in cancer.

And the way our contracts are set up with payers, we believe that we are absolutely in a position where we have healthy relationships and the reimbursement that we get is appropriate. And we are not in any way over-earning our share of the work we do.

What we're really talking about doing is growing this business to $500 million in a couple of years, doing it largely through health systems. And to scale all that the right way, we want to make sure we work in partnership both with health systems and payers to do that in a way that is consistent with industry best practices.

So, we are making pretty good progress in all those fronts and we appreciate the support from our investors, because it is a multifaceted lift and we think we're going to have a really compelling run over the next three years.

Great, thanks for that. Maybe just one last one just on the commercial ramp. You talked about the increasing headcount and investments you're making. Where do you feel you are right now in terms of that investment in headcount and in terms of either what inning are you in or where do you feel you are at right now in terms of the overall (technical difficulty) what do you think about the next 6 to 12 months in terms of commercial ramp up?

Yes, great question. As was mentioned in the script, we've got about 1,000-plus FTEs today, it is a substantial operation. And one of the things that really drew me to the components of that 1,000 people is Eric has been able to assemble a world-class team of laboratorians of course and all the support functions you need to be a public company. But on top of that, we've got over 150 computational biologists, the likes of which I don't think you see elsewhere in the industry.

And so, our ability to really lean into these health systems with cutting-edge technology, not just tests but also the data science and all that generation work that you need to do to bring the technology to life in a clinical context, we have that today. And I think the marginal investment for us is going to be around the edges.

So, think about the staff and resources you need to implement in these health systems, each of them being a little bit different, number one. And then number two, in the G&A side, the finance department, as an example, made tremendous progress over the next six months and I want to point out that there's more opportunity across the G&A side, which doesn't tend to get a lot of attention in high-growth companies. But I think that's going to be absolutely impactful to the operational output that you expect to see from us.

And maybe just quickly to add on top of that, Isaac said it in the previous response on learning based partnerships. The kind of staffing we're doing today, the uptake into these systems, the precision medicine and standard of care solution does not exist today. It doesn't exist in any company.

Sema4 is at the forefront of how do we wire all the components you need? Wire those together, whether it's the clinical labs, the genomic testing solutions, the patient, physician engagement, the data structuring and curation, the analytics.

All of those pieces you need to bring together and you need to learn with the system the best way to bring those together to support the physician workflows. That's the game and, once we have that figured out with these 5 to 10 systems, we are going to scale that to all systems. And for the 2023 $500 million number, it's focusing learning, 5 to 10 systems, and getting the uptake -- good penetration through those systems

And at this time I see no further questions. So, I will turn the call over to Eric Schadt for closing comments.

Okay, well great. Thank you, again, all, for joining us today and for your interest in our progress. We remain dedicated to increasing value to all of our stakeholders and keeping you updated on our progress. And we'll look forward to the next call in Q3.

Once again, we'd like to thank you for your participation on today's Sema4 second-quarter 2021 earnings conference call. You may now disconnect.