The Future Is Now: Tools/Dx Trends and Themes

Speaker 1:
Welcome to TD Cowen Insights, a space that brings leading thinkers together to share insights and ideas shaping the world around us. Join us as we converse with the top minds who are influencing our global sectors.
Dan Brennan:
Hi, I'm Dan Brennan and I'm joined by my colleague, Brendan Smith. And we're two of the analysts here at TD Cowen who followed the life science and diagnostic tool space. The point of this podcast is for Brendan and I to discuss the key sector insights gleaned across three days of our recently hosted TD Cowen Tools/Dx Revolution Conference, insights that we think have ramifications for companies and investors across the space.
We started this event about four years ago with a focus on zooming out and taking a longer term view of the sector and key drivers and themes. For the podcast, we thought we'd start out with some high level stuff and then walk through the six panel discussions and discuss and hopefully debate things that stood out. Brendan?
Brendan Smith:
Yeah, Dan. That's right. Look, we hosted over 20 executives across our six panel sessions, plus there were easily another 50 plus in attendance, not to mention nearly 100 investors on site. So needless to say, it was really a goldmine of information just about where the sector is today, trying to contextualize 2025 versus some historic downturns of the past and really sifting through the multiple areas of untapped opportunity that a cycle like this offers.
Dan Brennan:
Awesome. Well, let's jump in Brendan. So this was your first Tools/Dx Revolution. You've been covering biotech stocks I think for about five years, and obviously you've been through a wide spectrum of industry events, both TD Cowen and other. What struck you about the Revolution Conference? Maybe it's format, the content, the approach. Anything?
Brendan Smith:
Yeah, I mean, short answer is this is really unlike anything else we do. Yeah, I think that the combination of the informal networking opportunities, the range of constituencies that we have all in one place, the venue, atmosphere, really the topics that we discuss on the panel sessions, it's really kind of getting at the heart of where this space is right now. And I think my first year here just really emphasized why people have been coming up to me for months just telling me that they can't wait to come back.
But Dan, I guess, how did you find the overall sentiment of the investor base at the conference? Would you say people are starting to finally feel the bottom of this bear market?
Dan Brennan:
Well, I mean it's certainly been tough. We host this Revolution event really to showcase what are some of the key innovative technologies and themes and whatnot. But it does come in the context of a sector that's been under a lot of pressure over the last two to three years, exaggerated this year by a lot of the macro policy initiatives out of the Trump administration.
But that said, you walk around at the conference and I still felt there was a real vibrancy to the discussions in the halls. The event was crowded. I thought there was really good engagement. So you wouldn't really know it.
I think the message from the private companies, at least that were on the panel and/or that we could glean from the hallways was that things are tough, right? Fundraising's tough. I think demand still can be challenging, particularly for those that are facing the more academic customer base.
I thought the tools corporate executives on the panel, I thought they put their best foot forward. This wasn't a panel where we were asking them about the next quarter or things of that nature. But I think overall they kind of portrayed that they made a lot of progress managing through the difficult period and were poised to come out of it. I thought the diagnostic sector has been less impacted.
And I think from the investor standpoint, I don't know, it's harder to gauge. I think those that were there, I think there was a lot of private investors. I think they're coming there to search for the next big thing, so they were zooming out. So there wasn't as much discussion on the here and now, but I did think there was still a lot of interest. There was a lot of interest in looking for those investable themes that could be overlooked. So from that perspective, I think there was somewhat of an opportunistic view in a multi-investor base.
Brendan Smith:
Yeah, I mean, were there any areas or maybe segments within tools that you think people are sounding most bullish on? And I guess net-net how are you thinking investors are viewing some of those as a potential barometer for the sector overall?
Dan Brennan:
I thought on the panel when we were drilling in different topics and conversations about what's unique and what can unlock a lot of productivity as we'll discuss throughout this podcast, I thought multiomics definitely stood out on a bunch of panels, and in that context, proteins, proteomics, I think those are areas that consistently come back. Doesn't mean it's easy to grow in those areas right now, but I think there's strong interest nonetheless.
I thought multi-cancer screening, which we're going to discuss I'm sure throughout this, that popped up on a bunch of different panels. We don't have active coverage of the pure play today, but it's within the pipeline of a lot of the companies we do follow. So that was a very hot topic I thought.
And the oncology/Dx space also remains certainly really healthy. And then obviously I'm sure from your vantage point as we'll get into, I think AI just permeated every panel.
Brendan Smith:
Yeah, 100%. And like you said, I think we'll now kind of go through and unpack some of the individual panels, so maybe we can use that as an opportunity to just dig into the first panel discussion.
This first one was just called Building From the Bust and really focused on how to build long-term value within the tool's Dx space. Dan and I hosted three really luminaries from the field. Jay Flatley, who's currently the chairman of Cellanome, but Jay's known for his tenure of running Illumina and shepherding years of really strong growth in stock market returns. We also had Kevin Conroy, who was the CEO of Exact Sciences, and Mike Pellini, who's partner at Section 32, which is leading life science firm. Mike has a pre-storied resume in the corporate world prior to VC, most notably as CEO of Foundation Medicine.
So as kind of our first kickoff panel there, Dan, what really kind of stood out to you the most from these three really tightens the Tools/Dx space?
Dan Brennan:
Yeah, I think from a high level we had Kevin who's clearly diagnostics focused and has seen many cycles. Mike's investment orientation I think is more diagnostics focused, but certainly tools. And then Jay is much more firmly on the tool side. So we had two different sub-sectors kind of being discussed a little bit, but all mixed together within the context of the broader space.
I thought the feeling from the panel was that valuations had gotten pretty depressed, sentiment had gotten pretty depressed, and while the upturn may not be clear that it's at hand right now, I felt from the panelists that in their history they were articulating that we've had such mutli-year selloffs and sentiments this bad, it's usually proven to be a really great time to invest. Doesn't mean we're going to have the upturn tomorrow or next week or next month. I think on the panel, I think the median timetable that the investor audience discussed when the upturn could happen was like 12 months. I don't think the panel has disagreed that it could take that long, but nonetheless, at these levels, I think they felt it was really could be an opportune time.
And I also felt there was a strong point made amongst the smaller companies that they should be more proactive in taking partnerships. They might have really interesting technology, but it's difficult to raise capital to really go out and kind of commercialize. But partnerships could be a really strong ROI way, excuse me, to get to market and also could have some other benefits along with it.
Brendan Smith:
Yeah. I mean, I think there was a lot to unpack from that first session, but one that I know you and I have talked quite a bit about since it was really this discussion around investing in China. It's one that investors have come back to us a few times since the panel itself wrapped up and it's really interesting in that there was some real negativity about the attractiveness of that market for Tools/Dx. I mean, do you find that interesting relative to your conversation? Do you think that's really where consensus is at this point?
Dan Brennan:
I think it's pretty different. Most of the public tools companies, the larger cap companies, China is a really important part of their business. Obviously the last seven, eight years with COVID and the first Trump administration and now this one and China's own economic growth really significantly decelerating, China's gone from a tremendous growth market for the globe and certainly for tools that are more exposed to one that's been much more challenged and mixed. But nonetheless, it's still one that all the public companies talk about is exhibiting above average growth over time. They're still committed to. They still view it as a really important area.
So I thought at least on this panel, to your point, so I think from Jay's perspective, he sounded certainly on the negative ledger, but I think it could be possibly painted. We didn't dig in with Illumina's own experience. Illumina penetrated China early and then they had BGI, the largest competitor in the globe today, really kind of take their R&D, take their technology.
They just replicated the products without really focusing on the IP and now they have their own products in China that are eerily very similar. So I think it could be somewhat tainted or not tainted, it's a bad word, but maybe just painted with that brush as one way.
And I think from the diagnostic perspective, yeah, I think what we heard there is certainly if you're a smaller upstart diagnostic company, China probably isn't high on the list as the first market to target. There's a lot easier markets and more viable with better regulatory and pricing right here in the US. And if you want to look outside the US, you go to Europe. But I think the view is China's really not high on the list from a diagnostic basis either.
Brendan Smith:
Yeah. And maybe just to put a pin in this first panel, 'cause I know we've got five other ones that we want to get through, but I think there's a lot that these guys really felt that we could really be constructive on despite the tougher tape across the board. But what were some of the "next big things" from a technology, investment, opportunity standpoint that really stood out to you? Maybe what do you think of those answers?
Dan Brennan:
Yeah, I think we asked panelists, I think we asked the audience, but just focusing on the panelists it was, MCED was brought up, which kind of comes up throughout. I'm sure we're going to hit it on some of the next panels as a really large opportunity that's exciting. AI broadly was kind of cited, which not shocking. I don't think we dove in exactly where in AI, but I'm sure you're going to talk about that a lot as we go through this discussion.
And then I felt the other one that Kevin mentioned was kind of at-home testing, which I thought is interesting. During COVID that became a thing obviously. Certainly from the publicly traded companies right now, it's not really something that is a big commercial engine or an opportunity that we see, but I think there's probably a ton of startups that are doing things. So that could be something in the future. Who knows? Maybe it permeates more into the publicly traded diagnostic names where they're leveraging more at-home ways to do testing.
Brendan Smith:
Yeah. I mean, I think that's also a good opportunity now to maybe shift over to the next panel discussion. We hosted executives from GRAIL, Mayo Labs and Silicon Medicine on the second panel where we really focused on longevity, really looking to unpack some of the different factors, contributing not just to an increased lifespan, but also discussing some of the ways we can potentially delay and even prevent diseases before they manifest in some instances.
Dan Brennan:
Yeah. Well, Brendan, I thought it was a really interesting panel. 20 years from now, Brendan, would you thought through what we heard from the panelists and from the investors, how do you think they felt about whether or not we are going to be able to successfully have an improvement in longevity in terms of lifespan here in the US? Anything there that you would take away? And if so, what were some of the main drivers amongst the life science and healthcare companies discussed that could support an expanded lifespan?
Brendan Smith:
Yeah, absolutely. I mean, and this really gets kind of at the crux of the whole discussion with our panelists. So when we ask them just how life expectancy in the US might actually change over the next 20 years, I would say our panelists struck a fairly cautiously optimistic tone. And it's fair to say generally converging around what some might say is kind of a modest two to five year increase in overall lifespan. I think this was also in line with the plurality of the audience at the session itself who voted basically the same way during our live polling.
But look, I think Josh Hoffman from GRAIL made a really important point when he kind of pointed out that while average gains might appear small, he really thinks that there might actually be really long tail effects that could emerge with certain populations disproportionately benefiting pretty significantly with more access to early detection technologies and therapeutics.
William Morice from Mayo Labs also agreed that overall gains will likely be incremental unless the US healthcare system evolves to deliver more equitable access and actually better manage some of these product diseases that came up across a few of our panels.
And I guess maybe the last point I just make there is really from Alex at Insilico who I think really feels that meaningful longevity gains are ultimately going to require breakthroughs in our understanding of aging biology, which he sees as possible, but really just far from guaranteed at this point. So it's definitely a moving goalpost and one to kind of keep an eye on, but I think net-net it does seem to be, I would say fairly, fairly optimistic tone about the where and how we could see the needle moving over the next 20 years.
Dan Brennan:
That's pretty great. So AI, obviously it came up on this panel, it came up on a lot of panels. What role do you think or did you hear that AI could play in the hunt for anti-aging tools and drug development? And as you look at the landscape, where do you think the most value in terms of the technology's current capabilities and expanding use cases is a miss kind of domain?
Brendan Smith:
You know I love this question. You and I have talked about this a few times, really how AI really just did come up on basically every panel we had at Revolution, whether or not we were asking about it. So it's pretty clearly on top of everyone's mind in some capacity or another. But look, for the longevity panel specifically though, I'd say a couple of points were raised.
First, AI and really data quality overall, which I think is ultimately a factor of not just the size of your training data, but also kind of that combined with how complete the data is, how it's organized, and really how you're looking to apply it are ultimately emerging as really key differentiators for different approaches. GRAIL's approach relies on massive methylation data sets to train AI models that can detect cancer signals invisible to sequencing approaches. Insilico's simulation-based life models are really built on multi-omic multi-species data sets that aim to identify novel aging related targets and predict drug responses accordingly.
Alex from Insilico uses this analogy how most historical data sets can be thought of as being a snapshot of a patient in time, whereas he hopes to leverage AI technology to produce a continuous series of these snapshots into a kind of movie, if you will. And then he really likened our role as people in that movie to the whole idea of it being more of a video game, which I think is just an interesting metaphor for the whole process.
But ultimately he's arguing that the need for more complete longitudinal data is really going to be critical on this front, and it's something that can ultimately only be achieved at least at this point, using some of these computational modeling approaches and AI.
I think the last thing I would just note on there is that our panelists also did make a point of saying that some of the wearable and remote monitoring data devices I think should really help increasingly feed these AI models and hopefully flag disease risk earlier on, enabling diagnostics to be deployed a little bit more precisely and ultimately perform better, hopefully due to higher pre-test probabilities.
Dan Brennan:
That's great. Maybe just putting a bow on this panel, when we think about the tools and approaches to support the quest, MCED, which you touched upon a little bit, it certainly came up. What do you think the current sentiment is towards MCED testing, multi-cancer early detection, and how might these tests be leveraged to support the goal of longevity?
Brendan Smith:
Yeah, and on MCED, look, I think one of our panelists pointed out that consumer-facing platforms seem to be driving actually more uptake today than some of the traditional providers, not only galleries ordered by physicians today. But uptake is mostly coming from innovative consumer health hybrids like Function Health. Morice from Mayo Labs confirmed that they've deployed gallery in clinical settings. The demand from hospital systems really remains fairly modest.
I mean, poll investors in the audience seemed, I would say, fairly optimistic about the future of MCED testing. Kind of expecting about 5 million Americans will take MCED tests within five years. But I mean with that number, I think our panelists pretty exclusively looked at that result, that 5 million numbers from the audience, and it actually felt that it was likely a bit overly conservative just given how easily penetrated the MCED market is today. So I think it's definitely one to watch, particularly as it pertains to this broader longevity conversation.
Dan Brennan:
That's great, Brendan.
So digging into the specific tools and approaches to support this quest, what's the current sentiment regarding MCED, which is multi-cancer early detection testing, and how might these tests be leveraged to support this goal?
Brendan Smith:
Yeah, so I think our next panel, our third one in the lineup here really focused pretty squarely on AI. We've touched on this topic a couple of times here and it's really becoming increasingly ubiquitous across the sector, but we called it Acing AI, really how to play with different platforms. We hosted executives from ConcertAI, Pathos, Tempus, Absci, Recursion. Companies on stage really represent a pretty broad range of applications for AI and data-driven platforms, which I think just really reaffirms how quickly this technology's evolving at this point.
Dan Brennan:
Yeah Brendan, I certainly agree, as we've already touched upon a couple of times here, it was a ubiquitous discussion point at the event, namely AI. One of the panelists at the conference made the comment that everyone will be an AI company at some point. So in other words, he expects every Tools/Dx company will be using some flavor of AI in the workflows before long.
So how do you think investors can most effectively sift through the noise and identify the most valuable AI players? And related to that, what level of disruption do you expect this technology can have on the overall tool sector?
Brendan Smith:
Yeah, tons to unpack here. Look, I think overall our panelists definitely agree that the integration of AI into biopharma R&D workflows should ultimately allow drug developers to capture higher efficiencies and some cost time savings and key decision-making areas. And they expect this will eventually start chipping away at the 90% plus post discovery drug failure rate and savings on early stage R&D should subsequently allow companies to move assets more efficiently through the clinic given the improved capacity and lower spend per program.
So I think all of this to say that contrary to what some tools investors may expect, our panelists actually do not view increased AI usage as a headwind to traditional Tools/Dx spending. They believe we're to a point where most life science companies are at least beginning to examine ways they can integrate AI into their products, workflows, and strategic initiatives really to help their portfolios just remain competitive.
Our panelists generally agreed with a poll of investors in the audience who predicted that broader uptake of AIML should drive at least 1 to 5% more spending on traditional tools over the next couple of years. One of our panelists noted that reduced operational costs could also free up capacity to spend more meaningfully on newer areas of growth and innovation, at least maybe sooner than the current market might suggest.
Multiple panelists there also highlighted the ability for this tech to not just simply connect the dots on this massive data sets that exist both in the public and private spheres, but they noted that really being able to sift through the troves of data at the healthcare industry's disposal remains a pretty significant challenge that really no technology can address as well as AI.
So I think in short, we're really just getting started here, but our panelists expect the efficiencies bearing out from AI will continue to be felt for the foreseeable future.
Dan Brennan:
Yeah, I think from the tools investors that we speak with, I still think it's somewhat off the radar at this point because it's viewed to be like a separate category that really isn't coming up as much on discussion points. I think it'll be something, obviously it'll be increasingly something that you and I work together and monitor about the use case about is it one or the other, or does it actually complement an enhanced tool spending or does it cannibalize? But I think right now it's almost not even really on the radar yet for tools investors. So we're dealing with a lot of other things.
Maybe we go over to the FDA in this context. They've been very vocal recently on all things AI. How do you think investors should think about the near and medium term impact from the agency's updated views and what they could have on the tool sector and maybe healthcare more broadly?
Brendan Smith:
Yeah, look, I think recent guidance out of FDA really confirming plans to phase out animal testing requirements for biologics as well as just a broader openness to integrating these technologies across the development and review process are really an important sign on to an evolution that I think was realistically already ongoing, at least according to our panelists. And frankly, a lot of the diligence that we've done outside of the conference too.
And one of our panelists made the point that he believes the industry seems pretty comfortable with the role AI is going to be playing at the federal level, though he expects these changes will take at least a few years to fully implement. I think AI drug development companies included in our discussion agreed that FDA's focus on biologics will likely be expanded into other modalities and stages of drug development over time.
I think that said, companies with biosimulation drug discovery software offerings that address the shift away from animal testing things like Surterra, Schrödinger, Stimulations Plus could really feel the most potent tailwinds over the near term, though I think FDA support is still viewed as very early step in the broader adoption process.
Dan Brennan:
And maybe just closing out the panel, just one comment I thought was really interesting on the off the stage with the executive from Pathos where he took the role as CEO. He had been at Tempest, he had been at Astra in a senior role, but took the role at Pathos CEO, given his conviction and belief that over, I think he said the next 10 years, wasn't 20 and wasn't 5 or 7, so I think it was 10. But basically that Pathos with a few hundred employees and the AI models they're hoping to build based upon the Tempest data will be able to compete or maybe outcompete the likes of large global pharma that have tens of thousands of R&D employees. So that'll be certainly interesting to watch.
Brendan Smith:
Yeah. And again, I think this is definitely a space that we'll have no shortage of things to discuss over the coming months and years, frankly.
So I think with that, maybe let's move to the next panel, which was our, we call it Biopharma and solving the 4% ROI conundrum. We hosted executives from AstraZeneca and Surterra on our panel where we really just discussed the historically low ROI that biopharma companies see on R&D spending, as well as some of the key tools in use and in development that are looking to really help bend the curve in the right direction.
So I guess Dan, according to our panelists, what are some of the most underappreciated levers that biopharma companies can pull right now to boost efficiency of their R&D dollars?
Dan Brennan:
So I thought from the tool side of it, which we already touched upon a little bit, or you touched upon in terms of the rich multi-omics data sets that have to power AI, I think that came up on the panel being really useful. We didn't get into the weeds about the technology supporting that, but certainly from our landscape, the spatial products that can do RNA, can do proteins, some of them can do DNA.
Ilimuna's push for doing protein readouts on sequencing and also the Clear Labs, which are all who are deploying comprehensive genomic profiling, doing a lot of DNA targets, but also DNA and RNA, but they're also, and even in screening, but they're also looking to incorporate proteomic status in that as well. So I think that's definitely one thing that came up, and it's kind of consistent with what feedback we've heard.
I think secondly, whole genome sequencing, while it wasn't I think highly ranked by the audience in the poll, I think our panelists really felt that pharma should be deploying this aggressively across RNA and translational. It kind of would mean you'd have to find ways to pay for it versus other things that are being done, but they thought the value from that would be significant. It's really not being done that much directly today. And while short reads are in the lead, certainly I think long reads, if you could do them at the same price point you do them all day. Long reads would win. But right now, the price point is still a factor in why short reads are kind of the dominant player for pharma at least.
And then I thought MRD, which we're going to get into a little bit is something critically important. And then just broadly, AI I thought clearly came up consistently as a huge tool.
Brendan Smith:
Yeah. So maybe just first on R&D, to your point, our conversation did kind of touch on the increasing use of MRD testing. So I guess based on the sessions and some of your conversations at the event, how should investors really be thinking about MRD in the context of trial design and where do they expect the market should go from here?
Dan Brennan:
So the expert we had was actually squarely focused in on that area, so he's kind of speaking his own book, if you will, but nonetheless, in translational areas, MRD is definitely a big focus. And I think there the use today was characterized as being really nascent, but the potential could be huge. It could be huge, particularly in that vein for better patient selection. It could also help to get faster readouts in clinical trials. RXR is more focused on solid tumor MRD, but certainly on the hematological side, the FDA has already moved and they made MRD a primary employee in multiple myeloma. So that's been really exciting for companies like Adaptive.
But I felt this expert was looking at tens and tens of different assays. While there's a handful of publicly traded companies, there's a lot of private players as well that are there. And I think it was really up and to the right for the use case of MRD and translational medicine to be more effective.
Something that also came up, which has been a topic that we've been probing as new companies seek to get to market, is sensitivity and what type of assays. I mean, we didn't go super deep on this, but we just brought up it as a topic, and I think the audience view there to be a benefit to our sensitivity, particularly in the landmark setting. And our experts as well felt like certainly more sensitive assays would be welcome for pharma. Obviously it had to be done in the appropriate way. You can't trade off specificity for sensitivity, but that was something that came up on our panel. It came up at our recent visit at ASCO. So I think you're seeing this happen in the marketplace today, not only from market leader Natera rolling on a whole genome version, but a lot of the new upstarts are doing much more extensive level of testing, whole genome, looking at a lot more variants to drive more sensitivity.
Maybe Brendan, let me turn the tables back over to you here on this panel. As we touch upon AI starting to permeate across pharma and their approach to R&D, what did you hear on this panel that stood out to you in terms of how AI is being used and maybe where the next big update can be?
Brendan Smith:
Yeah, absolutely. So our panel argued that moving the failure rate of committed investments within pharma R&D down even by 1 to 3% realistically should have a pretty transformative impact. So I think simply put, the earlier that unsuccessful products are halted, the higher the ROI is likely to be.
One underappreciated area that could really drive these improvements is better preclinical toxicity profiling. Our panelists noted that about one-third of failed drugs do so because of toxicity, and our panelists felt that given improvements in efficacy with some of these more targeted approaches, there's really no reason why such targeting could not also be applied to understanding population toxicity profiles, especially in preclinical drug development.
James argued that existing comprehensive genomic profiling approaches could be fine-tuned to also monitor for more toxicity. He expects this should aid in the fast fail rate earlier on in development and actually help better tailor trials to target the optimal patient population. In theory, Surterra also argued that the continued evolution of biosimulation and computational modeling as well as the FDA, frankly just coming more broadly on side with Insilico replacements for animal testing, should really help streamline this approach across the board.
So I think now maybe we'll transition to our second to last panel absolutely actually titled Managing Transition, where we hosted a range of executives to discuss how their management teams have navigated pretty challenging macro environments in the past.
We held, or excuse me, we hosted Ankur Dhingra, the CFO of Illumina, Patrick Finn, COO of Twist Bioscience, Christian Henry, President and CEO of PacBio, Kevin Knopp, who's the CEO and founder of 908 Devices, and Adam Taich, who's the CFO of 10x Genomics.
So Dan, maybe let me just ask you, what do you think are some of the most important steps a company can take to right the ship in terms of profitability, in building momentum from a downturn? And I guess maybe better put from this panel, how can investors really best separate the likeliest winners?
Dan Brennan:
I think the thing we heard consistently was have a vision, be clear, get buy-in from senior leadership and employees, and be consistent and vocal about this vision. I mean, obviously that's maybe an understatement for any company, but it seemed like it resonates even more in difficult periods to have a guide post to get people through it.
And then the second point we heard was, again, could be a bit of an obvious statement, but nonetheless it was raised as really being a really helpful tool. You just have to be decisive. And in periods where you are making cuts, it's better to go maybe earlier and bigger earlier, get them done so you can move forward.
Maybe kind of turning the screws back to you, Brendan, or turning the light back to you. We had 908 on the panel, executive from 908 purposely, I think, 'cause they've actually executed a pretty big strategic decision during a really difficult period that unlocked a lot of value maybe. What did you learn about how they did it? Any lessons for other companies in the space?
Brendan Smith:
Yeah, look, I think in the case of choosing between growth markets, which is basically what Mass had to do, excuse me, 908 had to do here, it was really a matter of choosing where best to allocate investments and what would generate the most ROI when their end markets were distinct like they had a setup before earlier this year.
I think when early stage bioprocessing CAPEX slowed, CEO Knopp from 908 Devices really viewed this as the best time to invest even more in a growing end market, in security, really using funds from the spend out to do so.
So I think it really comes down to looking in the mirror and kind of making the hard decisions, but also finding a really compatible opportunity for what you view as your core business as you're really trying to situate yourself in a pretty rapidly evolving macro context.
All right. Yeah, I think transitioning now to our last panel, which is really focused on the oncology diagnostic sector, we hosted Gabriel Bien-Willner, who's the medical director of MolDX and CMO at Palmetto. Helmy Eltoukhy, who's the CEO of Guardants, Chad Robbins, co-founder and CEO of Adaptive. And Tony Zook is the CEO of NeoGenomics. But really kind looking at how some of these companies are building moats and looking to unlock profits.
So I guess, Dan, what do you really think of as the main angle of this panel and maybe what did you learn from the corporate panelists that we had here?
Dan Brennan:
Yeah, so I think we set up the panel, which is different than past panels where we were really drilling into a particular product, CGP or MRD or screening or digging further into that long read for short read.
Here it was, I think we've seen now in the last maybe 6 or 12 months, pipelines are expanding. Companies are now seeing other companies come into their space. Maybe there's one or two people in the space now that might be three or four or five or six. And there was always companies in that space, but maybe it just wasn't as evident from having commercial products. So the idea was how our company's going to handle this.
And I think we got some insight on that, probably not a ton because companies kind of stayed in their lane. But I think one thing we learned here, maybe some lessons if you will, from each of the speakers, I think from Helmy, what we learned was their strategy has always been to have this breadth of product that is going to scale across all different end markets, meaning they have a consistent approach for doing cancer detection, and that simple approach is going to permeate across CGP, MRD and screening.
And that was division from day one, that's division today. Maybe we're seeing more of it today as they're being successful. So I thought that was kind of interesting to hear him say that because I think it has ramifications to other players in the space who I think as well are following the same footprint, but maybe they're just not as far advance as Guardant.
Secondly, I think on Adaptive, I think they're in a unique spot now in hematological cancer testing. The stock has done well, and I think there's a lot of optimism now towards their competitive positioning. But I think if you went back 12 months, 24 months, 36 months ago, there was a lot of optimism. But at the same time, their strategy, maybe it was too convoluted with a pharma business attached to a diagnostics business. The stock was under a lot of pressure.
And I think maybe the lesson from this one is take a longer term view. I think as they were going through that process, maybe things weren't completely aligned yet. Maybe some of the growth drivers hadn't manifest, but if you build it, they will come and they were in a good spot, they had a leading technology and the utility was there, and now they're in a really good spot zeroing in on MRD, and the opportunity for them is bright.
And then I think the final point would just be getting back to that initial introduction on these lanes emerging, companies coming into each other space. I think what we heard from NeoGenomics was that there's still a lot of white space. I mean, they focus on the community hospitals. I think their view is there's a lot of untapped opportunity amongst these hospitals for them. And it doesn't mean some of the other CLIA labs can tap into it as well, but they think there's a lot of running room for them on their core hematological cancer testing and as well as they move into NGS just to really drive a lot of revenues and growth.
Brendan Smith:
Great. And I think with that, look, we've covered a lot of great ground. We covered a lot of great ground at Revolution. There's obviously a lot of moving parts in this entire process and the broader discussion to be had here. But Dan, I think it was a really, really fantastic event. Pretty unique across the street and across the industry. So I think really just looking forward to continuing the conversation as things progress.
Dan Brennan:
That's awesome. Yeah, no, I do think we have brighter days ahead in the Tools/Dx space and the technology is really bright today. It's just maybe the market isn't as receptive. But I think we're getting there, Brendan. So I agree with you. So thanks a lot and everyone, and have a good day.
Speaker 1:
Thanks for joining us. Stay tuned for the next episode of TD Cowen Insights.