Unidentified Analyst : The margin profile. So it seems like you might also be tracking ahead of the margins. Is that any — is that mainly driven by the increased payer traction? Or is that something that we can think of as — go ahead?
Paul Diaz : I mean margins are a function of everything going down the P&L. So as we talked about its increased productivity, it’s just a function of our fixed cost versus variable cost and the ASP progress all play into that. And I think incrementally, as Bryan spoke to, as we think going into next year, now that we have moved along in terms of opening our — both of our new labs as we’re seeing turnover down to 9.6%, 9.3%. All of that operationally is what plays into our opportunity to continue to grow margins beyond the adjusted 70.4% going into next year. There’s a lot of leverage in this P&L.
Operator: And your next question comes from the line of Daniel Brennan with TD Cowen.
Daniel Sammarco: This is Dan Sammarco on for Dan Brennan. Just a question on — and apologies if we missed this on the call, but on GeneSight, can you provide any time line for additional publications supporting a utility?
Paul Diaz : So — we go ahead, Mark.
Mark Verratti : Yes. The only thing I would add is, so we — at the Investor Day, we talked about the prelim results from Phase 1 of the Optum trial. And we also talked about Investor Day, Phase 2 of the Optum trial, which will be coming later this year, where we’ve got some control groups, and we’ll also be looking deeper into the economic utility as well as the clinical utility. There are several other publications that are going on, and you’ll see those published sometime next year.
Daniel Sammarco: All right. Great. And then on the pipeline, do you have any updates on timing for products, including FirstGene? You previously expected a soft launch in fourth quarter this year. And then, when should we expect to hear any updates on your MRD offering?
Paul Diaz : So no updates to the pipeline since our Investor Day in September. Everything is sort of tracking consistent with that. Still got a lot of work to do. But as we mentioned in the call, continuing to make great progress on our clinical validation work. We’re excited about the new studies with MD Anderson and others. And so that’s all tracking well. And the new partnership with QIAGEN is really exciting in terms of the ability and those are additional discussions with having with QIAGEN about MRD and different offerings there. So progress continues, but nothing substantive since our Investor Day.
Operator: And your next question comes from the line of Jack Meehan with Nephron Research.
Jack Meehan : Thank you. Good afternoon. The cash bridge that you laid out in the press release landing at $107.5 million at year-end, just wanted to clarify, are the payments to Ravgen incremental to that? Or is there a reason that the $5 million from October 31 was excluded?
Bryan Riggsbee : We didn’t exclude the $5 million. It’s in the expectation. So the $107 million has that, and then the other payment would be a year from now of October 31 of next year.
Jack Meehan : Okay. Just because I see it says end of the third quarter, $86.3 million amount available under the facility, $28 million, and then has the fourth quarter CapEx, but I didn’t see the Ravgen payment, but it’s included in one of those first three numbers?
Bryan Riggsbee : Yes, just to break it out, Jack, It just says in cash flow from operations. So it would be in that cash flow from operations number for the fourth quarter.
Jack Meehan : Okay.
Bryan Riggsbee : As a reduction of improved liability.
Jack Meehan : Got it. Okay. And then, Paul, I wanted to follow up on LDT regulation. I was just curious after you had a chance to review the FDA’s proposed rule from the end of September. I was curious if you’re about potential future regulation of GeneSight or just how you’re preparing for an LDT environment?
Paul Diaz : We — I remain quite confident in our ability to navigate those regulatory changes. We’re obviously engaged with our associations on a comment period with respect to that. I would just remind everyone that we’re running FDA like labs already. So many of our quality assurance processes are already in existence and we’ve been contemplating FDA regulation across our products through this whole Lab of the Future planning process. And I would stand again behind the comments that I’ve made before, Jack, with respect to GeneSight. There has been no under its enforcement authority any inquiries about GeneSight from the FDA and the comments in the proposed regulations were stated about the broad issues that have been raised by investors as evidenced by the New York Times article and the litigation that has now been resolved. So I think you took that out of context in your note.
Operator: And your next question comes from the line of Puneet Souda with SVB Securities.
Unidentified Analyst : This is Isabella on for Puneet. On the $40 million Rav opportunity that you highlighted during the Investor Day, would you mind just talking us through how much of the benefit will be assumed in the 2024 guide?
Paul Diaz : I’m sorry. You were talking about the ASP opportunity we talked about at the Investor Day, the no pay opportunity? Yes. I mean, we didn’t put a specific time line on that. But as you can see from this quarter’s results, we made progress on ASP, cash collections. And quite frankly, we incrementally see more visibility, again, under the context of the United contract has been signed for 4 years. The progress that we’ve been making with different payers for GeneSight and other products and the continued growth of these biomarker laws that are not only for oncology, test, but also extend the GeneSight in the majority of these states. So again, the first half of the year and some of the ASP challenges just gave us a refreshed view. And so we’ve really doubled down on our efforts there. And again, as we talked about earlier, we think it can contribute to margin expansion as we go into ’24 and beyond.
