Freenome Q3 2026 Earnings Results & Report

Freenome EPS Results

• Actual EPS: $1.10
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

Freenome Revenue Results

• Actual Revenue: N/A
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

Freenome (NASDAQ:FRNM) is a biotechnology company developing blood-based tests intended to detect cancer at earlier stages. Its approach combines analysis of biological signals—including DNA and other biomarkers—with computational tools to identify patterns associated with disease.

The company’s research has focused on multiomics screening, particularly for colorectal cancer. Freenome has evaluated its blood-based colorectal cancer test in clinical studies; the test is investigational, and its availability and regulatory status may vary.

Founded in 2014 and based in South San Francisco, California, Freenome conducts research and clinical development primarily in the United States. Its work also includes collaborations aimed at applying its platform to cancer detection and related research.

Freenome Q3 2026 Earnings Call Transcript

Key Takeaways

• Neutral Sentiment: SimpleScreen CRC received FDA approval and Abbott began commercial sales on September 30; more than 2,000 clinical sites requested kits in the first month. The launch is still in an early setup phase focused on provider education, payer negotiations and ordering workflows, with no meaningful testing revenue expected in Q4.
• Positive Sentiment: SimpleScreen CRC version 2 improved sensitivity for advanced precancerous lesions while maintaining about 80% CRC sensitivity at 90% specificity. Freenome plans a supplemental FDA filing by year-end, expects approval in the second half of 2027, and said approval and transfer to Abbott would trigger a $70 million milestone payment, currently expected in the first half of 2028.
• Positive Sentiment: Freenome launched its lung cancer LDT, reporting 85% sensitivity, 82% sensitivity for stage 1 disease and a 99.8% negative predictive value; the multiomics lung test also received FDA Breakthrough Device Designation. The company expects two additional single-cancer data readouts in December and an asymptomatic multi-cancer readout in mid-2027.
• Neutral Sentiment: Q3 revenue was $183.5 million and net income was $60.1 million, driven largely by a one-time $180 million revenue recognition tied to Abbott’s CRC approval milestone. Freenome ended the quarter with about $430 million in cash and expects runway into 2028, but guided to just $2 million–$4 million of Q4 revenue and no meaningful testing revenue or royalties.

Presentation

[Operator]

Good afternoon, and thank you for standing by. Welcome to Freenome's third quarter 2026 earnings conference call. All participants will be able to listen only until the question-and-answer portion of this call. During the question-and-answer session, you will be able to ask your question by pressing star one one on your touchtone phone. This call is being recorded by Freenome, with the exception of any participant's questions asked during the question-and-answer session. The entire call, including the question-and-answer session, is material copyrighted by Freenome. It cannot be recorded, rebroadcast without Freenome's express written permission. I would now like to introduce Mr. Bill Taggart, Director of Corporate Communications.

[Bill Taggart, Director of Corporate Communications at Freenome]

Good afternoon, and thank you for joining us. With me today are Aaron Elliott, Chief Executive Officer, Riley Ennis, Co-Founder and Chief Product Officer, and Linh Le, Chief Financial Officer. They will provide opening remarks, and following their comments, we will take your questions. Before we begin, please note that this call will include forward-looking statements under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Please refer to our most recent SEC filings for important risk factors that could cause our actual performance and results to materially differ from those expressed or implied in these forward-looking statements. Any forward-looking statements made on this call represent our views only as of today, and we disclaim any obligation to update any forward-looking statements. During this call, we will refer to certain non-GAAP financial measures, including non-GAAP net income, adjusted EBITDA, and free cash flow.

[Bill Taggart, Director of Corporate Communications at Freenome]

These non-GAAP measures should be considered in addition to, and not as a substitute for or superior to, our results prepared in accordance with GAAP. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings press release issued today, which is available in the Investors section of our website at investors.freenome.com. Now, let me hand it to Aaron.

[Aaron Elliott, CEO at Freenome]

All right. Good afternoon, everybody. Thank you for joining our first earnings call as a public company. Today, we are really proud to introduce Freenome and share with you how we are working to bring our AI-enabled cancer screening platform to millions of patients. We really look forward to establishing an ongoing dialogue with the investment community as we execute on this mission. In July, we achieved a major milestone by going public on the Nasdaq under the ticker FRNM, raising approximately $310 million in gross proceeds. This couldn't have been possible without our incredible team, our clinical and commercial partners, the patients in our clinical studies, and the ongoing support of our shareholders. As we begin this new chapter as a public company, we are focused on building out our commercial infrastructure and advancing our broad product pipeline.

[Aaron Elliott, CEO at Freenome]

We are incredibly excited about the potential of our technology to truly transform the landscape of cancer screening. Now, since some of you are getting to know Freenome for the first time, I want to start with just a brief overview of who we are. We were founded in 2014 on a pretty simple premise, that the traditional approach to cancer screening is highly inefficient. Today's testing options are fragmented and burdensome, requiring patients to navigate completely different processes for different cancers. As a result, a large percentage of eligible people never get screened at all. We've turned this premise into our mission, to make early detection simple, accessible, and affordable so cancer can be caught at its earliest, most treatable stages.

[Aaron Elliott, CEO at Freenome]

Over the past decade, we've built a proprietary AI-driven multiomics discovery platform that has the ability to look at numerous biomarkers, including DNA and protein signatures, and incorporate the signals into our tests that are most informative for each cancer type. This platform serves as the foundation of our expanding portfolio of blood-based tests, which began with colorectal cancer, now extends to lung cancer, and will soon include other single and multi-cancer tests. By aligning screenings with an individual's risk profile, we believe we're uniquely positioned to scale AI-driven diagnostics, and we call this approach Personalized Cancer Detection. The data generated from these tests will really be key. Beginning with an FDA-approved reimbursed CRC test enables the collection of massive population-level molecular datasets and the establishment of a longitudinal relationship with the patient.

[Aaron Elliott, CEO at Freenome]

This data, we believe, will rapidly improve existing tests, confirm efficacy for other cancer types, and enable our potential expansion into broader disease areas beyond cancer. Now, it's been a pretty busy quarter for us. In addition to going public, we achieved numerous other milestones, including the FDA approval and commercial launch of our first test, SimpleScreen CRC, validation of an updated version of that test with improved performance, FDA Breakthrough Device Designation for our lung cancer test, and then most recently, the commercial launch of our SimpleScreen Lung LDT. In July, the FDA approved SimpleScreen CRC based on data from PREEMPT CRC, which was the largest prospective clinical validation study ever conducted for a blood-based colorectal cancer screening test. While colorectal cancer is highly preventable when caught early, nearly half of the 120 million eligible U.S. adults still remain unscreened.

[Aaron Elliott, CEO at Freenome]

We believe the simplicity and convenience of a blood test can really overcome traditional barriers to testing and dramatically increase screening adherence. The full results of PREEMPT CRC were published in JAMA in June 2025, and in a pre-specified analysis adjusted to the U.S. Census, SimpleScreen CRC detected colorectal cancer with 81.1% sensitivity at 90.4% specificity. Also in this quarter, we released top-line data for an updated version of SimpleScreen CRC. This is our version 2 test, and we were able to do it within one year of our first version, really demonstrating our ability to rapidly iterate on our technology and improve performance in detecting advanced precancerous lesions, which is really the most important. Riley will speak more to that here in a minute. Now, let's turn to commercial.

[Aaron Elliott, CEO at Freenome]

Our unique commercial model is to efficiently and cost-effectively scale SimpleScreen adoption by leveraging strategic partnerships, like the Abbott partnership for SimpleScreen CRC when it is ordered as a standalone test, and Roche for international kitting, combined with our internal sales team focused on targeting the approximately 600 health systems in the U.S. that are dedicated to increasing patient screening rates. This combination of partner-driven, bottoms-up awareness of SimpleScreen and top-down health system channel strategy is how we plan to scale our commercial foundation. Freenome maintains full U.S. commercial rights when SimpleScreen CRC is ordered in tandem with any other Freenome test where the patient meets criteria. That means we receive the full CRC reimbursement for those tests. This partnership structure was deliberate, as we anticipate the market will naturally shift towards risk-based multi-cancer screening from a simple blood draw. The data really supports this.

[Aaron Elliott, CEO at Freenome]

84% of the 120 million people eligible for CRC testing also qualify for another cancer screening test. Of course, you then get almost complete overlap when pairing with an asymptomatic MCED test. So we believe our Personalized Cancer Detection approach, layered on top of Abbott's reach into primary care with CRC, will really allow us to capture a disproportionate share of the value as multi-cancer screening becomes more common. Abbott holds exclusive U.S. commercialization rights for standalone CRC testing, backed by a licensing arrangement worth up to $885 million in potential payments to Freenome, tied to regulatory market access achievements and funding for joint research and development. To date, we have received $242.2 million of these payments, including most recently the $100 million milestone for CRC version one FDA approval.

[Aaron Elliott, CEO at Freenome]

Most importantly, to capitalize on the potential long-term success of the test and maintain financial upside, we also receive a 10% royalty on net sales once a 20% gross margin is achieved. Abbott provided many of the attributes that we were looking for in a partner, including one of the largest primary care sales channels, and importantly, the ability to reach the unscreened patient population with high efficiency. By scaling the SimpleScreen brand, Abbott effectively primes the market for our SimpleScreen commercial portfolio while generating the critical test data required to fuel our pipeline of next-generation AI-enabled cancer diagnostic tests. Abbott began marketing and selling SimpleScreen CRC on September 30th, integrating the test into its existing colorectal cancer screening portfolio and drawing on its established relationships with primary care providers and health systems nationwide.

[Aaron Elliott, CEO at Freenome]

We are only about a month into launch, so it is too early to really provide any specific volume guidance, but Abbott has trained its approximately 800-person sales force and begun the reach out to their 380,000 provider channel. At this stage of launch, the focus is really on EMR integrations, health system and provider engagement, putting in place the proper ordering workflows, and engaging payers on coverage. As of now, more than 2,000 clinical sites have requested blood collection kits, showing early interest, and we are watching this test conversion closely. We are currently working with Abbott to put together the commercial KPIs that we believe best track progress and future potential. We are highly encouraged by the recent momentum surrounding blood-based CRC testing, which has secured pivotal inclusions in both clinical guidelines and major insurance policies.

[Aaron Elliott, CEO at Freenome]

This progress is highlighted by the American Cancer Society's recent August update, which officially added SimpleScreen CRC as an approved screening option for average-risk adults. On the payer side, in addition to Medicare coverage, which set an initial price for SimpleScreen at $920, UnitedHealthcare led the industry by becoming the first major commercial insurer to establish coverage for blood-based CRC testing, really marking a crucial milestone towards widespread commercial acceptance. Carelon revised its clinical guidelines to cover SimpleScreen CRC as a medically necessary second-line option every three years for average-risk individuals. Cigna, most recently, with EviCore, one of the nation's largest specialty benefit managers, will implement a policy covering blood-based CRC screening across the 20 states that mandate alignment with ACS guidelines. Together, these developments represent a transformative shift for broader market access and patient adoption.

[Aaron Elliott, CEO at Freenome]

Separately, in September, HHS announced new appointments to the U.S. Preventive Services Task Force, really an encouraging step as it brings USPSTF back to full strength and enables it to resume its important work. We look forward to the future developments of this body. In addition to our commercial partnership with Abbott in the U.S., we have an exclusive license and option agreement with Roche to develop a kitted version of our multi-cancer test outside of the U.S. We believe this partnership can meaningfully expand global access to blood-based cancer screening over time, while Freenome retains ex-U.S. multi-cancer centralized testing rights. Beyond CRC, we recently reached a significant milestone by launching our SimpleScreen Lung test. This test is designed for adults age 50-80 years with a minimum 20 pack-year smoking history who are currently not up to date with annual low-dose CT screening.

[Aaron Elliott, CEO at Freenome]

While nearly 15 million Americans qualify for lung cancer screening, fewer than 20% are actually up to date. We believe SimpleScreen Lung addresses this gap by offering physicians a practical and convenient screening option for their patients. Though we're just at the beginning of the launch, we're already engaged in encouraging discussions with health systems across the country. Our top-line results released last month demonstrated 85% sensitivity at 50% specificity, including 82% sensitivity for stage 1 disease and a 99.8% negative predictive value. Looking ahead, we are actively advancing enrollment for our PROACT LUNG registrational study, which remains on track to support a future FDA submission. With that, I'd like to turn it over to Riley, who's going to walk you through the capabilities of our platform and how it's driving our long-term single cancer and multi-cancer test portfolio.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

Thank you, Aaron. It took us nearly a decade to develop our first FDA-approved CRC test. Within a year, we upversioned the assay and algorithm, demonstrating improved performance, expanded into lung cancer, and have two additional indications reading out before the end of the year. I share these examples as they reflect what we set out to build when we started Freenome, an AI-driven multiomics platform that interrogates multiple analyte technologies and improves over time, and enables an expanding portfolio of early detection tests, while working closely with health systems to build a longitudinal real-world dataset through embedded digital products that can provide a long-term view of an individual's health. I want to walk through three of our core pillars that are illustrating how Freenome's approach is beginning to deliver. First, how we approach test versioning. The next-generation CRC test incorporated a comprehensive set of assay and algorithm improvements.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

We ultimately 3x the number of unique molecules derived through our assay, focusing on improving the detection of advanced precancerous lesions. In our pivotal study, the next-generation SimpleScreen CRC met all pre-specified primary and secondary endpoints in the U.S. census-adjusted analysis. High-grade dysplasia sensitivity increased from 30.5% to 41.9%, approximately 11% increase. The overall advanced precancerous lesion sensitivity increased from 13.7% to 18.2%, approximately a 5% increase. CRC sensitivity was 80.4%, in line with the first version, and all at a 90% specificity among participants with no finding on a colonoscopy. Finding and removing advanced precancerous lesions creates an opportunity to prevent colorectal cancer. Our peer-reviewed health economic model, COSMO-CRC, projects 143 fewer CRC-related deaths and 1,582 additional life years gained per 100,000 people screened compared with the first version.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

These modeled outcomes demonstrate a meaningful difference when you think about the 60 million people who are currently not screened for CRC. We plan to submit a supplemental PMA by year-end and anticipate approval in the second half of 2027. Approval and successful technology transfer to Abbott would trigger a $70 million milestone payment, currently expected in the first half of 2028. The second pillar is how we tune our platform for different indications across our Personalized Cancer Detection pipeline. A blood sample contains millions of DNA fragments, RNA, proteins, and other biological information. The earliest cancer signals are only present in a small fraction of that molecular background, and cancer signals can be scarce and differ across indications, stages, and individuals. We built our platform to address this complexity.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

We measure individual omics at high resolution, such as our DNA methylation assay that quantifies epigenetic changes at a single base level. We also approach our discovery process with breadth. For example, the comprehensive profiling of non-NGS proteins and other secreted analytes. These are just a subset of the internal/external technologies that we evaluate to identify potentially additive signal and ultimately the best integrated technology. We then use several machine learning and deep learning architectures to incorporate complementary information across each of the biological inputs and tune those models based on the specific populations and clinical need. Our lung LDT product demonstrates this flexibility. Protein signatures provided the strongest stage 1 performance among the technologies we evaluated. This resulted in the launch of our LDT, while in parallel, we continue to optimize the multiomics version of our lung IVD, which recently received FDA Breakthrough status.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

We plan to validate this final multiomics version through our PROACT Lung study, which will complete enrollment in the first half of 2027 and read out toward the end of 2027. Beyond CRC and lung, our current SimpleScreen assay embedded information from 10 additional cancer types, providing a foundation that we are building upon for the future single cancer and multi-cancer tests. Those indications we are targeting account for approximately 65% of cancer diagnoses and 70% of cancer-related death. We expect our next two single cancer readouts in December, and our first asymptomatic multi-cancer detection readout in mid-2027. Our third pillar is our learning engine. Reimbursed CRC screening, Abbott's reach, and established data sharing and linking capabilities gives us a path to build a multimodal molecular and clinical dataset for millions of screening encounters over time. PREEMPT illustrates this potential.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

We are linking our molecular measurements collected throughout the CRC screening study and have roughly five years of real-world longitudinal follow-up. A preliminary analysis of the clinical data identified 2,000 incidental findings of other cancers. We can now go back and investigate whether signatures were present in the early stages of disease and in those original blood samples. We can also envision using different cohorts for validation of those other indications. This really shows what's possible as we think about the commercial data flywheel as the training corpus continues to grow. Those larger datasets also play an important role as we think about scaling into other more complex models.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

Based on a fragment-level deep learning architecture that our team developed and data presented at ICML and a special conference at AACR, we observed for the first time that the fragment-level deep learning model outperformed our linear baseline machine learning model. This is important because these datasets are still small and will continue to grow over time. The real-world data and clinical information also has a role in how we think about expanding access and identification of patients through the screening journey. As Aaron mentioned, when you look at the CRC screening population, around 84% of people would be eligible for another cancer screening test. When you look at the overlap of different single cancer, multi-cancer screening tests with the CRC screening population, around 84% of people are eligible for another cancer screening test.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

For example, when you look at a single indication like lung, about 15%-20% of people were eligible for both CRC and lung. We think about the individual indications as well as an asymptomatic multi-cancer test, this really allows us to offer multiple tests to the same individual and expands our impact as our test menu also grows. When we work with our health system partners, we really see the convergence of the real-world data linkage and our health system strategy. We have been building a set of digital products through Freenome Digital Health, which really empowers our partners to improve the identification of eligible patients, engage them in the screening journey, and support the necessary screening follow-up and navigation.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

Embedding these into the clinical workflows also allows us to collect the necessary data and additional data that can augment and improve as we think about incorporating those data for future products or test improvements. Taken together, our North Star is to generate the most impact from a single patient sample and collect data over time that allows us to derive better versions of our tests, and we are excited by this next chapter to bring our technology to millions of people. I will now turn the call over to Linh to go through the financial results for the quarter.

[Linh Le, CFO at Freenome]

Thank you, Riley, and good afternoon, everyone. Let me start with our financial results for the third quarter ended September 30, 2026. Total revenue was $183.5 million, compared with $1 million in the third quarter of 2025. License and collaboration revenue was $182.5 million. This was driven primarily by $180 million recognized under our collaboration and license agreement following FDA approval of SimpleScreen CRC. That $180 million included $157.5 million for the exclusive commercialization license, along with $22.5 million cumulative catch-up adjustment to revenue recognized in earlier periods. Service and other revenue was $0.9 million. Cost of service was $0.5 million, compared with $0.6 million in the third quarter of 2025. Turning to operating expenses, total expense were $113 million for the quarter, compared with $65.7 million in the third quarter of 2025. Research and development expense was $68.4 million, up $17.8 million from the third quarter of 2025.

[Linh Le, CFO at Freenome]

General and administrative expense was $44.6 million, up $29.6 million over the same period. These increases primarily reflect non-cash stock-based compensation. This included $9.9 million in research and development and $29.8 million in general and administrative expense related to restrictive stock awards. The service condition for those awards were satisfied at the closing of the business combination. Operating income was $70 million, compared with an operating loss of $65.3 million in the third quarter of 2025. Net income was $60.1 million, or $0.58 per share. This compares with a net loss of $64.5 million, or $0.95 per share in the third quarter of 2025. We use 103.2 million weighted average diluted shares outstanding to calculate net income per share. Now turning to our non-GAAP measures. Adjusted EBITDA was $117.9 million for the quarter, compared with a -$56.3 million in the third quarter of 2025.

[Linh Le, CFO at Freenome]

Free cash flow, also a non-GAAP measure, was $35.7 million, compared with -$44.8 million in the third quarter of 2025. This quarter's free cash flow includes the $100 million milestone payment from Abbott. Turning to the balance sheet, we remain well capitalized. We ended the third quarter with approximately $430 million in cash equivalent, and marketable securities. This includes the net proceeds from our July business combination and concurrent private placement, as well as the $100 million milestone payment received from Abbott. We continue to expect our current cash resources to fund our operations into 2028. As a reminder, our agreement with Abbott provides for up to $885 million in total potential value. Of that amount, we have already received $242.2 million. The remaining $642.8 million is contingent on future regulatory and market access milestones and other conditions. Royalties on test sales are in addition to that amount.

[Linh Le, CFO at Freenome]

Finally, let me turn to our outlook for the remainder of 2026. We expect fourth quarter revenue of $2 million-$4 million. This would bring full-year revenue to between $192 million-$194 million. With the commercial launch still in its early stages, we do not expect meaningful testing revenue or royalties in the fourth quarter. Our revenue guidance reflects three components. First, research and development fees from Abbott for joint work under our agreement. Second, service revenue from our U.K. operations. And third, a modest contribution from lab service fees associated with Abbott's commercial launch of SimpleScreen CRC. As a reminder, lab service fees represent Abbott's reimbursement of our cost to process SimpleScreen CRC tests in our labs. This revenue is gross margin neutral, and its contribution will depend largely on the pace of Abbott's launch. I will now turn the call over to the operator for Q&A.

[Linh Le, CFO at Freenome]

Operator?

[Operator]

Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one one on your telephone. If your question has been answered or you wish to remove yourself from the queue, please press star one one again. We will pause for a moment while we compile our Q&A roster. Our first question comes from Puneet Souda with Leerink Partners. Your line is open.

[Puneet Souda, Analyst at Leerink Partners]

Yeah. Hi, guys. Congrats here on the first quarter as a public company, and couple of questions here. First one, just wanted to clarify, in that $157 million, could you provide what is there beyond the milestone payments? Apologize if I missed that, and I have a few follow-ups after.

[Linh Le, CFO at Freenome]

Sure. Thanks for the question, Puneet. That $167.5 relates to the commercial contract we have with Abbott, and as a result of the $100 million for the V1 we received, that trigger recognition of that amount.

[Puneet Souda, Analyst at Leerink Partners]

Okay. Maybe the second question is, and I could follow up on the more details later, but maybe the second question is just in terms of the, look, $2 million-$4 million for the fourth quarter, that is understandable given the milestone payments this year. But next year, wondering if you can provide some sort of guidepost in order for us, for the models to be aligned. You have milestone payments coming in next year as well, as well as the products are going to be ramping. Maybe just give us some thoughts on 2027, if you could.

[Aaron Elliott, CEO at Freenome]

Yeah. Thanks, Puneet. This is Aaron. For next year, if you think about it from a partnership perspective, we will have R&D contribution to revenue. Some of this will depend on where some of the other milestones could potentially fall. Right now, we're guiding for the V2 into 2028. As of now, we're not giving guidance for Abbott as it relates to the service fee revenue and our own internal revenue. For the next earnings call, we will likely provide guidance for 2027 from a commercial standpoint.

[Puneet Souda, Analyst at Leerink Partners]

Got it. Okay. Then maybe just last one. In terms of SimpleScreen launch, I mean, you have 800 reps. That's sizable for any product launch. Maybe just give us how you're thinking about now with the reps trained, how should we think about the momentum there, and just given how the existing Abbott products are and how this fills the bag for the reps. Thank you.

[Aaron Elliott, CEO at Freenome]

Yeah. I would say, we are only about a month into the launch, so a lot of the activities right now is really, I would say, laying the foundation for long-term growth. It's really three things. One, the engaging and educating of providers. How does blood-based testing fit within their workflows and fit within ACS guidelines? So part of that is obviously training and deploying those 800 sales reps and just that whole sort of Abbott commercial engine around that education piece. Another big part of the activities ongoing is the negotiation with payers, not just from a cover standpoint, but even the payers that have put policies out there, negotiating pricing for those payers.

[Aaron Elliott, CEO at Freenome]

As you know, that takes some time to do, and Abbott is actively engaged with most of the top 20 payers currently, and we do expect in the next couple quarters to be able to announce some successes there. Then finally, and maybe the biggest one is, the activities around integrating with EMRs and getting health system workflows in place, and that's really to drive bulk ordering. Those activities are ongoing and picking up momentum. I do think one encouraging sign as of now that we are releasing is the 2,000 clinical sites that have ordered SimpleScreen collection kits in the first 30 days. We think that's a good sort of leading indicator as those start converting over to volume. We do expect significant traction heading into 2027.

[Aaron Elliott, CEO at Freenome]

We are working with Abbott pretty closely on what commercial KPIs beyond volume that we would communicate to you all to reflect progress, and we will have a better update for that on the next earnings call.

[Puneet Souda, Analyst at Leerink Partners]

Okay, great. I will hop back in the queue. Thank you.

[Operator]

One moment for our next question. Our next question comes from Subbu Nambi with Guggenheim. Your line is open.

[Subbu Nambi, Analyst at Guggenheim]

Thank you so much, guys, for taking my question, and congratulations on your first earnings call. Your royalties from Abbott begin once Freenome reaches 20% gross margin on SimpleScreen CRC. I know it is super early, but have your expectations changed on timing given the current trajectory you have observed post-launch? The current $920 price, how are you viewing the opportunity to pursue an ADLT rate, and could a higher Medicare price move the royalty timing meaningfully?

[Aaron Elliott, CEO at Freenome]

Yeah. Thanks for the question, Subbu. You are correct that we have a 10% royalty that triggers on a 20% gross margin. Before that, we receive 50% of the gross margin, and as of now, there are no expectations on timing as it relates to royalty. Obviously, royalty is a function of cost of goods with scales with volume, but also ASP. Abbott is in charge of driving ASP with their commercial payers and also dictating the coding strategy for Medicare for SimpleScreen CRC. The $920 rate, I think with Abbott, one thing we are trying to balance is what is an appropriate price that in the long term can really drive blood-based test adoption. That was part of the thinking going into coding strategy and pricing strategy as it relates to Medicare. So that is why we went that direction initially with Abbott.

[Aaron Elliott, CEO at Freenome]

We will readdress coding with the V2 test as it relates to potentially ADLT.

[Subbu Nambi, Analyst at Guggenheim]

Thank you for that. That is helpful. My follow-up, what drove the decision to launch the protein-only assay now ahead of the multiomics version for lung? How do you plan to move ordering physicians to the multiomics test once it is available, and should we expect the protein-only assay to be retired at that point?

[Aaron Elliott, CEO at Freenome]

Yeah, I can take the first part, and then Riley can add some additional color. When looking at the performance of the protein-only test, we do think there is some additional upside for our multiomics assay as it relates to performance, and we will show that hopefully on our PROACT readout. But it does provide us a lot of pricing flexibility. The protein-only test is a fraction of the cost of goods of the multiomics assay, and really in this time period before FDA approval and establish a reimbursement, our focus really is on priming the market with the lung cancer test and getting these patients onto our platform, not just for lung, but also for other indications like CRC and other indications that we have in the pipeline. That drove a big part of the decision when we looked at what assay to roll out initially before there is established reimbursement.

[Aaron Elliott, CEO at Freenome]

I will Riley give additional thoughts.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

We were very encouraged by the stage 1 sensitivity at 82%, which really highlights the unique nature of some of these secreted analytes for detecting earlier stage disease, and that's what led to the launch of the lung LDT.

[Subbu Nambi, Analyst at Guggenheim]

Perfect. Super helpful. Thank you.

[Aaron Elliott, CEO at Freenome]

Thank you.

[Operator]

One moment for our next question. Our next question comes from Dan Brennan with TD Cowen. Your line is open.

[Dan Brennan, Analyst at TD Cowen]

Great. Thank you. Congrats on first quarter here. Maybe just the first one on lung, just could you let us know how many reps were in the field? I know there's no guidance at this point, but I'm just wondering, we have 9,000 tests next year. Is there any way to even comment, are we in the zip code on that?

[Aaron Elliott, CEO at Freenome]

Thanks, Dan. Right now, when we look at the commercial infrastructure, it's really scheduled to start building out next year. From a commercial standpoint, right now it's about 20 individuals on the commercial side really targeting health system and setting up our platform. I mean, that's the majority of the focus currently. As you would expect, we're not giving guidance on volume for 2027 yet, just the fact that we're only a couple weeks here in the launch. But as we said in the prepared remarks, we are seeing a lot of encouraging signs from the health systems as it relates to interest in lung and getting these unscreened patients screened. A big focus of ours right now, again, is priming that market with our protein tests and having that sort of pricing flexibility to drive volume.

[Dan Brennan, Analyst at TD Cowen]

Got it. Okay, thank you. Anyway, just related to that, when we think about attach rates, Guardant has over 50% attach rate so far with the MCD. When we think about attach rates of lung to CRC, any way to at least think about that? What's a reasonable proxy?

[Aaron Elliott, CEO at Freenome]

Yeah, right now, as Riley mentioned, if you look at the overlap, it is right around 20% overlap between CRC and lung. We are interacting with health systems that are interested in our platform in general, not specifically a single indication. We do anticipate being able to drive that attach rate, but we do not yet have the data to give any sort of trends as far as putting together what that attach rate would look like. We are expecting somewhere in that 20% range based on the data.

[Dan Brennan, Analyst at TD Cowen]

Got it. Then I know you mentioned the next two single cancer readouts will be in December. I guess you will announce those when they hit, because I know you have talked about in the past esophageal, pancreatic, and liver. I mean, can you confirm it is of those three, and would the launches occur immediately after, or just any sense on how soon after the data would you be launching those tests?

[Aaron Elliott, CEO at Freenome]

Yeah, we are not revealing what the indications are, but we will plan to put out a press release with the validation data in December, and then we would be launching those tests sometime in the first half of 2027.

[Dan Brennan, Analyst at TD Cowen]

Got it. I will sneak one final one in. MCED, I know you said mid-year next year data. Is it still 4Q 2027 is when you would look to launch the MCED add-on, or could it come earlier than that? Thank you.

[Aaron Elliott, CEO at Freenome]

That's correct. We would still be anticipating the data release in Q2 of 2027, with a launch in the back half of 2027.

[Dan Brennan, Analyst at TD Cowen]

Got it. Great. Thank you.

[Operator]

One moment for our next question. Our next question comes from Mark Massaro with U.S. Bancorp BTIG. Your line is open.

[Mark Massaro, Analyst at U.S. Bancorp BTIG]

Hey, guys. Thank you for taking the questions, and congrats on your first call as a public company. I wanted to start on SimpleScreen CRC. So far, lots of questions about the early launch. I recognize you're only a month in. Given the size of the Abbott sales force, I think, obviously, they made a large acquisition of Cologuard. I wanted to get a feel for, my sense is that Cologuard might be first in their bag, blood might be second in their bag. Can you just give us a sense for, it sounds like all 800 reps are trained on your product. I'm just curious if your understanding is that Cologuard would be offered first and that blood would be offered only after stool would be rejected?

[Aaron Elliott, CEO at Freenome]

Yeah. Hi. Thanks, Mark. Thanks for the question. Yes, currently, Abbott is following ACS guidelines, which really position colonoscopy and stool-based testing as the preferred options. Individuals that are unwilling to do those options would then be offered a blood-based option. It is early in the maturation of blood-based testing. The options of colonoscopy, stool-based testing, these have been around for a very long time, and there still remain 60 million unscreened people. That is really the focus with us and Abbott right now, is how do we identify and reach those 60 million individuals? We do think Abbott is in the best position to capitalize on finding these patients because they have the stool-based assay. As of now, based on ACS guidelines, we actually find our test complementary with their stool-based test.

[Aaron Elliott, CEO at Freenome]

We do think they can leverage having that assay to find this non-compliant patient population. That is our focus on the early launch.

[Mark Massaro, Analyst at U.S. Bancorp BTIG]

That sounds great. It sounds like, you talked about the 20 individuals calling on health systems for lung. Is that the size of your total commercial organization right now? Recognizing that you have over $400 million of cash on the balance sheet, how should we think about you scaling your commercial team, and where do you think you might be a year from now?

[Aaron Elliott, CEO at Freenome]

Yeah. So, yeah, thanks for the question. So yeah, that would be the total size of the commercial team currently. We are looking at 2027 to really start expanding that commercial team out, and then obviously we can gate the expansion based on performance as we go. Long term, we would anticipate a commercial organization probably in the $400 million range, long term. Again, we think that is probably the appropriate size based on our commercial strategy, which allows our partners like Abbott to do that bottoms-up approach while we do the top-down health system approach, and then put sort of reps in the field to support the health systems that we are partnered with.

[Mark Massaro, Analyst at U.S. Bancorp BTIG]

That sounds great. I wanted to ask about the lung. Obviously, you put up really strong data, notably on the negative predictive value of 99.8%. To what extent do you view this as a rule-out test versus a rule-in, showing 82% at stage 1? Presumably this could be both, but I'm just wondering how you plan to position it.

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

The most important is maintaining the highest sensitivity in ruling people in, given the care pathway and reflex to low-dose CT. Maintaining as high sensitivity as possible, especially early-stage sensitivity, is really the focus of clinicians, given less than 20% of people are currently getting screened today, despite having low-dose CT available for quite some time. That's really where blood-based testing can funnel more individuals into low-dose CT, where they can then receive the proper follow-up and triage care.

[Mark Massaro, Analyst at U.S. Bancorp BTIG]

Fantastic. Maybe last one. I recognize we're early days as we think about multi-cancer early detection. Is there any way to get your sense for what you think will be larger in the mid to long term? Is it the sum of multi-cancer early detection tests, or could it be the sum of individual cancer tests?

[Riley Ennis, Co-Founder and Chief Product Officer at Freenome]

It's likely going to be the overlap of individuals that are choosing single cancer alongside a multi-cancer test based on coverage and reimbursement. We really think broad adoption and where volume is going to come is when there's reimbursement in place. Right now, colorectal cancer, there is reimbursement, and potentially by early 2029, there could be national coverage for a multi-cancer detection test. We think anywhere where reimbursement goes is where large volumes are going to be. We'd say it's the sum of the single cancer test alongside multi-cancer, given that potential path to coverage and reimbursement.

[Mark Massaro, Analyst at U.S. Bancorp BTIG]

Great. Thanks so much for the time.

[Operator]

One moment for our next question. Our next question comes from Tycho Peterson with Jefferies. Your line is open.

[Tycho Peterson, Analyst at Jefferies]

Hey, thanks. Maybe just a question on commercial coverage roadmap here. I am curious how you think Carelon may ramp, and then obviously Abbott's talking to a number of payers. What's your sense of timing on any of those, and how do we think about kind of implications around ASP uplift?

[Aaron Elliott, CEO at Freenome]

Yeah, thanks, Tycho. We do know they are actively engaged with a lot of payers, the majority of the top 20, and this will be a process as it relates to not just coverage decisions, but also pricing, especially for the ones that have already announced policies. We would expect in the next couple quarters to be able to talk about two larger payers coming in network. But as of now, we're not giving guidance on timing of the payers coming online, but we do know there's progress being made there.

[Tycho Peterson, Analyst at Jefferies]

Okay. On V2, appreciate, you know, Breakthrough Device Designation. You shared some data on it. I guess, what are the remaining gating items to the filing, and how do we think about, you know, just timing for FDA approval and tech transfer in 2027?

[Aaron Elliott, CEO at Freenome]

Yeah, so from a V2 perspective, we are on track to file that supplemental PMA by the end of this year. Based on typical review periods, we would anticipate, you know, in the middle of 2027 for approval. Looking at the tech transfer with Abbott, you know, part of that is their lab becoming an FDA-approved lab to be able to run SimpleScreen. Based on where those activities are currently, you know, we are guiding to have that implemented in Abbott's lab in the first half of 2028. You know, obviously there's a milestone attached to that as well, so we are, you know, actively progressing that tech transfer.

[Aaron Elliott, CEO at Freenome]

At the same time, you know, until that tech transfer happens, we will be running all of the samples coming in from Abbott in, you know, our facility, which allows us to scale our lab as well. So there's some give and takes on that timing as it relates to, you know, the advantage of scaling our lab, and then you have the milestone of being pushed into 2028. But those activities are ongoing, but that's where we're guiding as of now, is the 2028 lab transfer for V2.

[Tycho Peterson, Analyst at Jefferies]

Okay. Just last one on Epic. You know, just curious how many health systems you think, you know, can be live with electronic ordering in the first six, 12 months post-launch, and what does the ramp look like for, you know, other implementations?

[Aaron Elliott, CEO at Freenome]

We do know there's a lot of activities currently on the Abbott side for the EMR integrations. We do anticipate those going live in November with a pretty significant number of health systems. We're not giving the exact numbers, but those activities should start going live here this month.

[Tycho Peterson, Analyst at Jefferies]

Okay. Thank you.

[Aaron Elliott, CEO at Freenome]

Thanks, Tycho.

[Operator]

I'm not showing any further questions at this time, and as such, this does conclude today's presentation. We thank you for your participation. You may now disconnect and have a wonderful day.

Participants

Executives

• Bill Taggart, Director of Corporate Communications
• Aaron Elliott, CEO
• Riley Ennis, Co-Founder and Chief Product Officer
• Linh Le, CFO

Analysts

• Puneet Souda, Analyst at Leerink Partners
• Subbu Nambi, Analyst at Guggenheim
• Dan Brennan, Analyst at TD Cowen
• Mark Massaro, Analyst at U.S. Bancorp BTIG
• Tycho Peterson, Analyst at Jefferies