Myriad Genetics, Inc.

Thank you for standing by. Your conference call will begin in approximately two minutes. We thank you for your patience and ask that you please stay on the line. Thank you. Greetings and welcome to the Myriad Genetics Third Quarter 2021 Financial Earnings Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the 1 followed by the 4 on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded Tuesday, November 2, 2021. I would now like to turn the conference over to Nathan Smith. Senior Vice President, Investor Relations.

Please go ahead. All right. Thank you, Kevin. Good afternoon and welcome to the MERI Genetics third quarter 2021 earnings call. During the call, we will review the financial results we released today and after which we will host a question and answer session. Our quarterly earnings release was furnished this morning on Form 8K and can be found on our website at investor.meri.com. I'm Nathan Smith, the Senior Vice President of Investor Relations and Treasury. On the call with me today are Paul Diaz, our president and chief executive officer, and Brian Rigsby, our chief financial officer. This call can be heard live via webcast at investor.myriad.com, and a recording will be archived in the investor section of our website. In addition, following the call, the slide presentation will be available on the investor section of our website. Please note that some of the information presented today may contain projections or other forward-looking statements regarding future events or the future financial performance of the company. These statements are based upon management's current expectations, and the actual events or results may differ materially and adversely from these expectations for a variety of reasons. We refer you to the documents the company files from time to time with the Securities and Exchange Commission, specifically the company's transition report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8-K. These documents identify important risk factors that could cause the actual results to differ materially from those contained in our projections or forward-looking statements. With that, I will now turn the call over to Paul.

Thanks, Nathan, and good afternoon, everyone. Thank you for joining us. On today's call, we will discuss our Q3 results along with highlights from the quarter and our continued progress on our strategic transformation and growth plan. Before we walk through our quarterly results, and the business highlights, I want to thank our 2,400 Myriad Genetics teammates who continue to advance our mission of improving the health and well-being of all of our patients by revealing the answers inside each of us. Because of their hard work and dedication, we are expanding access to vital genetic insights for more patients every day. At the same time, we are enabling healthcare providers to better detect, treat, and prevent disease. Our work matters, and all of us at Mary Genetics are driven by this mission and vision. Despite COVID-19 headwinds and typical seasonal softness, our quarterly operating and financial results were strong. In the quarter, revenues of $167.3 million increased 15% year over year, and diagnostic test volumes of 252,000 were up 15% compared to last year. Excluding the impact of our divested assets, revenue increased 27% year-over-year, demonstrating strong growth in our core business. For the fourth quarter in a row, average revenue per test remained stable year-over-year and quarter-over-quarter, excluding the positive impact of prior period collections of $18 million year-to-date and $8 million in the quarter. Total operating expenses were $199.4 million, and adjusted total operating expenses decreased $1.6 million sequentially to $121.5 million. Our gap operating loss in the quarter was $79.7 million, with an adjusted operating loss of $1.4 million and an adjusted loss per share of two cents. At the end of this quarter, we have $413.6 million in cash equivalents and investments on our balance sheet. And as noted last quarter, our progress towards long-term profitability will not be linear, but our transformation is progressing as planned, and our business units are primed for growth going into 2022. Our path to profitability is clear, and we expect to deliver more consistent growth while maintaining our focus on cost and our customers. During the quarter, we closed on the divestitures of RBM and Vectrum and paid down our revolving credit facility. With all three of these divestitures closed, we can now intensify our efforts to drive growth and begin to look for strategically aligned acquisitions and invest further in our commitment to becoming a more consumer-centric, technology-enabled company. Our goal is to make each interaction between Myriad Genetics and our patients, partners, and provider partners as seamless and hassle-free as possible, while improving healthcare outcomes with the highest quality tests, genetic insights, and services available. As previously discussed, we continue to execute on four strategic priorities. First, we are working hard to develop best-in-class quality products, service, and accessibility to accelerate growth and reach more patients of all backgrounds. Second, we continue to invest in enhancing our enterprise capabilities to both improve patient and physician experience, rev cycle management, our commercial capabilities, and opportunities to innovate. Third, we are expanding access to our genetic insights through new digital tools and beginning to look for better ways to leverage our data to elevate our products to their full potential. And finally, we are committed to disciplined execution on a key set of initiatives to fulfill our mission and drive long-term growth and profitability. We continue to make progress on each of these priorities and are excited about the opportunities they will create in the future. In our women's health division, we're seeing increasing market interest by unaffected women for hereditary cancer tests following the launch of our MyRisk hereditary cancer test with risk score for all ancestors, the first and only test of its kind. Melissa Gonzalez, with the first five months under her belt, is leading our women's health business, and we've already seen marked improvement in our operating results. Employee turnover in this unit has gone from 57% this time last year to now just 8% in this most recent quarter. Beginning this quarter, our new sales team is fully onboarded serving current customers, and actively pursuing new ones. We expect to see continued stability, growth, and improved operating results under Melissa's leadership in our women's health division in 2022. We are also progressing towards the launch of a novel product that will deliver the clinical value of both our prequel prenatal test and foresight carrier screening to more expectant parents. The combined offering will simplify non-invasive prenatal and carrier screening workflows, which currently involves several samples from different tests. Today, only one out of three patients undergo carrier screening and non-invasive prenatal screening during pregnancy. This process is complex and time consuming, requiring three samples from two parents. Our new innovations deliver the key clinical content of prequel and foresight with a single maternal sample. The offering will provide a comprehensive assessment of a single prenatal test that is simple, accurate, and allow more patients to get answers fast. In oncology, we are pursuing a $5 billion market opportunity in tumor profiling as we prepare for our launch of our combined somatic, germline, and companion diagnostic tests for ovarian cancer patients. With this new solution, NeuroGenetics is advancing precision oncology. teaming up with Illumina and Intermountain Precision Genomics to merge the power of companion diagnostics, next-gen tumor sequencing, and world-class testing services. We're also excited about developing risk score risk stratification capabilities. With risk score, clinicians can gain critical insights to helping treat women with increased risk of breast cancer, but who do not have likely identifiable pathogen variants in one of their breast cancer genes. Our customers are working and collaborating with us closely, providing valuable feedback to ensure we meet their needs both now and in the future. They are also embracing our current portfolio, and our field teams are gaining traction with a large number of institutional wins at major health systems. In addition, we applaud the new NCCN genetic guidelines, which now apply to all individuals with a personal history of colorectal and endometrial cancer. The new guidelines apply specifically to those with a gene mutation prediction score greater than 2.5%, regardless of age. This was a significant step forward and a win for patients who can benefit from our oncology tests, expanding the patient population that qualifies for the test. In urology, the new NCCN prostate guidelines are favorable for both our Polaris prostate cancer tests, as well as the MyRisk hereditary cancer test. NeuroGeneX is the only company that can offer both the truma profiling and hereditary cancer test to urologists, as well as companion diagnostic tests for therapy selection. We continue to lead the biospace for patients with prostate cancer with Polaris and look forward to continued growth there. In mental health, our gene psychotropic test is seeing accelerated demand. This is a result of the test effectiveness in helping physicians better determine patient response to mental health medications with just a single sample from the patient. In addition, our ongoing commercial transformation has been a key business catalyst as we've right-sized our field sales force, expanded inside sales capabilities, and executed on a robust digital marketing plan. We are now seeing and meeting patients and clinicians online where they are looking for mental health treatments more and more. Volumes for GeneSight are growing in new provider segments including general practice physicians and nurse practitioners. Digital ordering has continued to grow and involve currently accounting for 10 to 15% of all GeneSight orders. Around 30% of our tests are now home-based kits. Our recently announced gene site test, including ADHD, is on track to exceed launch objectives in both projected and volume and revenue. We have prioritized collaboration across our business units to determine how each of our segments can grow substantially together and individually, and we'll have more to speak to that in the future. As we move forward, we are establishing a consumer-centric and tech-enabled approach is our foundation for future relationships with customers, physicians, and to ensure long-term growth and profitability. We're also focusing on reimbursement and cost of goods sold to help generate margin expansion. Our transformation plan is progressing as expected, although there remains to be a great deal of work to be done. We have successfully reset our base of operations, and refocus our organization to reduce complexity and cost and better serve our customers. We are now turning our attention to accelerating growth by investing in innovation and technology, including more customer-centric tech-enabled commercial capabilities and strategically sound acquisition opportunities. Once again, we had a strong quarter as we continued to execute on the plan that we laid out for investors in May. Our commercial transformation is starting to take hold, as you've seen in mental health, and we have a trusted brand and strong product portfolio, both of which continue to grow and enable us to fulfill our mission and expand our leadership in genetic testing and precision medicine. I'd like to now turn it over to Brian to discuss our Q3 financial results in more detail.