Myriad Genetics, Inc.

Greetings and welcome to the Myriad Genetics 4th 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 Thursday, February 24, 2022. I would now like to turn the conference over to Nathan Smith, Senior Vice President of Investor Relations. Please go ahead.

Thank you, Kevin. Good afternoon, and welcome to the Myriad Genetics fourth quarter 2021 earnings call. During the call, we will review the financial results we released today, and afterwards, we will host a question and answer session. Our quarterly earnings release was issued this morning on Form 8K and can be found on our website at investor.myriad.com. I'm Nathan Smith, the Senior Vice President of Investor Relations. And on the call today with me are Paul Diaz, our President and Chief Executive Officer, Brian Rigsby, our Chief Financial Officer, and Nicole Lambert, our Chief Operating Officer. This call can be heard live via webcast at investor.myriad.com. And 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 on 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 annual transition reports 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 time over to Paul.

Thanks, Nathan. Good afternoon, everyone, and thank you for joining us. On today's call, we will discuss our Q4 results along with highlights of the quarter and updates on our strategic transformation and growth plans. As always, I want to thank all of our teammates for all their hard work and dedication this year. I also want to thank our healthcare provider partners and their patients for their continued competence in us. 2021 posed many challenges for everyone. but I am proud of everything we have done to advance our mission and improve the health and well-being of our patients. When we step back and look at the millions of patients we've reached over the years, the importance of our work is clear. We see an opportunity to reach more patients, lower costs, create a seamless user experience, and combine data from millions of diagnostic tests with other clinical data sets to help physicians, health systems, and payers better managed care. Despite COVID-19 headwinds and inflationary pressures, we saw solid quarterly operating and financial results during the fourth quarter of 2021. In the quarter, revenues of $160.8 million increased 4% year over year, and diagnostic test volumes of $237,000 were flat compared to last year. Importantly, excluding the impact of our divested assets, quarterly revenue increased 19% year-over-year and 34% for the year, demonstrating strong growth in our core business. Average revenue per test in the quarter increased 10% year-over-year, a reflection of the investments made in and the execution of our rev cycle plan. Total operating expenses were $158.1 million, and adjusted operating expenses decreased $6.2 million sequentially to 115.3 million as we continue to manage our costs more effectively and prioritize our operating expenses to our strategic initiatives our gap operating loss in the quarter was 43.1 million with an adjusted operating income that was break even and an adjusted operating loss per share of two cents at the end of the fourth quarter we had approximately 400 million in cash cash equivalents and investments, and no long-term debt. As noted last quarter, our progress toward long-term profitability will not be linear. The COVID-19 virus and its variant strains continue to limit access to providers and patients and has challenged our workforce. This can be seen in our hereditary cancer business as women are visiting their doctors less, delaying routine screening. However, our path of profitability remains clear and our confidence in our financial guidance for 2022 is unchanged and reflects the challenges we face as well as the benefits of our transformation plan. Myriad's position as a trusted, differentiated partner with specialized expertise is underpinned by three strategic priorities. First, we are working to develop best-in-class products, services, and accessibility to accelerate growth and reach more patients of all backgrounds. Second, we are building new enterprise capabilities to accelerate growth and leverage our scope and scale and to capture new market opportunities, including M&A. Third, we are focused on disciplined execution and consistent results as we work to deliver 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 2022 and beyond. Our transformation and growth strategy has been focused on three phases. The first phase, resetting our base of operations, was successfully completed ahead of schedule, reinforcing who we are as a company, developing our new commercial model, recovering test volumes, completing multiple divestitures, and returning roughly $400 million to the balance sheet. In the second phase, we work to elevate our current portfolio to its full potential, debuting a new brand and marketing strategy, restructuring our sales force, enhancing reimbursement and rev cycle capabilities, fostering diversity and inclusion, and launching new and exciting products that reflect our mission and our value proposition. As we enter the third phase and look to accelerate growth, we have the opportunity to expand on the foundation we've established over the past year. We continue to scale our technology-enabled commercial capabilities with an investment of over $50 million intended to drive volume and improve customer engagement with myriad more than 60,000 active ordering positions. We will build on these capabilities to support new product development, consumer engagement channels, the launch and expansion of our unified portal, and the rollout of new sequencing technologies in our lab of the future. At the same time, we are seeking acquisitions, and partnerships, we continue to invest in our technology infrastructure and core capabilities. Our commercial platform is gaining traction, fueled by a $12 million investment in commercial and marketing capabilities. We recently gave guidance for top-line organic growth of 9% to 12% from 2022 through 2024. This begins with stabilizing revenue from myRISC with risk score for all ancestries by streamlining our ordering and billing services, further integrating electronic medical records into our systems, and developing more consumer engagement. We anticipate a 4% to 5% revenue growth contribution from our mental health business driven by the continued momentum in Genesight. For our women's health business, we expect a 3% to 4% contribution in revenue driven by enhancements to our current products, favorable medical association guidelines, and the future launch of Firstgene, our combined carrier and prenatal screening test. In our oncology business, we anticipate a modest 2 to 3 percent revenue contribution through 2024. We expect this growth will be driven by our entry into the tumor profiling market with Precise Oncology Solutions launching in the next few weeks. Nicole will talk more about the power of Precise in a few minutes. Looking to 2024 and beyond, we are excited to pursue additional growth areas such as liquid biopsy and measurable residual disease monitoring, women's health products and channel expansion, and additional pharma partnerships to take advantage of our companion diagnostic capabilities. With that, I'd like to turn things over to Nicole, our Chief Operating Officer, to discuss the Q4 operating results and the new innovations in more detail.