Myriad Genetics, Inc.

Good afternoon, and welcome to Myriad Genetics' third quarter 2023 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 afternoon on Form 8K and can be found on our website at investor.myriad.com. I'm Matt Scalzo, Senior Vice President of Investor Relations. On the call with me today are Paul Diaz, our president and chief executive officer, Brian Rigsby, our chief financial officer, and Mark Verratti, our chief commercial officer. This call can be heard live via webcast at investor.mary.com, and a recording will be archived in the investor section of our website along with this slide presentation. Please note that some of the information presented today contains 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 report on Form 10-K, its quarterly reports on Form 10-Q, and its current reports on Form 8K. 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'll now turn the call over to Paul.

Thanks, Matt. Good afternoon, everyone, and thank you for joining us. On today's call, we will discuss highlights from our strong third quarter performance and provide an update on the progress we continue to make accelerating revenue growth on our path to profitability. First, I'd like to take a moment to reflect on the great work that the team has done to reposition the company over the last three years. Like many early entrants to a new market, Myriad Genetics relied on its early successes but failed to adapt to evolving market conditions. This created overhangs in the business and complexity that inhibited growth and innovation. Unfortunately, misguided product development, the poor integration of acquisitions, Outdated technologies, deteriorating facilities, and litigation also eroded the brand. To return Myriad to a leadership position, we embarked on a multi-year transformation journey with four key objectives. First, to build and re-energize the team and refocus us on the patients and providers we serve and the mission we committed to. Second, to modernize and expand our lab, IT, and support center capabilities. Third, to restore organic growth and profitability. And fourth, to build the company's R&D and product management strengths. While this hard work continues today, we can confidently say that we have made great progress on all four of these objectives, as well as advancing our mission of Envision to empower patients with the opportunity for better health, wellness through genetic testing and precision medicine. Now on slide four, I want to highlight certain key performance indicators and operational activities that are fueling our growth. First, we have continued to build an experienced and engaged team as demonstrated by our low turnover of just 9.3% and best places to work designation. Enabling our teammates to perform at their highest level by putting tools and resources where they are needed most. as we invested to upgrade our labs, IT infrastructure, and support center capabilities. Driving our double-digit growth has been our focus on the patient and provider experience. Our net promoter scores are strong at 69%. Provider retention is up to 70%. Turnaround times are down to just 6.3 days, and we've added 5,000 new ordering providers to the franchise this quarter. Making it easier to do business with Myriad is starting to pay dividends. as we see market share gains across all our product lines and make progress on large account wins and new strategic partnerships. Our payer markets and revenue cycle teams have been hard at work making sure we get paid for delivering on our mission. Recent highlights included a four-year contract extension and Polaris coverage expansion with United Healthcare, as well as gene site coverage determinations among a number of Medicaid and commercial payers. The team made great progress this quarter on improving ASPs, cash collections, and DSOs. We talk a lot about the company increasing teammate productivity that we see across the entire business. Excluding Sneak Peek, our COGS shrank to $179 per test in Q3 of this year as compared to $196 in Q3 of last year. Our adjusted growth margins improved to 70.4%. And operating expenses, a percentage of revenue shrank from 80% in Q1 of this year to 72% in Q3. And we resolved several legacy litigation matters, which provides more legal and financial visibility and operating focus moving forward. Lastly, we've made significant progress advancing our clinical validation efforts and pre-launch commercial and operational activities for Foresight Universal Plus, First Gene, and Precise MRD for Biopharma Partners. Turning to slide five, Muir Genetics drove significant volume growth in the third quarter across the portfolio as our commercial and lab operations team continued to execute. We are gaining share in the hereditary cancer market, growing volumes 18% year over year in the third quarter, driven by competitive account wins and increased adoption by providers of MyRisk. We continue to see momentum in our prenatal business as well. excluding contributions from Sneak Peek, prenatal testing volumes grew 20% in the third quarter. This third consecutive quarter of double-digit prenatal volume growth reflects ongoing commercial execution from our women's health team as we strive to make it easier for providers to partner with Myriad. Other products like Genesight and Polaris also contributed to our fourth consecutive quarter of double-digit revenue growth. We continue to see our gross margins have been, and we've been diligent in our cost management activities as our operating, as our adjusted operating loss of 2.2 million was reduced significantly from an operating loss of 20.6 million in Q3 of last year. Other highlights from Q3 included a raise in our full-year revenue guidance, which Brian will speak to later, a new four-year agreement with United Healthcare, and a settlement of the RavGen litigation, which now puts that legacy litigation firmly behind us so we can focus on running the business. Lastly, I'm pleased to announce that Sam Raha, our new chief operating officer, will be joining the company shortly. Sam brings over 25 years of general management, commercial, and operations experience to the business, and will hit the ground running on December 11th, building on Nicole Lambert's success in our lab operations, customer service, product innovations as well. Sam's initial focus areas will include improving the patient provider journey and overall customer experience, executing on our labs of the future strategy, and identifying opportunities to strengthen supply chain management and procurement, and helping us to grow our emerging biopharma business. I look forward to introducing Sam to the investor community in the near future, and would like to again thank Nicole Lambert for 22 years of serving Myriad Genetics, its patients, and providers. And with that, I'll turn it over to our Chief Commercial Officer, Mark Verratti.

Thanks, Paul. I'd like to start on slide seven and talk about our core business units. In the third quarter, hereditary cancer testing volumes from our oncology sales team grew 15% year over year, well above the estimated industry growth, which speaks to our enduring franchise and improving brand reputations. Prolaris, our prostate cancer test, continues its momentum with third quarter revenues up 18% year over year. We are pleased to share that UnitedHealthcare has issued a positive medical policy covering Prolaris in the biopsy setting for all risk groups. This policy will take effect on January 1st of 2024 and represents another win for the urology teams that continue to reach patients with diagnosed prostate cancer to provide them and their physicians with important information needed for better treatment decisions. This aligns with several other positive pro-laris policies that were released in the third quarter. Now we'll move to women's health on slide eight. Mary Genetics Women's Health Business serves women of all ancestries by assessing the risk of cancer and offers prenatal testing solutions for those who are pregnant or planning a family. In the quarter, hereditary cancer testing volumes of women's health increased 22% year over year. making five consecutive quarters of positive volume growth. Prenatal volumes, excluding sneak peak, grew 20% in the quarter, with quarterly Salesforce productivity up 25% in women's health and leading turnaround times. It's no surprise that this team continues to outperform and grow our share of these markets. Recently, much attention has been placed on 22Q microdeletion syndrome in prenatal screening tests. We want to highlight that our internal data on Prequel's positive predictive value for microdeletion syndrome is significantly higher, nearly two times that of our leading competitor. Lastly, I want to give a shout-out to the Sneak Peek team for reaching 1 million tests to date, and now that the test is stocked in over 4,000 Walgreens stores, we are optimistic on future test growth. Let's move now to slide 9 and talk about Genesight. Mental illness continues to have a lasting effect on patients and their families in the U.S., as those suffering fail to receive proper medical treatment. GeneSight helps physicians better understand how antidepressants and other drugs will affect their patients. Importantly for this patient group, the test can be performed with a single cheek swab sample that can be taken in the privacy of their own home. In the third quarter, GeneSight volumes increased 19% year over year and 24% year to date, as we've added approximately 4,000 new clinicians to the franchise during the quarter. Myriad continues to build on GeneSight's solid foundation of clinical data, including a collaboration with Optum Genomics to create a multi-phase study designed to better understand GeneSight's ability to improve clinical outcomes and reduce overall healthcare costs. As mentioned at our investor day in September, we are pleased with the positive phase one readout from our real-world study with Optum. I would also like to point out a couple of new partnerships and collaborations on the next slide. We recently announced the collaboration between Myriad and QIAGEN to develop kit-based companion diagnostic tests. Combining our strengths in assay development, clinical testing, and regulatory approvals, we are excited to offer a comprehensive global companion diagnostic solution based on a wide range of testing platforms to our pharma partners. Not only are we excited about the opportunity to better serve pharma partners, but we hope that this collaboration sets the stage for advanced analysis and accessibility of MRD and HRD assays to potentially improve cancer treatment decision-making. Additionally, in the quarter, we announced a new partnership with Onsite Women's Health to launch a new breast cancer risk assessment program to help more women understand their breast cancer risk. Combining myriad strengths in hereditary breast cancer risk assessment with Onsite's expertise in breast health services, This new partnership is expected to deliver personalized breast cancer risk insights to more than 400,000 patients that Onsite currently serves nationwide. I'll now pass the call over to our Chief Financial Officer, Brian Rigsby, to discuss the financial highlights in further detail.