Myriad Genetics, Inc.

Good day and thank you for standing by. Welcome to the Marriott Genetics Fourth Quarter 2024 Financial Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our speaker today, Matt Scalo. Please go ahead.

Thanks, Latonya. And good afternoon and welcome to the Marriott Genetics Fourth Quarter and Full Year 2024 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 .mariott.com. I'm Matt Scalo, Senior Vice President of Investor Relations. And on the call with me today are Paul Diaz, our President and Chief Executive Officer, Scott Weffler, our Chief Financial Officer, Sam Raha, our Chief Operating Officer, and Mark Verratti, our Chief Commercial Officer. This call can be heard live via webcast at .mariott.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 SEC, specifically the company's annual 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. And now I'll turn the call over to our CEO, Paul Diaz.

Thanks, Matt. Good afternoon, everyone, and thank you for joining us. On today's call, we'll discuss our fourth quarter and full-year performance and provide an update on the progress we continue to make to accelerate profitable revenue growth and innovation in advanced diagnostics. First, I want to thank my myriad teammates and our provider partners for their continued support and commitment to advancing our mission and vision to make genetic testing and precision medicine more accessible to help people take more control of their health. Delivering on our mission would not be possible without our myriad teammates who continue to recognize our company as a great place to work, with approximately 84% of our teammates rating us as such. Additionally, Forbes recently named myriad in its list of best employers for 2025. Most everyone you meet at myriad loves what they do, and we see it played out daily as our teammates go above and beyond to serve our provider partners and their patients. This is reinforced by our strong 72 net promoter score, which captures how different external groups, from providers to payers, score their interactions with myriad. Our active pipeline of innovative and clinically relevant products is supported by the clinical studies and data that we continue to produce at an accelerated rate. As we continue to invest, to bring new science to the marketplace, we continue to maintain industry leading margins, achieve profitability, and are seeing growth across the enterprise. I wanna now highlight the progress that Myriad Genetics has made over the past five years. We're a very different company than when we started this journey in 2020, and our proven ability to innovate, grow organically, and reap profitability has set us apart from many of our respected peers in the industry. Top tier science and innovation are at the foundation of Myriad Genetics, as we deliver clinically differentiated products supported by technology to deliver value in real world clinical settings, and enable early detection and better treatment decisions for providers and their patients. Combining our mission and vision with expertise in our lab operations and our technical capabilities, together with our in-depth regulatory compliance of revenue cycle management, we find ourselves in a position to serve our customers at scale and profitably. We continue to deliver our commitment to shareholders as we achieve 11% revenue growth in 2024 as compared to 2023, reflecting both volume and revenue protest improvements across the portfolio. Our focus on profitable growth continues as we generated approximately 589 million in adjusted gross profits, 40 million of adjusted EBITDA, positive adjusted EPS of 14 cents, and maintained approximately 158 million in liquidity in 2024. Continued execution of our strategic priorities and commercial growth strategy support our long-term financial targets, which together with our recent and new pending product launches, give us the confidence we can accelerate growth in 2026 and beyond. Today, we announced an exclusive partnership with Pathomic to apply their advanced AI technology platform to our suite of oncology products, enabling Myriad to provide urologists and radiation oncologists with molecular and AI-powered testing solutions to inform decisions both before treatment, at the time of biopsy for active surveillance, and following surgery or radiation treatment. This complements Myriad's existing offerings of combining germline and comprehensive tumor profiling as recommended by NCCN guidelines for prostate cancer care. With that, I'll now turn the call over to Sam.

Thank you, Paul. I wanna take a moment to recognize the hard work that you and our Myriad team have put in over the past four and a half years to deliberately focus in on areas of strategic importance, divesting non-strategic assets, restructuring to get our cost basis under control, and shifting to invest and prioritize for growth. Thank you, Paul, for your leadership. Next slide. As we move forward into 2025 and beyond, we will continue to be guided by our mission to advance health and wellbeing for all, along with our commitment to delivering predictable, sustained, profitable growth. Core elements of our strategy in oncology, women's health, and pharmacogenomics remain intact, as does our focus on providing an -to-use customer experience across our product portfolio from learning about our offerings, to test ordering, to results delivery, along with patient and provider education and support. We will continue to increase our focus on innovation and providing relevant, compelling product offerings for sizable, attractive market opportunities where we can leverage Myriad's differentiated capabilities and right to win. We will also have a stepped-up focus on execution excellence across the company to support the achievement of our strategic intent and ongoing business and financial objectives. Next slide. MyRISC remains the gold standard in the market for hereditary cancer testing. Building on this cornerstone, our strategy in oncology remains to serve the continuum of patient care from screening and prognostics products, including MyRISC and Prolaris, to therapy selection with products including MyChoice, PreciseTumor, to monitoring and therapy adjustment, including PreciseMRD, for the most prevalent cancer indications, including breast, prostate, and ovarian. We will drive growth by focusing on products that are most needed by community oncologists and healthcare providers, leveraging our broad commercial reach and establish reputation for quality and delivering diagnostic insights with clear clinical utility. As we develop and update products, we will be deliberate about having a clear path to guideline inclusion and reimbursement. Our biopharma service business will help drive evidence generation for key applications while also supporting our pipeline of new cancer diagnostic tests and providing profitable revenue. Next slide. Our strategy for women's health remains centered on providing relevant, trusted testing solutions throughout a woman's reproductive journey and beyond. We're excited about the potential for our women's health business, including the sizable MyRISC cancer screening opportunity related to an estimated 50 million unaffected women in the United States that meet guidelines for hereditary cancer testing. We will continue establishing and strengthening partnerships with hospital systems and provider networks to identify and serve these unaffected patients. We will also continue to bring differentiated, clinically relevant prenatal health products to market for carrier screening and NIPs, such as pre-col, which delivers critical insights at eight-week gestational age as compared to 10 to 12 weeks for other available tests. Next slide. Turning now to pharmacogenomics. Mental health continues to be a significant issue in the United States and continues to be a meaningful opportunity for myriad. One in five Americans develop a major depressive disorder in their lifetime. And our gene site test provides an important tool to healthcare providers to get patients on the right medication faster than conventional medical practice. As Mark will discuss later, we continue to see good demand for gene site and are excited about the momentum we see with biomarker legislation. Our strategy for gene site growth includes continuing highly effective digital engagement from driving provider and patient awareness to provider onboarding. It also includes optimizing patient direct payment options and optimizing revenue cycle workflows to maximize reimbursements. Next slide. Looking ahead, let me share some of the key elements that will enable myriad sustained growth. First, as Paul and I have already touched on, an important part of the growth will come from a stream of organically developed, innovative products. This includes the recently launched pre-col for early gestational age, the upcoming launches of first gene and precise MRT. Our growth will also come from the increased focus on executing corporate programs that have the potential to drive material testing volume increase, including the breast cancer risk assessment program and EMR integration value realization. Finally, in a dynamic fast-paced market where technology is advancing quickly, there will be times where partnering is the faster, more efficient path to capture an opportunity by complementing our own areas of expertise. We will supplement our organic efforts with purposeful partnerships that enable us to serve high growth, attractive market opportunities with a focus of bringing compelling solutions to our targeted customers with speed, with the potential of drawing high return on invested capital. Next slide. The Pathomic collaboration that we announced earlier today illustrates how we will leverage strategic partnerships. Pathomic's validated AI technology platform extracts hidden insights from complex cancer morphological structures to quickly and efficiently deploy new use cases to predict patient outcome, treatment response, and genotype mutations. This image-based AI technology can deliver results one or two days after receiving the digital images from a patient sample. Pathomic was founded around prostate cancer and has a deep clinical expertise and extensive relationships with KOLs in this area. While the current Pathomic model is specific for use in patients with prostate cancer, the underlying foundational model provides opportunities for applications in virtually all solid tumor cancers that are diagnosed through a biopsy with H&E staining. Also, the partnership with Pathomic will help accelerate the timeline for gaining Simon Level 1 evidence for Prolaris. Next slide. For prostate cancer, Myriad is a leader for diagnostic testing at the time of biopsy with Prolaris, which is a molecular test and form active surveillance. The collaboration with Pathomic will enable us to also provide urologists and radiation oncologists with an AI-based testing solution, post-radical prostatectomy or radiation, where we do not participate today, to guide treatment options. So, within 2025, Myriad will have a molecular plus AI solution set to serve the market opportunities for both biopsy, pre-active surveillance, and treatment selection post-radical prostatectomy or radiation from diagnosis to metastatic disease. Also, as Paul mentioned, the NCCN guidelines recommend the use of germline and somatic information to support cancer care. And with our MyRIS and precise tumor tests, we will deliver a comprehensive set of solutions for providers to care for patients across the prostate care continuum, from diagnosis and therapy selection, to monitoring and therapy adjustment, and overtime for remission. And now, as I hand it off to Mark Verotti, I wanna take a moment to thank you, Mark, for your leadership of our commercial organization and for driving meaningful revenue growth and Salesforce productivity over the past few years. Thank you as well for your partnership from the moment I joined Myriad. Really looking forward to continuing working closely with you as our Chief Operating Officer.

Mark. Thanks, Sam, for the kind words, trust, and leadership. I also wanna echo Sam's comments and thank Paul for his leadership, guidance, and partnership over the last four and a half years. Turning to slide 17. Full year 2024 revenue grew 11% year over year, and our ASP remained stable with 3% growth over the year. For the fourth quarter, hereditary cancer testing revenue increased 6% compared to last year, while prenatal revenue grew 12% over the same period. Genesight continued to show strong demand as well, with revenues up 14% in the quarter. I do want to address our slower than expected volume growth in Q4. Our prenatal, genesight, and affected hereditary business remained on track, while our unaffected business slowed due to attention placed on the launch of Prequel at eight weeks gestational age, and EMR workflow conversions taking longer than expected. Next slide. EMR solutions continue to be a key area of investment across our enterprise, as we seek to improve the customer and patient experience. Our efforts with EMR systems are making a difference in the way we engage with our customers, and will be an important driver of future volume growth. As Sam has mentioned on previous calls over the past two years, we have doubled our investment in EMR through engineering, integration, and commercial pull through, resulting in more than 4,500 new clinic locations in 2024. We have system integrations across 15 plus different vendors, including strategic partnerships with key EMRs like Athena, Epic, Flatiron for oncology, and Lumia for urology. This has been an incredible effort by all our teams, although we have seen workflow disruptions at certain health systems take longer to fully integrate, and often take several quarters to stabilize and yield increased volumes. Next slide. In 2024, our women's health team delivered 14% revenue growth year over year, as we continue to sell deeper into current accounts and win new accounts. We're leveraging our breast cancer risk assessment program and establishing key partnerships with hospital systems and provider networks to identify and serve those unaffected patients. Over the course of 2024, our women's health team successfully launched exciting new collaborations, including partnerships with JScreen, CancerCare, to expand access to prenatal and myros testing. Next slide. In 2024, we launched our expanded carrier screening test Foresight Universal Plus, which features an expanded panel of genes, as well as more efficient workflows. Guideline and payer coverage expansion for carrier screening is something we are excited about, as we look for ways to expand access to Foresight Universal Plus. In Q4, we launched our new Prequel product, which delivers critical insights at eight weeks gestational age as compared to 10 or 12 weeks, significantly increasing the provider and patient experience by delivering critical information to pregnant parents much sooner than any other test of its kind. Next slide. In 2024, gene site continued to see double digit growth with revenues up 23% year over year. We continue to work with UnitedHealthcare to find a solution for the recent decision to not cover this category of tests for their patients. Despite this reimbursement challenge, our volume demand remains strong, and we are committed to our pharmacogenomics business and the important role it plays for more than 30,000 clinicians who use gene site to inform how they treat their patients. Data from the Optum study showing increased economic utility of gene site was recently accepted for publication and is expected to appear in print form in the next few weeks. Additionally, new meta-analysis data is expected to be published in the first half of this year with more data to follow in the second half of the year. Next slide. In 2024, our oncology team delivered 24% myRisk affected revenue growth year over year. We saw consistent volume and ASP growth throughout the year as we focused on large account EMR integrations and driving paired testing across multiple products. Additionally, we recently placed our urology team within our oncology team to drive greater synergies in marketing, medical affairs, and sales resources. Turning to prostate cancer on the next slide. There has been some confusion regarding the updated NCCN guidelines, and we want to share that Prolaris is included in those guidelines for low, intermediate, and high-risk patients at the time of initial biopsy. Furthermore, every test in the urology market that Prolaris competes with has the same NCCN category 2A level of evidence. Guidelines also state the need for germline and tumor profiling testing for certain prostate cancer patients. Now that we have added Pathomics AI technology platform to our portfolio, Myriad is the only company that offers AI, biomarker, germline, and tumor profiling testing. Although these updated guidelines were met with some confusion in the marketplace, in speaking with our 20 largest urology accounts, they have reinforced their belief in the clinical utility and relevance of Prolaris with the demand for testing showing no signs of slowing down in 2025. We are increasing capacity in prostate cancer sales, medical fails, marketing, and now AI products, leveraging these investments to support urologists from the time of biopsy through post-surgery with radiation oncologists. Next slide. In closing, we are excited about 2025 and our focus on accelerating integrations, driving depth through paired testing, and our expanded pipeline and product launches. We look forward to myRISGene expansion, Precise Liquid, FirstGene, and MRD in the coming quarters. I will now turn the call over to our CFO, Scott Leffler.

Thanks, Mark. I'll start on the next slide. We are pleased with our continued progress this year, having generated 11% total revenue growth, including domestic revenue growth of 15%. This growth was driven across a number of areas. Hereditary cancer testing revenues grew 11%, while prenatal and pharmacogenomics grew 17% and 23%, respectively. 2024 revenue growth also reflects a positive, sustainable pricing environment, which we have highlighted on past calls. Regarding fourth quarter results, total revenue grew 7% year over year. Domestic revenue grew 11% in the quarter, partly offset by the Q3 of 24 divestiture of our endopredic business in Europe, which removes approximately $11 million of annual run rate revenue. Mark addressed the commercial dynamics affecting Q4 volume growth, and I reiterate our belief that test volume growth and hereditary cancer and prenatal will reaccelerate as the year progresses. We did benefit modestly from a favorable change of estimates from prior periods in Q4, but the amount was less than either Q3 of 24 or Q4 of 23. Next slide. We have been highlighting key drivers for sustainable progress in average revenue per test, including various investments and initiatives by both our revenue cycle and payer markets teams. These include, among other things, working with health plans to encourage their implementation of medical policies that conform to state biomarker legislation. There is a growing list of states that have passed biomarker legislation that lends itself to ensuring access to precision medicine and advanced diagnostics. Generally, no one of these wins is likely to have a material impact on revenue, but we certainly expect the accumulation of many small and medium-sized wins over time to contribute to the rate environment for our product. In Q4, we again saw stability in underlying rates across our portfolio, which represents another proof point for the great work being done by our revenue cycle and payer markets team, along with others throughout the company. Next slide. Our 7% revenue growth in Q4 also translated to 12% -over-year growth in gross profit dollars and a 72% gross margin. That improved 300 basis points over last year. This -over-year improvement in gross margin partially reflects improvements in average revenue per test, as well as overall lab efficiencies. Adjusted operating expenses increase -over-year and were driven primarily by greater investment in R&D and the timing of incremental marketing spend. We continue to focus on striking the right balance between investment for future growth and profitability, as we generated a third consecutive quarter of positive adjusted EPS, reporting three cents in the fourth quarter. It's a testament to the health of the underlying business that we were able to deliver a strong bottom line performance while still absorbing the incremental investment in R&D. Next slide. The profit and cash generating potential of the business are also highlighted by our improving positive adjusted EBITDA profile, with $11 million of adjusted EBITDA for the fourth quarter and $40 million for the full year. We also finished Q4 in a strong liquidity position with $158 million of total liquidity from a combination of cash and cash equivalents and availability under our revolver. We saw sequential increases in cash and cash equivalent balances from Q3 to Q4 and delivered adjusted free cash flow of approximately $10 million in Q4 as well. During the fourth quarter, we also determined that the previously recorded $21 million contingent payment to RAVGEN, which was to be paid out beginning in 2026, was no longer probable. We therefore reversed the accrual and importantly, no longer feel that this contingent payment will impact our liquidity needs in the future. Next slide. For the full year 2025, we reaffirm our financial guidance as previously issued in January with a revenue range of $840 million to $860 million, a gross margin range of .5% to .5% and adjusted OPEX of between $575 million and $595 million. This results in positive adjusted EPS of between 7 cents and 11 cents for the full year 2025. We are also targeting adjusted operating cash flow of between $20 million and $30 million. While we don't guide on a quarterly basis, we wanted to set appropriate expectations for the first quarter of this year. We anticipate generating first quarter revenue of between 196 million and $204 million. As a reminder, we had a total of $7 million of benefits in Q1 of 2024 from a combination of change of estimates and an unusual payer markets win from a payer retroactively granting coverage of one of our products. Those make for a more difficult gross comp in Q1 of this year. We also anticipate a first quarter adjusted EPS loss of between four and eight cents. Now let me turn the call back to Paul.

Thanks, Scott. I'd like to close by saying thank you to our board of directors for the opportunity to serve here at Myriad Genetics the past four and a half years, to my colleagues in the industry and to everyone in the investment community on the line today for helping me to learn advanced diagnostics and your advice over the years and most importantly to my Myriad teammates for their commitment and friendship as we work together to reset Myriad Genetics culture, our foundation for continued growth, innovation and value creation for all of our stakeholders. I'll pass it back to Matt for

Q&A. Thanks, Paul. And as a reminder, during today's call we use certain non-GAAP financial measures, a reconciliation of the GAAP to non-GAAP financial results and a reconciliation of GAAP to non-GAAP financial guidance can be found in our earnings reliefs and under the investor revolution section of our website. Now we are ready to begin our Q&A session to ensure broad participation. We're asking participants, please ask only one question and one follow-up. LaTonya, we are now ready to address the Q&A portion of this call.

Certainly. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. And our first question will be coming from Doug Schinkel of Wolf Research. Your line is open, Doug.

Hi, this is Madeline Moulman on for Doug. Just wanted to touch on the operating expense. On the 25% increase in R&D spend, should we assume this is primarily allocated towards criminal evidence generation for precise MRDs? And given this increase, is it reasonable to assume that SG&A would decline year over year to align with the overall APEX guidance for 2025? And then are you still targeting a thousand basis point SG&A reduction by 2026 versus 2023?

So yeah, the quarter definitely reflected our acceleration of our investments in clinical studies in advance of the law into first gene and precise MRD, where we're continuing to be excited about the studies that should come out this summer. As referenced earlier in the call and in the earnings release, you know, we've made certain changes in operating cost model to reflect the UnitedHealthcare payment changes. So across commercial SG&A and R&D, but I think what you will see is a 25% increase in R&D to support future growth, about an 8% increase in our technology spend and belt tightening elsewhere in the organization for an overall pretty modest 3% increase, Scott, I think we're forecasting year over

year.

So I think that just reflects our ongoing discipline about operating expense management, dealing with UnitedHealthcare change in a pragmatic way, but reallocating our investment dollars for future growth.

Great, thank you.

Two

and

one moment for our next question. Our next question will be coming from Matt Sykes of Goldman Sachs. Mike, Matt, your line is open.

Hi, this is Will Ormeiron from Matt. Thanks for taking our questions today. Just wanted to shift over to hereditary cancer. With the unaffected markets still around 10% penetrated, you mentioned some good traction, your breast cancer risk assessment program recently. Can you talk a little bit more about the progress you're making in that unaffected market and the runway you're seeing for sustained growth there?

Yeah, as we said in the call, we think that that is a real sweet spot for myriad. We think we have a competitive advantage with our breast cancer risk assessment program. And we are gaining traction and in large part, a lot of that EMR integration that we talked about will help fuel that. I think, but as we also mentioned, as you can imagine, switching workflows, especially in the unaffected market where it requires a lot of patient education, it requires gathering family history, there's a lot of ancillary parts other than just ordering the test, but we see a lot of future growth. And as you mentioned, it's only 10% penetrated. And so that is definitely an area that we're excited about moving forward in the 2025, not to mention, as Sam mentioned, the 50 million women who really can benefit by getting hereditary cancer testing.

That's helpful, thank you. And then just to follow up, you mentioned some opportunity from the recent market dislocation in that space. Has that been playing out for you to start the year and how big of a tailwind could those share gains be throughout the year? Thank you.

So as we said last quarter, the integration with LabCorp really just sort of happened here in January in terms of potential impact for customers. LabCorp does a fine job, but that certainly presents an opportunity for people that are looking for a different experience. The Ambry acquisition by Tempest just occurred a couple of weeks ago. And so typically, these kinds of changes in the marketplace take several quarters to sort of play out, but they do provide an opportunity for us, given our value proposition about reliability, consistency, accuracy, fast turnaround times, to gain share in these markets, particularly in

hereditary cancer. One moment for our next question.

Our next question will be coming from Tejas Savant of Morgan Stanley, your line is open.

Hi, this is Madison on for Tejas. Just wanted to start off, as we look out to the next year, how should we be thinking about revenue phasing? And is there any seasonality we should be keeping in mind? And just giving us maybe a little bit of a sense of waiting between first half and second half?

Yeah, I mean, generally, I would say, we made some comments on the call about expecting an acceleration in the volume growth trajectory in the second half of the year based on some of these initiatives, including accelerating ramp from EMR. So that I think will weight it a little bit more heavily towards the second half of the year. Other than that, I would say, bear in mind, some of the typical seasonality that we see as a business, and we have talked in the past about, for example, Q3 being a relatively lighter quarter, and Q4 being a relatively stronger quarter.

Yeah, Q2 and Q4 are typically where we see a little bit more of an out.

Got it, okay, that's really helpful. And then previously, I know you discussed My Choice CDX experiencing a bit of underperformance to the disruptions in Europe, given the AstraZeneca decentralization of their product. I was just wondering if you could kind of speak to the trends you're seeing there now for My Choice and what assumptions you have baked into the guide for how the test should perform during the year?

Yeah, I would say that most of that change is behind us, and so we expect to see stable to modest growth of My Choice going forward. The thing that we're the most excited about My Choice is expansion to other indications where we're making progress to expand beyond ovarian to breast and prostate, much bigger TAMs, and so that's very, very little in terms of growth in 2025 is based on My Choice, but expansion of indications really set us up well for bigger growth in 26 and 27.

Got it, okay, that's really helpful. Thanks so much.

And one moment for our next question. Our next question will be coming from Subu Nanpi of

Guggenheim. Your line is open.

Hey guys, this is Thomas Vonn for Subu. Just

one on Polaris. So thinking about NCCN guideline updates and the confusion in recent months, just curious where your focus is with Polaris today and where can you add the most value this year for growth in that test?

Yeah, I think there's a couple of things. So number one, we continue to work with our KOLs as we mentioned on the call, as well as those that are in charge of writing the guidelines to potentially get that confusion removed. So I think that's sort of step one. I think step two, as we said, we are increasing our investments across marketing, medical affairs, KOL engagement across the board because we're excited not only about where our product sits today, but as well as the announcement that we made with Pathomic and our ability to bring the pairing together of AI as well as Polaris. And then as we also mentioned, also within those guidelines was our ability to bring my risk precise tumor also to the table. So we see this as an area that

we're gonna strongly invest in and we expect growth in the future. Great, thank you. And then my second one's on gene site. So over

the last couple of months, Mary has made it a point to get out in front of investors and customers following some 24 decisions that didn't go your way. Curious if you can share what that time has been spent in terms of where you're spending your attention on your Salesforce or is it being more customer facing or is that time spent in front of commercial payers? And then where have you seen the most benefit given the situation and where will you continue to aim your focus this year?

Yeah, let me clarify. So the Salesforce hasn't changed its focus at all. So the Salesforce remains completely focused on those providers that are treating mental health patients and they've been continuing to do that, which is why the gene site demand continues to remain strong, why they're the market leader. And also unfortunately because of the mental illness crisis that is happening today. Internally as an executive team, we've been working with United. We've had our different medical affairs teams working on data evidence generation, as well as our government affairs team working with advocacy support and so on. So two very completely separate things and we think that's the way it needs to be so that we can remain focused and we can make sure that the patients who need gene site continue to get gene site while we continue to work through this.

Yeah, maybe the up level of the answer a little bit. As Mark stated and I think sort of implicit in your question, we continue to see strong demand for gene site and so our market approach really hasn't changed. What we continue to see is the opportunity to mitigate the UHC policy change. Again, putting aside our continued work with UHC to carve out a reverse that policy, is our buyer market legislation and our advocacy efforts there, which again we're investing more in time and energy in. I would just underscore sort of two things. We have not seen, as we sit here today on February 24th, any effect on this with respect to gene site volumes and we have not seen any impact on our Polaris volumes because of some of the confusion around MCCM guidelines. And in fact, as Mark stated, the underlying strategic premise and Sam spoke to of our ability to bring a comprehensive set of offerings in prostate cancer and other places is really the future opportunity in this company that

we're most excited about. Great, thank you. And one moment for our next question.

Our next question will be coming from Tycho Peterson of Jeffreys, your line is open.

Hey, thanks. I just wanna go back to Polaris for a minute. I mean, can you maybe walk through the exact steps you think you need to take here to get to level 1B in guidelines and do you think this is viable? Is there a timeline on this? And I know you don't guide for Polaris, but can you actually go through the process give us some sense of what you've baked into numbers just given all the moving pieces around it?

Maybe I'll take the first part, Mark, you can take the second part. As it relates to getting Simon level 1 relevance, I think we've been pretty open about it. One of our challenges has been access to the samples that are needed to get that designation. The partnership now with Pathomic who has this deep seated set of relationships, they started with prostate cancer and we are excited and we're seeing receptivity to working with us when you have the combination of clinical collaboration which includes not just molecular, which is our base of Polaris, but combined with the AI element that Pathomic brings. So we haven't quantified yet, give us just a little bit of time. We announced the collaboration formula this morning, but we are confident that the timelines, which we have been working under are gonna be accelerated. And we look forward to sharing more of that with you in the upcoming months.

And as you said, Tycho, we don't guide at the individual product level, but what I can tell you is that we are expecting growth revenue and volume growth from Polaris in 2025.

Thank you.

And one moment for our next question. And our next question will be coming from Sung Jinam of Scotiabank, your line is open.

Hi, thanks for taking the questions and congrats to Paul, Sam and Mark. I'll just ask my questions together. We're hearing more and more about these kind of AI enabled testing technologies, capabilities, et cetera. So just kind of curious with this exclusive partnership with Pathomic, what are the things that you're seeing and why Pathomic the right partner? Is the multimodal testing approach pretty unique to what you guys are trying to do? And then what do you think differentiates the different AI technology platforms out there? Is it just the access to the amount of data, patient data that you have, or is it just some sort of differentiated technology, AI technology platform that kind of provides the competitive advantage? Thank you.

Yeah, thank you very much for the thoughtful question. You know, I'd start off by saying, by the way, we've been employing AI in various parts of our operations for a long time, including a lot of our pipelines for variant calling and so forth. But to your question, why Pathomic? What really gets us excited is we were doing our diligence to look at potential partners is really related to the fact, again, I'll restate, Pathomic started with prostate cancer. That's where they have deep roots. If you look at the Pathomic team, there are a number of folks, this is what they've done for their entire career. Beyond that, the established relationships that they have with leading members, institutes that are 100% focused on prostate cancer, that gives not only the ability to access the samples, but it also gives, once again, a broader network for 100% focused on prostate. So for us, it's the combination of that together with the IT position that as we looked at what they have, which we believe is strong and gives us together the freedom to operate and to build on. And we've been impressed also, we haven't talked about this yet today. The actual product, the way it will be brought to market will be able to start from H&E staining. And as you might know, in pathology, H&E staining is the most foundation or fundamental way of staining. Being able to start from those slides, digital images, to then be able to bring the proprietary AI algorithm for the analysis and interpretation, which can all be in the partnership, which Myriad will then be able to handle, leveraging our commercial channel and our customer service. We think that combination with our channel is what really allows us to feel confident. One further thing, we've been spending time looking at options and opportunities for some period of time, including doing pilots with Pthomic to gain the confidence that they are the right partner. So we couldn't be more thrilled with Rajat, the CEO of that team. I'm looking forward to a very exciting partnership, which we'll be able to share more about in the coming months.

Great, thank you much. One moment for our next question. Our next question will be coming from Bill Bonello of Craig Halem. Your line is open.

Hey guys, thanks for taking the call and also congratulations, Sam and Mark and best wishes to you, Paul. Thanks, Bill. I guess just a question on the CEO transition, which isn't necessarily surprising given the timing of when you brought Sam and Scott on and you've been asked about it a lot, I think, over the course of the last year, but maybe you could give us some sense of why is now the right time, or maybe if I ask it a little bit differently, why is it not the wrong time right now?

Well, it certainly would have felt a lot better before the United decision. But, Bill, the truth is that Sam has done an exceptional job here as has Mark. And there's always more work to be done, there's always more opportunity. But this was a personal decision for me and my family and I got an opportunity to join Cresting Company as a managing partner, which is not typically what an operator like me gets to go do for his last chapter. And so that's really what drove the timing. My confidence in our strategy, in this team, in the platform that we have built, the opportunities that we have are significant. And so, never a perfect time, but it was the right time, given the opportunity that was presented to me personally, and the significant runway that Sam and Mark and the rest of the team have here. Okay,

all right, that's helpful to understand that it was sort of driven by the timing of your opportunity as well. For sure. I guess just, oh, go ahead. Mark.

No, yeah, I mean, that really was what may have been a year from now or something like that, was driven by the opportunity today to pursue this opportunity for myself and for my family. So, thank you.

Sure, okay, appreciate that. And then maybe just in terms of the Q1 commentary, obviously it wasn't that long ago that you updated your full year guidance, and I get it was early in the quarter, but you kind of had every opportunity to talk about Q1. I guess I'm just trying to get a feel for this. I mean, are you characterizing Q1 as a typical Q1, or some of the commentary I heard over the course of the call made me feel like maybe the year isn't getting off to quite as good a start as you would have hoped it was. So, if you can just kind of characterize that a bit.

Well, just to clarify, and sorry if I misunderstood your question, but we had made previously comments about the full year. We had not previously made any comments about Q1 expectations. That's what I said.

You could have,

but you didn't. Yeah, I mean, I think it would have just been premature for us to do that, quite frankly. But really, if you go back to the comments that I made, one of the areas that I flagged was that we did have a fairly significant favorable out of period in Q1 of last year. And so, certainly there's always a possibility that you could get a repeat of something like that that continues to provide a tailwind. But where we said today, we feel like that is gonna make it a more difficult comp of the quarter, and then obviously we're still ramping in some of the other areas that Mark highlighted during the call.

Okay, so I mean, in terms of if the year is getting off to sort of how you hoped it would, I mean, the comp was always there. So just curious how you characterize that going relative to your expectations.

Yeah, we reiterated our full year guide. So nothing has changed in that respect. And as we said, we have been expecting a ramp that would accelerate throughout the year. Nothing has

changed from when we gave initial guidance in our views of the year, or quite frankly, the seasonality that we typically see in the quarter. You know, you have copays and deductibles. If you look back over the last couple of years, Bill, you know, as we talked about earlier on the call, you typically have Q1 and Q3 seasonality.

Yeah, I get that. And obviously nobody brought their consensus numbers down after your guidance, and so that's part of the disconnect there. Well, the fact that

like half the arrows have not updated their consensus numbers is a little bit of a challenge, but yeah, we've scratched our heads about that.

Try initiating into that. In one moment for our next question.

Our next question will be coming from Panit Souda of LeeRink Partners. Your line is open.

Hey, Sam. Yeah, thanks for taking my question, and congrats, Sam and team, and Paul, great working with you here. Thanks. So listen, so my question is really, looking forward, just diagnostics has been relatively spared so far, fingers crossed, just given all of the concerns out there, but just, and questions out there, but just can you elaborate a little bit on the Medicaid exposure? And I'm just trying to understand, how much of a risk would that be if new administration pursues some Medicaid spending cuts?

Yeah, if you think about Medicaid spending cuts as a consequence of block grants or anything, and where our Medicaid reimbursement comes from, it's mainly gonna be in prenatal, and that is not historically where, and I've been on the other end of Medicaid cuts in many other sectors, not where state legislatures go. So, you know, look, there's a lot of questions in terms of policy right now, but when we look at the distribution of our revenues in terms of Medicare commercial and Medicaid, and where in our products the Medicaid revenue falls, we don't think we have a lot of exposure to Medicaid block

grants or some other changes in Medicaid reimbursement. Got it, and then, maybe first time, I mean,

just looking at the portfolio, can you maybe just elaborate on how are you prioritizing investments? And again, when we're thinking about potential opportunities, there's ACOG for NIPT, other things that could potentially be tailwinds, despite the headwinds that you're seeing in the marketplace. So maybe just elaborate, what are some focus areas for you investments-wise? Thank you.

Yeah, thank you, Paneet, that's a great question. And as I mentioned, at this point, I feel privileged that I've been an important part, along with Mark and Paul and Scott and others, of developing our strategy and areas of focus, right? So, in the near term, at least, there is no intention of changing our strategy or focus. You're right, when you talk about we are excited, we've already developed our expanded carrier screening, foresight, universal plus product. So we're ready to catch the wave, if you will, when ACOG guidelines are updated, that's exciting for us. And oncology remains another, probably at the heart of the company still, a great opportunity to build on the cornerstones that we have, and it's not just my risk, it's my choice, we are the HRD gold standard. And we're looking at other opportunities to take HRD broader into the market. We announced with Illumina, I think, a few months ago, how it'll get integrated into their TSO kits as well. But really, it's serving the continuum of cancer care. I'll go back to that, right? Really filling out those gold standard positions with new offerings, which allow us to look at therapy selection with precise tumor to build on that, to get a liquid solution for therapy selection into market in 2026 as well. And of course, there continues to be a lot of real engagement and work on MRD. Again, our first indication that we're gonna bring a product to market is gonna be breast cancer. And we have nearly 20 different clinical studies in MRD that are underway, and a total of more than 4,000 patients that either are in the process of being enrolled. And since you look at multiple data points in the journey of a patient, looking at remission and relapse, we're talking at over 30,000 data points. So the focus there, and then the opportunity again, is really about the continuum of cancer care. And the partnership that we announced with Pathomic, which we're very excited about, complements what we have to give us a solution where, honestly, we were not participating already, right? Excuse me, we were not participating today in post-radiable prostatectomy. So we're gonna have a solution there by the end of 2025 with our partnership, very excited about that. And just kind of a foreshadowing, I think I mentioned in my prepared remarks, we understand that along with the great organic work that we do, that there's opportunities to get to market faster with select deep partnerships. So Pathomic is a great example, but there will be more to come that allows us to accelerate the path that Myriad has been on

organically.

And one moment for our next question. Our next question will be coming from Ben Mee of Stevens.

Your line is open.

Hi, thanks for taking the question. This has been on for Mason. So I just want to start with the launch of Prequel at eight weeks there. I was hoping you'd be able to provide some commentary sort of on what you're hearing from the docs there, just really how that early adoption and March reception has been.

Yeah, let me just frame it by, we launched it in November of last year. So we're still in early innings, but as I call that on the call, one of the keys within that space is that first OB visit is typically at eight weeks. And so historically when you've got a 10 week test or you got a 12 week test, that kind of disrupts workflows. It's not the best for the patient. It certainly isn't the best for the provider. So we've seen a lot of excitement about it. And it is something very unique because of our amplified technology. So Prequel was always sort of one of the best tests out there. So now that it is at eight weeks, we're seeing a lot of acceptance and you will hear more from us in the upcoming quarters. It's just still literally for us to really comment and get into more details.

Okay,

got it. Thank you. And I believe you've pointed to sort of in 2025, double digit growth in hereditary cancer testing volumes and have guided stable ASPs there. One, can you confirm this? And then with some of the initiatives that you have. I don't

think we've guided to, you're breaking up, sorry. I mean, we haven't guided to specific volume numbers Scott has talked about stable ASPs and hopefully continued contribution there. A couple of percentage points if we're continue to execute but we don't guide on specific volumes for any products.

Get it.

Thank

you.

In one moment for our next question. Our next question will be coming from Tycho Peterson of Jeffrey's

Earline is Open. Again, Tycho. Tycho, your line is open.

Yeah, thanks for taking the follow up. Just a question on the LRP, the language you're changing a little bit. You're going from 12% to double digit revenue growth. Can you maybe comment on that?

Well, we took a $45 million run rate hit for United. So that's kind of, you know, knocked us back a little bit. So, and GeneSight has been doing a lot of work and has been a big contributor to our growth, 23% this past year. So, you know, we still have a long-term growth objective of 12, but we think in the intermediate term, getting back to double digit in 25 and growing from there. You know, X. Yeah, I was commenting specifically

on the 2026 and beyond guidance that you have applied. Again,

we'll be launching new products in 26, but you are correct. We have, because of the contribution of GeneSight and because it'll be early in the launches of first gene and precise MRD, you know, we have modified that to double digit, call it 10%, as opposed to 12. Obviously with our expectation that we can get back there quickly. But we were certainly on that path to that and beyond, you know, before we sustained the United piece. And I just want to underscore that we continue to work with United on what we think was an error in their policy making process here. And as Mark talked about, we'll continue to submit clinical evidence and engage with them. And hopefully, certainly by the end of the year, when they revisit their policy, we'll have submitted, you know, two or three different studies that underscore, you know, the value proposition of GeneSight. And quite frankly, get a couple of the points that people have criticized these are the prime study and other things, so.

Thanks.

Thank you.

I would now like to turn the conference back to Matt for closing remarks.

Okay, thanks, LaTonya. This concludes our earnings call. A replay will be available via webcast on our website for one week. Thank you again for joining us and have a good afternoon.

And this concludes today's conference call. Thank you for participating. You may now disconnect.