Myriad Genetics, Inc.

Good day and thank you for standing by. Welcome to the Marriott Genetics Second Quarter 2025 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 your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today. Matt Scallo, please go ahead.

Good afternoon, and welcome to the Mary Genetics second quarter 2025 earnings call. During the call, we will review the financial results we released today, and afterwards, we will host a Q&A 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 Scalo, Senior Vice President of Investor Relations, and on the call with me today are Sam Raha, our President and Chief Executive Officer, Scott Loeffler, our Chief Financial Officer, and Mark Verratti, our Chief Operating Officer. This call can be heard live via webcast at Investor.myriad.com. and a recording will be archived in our 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. With that, I'll now turn the call over to Sam. Thanks, Matt.

Good afternoon, everyone, and thank you for joining us. Before I begin, I want to share that I believe today, as I did when I joined the company, that Myriad is really good at a lot of things and we have significant potential, but we have not lived up to our potential yet. I'm excited about the journey we're on to live up to that potential by focusing on high growth market segments and executing with stepped up urgency and strengthened execution rigor. Let me start with our results. I'm pleased to report on the overall progress the team has made, both financially and operationally, in the second quarter. We generated revenue of $213 million, representing an increase of 5% year over year, when you exclude UnitedHealthcare's decision on GeneSight and the divested European EndoPredict business. Growth in average revenue per test during the second quarter, up 2% year over year, with growth across most of our tests year over year, as a leading contributor to our strong Q2 results. This growth in underlying average revenue per test has been enabled by great execution in Q2 and over many quarters on multiple programs that are part of our pricing improvement operational plan by our strong revenue cycle team. There are no material revenue contributions from prior periods. This momentum certainly provides a nice tailwind in the second half of the year and supports our profitable growth journey. Our strong results were also enabled by the actions we have been taking to address the challenges we noted on our Q1 call. I'm pleased that our execution has been better and quicker, contributing to our better-than-projected revenue growth, a step forward on delivering on myriad's potential. Now, I want to talk about testing volume. We continue to have strong volume growth for MyRisk HCT and oncology at 14% over the year-ago quarter. we saw a return to volume growth for MyRisk HCT for unaffected, as our efforts on addressing previously identified challenges with customer workflows, including EMR functionality, are starting to be addressed, which Mark will talk about further in his section. Gene site volume increased from low single digits to 5% growth year over year, as we had anticipated, based on our organization settling in after deliberate cost savings related actions we made in Q1 and our focus on targeted accounts. Polaris volume, as we anticipated, was slightly down year over year against a strong Q2 of 2024 compare, but up 6% sequentially over Q1 of 2025. Volume for our legacy prenatal products, Prequel and Foresight, declined 7% year on year. This was based on challenges we had with implementing an order management system which slowed down orders in Q2. I've been close to this. working with our CTO, Kevin Haas, Mark Verratti, and our Chief Commercial Officer, Brian Donley. We have fixed the prenatal ordering system issue. There's no remaining impact to customers, and we expect to see improving trends in prenatal volume growth starting in Q3. Along with maintaining strong growth for registry cancer testing and oncology, mid-single-digit growth for gene site, and resuming growth for our prenatal products, we are actively executing programs to increase growth for HCT and unaffected and Polaris. We believe these actions will lead to increasing volume growth in Q3 and Q4 and enable us to enter 2026 with momentum. Turning now to profitability. We generated strong adjusted gross margins, 71.5% in the second quarter, or 140 basis points greater than last year, and closely managed our discretionary spend as reflected in our adjusted OpEx line. Ultimately reported strong adjusted EBITDA $14.5 million, or 24% growth over last year, and $0.05 of adjusted EPS for the second quarter. I'm pleased that Marriott secured a $200 million term loan from Orbamed, a well-known investor in the healthcare industry. We ran a thorough process working with AgriCorp, and we're very happy with the number and quality of interested lenders. We're excited to partner with Orbamed on the credit facility which provides us with liquidity and flexibility to support our growth journey. The journey ahead will be enabled by our updated strategy intended to drive accelerated growth and profitability by focusing on the cancer care continuum, as we will refer to it as the CCC. Before I share more about our strategy, let me note that based on our Q2 results and the progress we're making on addressing identified challenge, We are raising guidance for 2025. Scott will share more details in his section. Now, on the next slide, I want to provide a summary of our updated strategy. Since becoming CEO, one of my top priorities has been to work on updating our long-range strategy to provide clarity on our direction for this next chapter of Myriad. Since May, we've made significant progress on advancing our strategy work. While next-level details will be completed over the coming months, The core of our updated strategy is to drive accelerated growth and profitability by focusing on the cancer care continuum. There are three strategic pillars to support its achievement. On the next slide, let me start by answering the question, why focus on cancer? After careful consideration of different possibility, we're choosing to focus on the cancer care continuum for a number of reasons. The cancer-related market is sizable and growing with good reimbursement. We are a pioneer in cancer diagnostics and have a strong reputation for high quality products established over 30 years. We have market leading products for HCT and HRD, and we have extensive commercial coverage with healthcare providers and systems. Now, let me walk you through our first pillar, focusing on the cancer care continuum to accelerate growth. We will leverage our leadership in hereditary cancer testing and increased growth with initiatives such as the Breast Cancer Risk Assessment Program, the upcoming launch of the expanded MI-RIS panel. We plan to expand our testing portfolio in other attractive cancer segments, such as therapy selection, including comprehensive genomic profiling and HRD assays, immuno-oncology therapy response monitoring, and MRD. As you can see here, these are large, high-growth market segments. And though there are other companies in these areas we believe we have the opportunity to build meaningful revenue streams here based on healthcare providers and systems wanting to work with only a handful specialty diagnostic labs that they trust who can provide multiple tests that they need. And we will leverage the established trust and reach that we have with thousands of relevant healthcare providers. Strategic partnerships, such as the one we have with Pathomic, to enable us to provide prostate cancer tests that combine the power of molecular and AI analysis will help us bring compelling tests to market faster. I expect to have more exciting news regarding strategic partnerships to share with you over the coming quarters. Also, as part of this pillar, we will plan to increase our investment in R&D for the CCC and focus on enhancing our commercial capabilities and customer digital experience. On this next slide, let me move to the other two strategic pillars. While we are focusing on accelerating growth in the cancer care continuum going forward, our second strategic pillar reflects our recognition of the opportunity to meaningfully grow prenatal health and mental health revenues at or above market growth. We will do this in prenatal health by leveraging recently launched tests, including pre-poll NIPS that can be performed eight weeks into pregnancy, and an expanded foresight carrier screen panel, both of which have been well received in the market. In addition, we recently commenced early access for our first gene multiple prenatal screen that we believe has significant potential to expand the prenatal market over time and plan to do a full commercial launch in 2026. We expect to continue to grow revenue for our market leading mental health test gene site by focusing on high volume accounts and leveraging state biomarker laws. Building on the success we've been seeing this past quarter, including a number of pairs newly initiating coverage of the test. And while we achieve this growth for prenatal and mental health, while maintaining a disciplined level of resourcing and investment in these businesses, while prioritizing investment in the cancer care continuum strategic pillar. The third strategic pillar is about our focus and commitment to delivering sustained profitable growth. While we will provide further financial detail in the future, We believe execution of this updated strategy will enable us to grow revenue in the high single digit, the low double digit range, and increase profitability over the next five years by complementing the revenue growth drivers outlined in the first two strategic pillars with increasing focus on maintaining financial discipline, growing revenue faster than operating expenses, and strengthening our planning and execution capabilities. We expect to fund near and longer-term revenue growth in part by maintaining industry-leading gross margin profile, which is enabled by low cost per test, leveraging operational excellence, and stable pricing, leveraging strong revenue cycle capabilities. Moving now to the next slide. I've already shared when introducing the CCC strategic pillar why we're choosing to focus on cancer and our strength that we believe we can leverage to drive accelerated growth and increase access for patients. I want to take a moment to share what we're going to do differently from before to enable our intended success. First, it's about capital allocation. We're going to be disciplined in prioritizing investments, resources, and organizational focus on attractive cancer care continuum opportunity. Next, it's about compelling portfolio. We plan to expand beyond the established tests we have in HCP and HRD to complement them with relevant offerings for other important high-growth testing applications. Next, it's about strategic partnerships. Unlike before, we see an increasing opportunity to serve attractive market opportunities in a timely manner by complementing myriad differentiated capabilities by leveraging select partnerships. And finally, it's about execution. We've started to and will think and act with elevated urgency and strengthen execution through enhanced processes, continuing to add the right talent and elevated rigor and discipline. I'm confident that the implementation of our updated growth strategy, based on these three strategic pillars that I've shared with you, along with strengthening our organization and execution, will enable Myriad to drive sustained, profitable growth. Now, let me hand it over to our COO, Mark Ferrati. Mark.