MYGN - Earnings call transcript Q3 2018

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Operator

Ladies and gentlemen, thank you for standing by. Welcome to the Myriad Genetics Third Quarter 2018 Financial Earnings Conference Call.

During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session.

As a reminder, this conference is being recorded, Tuesday, May 8, 2018. to Investor conference Relations. like Gleason, to now President, Vice would turn over the Scott I Please ahead. go

Scott Gleason

Thanks, Gwenn. name Good of Genetics and fiscal morning am Investor and welcome quarter I earnings to Relations. XXXX call. Vice My the is Gleason, third Scott President the Myriad

after During call, today, review will host results we the the we financial a will released we which question-and-answer session.

Officer in Presenting our a chance be President release, be Myriad can be found Executive earnings website Vice be will archived to section of it in Financial being of myriad.com. President call via section myriad.com. the Bryan live is had This the review not at Mark Relations you've and the webcast Investors from Officer; Development. If Chief Dechairo, today website. heard Chief The at our and Investor Bryan can will of and Capone, our call Clinical Executive Riggsbee, recorded

the and current These Reports our that to We contained or on are over XX-Q future financial from documents the the documents Report these company. to identify reports with from differ you results and there's that, to section information statements. or on call forward-looking based company's company note cause Mark. statements on pertaining could With the its results in projections Form of may specifically Quarterly forward-looking a actual the current materially the turn on materially regarding reasons. events pleased Securities on performance call events some to the X-K. XX-K, In and to website presentation of be Commission, actual from I'm the Form important adversely contain risk refer following today call its to These other earnings Form will the factors variety of our those which Exchange of projections future a X-K. time that today's slide filed expectations, addition, the time and management's files Annual or Investors differ presented and statements may Please the expectations on and for

Mark C. Capone

I and randomized Bryan Thanks, share and Psychiatric key of financial to Association by revenues Dr. GeneSight provide we which the financial fiscal after Riggsbee today's and again at with Vice by results providing of Scott. and call overview of American third will Dechairo, per third presentation finish would quarter of highlights once XXXX, million our expectations we will released an Bryan with guidance the Myriad's business like data of from earnings controlled trial $X.XX. the start Development. Clinical exceeded the adjusted yesterday President In Executive quarter, $XXX.X of meeting the

approximately with this challenging the weather in into solid to by upon pleased negatively are we the We impacted quarter believe X% performance test States across the volumes we Based strong the fourth which and $XXX to share range again earnings $XXX million [$XXX this for and to to our previous million range of compared $X.XX our $X.XX. of revenues to now of $X.XX outlook guidance to are million million of adjusted to our X%. results raising quarterly third heading fiscal financial and previous and given trends $X.XX $XXX are conditions compared per once $XXX strong United volume guiding year (sic) million] quarter,

new exceeded XXXX fifth the weather that quarter. for the quarter. year-over-year on From reimbursement in to growth stable and once our improve straight upon five foundation, challenging from a Volume winter target. Elevate grow and continued solid product the second was expand expectations profitability progress volume, our our new increase we co-pay for products, RNA third hereditary kit on cancer majority in we to quarter of again hereditary critical significant relative cancer program. perspective, resets the the basis During a the grew the seasonality the with third Pricing X% factors quarter, success given revenue for our outperformed a quarter, quarter make international the persisted to and and typical deductible build

conditions, – opportunity remain in market strong weather penetration. saw about volume initiatives trends deeper we strategic riskScore and normal for drive During remained the to including encouraged

riskScore, In the accelerating fact, two we Preventive primarily last due growth to in quarters. our saw Care segment

the greater trends we saw February, to initiated than targeted CDx the we sales breast training metastatic of the mid-February. our end breast completion BRACAnalysis With of metastatic approval FDA cancer of CDx two-thirds a in rollout cancer. following who indication, increasing BRACAnalysis approximately treat and oncologists demand At force of of X,XXX

saw quarter third cancer As metastatic XX% we a in breast compared second to quarter. the the increase result, testing in

We expect physician education the fourth of efforts we direct-to-patient upon fiscal initiated this April. our volume marketing launch to the campaign based quarter in and which increase our in

trajectory double-digit samples with X,XXX over to Moving new product and new a March. at test year-over-year volume at records rate new growth in the on demand accelerated strong second weekly per again its record our volume and growth, quarter. once GeneSight continued to month week grew compared

Our positive interest clinical continues top-line utilization. in to increased result randomized results from trial and the

for revenue, and new for DA the total, of with company. overall – new and which volume standard-of-care also NCCN we of trends new product patients to the prostate Prolaris, reimbursement broader products XX% risk Prolaris make records in the both cancers. products. treatment accelerating support toward Vectra low In for coverage Guidelines new both and volume showed favorable In sample With volume the new decisions growth. Additionally, sequential intermediate test third were our continued fiscal with of XX% represented double-digit strides total quarter, as

for of use broad and as NCCN targeted Guidelines patients year myChoice every to urologists cancer testing Clinical Additionally, major use Urology the patients American diagnosed the guideline Plus biomarkers paper in represent country. position prostate therapies. Association in a XX% cancer urology These turn the in that were LUGPA two identify endorsed physician prostate groups: by of HRD the cancer and the such in specific of hereditary XX,XXX support of

these quarters. coverage coming the tests we ability in With these confident our new guidelines, expand in are to reimbursement for

have medical our randomized from to their we several showed compared payers the GeneSight, several update history. first ability yesterday trial American in improve Medicaid Blue payers. a a Association these physician outcomes in landmark Blue data upon presented already drug to significantly Cross guidelines when decision arm and fact, XX GeneSight at pharmacogenomics seen including of results the resistant policy regional policies based the patients Shield prospective The Psychiatric positive controlled control we largest With plan states and In meeting. the from treatment study optimized in the depressed Prolaris

the in pleased we to manuscript data, this coverage top fiscal for decision notified have with of of am announce come of the We around a region and quarter. GeneSight publication have year details I been Mid-Atlantic our now that XX GeneSight end this the anticipate RCT more Based submitted a to upon payer XXXX. commercial from strength

payers upcoming Additionally, a we could publication controlled randomized of believe for additional continue catalyst be the to with the trial further a dialogue and very productive have data coverage.

which the Union We evidence also have including economic dataset, economic supporting health the publications been already additional Medco have Health GeneSight, provided will Optum upon data recently additional strong which Services and for based the the studies. add to health by believe submitted we

than are more per in coverage to GeneSight, Overall, for reimbursed responsible are continue care for to tests primary results broad care submitted ability We the the our GeneSight. at publication demonstrates by confident physicians study psychiatrists revenue. believe IMPACT a which compared of for have ordered primary when that to IMPACT have coverage for XX% antidepressant we better in even over is annual we current volumes, year million using physicians prescriptions. product could represents which publication Lastly, patient expand fully that $XXX ensure

EndoPredict, end coverage approximately increasing market. LCD for of Medicare XX% a effective at the to became of Lastly, U.S. the total January, reimbursement

strategic under as we a our our Elevate our recently are conducted operations. Moving international XXXX a result and review significant on international restructuring a to business, implementing of program,

scale to our focus is initial reminder, and by cancer Melanoma, service a costs Consistent hereditary will facilities. multiple based ongoing Prolaris a extensive laboratories. which upgrades can partner, on avoiding including on X, performed diagnostic strategy with in we provide future and offerings in the our a our have performed in reduce Thermo companion will our of more our tests by technical our laboratories tests strategy, ongoing laboratory economies technical QuantStudio in the As be myPath efficient marketed developed kit Fisher. The and shifted and strategy that and EndoPredict, development be including U.S. international U.S.

to As have end the be occur end of and a is will the the Germany which fiscal closing consequence, we our in XXXX. by laboratory by year of first calendar goal year our clinic quarter the of German Munich, the selling

clinical to in million continue kit products. in the generate clinic for facilities guidance we reflect will revenue revenue in restructuring our services revenue. to our breakeven Cologne, and will This support $XX provide reduction in earnings. in and will charges. manufacturing laboratory perspective, this a onetime Therefore, which will year XXXX, per financial is August, From and Germany generates pharmaceutical some a We have

from revised patients. Japanese advantages and However, develop market were business, to cancer international laboratory one incremental tests. growth. to the the diagnostic the Lake Consequently, pre-market for States in regulatory for receive market Continuing test in give issued and Also testing a draft approval prior our in largest Japan We XX,XXX breast three Labour and has distributor offering approximately breast approved opportunity. test City guidance business, BRACAnalysis companion Inc., in Japan EndoPredict quality us the through Welfare expertise were the HERX-negative Myriad's encouraged the Japan one cancer, that of market. expect cancer still our similar was SRL pleased women we our to business, this approval prognostic regulatory signature regulatory Every that improve year international long-term high perform competitive will as our significant while HERX-negative initiative strict with now in representing this of the the list metastatic commercial believe Ministry international Japanese to Health, a CDx profitability which in breast launch. ultimately NICE laboratory. infrastructure our prognostic needed providing significant we United we plan requires to in market Salt framework of we test metastatic distributors for

We and to expect optimistic that are this summer included. continue in draft the finalized will be to be EndoPredict

significant volumes. Elevate are reminder, meaningfully year-over-year expenses XX,XXX progress adjusted of a make breast year As U.K., despite patients would cancer $X.X trend we for decline that continue and breast operating the in again, a qualify testing there down, With saw basis, million per with higher cancer potentially to prognostic signature. XXXX, on yet a

XXXX. move As fiscal of from year announced Francisco Vectra service the to second fiscal customer XXXX plan end City. last San project groups we and our to initiated customer the complete service the quarter, to DA half in laboratory of a and We year laboratory have of move Lake by Salt group the the

additional that multiple anticipating are projects, which we XXXX. discuss, addition, significant fiscal cost Bryan deliver savings In in will will

the confident with in we business exceed With in extremely expectations. already $XX Crescendo additional fiscal XXXX, XXXX. million XXXX the remain to international projects financial I fiscal we pleased our Overall, implemented our in improved fiscal restructurings, income very in operating planned achieve continue and the by progress as ability and am for to projects

our begin positioned the are XXXX I with to results further in on to assessment quarter we third new increasing that, Elevate hereditary our a year the the solid fiscal expanded Bryan a in call financial for product profitability. strongly we transition additional year more to and As our will the program of coverage cost strong savings updated outlook. prospects and fiscal With and XXXX, guidance over significant now commentary from volume financial foundation, reimbursement enhance detailed growth, fiscal turn provide XXXX cancer

R. Bryan Riggsbee

results. overview our by in-depth would more I a third like to Mark. financial fiscal quarter of Thanks, start providing

compared offset product X% new in revenues prior cancer $XXX.X the million being quarter revenue and of mostly decline cancer to year-over-year, million same with year-over-year in a hereditary pricing hereditary growth total Third of volume period growth. the $XXX.X the in year, decline by

year-over-year impact given been and given in to pricing. revenue given test million, revenue quarter XX% attributable believe Hereditary by our a typical the pricing. believe revenue sequentially X%. overall Volume our million, volumes In we we in new stable decline third seasonality revenue despite very favorable cancer typical challenging to we in volumes negatively impact, $XXX.X the the absence $XX.X to of GeneSight, mix. with strong basis weather winter weather was were sequential this lower the quarter, was less quarter. quarter exceeded straight sequential that revenue relatively would the record achieved pleased and quarter payer fifth for X% the severe approximately volume flat headwinds, weather of basis, quarter We we grew third the saw on year-over-year. for and have which and modestly with the GeneSight in the a in our was impacted so conditions the quarter in expectations weather grew attributable year-over-year seasonality trends quarter up entirely a was the On

volumes we reimbursement once is recent improved but revenues the was of expansion strong ordering strong ordering ordering data XXXX. the of $XX DA The revenue were total was future increasing payment this third Medicare top-line to trend new new and Rheumatology saw the up in and Improved traction coverage XX% is year-over-year reflective set Much trial X,XXX was up the million also PAMA the an to for revenues. DA College growth. we under additional in in growth was over France which received third have the year-over-year, control PAMA, increase million relative U.S. and quarter a quarter double-digit revenue and quarter, was grew increasing year-over-year. data. demand volume received with attributable of reflective to meeting average we third favorable XX% strong sequentially in of price fiscal $X.X under $X.X fiscal intermediate test physicians the EndoPredict believe EndoPredict Prolaris' growth and randomized patients This We attributable XX,XXX volume which double-digit the response Vectra the million, again volume Vectra a quarter strong in was quarter physicians increase the record XX% third increased indicator sequentially. of quarter in of doctors. rate sales leading the the the supporting XX%. with strategies. in Medicare's renewed quarter American and was Medicare to reflective we a positive in and selling at and physician new Total of fall

revenue margin Once at XX% our from XX.X% were was pharmaceutical our third Gross million new RBM year-over-year would which our the $XX.X clinical business financial with strength metrics in offset from as trial growth at a partners. Lastly, was relatively was margins production clinical product quarter, with this our result of grew in of activity XXXX Vectra to associated well Prolaris. services flat and to pharmaceutical our DA were efficiencies hereditary increased robust quarter. third tied like the lower year I in strong again pharmaceutical fiscal The Elevate with and XX.X%. revenue discuss pricing for reimbursement our quarter gross process and services initiative continued quarter, last headwinds Myriad clinical now year-over-year. division, as for cancer and increased by as the

On basis, year. to to of of expenses of GAAP last share fiscal the GAAP for on Adjusted an quarter were adjusted research reducing $XX.X relatively million million program. the expenses, the – administrative the quarter a cost. million to third almost $XXX.X million $X.X result development compared $XXX.X non-GAAP of Adjusted quarter in were compared fiscal and Moving third general our $XX.X was declined in the last million million year, our this in XXXX compared in expenses third again, basis, third in Elevate $XXX.X SG&A last $X.XX XX%. operating $XX.X a quarter third the compared our million was SG&A year million third the in quarter million initiative development quarter significant $X.XX quarter per operating year. On to fiscal of demonstrating research $XX.X of our and quarter was to million flat adjusted reduction to and $XXX.X increase XXXX. was impact the year. entirely expense was compared earnings and expense $XXX a expense This sequential this of last

sequentially Our fully to diluted increased count outstanding. million XX.X shares share

to of continue as prioritize We near debt a use term repayment cash.

calendar result track This the or increase million remain million new repayment internally to of the to off net We on XXXX. quarter being $XX including as This credit by $XX deploy additional debt the $XX paid capital, potential our million. Assurex acquired developed our our a of to will offset milestone completely end of million by $XX for credit facility year by balance facility on payment have the final increased flexibility products.

was the balance cash and cash million, million of quarter which $XXX the the equivalent Our at end $XXX third second compared of quarter. to the end at

flow the per million $X.XX We share. trailing which quarter flow of or the our earnings in our cash continued cash cash adjusted XX-month free free our to significantly $XX share. adjusted over flow and generate free cash in per $X.XX understated meaningful share, flow fact, our EPS significantly was adjusted per higher per Historically, than have free approximately share, with was

to quarters trends. our the on business reflect the XXXX to guidance, Moving trends strong of we year demand and the year fiscal saw financial are raising guidance in for strong current we three first fiscal

Our $XXX XXXX per compared revenue for increasing guidance From fiscal earnings to $XXX million previous million, previous relevant million to guidance new annual an guidance guidance from is $XXX and adjusted like fiscal This approximately I to of to to adjusted we share translates drivers would guidance our fourth $X.XX. $X.XX. our quarter $XXX range per million guidance for $X.XX share our year are earnings to $X.XX to of million. $X.XX earnings revenue $XXX to financial to of of $XXX of our discuss million the guidance. to now $X.XX perspective,

sequential in up-tick to patient growth, would breast growth we upside breast pricing metastatic sales reflect once effective, expect BRACAnalysis If testing our for stable and modest sequential significant and seasonality hereditary test revenue our more guidance. perspective, cancer a digital cancer are marketing patients. metastatic volume driven for initiatives cancer cancer CDx by again to hereditary our a from see expect First, and

volume Prolaris are sequential demand growth Vectra DA, revenue and and trends anticipating and we For April. in March given recent GeneSight,

For when at of billing impact payer GeneSight, XXXX decision systems commercial in also quarter are we the coverage results the updated. first assuming will that fiscal the are

in anticipate improved For improvement and revenue reimbursement EndoPredict, international U.S. January the markets. access given became we the in LCD, continued effective which Medicare in

due expecting versus a clinic quarter reduction clinical in and lower fourth clinical patient Finally, the are segment the trial and in seasonally we fiscal spring services with revenues months. lower reduced revenues pharmaceutical winter in visits revenue to

operating we increase track progress savings our $XX profit XXXX Elevate to fiscal fiscal least million target year our on exceed this are our Elevate and on XXXX, in the XXXX. under to achieve at positioned Turning million $XX to program for year by and cost

changes strategic Mark the working Beyond laboratory of DA the and on move, a additional we to international and discussed by number our cost-saving initiatives. operations are customer Vectra service

One and our significant more operations. protein result laboratory levels. world-class cost changes RNA our for are These we have programs of in times production quality significant lower major will maintaining DNA, saving, the initiated improvements process laboratory while turnaround

management program, productivity. of a these no production increase organization commercial or CRM cost to made process enterprise-wide XXXX. our fiscal the for Furthermore, we sales we representative software upgrades the XXXX result salesforce.com. fourth savings and our to are in early process transition best-in-class customer system, in have but only will will We support and single will system, also year fiscal multiple to in implementing longer sales CRM phase decision relations not entire have this into platform We the them believe of laboratories quarter new as

could new platform greater evaluating throughout and XXXX software efficiency and initiative, out are lead rolling this enterprise-wide year savings. be which to will fiscal We other

year I items our that like financial guidance. fiscal pertain Finally, to would discuss to two XXXX

goal earnings. estimate million first We will and sale the plan German First, XXXX in in fiscal mentioned, the by to XXXX. year we of generate be to fiscal $XX current to that clinic sale approximately and neutral will as clinic, revenue pursue quarter is Mark our complete to year

hereditary other Secondly, be revenue Myriad been other to new transition for creating eliminated and all like XXXX. impact debt the ASC matched will first business a in be collection item. for will for will only businesses, XXX, standard we year historical occur accounting implementing ASC cancer will the be has bad of experience already all implemented cash for since standard, products. contra-revenue fiscal will the which XXX, our quarter This our revenue Under claims

share. would been XXXX, For year XXX debt in example, year and we two and expense. have in German would XXXX an XXXX be earnings cancer administrative but clinic adjusted months applied no changes. the sale our guidance ASC and fiscal expect decline fiscal result will we a with in throughout fiscal anticipate of reflect approximately was the if to bad have revenue with financials, to In expense The no million impacted of fiscal of meaningful per of summary, $XX been result of offset these impact net general the bad as change reduced the I elimination our revenue we strong to and and year am hereditary anticipate exceptionally our lower approximately guidance In adjusted to financial conclusion, $XX impact $XX items million pleased million these first to our earnings our should debt in XXXX. performance nine

in excellent improved would fiscal improving to review RCT strong potential new we As transition foundation, Elevate provide call opportunities we growth, Dechairo Dr. data. the that, to With for a GeneSight over XXXX, are given I XXXX. to volume year product with the a Bryan and hereditary turn solid operating of like cancer position efficiency reimbursement into

Bryan M. Dechairo

Thanks, randomized the background the need clinical with trial, GeneSight for product. Bryan. I'm controlled excited results to provide beginning some from the the on broad

XXXX. significant you and decreased depressive than the such disabilities regulators. productivity sleep as almost currently Over Psychiatric United a From lifetime, leads costs XX These state free in one $XX,XXX goal Studies pain, exceeds well XX% depressive significant and between cost, in indirect ancillary XXXX impacts dramatically, "Treatment cost medical should of healthy aimed the increased workplace which depression following the to to clinical inducing leading in episode." back that than The As for related have disorders conditions States medical disability. in form a as Association for develop most major Depression physical of American and are increasing other with in necessarily perspective, major of patient in the phase being Consequently, to do quote, States that physicians $XXX small class total With acute United not the Guidelines depression second cost be The prescribed and of Treatment physician is of Americans drugs is as antidepressants at problems lipid achieve treating costs focused is There societal medical total directly severe and symptoms. in treatment will common many greater that documented long-term total five changes know, depressed disorder one remission the depression I are improved evidence economic strong billion of states a in shown for the outcomes. symptoms already cost. of depressive rising is most correlate the on greater per achieving remission a year. remission. one Americans.

determine assessment than used model exceptionally health performance. are plans star to used These healthcare our NCQA. transition more fact effectiveness they ratings discussions of importance care health for the to due we the this in information of Additionally, with and report for their the to and data top have that by The or to remission set, commercial Committee to Quality Medicare value-based to Advantage. National payers, as a are data need system important NCQA quality plans feedback and makes national Assurance, the to response quality on U.S. and HEDIS, measure received measures measures our XX%

provide clinical the historical studies. Before antidepressants I wanted some context on study actual review I result, to

symptom studies last endpoint the for antidepressant medications the for analysis submitted of significance studies, of the nature remission. XX to past antidepressant subjective response statistical is We registration of the for in show the FDA inconsistent an to improvement, performed studies during endpoints the Given XX approved three key pharmaceutical years. it common and

and For these statistical the GeneSight in compared approved FDA significance medications – symptom comparison Despite response study. to significance a lower drug in improvement. bar showed arm placebo, the showed significantly for in these physician like studies in these optimized XX% first, only significance XX% showed not remission. showed studies XX% only significance when

drugs the study which in outcomes improvement these the medication. active is included antidepressant expressly of of to studies. and the show statistically medication comparable Lastly, were state within unable significant classes against generally comparator in guidelines Consequently, drug the was of APA most between classes effectiveness

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discuss of Now, the trial. I the would GeneSight controlled like to randomized details

at greater trial change Depression a line medication. to into sites to similar institutions rigor score. Patients controlled and to score; defined disorder from was randomized at that including and GeneSight-guided leading was the the is GeneSight XX randomized as one evaluated on key the have any XX HAM-DXX Importantly, greater defined of than The score National which less over members symptom score depressive study patient's included the the scores, be related or of study blinded depressive symptom conducted defined as treatment-as-usual which pharmacogenomics patient major or raters eliminate in equal and the percentage academic as with the or HAM-DXX this of both Network Centers. equally who had XX% of In including of baseline. in a to scale study, a baseline patient than clinically having the screening symptom have pharmaceutical study primary to a symptoms order largest at remission, in HAM-DXX failed response bias. the arm the which The FDA. HAM-DXX with with which the equal trial eight their for three the is psychiatric nation's least were the with and approval QIDS-CXX weeks key arm were the performed central and be to moderate study patients ever of seven; conducted enrolled approximately decreasing X,XXX least design than their endpoints would to treatment improvement assessment from reduction to patients a is a HAM-DXX to Overall, as seeking patients

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toward arm. significant improvement knowledge all performed a was in that a relative to treatment-as-usual the and symptom to significant a active a improvement treatment-as-usual significance. this the statistically Importantly, trending relative better slide. arm an the color explanation worst is symptoms based entering in technology shows in statistically to GeneSight-guided GeneSight improvement our in remission medication rates improvement results and improvement to the highly first The the in areas, on can time would that trending the improvement on XX% in what three response statistical be improvement statistical depression. led and showing an taking point a when arm This the left exactly demonstrated Impressively, are towards outcomes patient response rate XX% remission to has compared for the study. was upon The symptom arm expect. you chart for arm significance time eight-week drug in The relatives seen the GeneSight after the

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when is study significant result, green diluted As patients by on improvement the that a XX% of red for entering the yellow medication. the symptom enter analyzed, patients on cohort entire medications or is the

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Patients and remission represent see economic the to continue symptom that the Moving the drive benefit. response payers, to improvements XX%. are of of data in rates next rates at XX open all improvement with can weeks health real-world These major of because XX% the on the XX%, important results clinical see of they label to slide, study. durability you endpoints period results these across of three

year. $XX,XXX important into material provide represent depressed per results trial very in savings treatment-resistant patients a an payer cost discussions. healthcare increase economic of to total reminder, system XX% a difficult-to-treat for economic Therefore As benefit. these patients these rates the is a positive a our Translating remission clinical health for step

included, As treatment-as-usual. productivity greater savings in workplace the savings patients first to $X,XXX If previously according even are are treated compared published, utilization of the for in $X,XXX GeneSight combined at savings first savings. in prescription exceeds drugs year the and to the year healthcare

medications in mentioned, study additional controlled economic this data of rates level response that randomized them coverage identify combined and be utilizing medications. economic the landmark to an that with ability will new these improve current a result broaden to on conclusion, and are will months health standard to In over one extremely when findings provide believe evidence improved base. health it pleased durable payer results As and The time, of catalyst congruent showed establishes with remission a trial. Optum patients GeneSight significant from and the publications. this the to future switch we replicate with care coming incongruent published study a the We

expectations and to seen We payer ahead occur RCT. prior national the already publication a this of with large the have of

back will physicians. Q&A. guidelines Scott the society be turn Additionally, in professional pleased we from believe the for expanding I adoption deepening that, instrumental am study call over to to and medical With

Scott Gleason

Thanks, Bryan.

Investor results our found GAAP section of reconciliation on call, financial today's the guidance GAAP the reconciliation during website. and a reminder, non-GAAP to A a certain financial Relations measures. can results to use As financial non-GAAP we non-GAAP of be of financial

call. Q&A the for begin now to portion ready the Q&A we're Gwenn, session. Now, the of ready we're

Operator

you. Thank

of Cowen. comes first the Doug Please go The Schenkel question from with line ahead.

Doug Schenkel

Thank morning. Good taking questions. for you my

And the GeneSight, little a economic on to PCP but thinking data maybe you the move targeting bit, I'm are impact the you're market into allow the just for based on potentially ahead more health morning. this expanding this how direct about is morning? curious a PCP would know First label of presenting this market? jumping I coverage the or calculations that shared you

Mark C. Capone

Thanks, This Bryan, that is add. you and, I'll if Mark. anything Doug. answer to I'll have see

things That primary in provided importantly we that of primary with morning care generate the from some we to GeneSight was important just on the IMPACT announced. practitioners. a with was in primary that study more again did specifically were that designed care perspective the care even data included see the we That physicians Probably we physicians RCT mentioned relative that. included of well There is script in data to There One wanted positive. primary the top-line very specifically that. care use was results how to data psychiatrist. this the were

well. for has well. large around better. of did In submitted care be as fact, physicians it end study that study, A physicians Both can showed that did And did anticipating the Primary very even are we better. even been the published care fiscal primary physicians publication. year this potentially that

So care results we primary sufficient type if information, the that specifically requested that study from reimbursement. and Medicare believe of required think to magnitude the scale are payers in has that secure of and that both that's of information we quality the

care expect I differences different. and think any to from economic psychiatrist wouldn't standpoint, the primary be health I between

economic savings of all Bryan, health your fundamentally drive additional think from settings. the same both those the are comments side? those any I in dynamics that

Bryan M. Dechairo

add therefore in patients, because XX,XXX study also test versus care our had just with they we I with utilize more saw the that congruently, healthcare physicians will primary Medco we savings Yeah. and better that outcomes. again, higher did psychiatrists

because comorbid like savings very and healthcare we patients' across cardiovascular the are with addition, which they diabetes greater able see even system. illness, to treat depression, comorbidities is In

Doug Schenkel

very follow-up. I could just That's And more, one Great. helpful. then, ask unrelated I guess, if

XX% refresh mathematically volume than It the declined outlook seems on believe sequentially. sideways year-over-year expected. revenue ASPs that dropped stabilization? for like You said that stronger HCT XX% That HCT just year-over-year. X%. moved growth but they us I did guys indicated said, indicate you you was ASP at year-over-year, Can you

So in and the you next of quarter revenue then the to second is given the should growth Anthem ASP expect half quarter overall agreements of we resume? last HCT where there the annualization and from entered into stabilization, year,

Mark C. Capone

Thanks, Yeah. Doug.

year. in is our year-over-year for We exceeding indicate – you the decline. As reflection volume those that we did a contracts that yeah, revenue X% had target the fact decreases. was numbers of mentioned, the XX% were some price long-term growth And our exceeded taken volume the

with looks For us to And as basis. was ASP how – in flat the sequential this quarter. mentioned, a was how what's second in we the at on look ASP important quarter ASP third

at that fourth we'll the pricing that have seen So into stabilize this We're continue we anticipating quarter point. we stabilization that of pricing.

XXXX. volume a think hereditary our is really a on we we've sequential conviction good perspective, growth volumes into when that cancer So at stable move looking from of as one about provides for strong I quarters five that business pricing we feel to row got continue you're basis, fiscal and growing the very that in year us

Doug Schenkel

Okay. Thanks, guys. Appreciate it.

Mark C. Capone

Doug. Thanks,

Operator

the you. Meehan ahead. Jack Thank line comes next The question go Please of from with Barclays.

Jack Meehan

Thanks. Good morning.

been test, economics So think that. you'd gotten drive coverage? payers the The workplace feedback a to than price be related something whether curious related that commercial appetite I'm GeneSight. the is related anything questions to what well you've accept point of I $X,XXX from has less had you productivity received? of health your to then, to few just And willing to

Mark C. Capone

can a coverage We've we've as by in and you Thanks, Bryan, comments Obviously, all have already, multiple chance a discussion fill Jack. then, secured even had payers Again, make before both to a ahead with that through. the health I'll GeneSight point. means, of the few schedule. at for very economic well. Bryan clinical has gone as that publication which well I as of that's think exist arguments was strong strong And the result data this

to first – this So economic impressive year a that's that's $X,XXX the data number health payers. savings, with very

a a consistent is data, very again on fact the its well that the organization. way second respected process and working discussed Optum have this and is publication publication which with we the have dataset at that's that. is That that We strong point through

in think of both payers. impressive that I So to regard, are those numbers

we've number the think successful very workplace employers. important with is and productivity employers to had conversations I very

which can there is strong haven't self-funded, typically workplace is the particularly groups, is of anything products pursued this historical avenue half for interested an in about employer we this the So for do productivity. are that those in that been think particularly we They're has managed but life interest the they from affect – for GeneSight, very country. productive. to one And

to of that interest retain market with they and that anything in As they so their a do appeal employers. result to are very that, payers interested can can increase share

the accrued impact that gain – against others. directly share although ability their doesn't that's So it to payer, to necessarily does

And workplace with so they consistently productivity. large the had address looking costs to employers been ways very economic for associated interested health are because

From the is So be our ASP. conversation as price found $X,XXX of entered standpoint into we've very target to payers. that we out noted productive we've our point,

with pricing in the point point. have We payers. you contracts is offers that's else that this with what would have with price we Bryan, consistent the consistent $X,XXX where add? our and that value multiple think product signed with at We been Those are conversation payers.

Bryan M. Dechairo

The only we shown randomized And have landmark is thing improving per that results only trial controlled patient, it's further our that increases add the the in is show disorder. to response we've time. chronic indirect is I'll studies able and do remission for we're and over and what durable $X,XXX not strong but Medco we in a And over depression per UHS year. cost that both save

these a So as economics that health annuity at then for the – continued realized savings in first year look year-over-year payer system. an when economic the you for but payer, are health

Jack Meehan

July to for just to you sale, sure could new ability Riggsbee, the out products? Mark thinking get update Great. XXXX, That that on we impact Bryan the the X? your right stream think what the So, we're was give drove you pull all think sale? could an Do it strategy? reimbursement it any international revenue make you and very starting do helpful. of And about should just And, then clinic for

Mark C. Capone

because that really don't have decision based a that's the the clinic. towards what to wasn't to necessary strategically ultimately kit – shift We it led our Jack. strategy, Thanks, of

this wanted designed capital that deploy as to for our testing I kit, so think not laboratory again, and we other uses. just necessary. believe capital point at shifted the better clinic we be And the it's strategy. That to best originally there's to to places of was developed put we part us

grow will have the kit business international products. don't our to to we think our any on based for ability So it reimbursement impact get

so, it a shift capital. And again, decision was to

Bryan, So, other comments?

R. Bryan Riggsbee

would timing both the while lab. the as by of the we to year, sale end the quarter process clinic well already the as we've first fiscal relative add of just project managing the started the next I would I Yes. closure the say, of of of said

of lab so sort of the a And end of clinic relative coming that's year. the the piece the with to backstop the closure of by calendar that current

So that's our at this best estimate point.

Operator

Piper question The Quirk Jaffray. the next line ahead. comes with from Please of you. Thank Bill go

William R. Quirk

Great. help Thanks. around the takes think us you volumes Good revenue? the details just Can morning, about puts just lower the quarter. trends, everybody. GeneSight given Mark, yet and the in the appreciate higher the the volume, between sequential volume

Mark C. Capone

Bill. Yeah. Thanks,

So we were very the pleased with the volume in quarter.

weeks Of course, interesting saw weather we first without in all was had weeks in weeks, the to we impacts, quarter. record like in it clean But it conditions weather was March. from note record we month products impacted saw where

a that see the From we a in private know, reimbursed in remained volumes not segment, very fully did mix. for as standpoint, And So segment. sequential you payer the shift strong. we're

fundamentals event in the that. stronger short-term disclosure reduction a so, a see having result growth going very very as in put this the to we're is business ASP in think quarter. of on and phenomenon going now only that's position towards have the full with, payer and the us least pleased the continual that data at in we're see to And the productive the conversations. more GeneSight, seeing in we week ultimately shift as But of the saw mix, a you're you private we a And to really

record well, of is quarter As aware, bellwether the physician Bryan for the also you're continued saw which, the as well in future. growth mentioned, we testers additions as in

be expected. volume overall, little to So, shift really that's ASP, but in led a lower mix strong to

William R. Quirk

kind at guess Mark, the going And help actual data as to payer be I you. discussions? getting the I'm had guess, will frame the under Thank that, can Okay. is they've some data presentation that that the of then, presumably with CDA? what just payers you're review trying to made the compared eventual a associated in with yesterday, seen on the and/or presented well, to about if early kind you chance speaking of that discussions are everything? already publication background? just figure have decisions impactful GeneSight, out you a the I'm of around And thinking I decision how already a

Mark C. Capone

Yeah. Thanks, Bill.

You're correct.

last So were the able the to under that released over show discussions in few we we data payers NDA, our to yesterday months.

and data now know already a need coverage decision. you and will seen. have result first what comes you I publication, those you other some in seen we've think in sure you've is have of why that there they publications. out we haven't of all There got endpoints those were as additional be other that in with to will And so, the also that, that presented yet. publication. when we the make that be the are discuss results which excited And mentioned data seen analyzed Those to published. We're And well were non-public as you secondary as

discussion the And to was able in we've with to been so, that gone to important of very our payers, extent disclose well. any of payers. have that Conversations that all

results were was statistically eight in exactly what very is for. significant a this of both response. prospective payers It a that think double-blind showed large showed and hoping durability study weeks I

been those of provide. other been symptom provide, so data. in all. couple the the to we've I even impressed can at with virtually It's And not so discussion asking very been what it's improvement interesting exactly that a is of all part and they've A anecdotes

to think we symptom very any organization a with remission of in the Officer and had middle the most discussion payer a of from discussion discuss large response. I cease please the asked only and with Medical recent presentation improvement

help so. programs behind to HEDIS the what to drive two and response. will were is And down are Morningstar it ratings can savings rationale do evidence is potentially do have we investors. and very can that They that they Medicare not important. GeneSight only them, overall produce ratings share. report They for Anything dictate help to do for but revenue like on. we reimbursement the their higher they're which impacts remission share. dictate asked from reimbursement perspective, are with They programs. generate endpoints – help increase course, the delighted a HEDIS Of do Those to that Advantage are

data And got very seeing interested going of to response and the the a those chance so them. in discussions time with so, the details spend been and they've some all we've lengthy through remission

So that And for that. believe, wait our coverage I the in reference payers general I would a have suggested they we their publication, in think, earlier to until decisions. continue had so obviously, discussions, would we believe

of We payer have seen, to course, one has prematurely that. that moved

which believe we the to the around continue fiscal track is after until the mostly year. of expect We end for publication publication wait on

William R. Quirk

if to sneak to but up, up just out that excuse to the down one million German could million in Riggsbee, And I winded you it. should the just in XXXX is $XX – Can just – there. $XX go realize fourth or Jack's just quarter of you follow-up revenue. in trying clinic follow some in started should clarify, clarification take me, question, Got just Bryan to we as that it numbers? I start there? get it the – Thanks.

R. Bryan Riggsbee

at thanks I are this to XXXX Bill, not prepared point. – Yes, think Yeah, guidance give question. we for for the

remarks, process say is, is, in all which So are I said I during what the the we active would currently.

We're expect We quarter well. sooner end as of with aggressively moving that. fiscal but close to year it it of first by the the could our be

William R. Quirk

you. Thank

Operator

the The next comes with you. question Murphy line William from ahead. Blair. of Thank go Please Amanda

Amanda L. Murphy

Hi. Good morning.

I how that couple to so in trusts just been of themselves some three more there you've different the they of a some what guess, focused docs terms were GeneSight. data the physicians first, have I'm presented, APA that conference of few endpoints? on some something reacting – There days, last terms obviously, great. is just And yes, of data? at the I that So sort and discussions, curious is subset that buckets the just of in you from the were are saying, out reactions this on are

was curious just saying, were be told was on medicine the ground prefer maybe to the use, to I of some we kind there? this reaction what so And

Mark C. Capone

Thank the so us you. most there – were closer Amanda. psychiatrists, you for are thoughts some as probably Bryan, of from Yes. to but of you were you?

Bryan M. Dechairo

XX,XXX the that I we right that GeneSight. lot have with We quarter meeting. Yes, on think, users. of this users right for now, now of them at a A – saw lot were

actually have understand test. piece clinical the changed in you improvement does practices. impressive really implement data compelling asked The with genetics. that the that our the They But sub-analysis physicians decision already But the the they've in physician just from this of approval overall is total because to this trial evidence them, the GeneSight have also their response well come utility. fully medication. level on a it and to population, for remission with people in that's antidepressant, mind is same skeptical. that and they XX% approval into FDA phase we been have that very comes For as that and XX% than and were GeneSight since found utility improvement resonating wanted And that great their on had one longer from would the was FDA for want where supports of made you congruent who larger this

never off them on validity remission, that show response that improvement, that by guideline. the Again, moved that, and were in significantly. of the genetics able incongruent wrote patients I really again, medication inappropriate positive of the with sub-data of investigators of the that total really minds the largest it's then of drove finally, basically and the the And the study clinical a study physician. switched think that had to it. XX% of and test this the needle type lot Network in Depression the a who pharmacogenomics. overall And were proves population, result, symptom site physicians it's also And for individuals. the who so lot working type of with the National of on have say in And moved would And I drives that Centers on current needle the has of it benefit in the that has investigators of been been who has conducted coming by waiting improvement being turning genetically treatment key some the a

tide doctors and this at the was of they One in symposium like the now moved. has night last our change felt needle the said,

Amanda L. Murphy

that's Okay. go Bryan, – ahead.

Sorry.

Mark C. Capone

asking would to the just Yeah. guidance question as which medication. add, are last more physicians I for Amanda, your even about

to medications of most appropriate be the given generally, fact what be many likely category I are the more think, we in know which may is that be it hear helpful of to even on these that, the polypharmacy. would particularly and green very patients

And and encouraging us, that so, question, I think, which to in But know on this is to physicians even how the our help that is, green from look we're the all says that already tools because on. they would utility see they're additional we're which really fact they test great, better. working understand category information? now. perspective, asking very see more me like in continued to to Can you give utility now working That's the I

use. its that's bellwether us, for for a So good future

Amanda L. Murphy

mean, no becomes sort sort yeah, if the argument incongruent a fashion. don't in know payer just patient's similar the population, remission test I'm guess, data a there's with subset early sense. they're that you've makes about any side, and on how assuming that there's it's you will of payers? response. But side. a vein on the I way some more you then, wondering just subset on can I a how I resonate obviously, with if on But a guess, obviously question test. think it you reflex focused do And the stratify lot because That talked data And Yeah. that's the on Okay. the And, of before you side. do

Mark C. Capone

Yeah.

side the really to to Bryan medical data payer. that payers mentioned, think remember on the as are I having psychiatrist, and of the was, the discussions

the sides. there's organization, the two the there's contracting side the side. medical and know, payer the coverage you by then As medical side. And made decisions There's are

is of can providers are that data those physicians, subset looking healthcare that I extraordinarily impactful lot of to understand words improvement impactful meetings and talk I've you of how you this a by don't these said is. you need switching medications, are So data. them type some personally this about tell When to for this all off immediately them. of patients at in red

how not them about know you to they're as a there's a information to red response could was know with musing, we even to I one It absence on So of one from suggested, beginning? test. type that. Wouldn't I type of them was way you've that the genetic whether fail that so got payer medication can very on information no care could do yellow a we're medication? of getting new in establishes a that this or of And that we standard How better. red want really, the medication know. even let meeting or the think medication patient much the knowing doing let fail one your a point, in Amanda, that's Bryan to

And it's well been think this received so very at point. I

Amanda L. Murphy

it. Got Thanks very much.

Operator

Thank you.

Stanley. of Our comes ahead. last go question line for the Please with Steve Beuchaw Morgan from today

Steve Beuchaw

morning. Good Hi.

for impact like me. Bryan. Bryan, Just you on actually dynamics the with and start heads-up, some there way in remarks prepared see the I $XX XXXX in the that we'll we I'll will at so the would for that figure ASC underlying model XXXX. that the for prior when mentioned time if that a around your ones look did discussion give periods? million be more HCT the on housekeeping that comes, first, wonder to in trends in What us you XXX, thanks look could to couple Maybe any debt be trend. fiscal bad of history able fiscal

R. Bryan Riggsbee

recognition business when this, Steve. think you just the of That's our $XX year. I comparison. present, at be look and cash it look about, other But million think the we would I bad of that. it Historically, sure, beginning we looking year-over-year the at we'll an for and historical ASC revenue our Vectra go do statements our simply how the ASC I And that is be way as always would can bad to at move the pick back simplest flow That mechanics But the I at be apples-to-apples Yes, think that methodology that you will to XXX look will parts of use our that way. hereditary been revenue at referenced debt. and numbers. when XXX the suggest compliant did off against where DA and I debt to you expense

Bryan M. Dechairo

and Steve, changed of our history X% really it hasn't very that consistent time. number much so been over has around

Steve Beuchaw

a up if about Okay. for Mark, wouldn't deployed, GeneSight, obviously, be out the Thanks mind that people you in payer that are top what any be there your Perfect. playing understand to to more how perfectly how that you there the see just are it. then it to the wonder focus policy, payers to And terms gets for, seems this – were conversation out? broad outcome figure and looking lot mentioned. for on I that. there XX with neighborhood is been on into trying much. how the Thanks the that reimbursement, any this insight or in giving consistent be, If so thinking calling of were tie we've around reimbursement might of amount Mid-Atlantic out would with worth of target nuances we pricing to us all

Mark C. Capone

Steve. thanks, Yes,

tell around has pricing here's value all As for on, your payers here's discussion don't it individual payers. our plan. specifically you been how you can on the value, what comment with the we the the I know, can is, consistent help test

differences think don't there's I value discussion. so, And type any that from

the most seen care the we've with treated the as of primary that think most numbers mental setting, from I probably from in primary the is the setting. physicians health their benefit can commercial payers, care probably can in most the because the view is benefit are that and most that

where that's we've even that more – recognition really need the probably is we had so, And psychiatric the in this that's the and dialogue really help setting.

all-encompassing it's had think for all this. I prescribers are across conversation that definitely an to been benefits there be So

that. that's So of tenors I the one think of

what as this they payers are work ensure I the that from gets contemplate exactly seen have programs this we on interest other that together adoption. to broad could scale to try thing we think on

we we resources with they are And that gets the implemented right we're ensure this so and what way. in are how the value-added the what resources bring, really can discussions bring collectively

fact there work we you'll all than arm, after with is were this incongruent significantly things that X% X%. in want note on we the even of on were congruent you that patients would did. been Payers to results still Because One us have if GeneSight medications, the seen study that's in X% after, had of gave, better to those make sure in medications.

the they cohort. excellent the whole even results those on have So across but medications, are symptom are, you congruent even board seen all improvement of would if had significance for better been across statistical the likely as and results

very is, together. one that zero, are we do get do their there that that's can we've focus ways of a and been conversation to that them how specific we that's had So with

can I fulsome healthcare has think So providers do of productive across we nature the that the together. discussion interventions and been all across

Steve Beuchaw

the Great. Thanks for color, guys.

Scott Gleason

call. our us for This Thanks for website morning. concludes Thanks. week. again joining this replay on via will A our earnings available be webcast one

Operator

conference you day. thank you for conclude and Thank Ladies does today. ask good call that the have you. gentlemen, your a and for please participation your Thank you lines. and that We disconnect

Myriad Genetics (MYGN) 8 May 182018 Q3 Earnings call transcript